Equator Principles

Our Bank’s adoption of the Equator Principles (EP) dates back to 2006, even before the merger of Banca Intesa and Sanpaolo IMI, that gave rise to Intesa Sanpaolo. Membership was later reconfirmed in 2007 by the new Group and the implementation process is defined and regulated by the Rules governing the Equator Principles, which are valid for the entire Group.

Internal regulations are constantly reviewed and updated when internal or external events make it necessary. As a result, with the entry into force of the third version of Equator Principles in 2013, the legislative corpus has been updated for the first time. 

In the second half of 2019, the activity of evaluating operations subject to Equator Principles was incorporated into the "ESG and Reputational Risk Clearing" process. This integration helps to more effectively delineate the risk profile of the funds assessed and meets the objective of making the risk protection as a whole more integrated.

The internal legislation dedicated to EP is integrated into the Group's credit policies and recalled by the relevant lending procedures, in order to intercept, right from the application phase, all loans subject to the Equator Principles evaluation process.

The review of the projects involves at least two levels of assessment: the first level evaluates the compliance with Equator Principles and the risk level, the second is carried out by the credit function in the sphere of the ordinary activity. In particular, in presence of high risk category projects, independently of ordinary credit competence, the level of deliberative competency is assigned to the central deliberative body.

In 2021, a total of 19 loans subject to screening according to the Equator Principles reached financial close (a total of 386 since 2007) for an overall granted value of 1,427.6 million euro (the amount of granted credit subject to EP screening came to 45.3% of the total granted credit for project finance transactions).

OPERATING GUIDES: EP REQUIREMENTS FOR THE FINANCING BANKS

Principle 1: Review and Categorization

• Require preliminary information on the project
• Categorize the project and identify the applicable standards
  
• Verify the reputational risks and applicable standards
  
• Inform the client about the EPs application and what they require

Principle 7: Independent review

• Define the Environmental and Social Due Diligence (ESDD) Scope of Work
• Assign or execute the Due Diligence
  
• Prepare the Memo for the deliberative Body
  

Principle 8: Covenants - Principle 9: Independent monitoring and reporting - Principle 10: Reporting and transparency

• Define the contractual obligations (Covenants)
• Monitor compliance with social and environmental requirements
  
• Produce periodic information

OPERATING GUIDES: KEY PHASES IN THE SCREENING OF A PROJECT

Since the adoption of the EPs, the Bank has committed to carry out an extended and structured training plan which involved colleagues from different areas of the Bank involved in the financing activities that provide for the application of the Principles, both in Italy and abroad.

By adopting the Principles, financial institutions also agree to participate in the ongoing international debate organised by the EP Association. This means involvement in theme-based working groups, events organised for the member banks, and also meetings with our stakeholders - mainly the IFC, NGOs and the industry business associations.

Furthermore Intesa Sanpaolo participates in the Cross Sector Biodiversity Initiative Working Group.