Intesa Sanpaolo is aware of the positive influence that major institutional investors and banks are able to exert in the activation of sustainability dynamics among the companies they invest in or liaise with.
In September 2015 Eurizon Capital, the asset management company of the Intesa Sanpaolo Group, embraced the Principles for Responsible Investment (PRI), geared to achieving a sustainable global financial system, born from the partnership between the UNEP-FI and the UN Global Compact, after having contributed in developing them by intervening in working tables since their inception in 2005 in UNEP FI, thus confirming its commitment to continue a responsible management activity. In November 2015 was one of the first companies to subscribe to the Italian Stewardship Principles.
To strengthen its control over the sustainability of its investments, Eurizon is assisted by its internal Sustainable and Responsible Investments (SRI) Committee (chaired by the CEO) and the Sustainability Committee (an autonomous and independent body that helps with t he management of Ethical Funds). The SRI Committee, set up in 2017, supports the Chief Executive Officer in setting out ESG-related (Environment Social and Governance) proposals to present to the Board of Directors by monitoring the exposure of assets in relation to the relative assessment indicators identified, and overseeing the escalation process relating to the securities of “critical issuers”. As well as the Chief Executive Officer, the Heads of the Investments Department, the Heads of the Control Functions, and the Corporate Governance, Corporate Affairs and Sustainability Heads also sit on the Committee.
Eurizon Capital has an investment process in place which contemplates to remove all companies directly involved in controversial weapons from active managed portfolios (nuclear, biological and chemical weapons; cluster and fragmentation bombs; weapons containing depleted uranium; and anti-personnel landmines). The List of issuers operating in sectors deemed not "socially responsible" (controversial weapons) is used for verifying the following Operating Limits:
for products whose investment policy is characterised by the presence of a benchmark, the maximum direct investment allowed is equal to the weight of the issuer in the reference parameter;
for products whose investment policy does not contemplate the presence of a benchmark, it is envisaged the exclusion of direct investment in securities of issuers belonging to the list.
Eurizon has established a group of 11 sustainability professionals responding to different divisions among Corporate Affairs and Investments, with the mission to take care of and to supervise all activities relating to Sustainable and Responsible Investments and to provide support to the Marketing and Commercial Development Division on the integration of ESG factors into the core processes of the Company.
In 2016 was launched, Eurizon Flexible Equity which also incorporates environmental, social and governance elements in the selection process of issuers in which it invests.
In 2017, the Eurizon Sustainable Global Equity fund and the Eurizon ESG Target fund were launched, both of which have sustainability criteria and attention to environmental, social and good governance (ESG) factors, while in 2018 they were 11 new products, consisting of Absolute Green Bonds, Bond Corporate Smart ESG, the Eurizon Family Sustainable Discipline with 4 products and the Family Flexible Equity of 5 products. In total, assets managed in funds with sustainability and ethical criteria (24 products at the end of 2018) are 5.6 billion euros (over 1.8% of the total and about 8.2% of Italian law funds).
Investments in ethical funds are selected on the basis of positive criteria (inclusive principle) and negative (exclusive principle). Positive criteria are applied in order to detect the presence of ethical characteristics in the companies and entities that are under analysis; negative selection criteria instead detect the areas of activity which are considered in contrast to the principles declared by the funds. At the same time the "best in class" principle is used, which allows positive and negative selection criteria to be used together, with the aim of singling out companies which, within certain risky markets (e.g. oil sector) stand out in any case thanks to merits earned on social and environmental topics. In 2016 the ethical system was provided with benchmarks SRI provided by MSCI, one of the most important companies worldwide for the ESG (Environmental, Social, Governance) research. An additional research service focused on environmental, social and governance (ESG) topics was also implemented by MSCI ESG.
The application of the ESG criteria resulted in the variation of the investment universe, with inclusions and exclusions of various issuers in the investment portfolios. Among the main reasons for stock inclusion we generally consider: greenhouse gas reduction programs, biodiversity, clean tech, suppliers involvement and protection of minorities in the workforce. Exclusions are mainly triggered by the involvement in arms, antitrust violations, accounting frauds and discrimination in granting credit.
In order to guarantee that the management choices respond to the above-mentioned ethical principles, Eurizon has set up a Sustainability Committee, which is independent and autonomous with respect to SGR, composed ofprofessional persons of heterogeneous extraction, with significant experience in various sectors of social responsibility concerning the management of products (bioethics, alternative energy, corporate governance, law, medicine, environment, equal opportunity). Only one member of the Committee represents SGR.
The "Regolamento Unico di gestione" furthermore envisages "the commitment of SGR to finance humanitarian projects and initiatives through the devolving of a part of the management commission paid to the Ethical System Funds, equal to 0.01% of the overall daily average net worth of the Ethical bonds and International Shares funds in each financial year". The devolving is destined in part to recognized associations and in part to humanitarian initiatives selected by the Board of Directors, on the basis of proposals from the Sustainability Committee. Participants in the Ethical bonds fund furthermore have the possibility to devolve to charitable bodies or associations a part of the profits made by the same fund, which is in fact the distribution of profits.
Eurizon Capital collaborates with international entities for the development of sustainability guidelines for the finance sector.
FONDITALIA ETHICAL INVESTMENT
Fonditalia Ethical Investment is the socially responsible investment solution of the Fideuram Group which integrates income objectives with financial sustainability and social value aspects.
Initially born as a flexible bond segment, it then enriched its mandate also including the shareholding and a greater use of third-party funds. This product adopts an approach that integrates principles of social and environmental responsibility (ESG) at the level of the overall portfolio, with positive and clear impact objectives on people and on the planet, at the level of individual investments. Indeed, issuers are selected on the basis of financial and social and environmental performance criteria, both absolute and relative to the sectors or geographies of reference. In addition, bonds, equities and funds are selected that intentionally use capital to solve some of the main social and environmental challenges.
To ensure uniformity between the investment choices and the ethical principles that inspire the management of Fonditalia Ethical Investment Ethics Committeehas been established , with the aim of verifying consistency between the actual fund portfolio composition and the ethical principles characterising the same, thereby formulating, where applicable, its own opinions on the ethics of the investments.
A further element characterising the ethics behind the sub-fund is given by its commitment to supporting scientific research, through the placement of share units and through the donation in favour of the AISM and its Foundation (FISM), the amount of which is proportional to the fund fees.
As the end of 2018, the asset managed amounted to 48 million euro.
The Fondo pensione Gruppo Intesa Sanpaolo is the first in Italy to adopt an active shareholder strategy, interacting directly with a number of large companies included in the portfolio and recommending improvement measures on topics of particular interest to customers regarding social, environmental and governance issues.
The Fund adhered to the Principles for Responsible Investment promoted by the United Nations (UNPRI) and to the CDP (Carbon Disclosure Project), an international non-profit organization that promotes the reduction of greenhouse gas emissions and the improvement of water management.
In 2018 the Fund decided to participate in two new engagement initiatives on the following issues:
Governance, to examine the transparency of tax policies in major businesses. The top 20 businesses on the MSCI World index were asked to provide information on their tax risk policies and the consistency of these with their sustainability goals. Being multinationals, they were also asked for information on tax reporting in the various countries in which they operate;
Environmental, to assess transparency on climate change risks, as established by the Task Force on Climate-related financial Disclosures, TCFD. The top 20 businesses on the MSCI Europe index were asked to state what measures they have taken in relation to transparency obligations concerning the disclosure of information on climate impact, particularly concerning the financial implications of climate change.