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 updated when internal or external events make it necessary. As a result, following the entry into force of the new Equator Principles in 2013, the legislative corpus has been updated and a new operational guide was published in 2014.
In 2016, after an internal reorganization process aimed at ensuring a better management of risk management, the central Credits function integrated the activities related to the implementation of the EPs, which include, inter alia, the assessment of the socio-environmental risk level of the projects for which funding is requested. In 2017, an update of internal regulations was published as an adjustment to the new organizational structure. The adoption of these Principles by a financial institution, in fact, implies the same approach by all of its subsidiaries, if they are active in the financing of projects to which the Equator Principles are applied.
The Guide is integrated into the Group's credit policies and recalled by the most 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, 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 2018, 20 of the loans that followed the evaluation process of Equator Principles have reached financial processing (for a total of 346 from 2007).
In 2018 the amount agreed for the projects that followed the process of evaluating the Equator Principles is 993.5 million euro, equal to about 11% of the total amount of loans from the reference perimeter (all the Intesa Sanpaolo structures active in the financing of projects that fall within the scope of the Principles, in Italy and abroad).
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 (PDF - 67 KB)
Over the years, an extended and structured training plan was carried on, which involved colleagues from the interested Bank’s departments both in Italy and abroad.
In 2018 two training initiatives on the Equator Principles were provided, with the dual purpose of spreading awareness of the importance of the topic and illustrating to the participants some case studies to focus the scope of application of the Principles and the phases of the process implementation.
The first initiative, aimed at the most heavily involved structures based in Italy, was spread through the remote classroom (about 100 guests); with the second initiative, the Equator Principles e-Learning Tool, developed by the Equator Principles Association, was made available to over 400 people.
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.