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 |
Compliance risks 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 compliance risk, with specialised functions Internal control system Definition of corporate internal regulations Admission to the cooperative compliance scheme with the Italian Revenue Agency Specialist training for employees Introducing a whistleblowing system Guidelines for the governance of environmental, social and governance risks in lending activities and associated self-regulation 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 Loss of access to services |
Customer dissatisfaction with loss of competitiveness, customers and market shares leading to reduced profitability Disputes and complaints Fines and penalties Damage to reputation and brand |
Model focussing on the level of service, on personalised advisory services, and on transparency Process of clearing for new products and services Careful and proactive management of complaints Dialogue with Consumer Associations Initiatives aimed at ensuring accessibility to services Business continuity plan |
| Innovation, digital transformation and cybersecurity |
Ineffective transition from traditional to digital channels IT risk 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 |
Prevention of IT risk Careful assessment of emerging risks Development of an innovative offering/ solutions Physical network integration with online structures Dissemination of the digital culture Innovations aimed at ensuring accessibility to services for people with disabilities |
| Financial inclusion and supporting production |
Inadequate offering of products/services to customers Reputational risks |
Loss of competitiveness, customers and market shares leading to reduced profitability Damage to reputation and brand |
Offering development in favour or financial inclusion for vulnerable people Development of solutions in support of the third sector Offering development to support production |
| Sustainable investments and insurance |
Assessment and control of ESG risks in the investment portfolios Investments in controversial sectors Reputational risks Failure to comply with regulations |
Loss of competitiveness, market shares and customers who are conscious of ESG aspects, leading to reduced profitability Damage to reputation and brand Fines and penalties |
Integration of ESG factors into the Investment process Development of the range of ESG funds Company engagement activities ESG training Internal control system Subscription to PRI (Principles for Responsible Investment) and the Principles of Stewardship Subscription to PSI (Principles for Responsible Insurance) |
| Community support | Reputational risks |
Damage to reputation and brand |
Development of investments and partnerships with a social impact in the community Development of training and work projects for the next generations Initiatives supporting the promotion of culture for social cohesion Development of institutional initiatives in support of the community |
| 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 System of labour relations |
| Retention, enhancement, diversity and inclusion of the Group’s people |
Inadequate employee growth and motivation Incapacity to acquire and maintain talents Termination of the employment relationship with managers holding relevant roles Insufficient focus on diversity and inclusion issues |
Employee dissatisfaction with impacts on productivity Lack of adequately trained and qualified personnel Inadequate customer service levels Damage to reputation and brand |
Investments in training activities Talent management programmes Recognition of employees' merit Succession plans for business continuity Initiatives to enhance diversity and inclusion, including training with a specific focus on the topic Diversity & Inclusion Principles Sexual orientation and identity diversity regulations Rules for combating sexual harassment Adhesion to “Women’s Empowerment Principles” |
| Health and safety of customers and employees |
Accidents in the workplace Occupational diseases Risks associated with the COVID-19 pandemic Robberies |
Employee dissatisfaction with impacts on productivity Damage to persons arising from the COVID-19 pandemic Damage to persons and objects during robberies Damage to reputation and brand |
health and safety training 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 Development of specific organisational, training, technical and medical solutions to combat the COVID-19 pandemic Preventing and combating robberies |
| Employee well-being |
Inadequate employee motivation Work/life balance difficulties |
Employee dissatisfaction with impacts on productivity Loss of skills as result of employee exits |
Risk assessment of subjective |
| Transition to a sustainable, green and circular economy |
Management of social and environmental risks in loans Transactions or loans in controversial sectors Reputational risks |
Loss of competitiveness, market shares and customers who are conscious of ESG aspects, leading to reduced profitability Problematic loans or need for provisions Damage to reputation and brand Non-performing loans or needs for provisions Damage to reputation and brand |
Guidelines for the governance |
Last updated 12 April 2022 at 11:21:41
