Support to the Circular Economy

The eligibility criteria for loans within the circular framework, verified by Intesa Sanpaolo Innovation Center, are:

• solutions that extend the useful life of the product or the cycles of use of goods and materials (application of modular design; implementation of reverse logistics programs; reuse, repair and regeneration or reconditioning of products);
• production processes powered by renewable energy and products made from renewable or recycled resources;
• products and services that significantly increase the effectiveness of resource consumption, either internally within the company or along its value chain (application of industrial symbiosis principles and implementation of an integrated value chain that transforms waste into production inputs; implementation of closed-cycle models and/or application of eco-design and systemic design principles; creation or promotion of a supply chain that follows circular principles);
• design and/or production of totally recyclable or compostable products within a context of efficient collection, separation and recycling after use (compostable products, recyclable products);
• innovative technologies that enable circular economy models (Internet of Things systems for the implementation of traceability, reverse logistics and/or predictive maintenance systems; use of additive manufacturing and 3D printing to increase the degree of ease of repair and the efficiency of the use of materials; Big Data analysis, Artificial Intelligence and Cloud Computing in order to dematerialize services and develop markets for secondary raw materials).

With regard to the tranche dedicated to the green framework, the criteria used for access to the plafond and for which Intesa Sanpaolo Innovation Center expresses an assessment are:

• renewable energy and in particular investments in production, transmission, infrastructure and associated assets, such as solar, wind, bio-energy/biomass and hydropower;
• energy efficiency (energy storage from renewable energy; smart grid technology and/or infrastructure; energy-efficient equipment for buildings);
• sustainable mobility (financing of passenger cars and light commercial vehicles and urban and extra-urban means of transport, for passengers and passenger transport by road/rail, with zero specific CO₂ emissions directed at the tailpipe; infrastructure enabling low-carbon road and public transport);
• green buildings (new, existing and renovated buildings that meet certain criteria such as, for example, Class A Energy Performance Certificate (APE), LEED/BREEAM high-level certification);
• eco-sustainable management of living natural resources, land use and biodiversity (projects and activities aimed at the development and use of sustainable agricultural practices, conservation, preservation and/or restoration of nature and biodiversity, as well as natural habitats and ecosystems).

It should be noted that at the moment the internal framework is not completely overlapping with the criteria of the European Taxonomy on the Circular Economy and therefore the loans disbursed with this framework are not considered "aligned" with the criteria of the taxonomy for the purposes of calculating the Green Asset Ratio.

In order to contribute to the acceleration of the transition to the circular economy paradigm, multiple initiatives continued during the year and new projects were launched, which can be grouped into four macro-areas: finance, innovation, corporate and corporate.

With a view to concretely support companies active in the circular transition process, the Intesa Sanpaolo Group has renewed the credit plafond dedicated to the circular economy (initially inaugurated with the 2018-2021 Business Plan), allocating an additional 8 billion euro over the 2022-2025 Business Plan.

In 2024, through the specialist support of the Intesa Sanpaolo Innovation Center, 285 projects were validated for an amount of approximately 13.1 billion euro. Of these, around €8.3 billion was then granted by the Group in 170 transactions. In the period 2022-2024, more than 1,050 projects were evaluated and validated for a total of about 34 billion euro, of which over 20 billion euro were granted in 642 transactions and about 12.6 billion euro disbursed.

In general, numerous company projects have been supported for initiatives such as the replacement of critical materials and fossil fuels with others from recycled or biological sources, the reuse of municipal organic waste for the production of biomethane and compost and CO₂ recovery, the revamping of renewable energy plants with extended useful life and increase in production capacity, the recovery of industrial production waste for reuse in new product lines.

In the field of sustainable bonds, Intesa Sanpaolo was the first Italian bank to issue a 750 million Green Bond in 2019 focused on the circular economy and intended to support the loans granted by the Bank as part of the dedicated credit offer.

The Group's commitment to support the circular economy also continued within the Wealth Management Division. Eurizon Capital SGR is positioned as a leader in the circular transition, continuing the presentation of the strategy both in Italy, in collaboration with the Group's Private Banking division, and also abroad, where Eurizon organized an event in collaboration with the Italian Chamber of Commerce in Zurich. Eurizon also promotes knowledge of the circular economy in the world of investments through the creation of digital training supports, which have been updated during 2024.

In addition to the financial area, the Group also implements its strategy for the circular economy through specialist support for innovation initiatives and projects that promote the transition of companies. In this context, the Circular Economy Lab, a multi-stakeholder innovation initiative established in 2018 in Milan thanks to the collaboration between Intesa Sanpaolo, Intesa Sanpaolo Innovation Center, Fondazione Cariplo and Cariplo Factory, offers non-financial services to support innovation, with the aim to support and accompany the transformation of the Italian economic system and disseminating new models of value creation in the collective interest, accelerating the transition to the circular economy.

The activity of the Circular Economy Lab, which during the year dealt with issues of increasing the circularity of products and materials, is developed along three lines:

• training activities, through paths to disseminate the culture of circular economy aimed at companies and the academic world, through dedicated workshops and lectures. During 2024, 18 lectures were held for both national and international universities or specialized courses;
• connection activities, through initiatives aimed at creating an open dialogue on the subject, involving a vast national and international network of companies, institutions, universities, research centers and other partners. In this context, 18 Circular Economy dissemination events were held on sectoral verticals in 2024, 6 of which were held within the "ESG Laboratories" of the Group's BdT Division;
• innovation activities, through innovative consulting services aimed at accelerating the transformation path of SMEs and Corporates towards circular business models. In particular, 7 projects were carried out in 2024 with Intesa Sanpaolo client companies.

