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Interview with Carlo Messina for the Ellen MacArthur Foundation’s Summit21

Interview with Carlo Messina for the Ellen MacArthur Foundation’s Summit21. Intesa Sanpaolo believes climate risk is investment risk. The Group is responding with change and influencing others to do the same

The Ellen MacArthur Foundation recently held its annual Summit21 to explore how government and industry should work together to address our greatest global challenges, while creating resilience and wellbeing.

This year’ Summit21 was about transformation. The circular economy is itself a transformation of the system, since it provides tools to address climate change and biodiversity loss, while addressing important social needs.

During Summit21, the Ellen MacArthur Foundation asked Intesa Sanpaolo CEO Carlo Messina how Intesa Sanpaolo – one of the largest banks in Europe – applies the principles of the circular economy in its business.

CEO Carlo Messina said that “a large banking group like Intesa Sanpaolo is aware of its significant impact on the social and environmental context in which it carries out its business”. And this is the reason why Intesa Sanpaolo chooses to act not only based on profit, but also with the aim of creating long-term value for the Bank, its shareholders, employees, customers, community and the environment in general.

Messina also remarked that “Intesa Sanpaolo is ready to be a driver of sustainable and inclusive growth in Italy”. He pointed to Intesa Sanpaolo’s commitment to provide over €400 billion to businesses and families in support of the Italian National Recovery & Resilience Plan, which focuses on investments in innovation and the green economy.

Asked about how Intesa Sanpaolo is shifting the system, Carlo Messina said “in Intesa Sanpaolo we know that finance, investments, education, innovation and corporate social responsibility can contribute to effectively addressing the issue of economic growth and progress, on a human scale, and, together with our partners, we want to play a key role in this. Climate risk is investment risk. Firms like Intesa Sanpaolo and other strategic partners of the Ellen MacArthur Foundation are responding with change and influencing others to do the same. Sustainability and Circularity must be integral to portfolio construction and risk management”.

READ THE FULL Q&A SESSION WITH CEO CARLO MESSINA

Q: Fix the economy to fix our climate: How is Intesa Sanpaolo using the circular economy to help meet its commitments to reduce pollution and tackle climate change?

A: “Intesa Sanpaolo pays significant attention to issues relating to climate change, biodiversity and pollution – along with social inclusion and sustainable development – with the ambition of becoming the first Impact Bank in Europe.

“Climate change is an extremely important phenomenon whose consequences are both environmental as well as having major effects on the economic and social dynamics of current and future generations.

“A large banking group like Intesa Sanpaolo is aware of its significant impact on the social and environmental context in which it carries out its business. For this reason, we choose to act not only based on profit, but also with the aim of creating long-term value for the Bank, its shareholders, employees, customers, community and the environment in general.

“Since 2016, as the first Financial Service Strategic Partner of the Ellen MacArthur Foundation, our commitment to supporting the transition towards the Circular Economy has been tangible and driven by innovation.

“Launched in our 2018-2021 Business Plan, our 5 billion euro credit facility dedicated to supporting the Circular Economy - increased to 6 billion euros after the successful acquisition of UBI Banca – has enabled the financing of innovative projects for a total of about 4 billion euros as of April 2021: this includes over 200 supported companies for cross-sector and transformative initiatives, as well as green mortgages to retail customers (of which 1.2 billion euros have been disbursed by the first quarter of 2021).

“Moreover, in 2019 Intesa Sanpaolo successfully completed the placement of the first Sustainability Bond fully focused on Circular Economy, raising 750 million euros and collecting orders for over 3.5 billion euros.”

Q: Growth in a circular economy: What opportunities do you think the circular economy is creating for growth while reducing greenhouse gas emissions, waste and pollution?

A: “The Circular Economy enables huge opportunities in terms of growth and prosperity, while addressing waste and pollution issues by design. Banks have a social responsibility in promoting a broader and systemic understanding of the modern economy and should therefore investigate how the circularity changes business as well as finance.

“Today the strategic role of the Circular Economy is globally more relevant than ever, acting both as a key strategic plan, especially within the European Green Deal and the Next Generation EU to rethink and evolve the industrial system, and as an accelerator of important topics like ESG standards, digitalization and social impact.

“The pandemic and the containment measures required have certainly revealed with greater evidence and urgency the exposure of our economic and social system to a series of risks of global nature, and the severe economic recession that has followed requires a profound collective effort to reshape our economy.

“The spread of COVID-19 has therefore redefined the challenges related to sustainability and accelerated the need for new paradigms. This is linked to the exponential growth of interest by business, investors, consumers and regulators in environmental, social and governance dimensions of the new economy that is to be built in post-pandemic restart phase. In fact, as we rise to the challenges caused by the coronavirus pandemic, the question is no longer should we build back better, but how.

“At Intesa Sanpaolo, we are ready to be a driver of sustainable and inclusive growth in Italy. This included over 400 billion euros of medium- and long-term lending that we intend to provide to businesses and families in support of the Italian National Recovery & Resilience Plan, which focuses on investments in innovation and the green economy.”

Q: Shifting the System: How is Intesa Sanpaolo using the circular economy to transform systems and deliver impact at scale?

A: “A well-known proverb said “If you want to go fast, go alone. If you want to go far, go together” – this is true, more than ever, for such an ambitious and systemic transition. Businesses and governments must work together to deliver the economic, environment and social impacts expected from the Circular Economy at scale.

“At Intesa Sanpaolo, we know that finance, investments, education, innovation and corporate social responsibility can contribute to effectively addressing the issue of economic growth and progress, on a human scale, and, together with our partners, we want to play a key role in this. Climate risk is investment risk. Firms like Intesa Sanpaolo and other strategic partners of the Ellen MacArthur Foundation are responding with change and influencing others to do the same. Sustainability and Circularity must be integral to portfolio construction and risk management.

“The collaboration between Intesa Sanpaolo and the Ellen MacArthur Foundation is the best opportunity for us to work with a systemic approach, alongside the other Strategic Partners. We had, for example, a key role in the development of the position paper “Financing the Circular Economy - Capturing the opportunity” published in Sept 2020 together with relevant players of the financial industry. Moreover, since the beginning of 2020 we have participated in the Circulytics Sounding Board, shaping the framework of this innovative tool used to assess and measure the circularity level of a company, together with partners coming from different industries.

“Together with Fondazione Cariplo, one of Intesa Sanpaolo’s key stakeholders, at the end of 2018 we launched the Circular Economy Lab, the first Italian laboratory dedicated to the Circular Economy. The Lab, under the management of Intesa Sanpaolo Innovation Center and Cariplo Factory, aims to become the national point of reference for companies and institutions in the circularity and innovation fields, acting as a platform for collaborations. The Lab offers a wide range of consulting services for companies and develop projects dedicated to the startup ecosystem.

“Thanks to the collaboration with our partners, Intesa Sanpaolo also had the opportunity to deliver important initiatives connected to culture, training and advocacy. A couple of key initiatives are:

  • since 2016 Intesa Sanpaolo has been actively involved in several advocacy activities for policy makers, by participating in working groups in ECB, European Commission, United Nations, Italian Government and some of the most relevant corporates representing the Made in Italy;
  • very soon Intesa Sanpaolo will launch an executive training course in “Strategy & circular economy for professionals and entrepreneurs”, together with Intesa Sanpaolo Formazione and Università Cattolica di Milano. Intesa Sanpaolo wants to play a key role also in the world of professional education, making available to managers and entrepreneurs all the experience and skills we developed as of today, with particular attention to Innovation & Circular Economy, Digital Transformation, and Sustainable Development.“
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