Management of environmental, social and governance risks

The Group has implemented specific processes and responsibilities to understand and manage risks in such a way as to ensure long-term soundness and continuity, extending the benefits to its stakeholders.
Below is an overview of the main ESG risks that are significant due to their potential impact on company activities and the related mitigation measures.

Issue	Potential risk	Potential impacts	Mitigation measures
Integrity in corporate conduct	Risks of non-compliance with applicable legislation (corruption, money, laundering, taxation, free competition, privacy, labour law) and ineffective response to regulatory changes Risk of providing employees with insufficient or no training Reputational risks	Fines and penalties, limitations to conducting business Damage to reputation and brand	Compliance system divided into different levels to monitor the risk of non-compliance, with specialised functions Internal control system Definition of corporate internal regulations Specialist training for employees Introducing a whistleblowing system Guidelines for the governance of environmental, social and governance risks in lending activities and associated selfregulation policies for sensitive sectors Adherence to UNEP FI's Principles for ResponsibleBanking (PRB)
Service quality and customer satisfaction	Unfair commercial practices Inadequate customer service levels Inadequate customer communications Ineffective transition from traditional to digital channels Inadequate customer communications Business continuity in the event of an emergency, blocking or malfunctions	Loss of competitiveness, customers and market shares leading to reduced profitability Disputes and complaints Fines and penalties Damage to reputation and brand Damage to persons and objects during robberies	Model focussing on the level of service, on personalised advice, and on transparency Process of clearing for new products and services Careful and proactive management of complaints Innovation in the offer aimed at ensuring accessibility to services Business continuity plan
Multichannel approach and accessibility	IT risk		Prevention of IT risk
Health and safety of customers and employees	Accidents in the workplace Occupational diseases Robberies		Certification of the health and safety management system (ISO 45001) in all branches and buildings in Italy Assessment and management of infection risk Risk assessment for workplaces and work processes Coordination and rules for health and safety management systems in Banks of the ISBD scope Preventing and combating robberies
Employee well-being	Health and safety of employees	Employee dissatisfaction with impacts on productivity	Risk assessment of subjective and social conditions Assessment of work-related stress Work-life balance initiatives Prevention and welfare for employees
Supporting to production	Management of social and environmental risks in loans Transactions or loans in sensitive sectors Reputational risks	Non-performing loans or needs for provisions Damage to reputation and brand	Rating model which also includes intangible aspects of companies Risk clearing processes which include environmental, social and governance aspects Equator Principles for project finance Guidelines for the governance of environmental, social and governance risks in lending activities and associated selfregulation policies for sensitive sectors Opinions involving the assessment of socialenvironmental fact
Sustainable investments and insurance	Assessment and control of ESG risks in the investment portfolios Investments in sensitive sectors Reputational risks	Loss of competitiveness, market shares and customers who are conscious of ESG aspects, leading to reduced profitability Damage to reputation and brand	Subscription to PRI (Principles for Responsible Investment) and the Principles of Stewardship Subscription to PSI (Principles for Responsible Insurance) Range of Ethical/ESG funds Company engagement activities
Retention, enhancement, diversity and inclusion of the Group’s people	Inadequate employee growth and motivation Incapacity to acquire and maintain talent Insufficient focus on diversity and inclusion §issues	Employee dissatisfaction with impacts on productivity Lack of adequately trained and qualified personnel Inadequate customer service levels	Investments in training activities Talent management programmes Recognition of employees' merit Initiatives to ensure diversity and inclusion Diversity & Inclusion Principles Sexual orientation and identity diversity regulations
Employment protection	Conflicts and related labour dispute risks	Disputes Strikes with impacts on service continuity for customers Employee dissatisfaction with impacts on productivity	Responsible management of corporate restructuring processes, with the reallocation of employees to other activities New hires to promote generational change Management of labour dispute risks

Last updated 4 May 2021 at 14:38:40