With the aim of contributing to the spread and consolidation of the circular economy, the Group continued its advocacy activities at international and national level in 2024.

One of the initiatives of international relevance is the collaboration with the United Nations Environment and Finance Programme (UNEP FI) aimed at promoting the best practices of circular economy in the global banking sector.

In particular, in 2024 UNEP FI cited the Circular Economy Lab as a case study within the guidance document for banks called "Circular Economy as an Enabler for Responsible Banking: Leveraging the Nexus between Circularity and Sustainability Impact", recognizing the Group's commitment to supporting corporate customers for the adoption of circular business models.

The same document also cited the Green Bond as an example of sustainable bond products focused on the circular economy, acknowledging the significant results in terms of environmental impacts generated by this initiative and, more generally, the Group's commitment to spreading the values of the circular economy.

The Group's activity continued in 2024 in the task force coordinated by UNEP FI and called "Circular Economy as an enabler to operationalize the nexus between climate, nature, pollution and healthy & inclusive economies" which aims to guide the Principles for Responsible Banking (PRB) from a circular economy perspective, recognizing how the latter can represent the strategic lever for the financial sector to achieve the objectives of decarbonization, restoration of biodiversity, reduction of pollution and support for local economies. The publication of the first non-binding guidelines for banks, to which the Group actively contributed, took place on 18 July 2024 through the two documents Circular Economy as an Enabler for Responsible Banking: Leveraging the Nexus between Circularity and Sustainability Impact, of a general nature, and Circular Solutions to Achieve Climate Targets,  which also includes insights into the interconnections between circular economy and climate change for the construction and textile sectors, as well as a sector-agnostic introduction.

Also at the international level, thanks to the coordination of the Chief Institutional Affairs and External Communication Officer Governance Area, a new collaboration was also launched in 2024 between Intesa Sanpaolo and the Intesa Sanpaolo Innovation Center (ISPIC) with the International Finance Corporation (IFC, World Bank Group) to develop and disseminate new circular economy guidelines and practices in the international banking sector,  with a particular focus on multilateral development banks. As a first concrete action, through ISPIC, the Bank organized a webinar dedicated to the topic entitled "Circular Finance: Practical Experience from Intesa Sanpaolo", which was attended by about 50 people mainly from the IFC, as well as from other multilateral banks.

Among the initiatives of national relevance, the Group's participation, through the Circular Economy Lab, in the activities of the Italian Alliance for the Circular Economy, of which it is the promoter, the partnership with the Freight Leaders Council (FLC) and the renewal of the sponsorship of the Valore Acqua Community promoted by The European House Ambrosetti. In particular, in 2024, activities were developed to strengthen the role and positioning of the Alliance for the Circular Economy, in addition to the scenario analysis aimed at identifying the prospects and potential of the circular economy; with the FLC, the networking activity continued in dedicated events, one of which focused on the presentation of the activities that ISPIC can make available to members, as well as having contributed to the drafting of the "Thematic Notebook" published annually by FLC; finally, with regard to the "Water Value Community", in the 2024/2025 edition it aims to deepen the contribution of the various sectors of the extended water supply chain to the transition from a linear development model to a circular model.

With the aim of promoting the adoption of circular economy practices also internally, the Group continued to experiment with the application of innovative and circular asset management models in the ICT sector. During 2024, the fifth pilot project for the sale of IT hardware decommissioned by the Group was completed, with the aim of enhancing these assets from a circular perspective (e.g., reconditioning, reuse), reducing costs related to warehouse storage and contributing to the reduction of CO₂ emissions related to the related disposal and disposal activities,  in line with the objectives of Intesa Sanpaolo's "Own Emissions Plan". In particular, the sale involved 600 laptops, for a total of about 101 kg of CO₂ saved.

In order to promote and disseminate the circular economy paradigm, many initiatives continued during the year and new projects were launched, aimed both inside and outside the company. For example, with reference to the International Banks Division, four online sessions were organised in 2024 dedicated to the relationship managers of the Group's member banks, with the aim of supporting customers in the transition process towards a sustainable and circular economy, including through the sharing of best practices at Group level. In addition, during the year, the Turin museum venue of Gallerie d'Italia promoted the creation of two cultural initiatives on the circular economy and aimed at the external public, which gave continuity, in the square of Milan, to the photographic exhibition: "Luca Locatelli: The Circle" exhibited in Gallerie d'Italia - Turin from 21/09/2023 to 18/02/2024 and created in collaboration with Fondazione Cariplo and Fondazione Compagnia di San Paolo and with the specialist support of the EMF and ISPIC.

Finally, as part of the initiatives carried out through the Circular Economy Lab, in 2024 the collaboration with the Italian Circular Economy Stakeholder Platform (ICESP)  continued for the dissemination of good practices in the circular economy. Finally, the Circular Economy Lab is a technical partner of Tech4Planet, the National Technology Transfer Hub for Environmental Sustainability, an initiative promoted by Cassa Depositi e Prestiti and co-invested, among others, by Neva SGR, with the aim of identifying and accelerating research projects by promoting the path towards entrepreneurial initiatives.

In 2024, the Group continued its collaboration with Bocconi University in the field of Circular Economy & Finance, involving the independent research center GREEN63 of the university in order to deepen the relationship between circular economy and sustainability, improve the metric for measuring the degree of circularity of companies (called Circularity Score - CS) and evaluate the opportunities offered to the financial sector by the circular transformation of economic sectors, starting, for example, from the theory of de-risking of financial portfolios. A further activity in the research area was the collaboration of ISPIC, through the Circular Economy Lab, with the Energy & Strategy Observatory of the Polytechnic University of Milan for the development of the "Annual Report on the State of the Circular Economy in Italy".