Control of social and environmental risks - Intesa Sanpaolo
Management of social and environmental risks in financing
The Code of Ethics requires investment decisions and the credit policy to take into account the socio-environmental risks associated with the activities of corporate customers. This commitment is also contained in the Rules for the environmental and energy policy. Both documents also mention the importance of adhering to the Equator Principles covering these risks. The assessment of environmental risks also enables compliance with the regulatory requirements set out in the Organisational, management and control model pursuant to Legislative Decree 231/2001 on the administrative liability of entities.
From an organisational perspective, the analysis and assessment of the socio-environmental risk of financing operations subject to the Equator Principles is the responsibility of the Chief Lending Officer Area. For other loans, the Structures responsible for this assessment, if requested by the business or lending Structures, are the Corporate Social Responsibility for the specific social and environmental risk and the Risk Management function for the reputational risk aspects.
The assessment of the credit rating, which includes the socio-environmental aspects, is conducted for all the corporate customers, in accordance with the Rules of the Internal Rating System.
The social and environmental aspects can also have a positive impact, leading to an improvement in the rating. The new rating model has introduced additional assessment elements regarding the qualitative aspects of the companies, such as trademarks, patents, quality and environmental certifications, research and development, innovation and digitisation, ownership and management, and membership of a supply chain.
With regards to the sectors potentially most exposed to environmental risks, a specific Questionnaire for integrating environmental risks into the credit assessment is currently being tested on a sample of customers.
In 2017, a process of issuing advisory opinions, on request from the operating structures, on the social, environmental and reputational risks of financing transactions in sensitive sectors was launched on an experimental basis. The opinions, provided by CSR jointly with the Reputational Risk Office of the Chief Risk Officer Area, include the allocation of a risk class (from low to high) and 32 of these opinions were issued in 2017.