During 2021, activities continued on the one hand for the promotion of initiatives to support innovation and growth, in line with European Union projects and objectives and, on the other, for monitoring and advocacy towards regulators and policies. -European makers. With advocacy activities, Intesa Sanpaolo makes its contribution to the discussions relating to regulation in the banking, financial and customer support fields with the ultimate aim of fostering its role in supporting the necessary relaunch of the real economy.
2021 was a year that saw the continuing of the increasing trend of the political pressure at European level for sustainability, that remains as a priority and a central issue by the Von der Leyen Commission.
The political centrality of environmental sustainability (in all its forms) is also demonstrated by the intensity of the initiatives launched in 2021, including the presentation of the "renewed strategy for sustainable finance" and the "Fit for 55" legislative package (which includes a series of sectoral legislative initiatives to achieve the 2030 objectives of reducing climate-altering emissions). In particular, the new strategy for sustainable finance lays the foundations for a series of legislative interventions that are directly relevant to Intesa Sanpaolo, some of which were presented as early as 2021 and for which the interests of the Group were represented, in the manner provided for by European legislative processes.
2021 also saw the extraordinary situation caused by the Coronavirus pandemic continue, which led to the need for extraordinary actions to revive the European economy and which was characterized by a new milestone of European integration with the adoption of the Next Generation EU (NGEU). In fact, 2021 saw the first issues of common debt to finance the Recovery and Resilience Facility, the main financing instrument for national recovery and resilience plans (NRRP). Among these first issues, the first European Green Bond issue stands out, with which the EU has started the path that should lead it to be the largest Green Bond issuer in the world.
Intesa Sanpaolo has actively followed these developments, representing to the European institutions the positions of the Group and the opportunities for collaboration linked to the great expertise that we can offer, also on aspects related to environmental and social sustainability.
In addition, advocacy and monitoring of the European Commission's initiatives included in the first Action Plan on Sustainable Finance continued during 2020, and the Group continued to be an active member of the European Banking Federation (EBF), of the European Mortgage Federation (EMF) and of the Association for Financial Markets in Europe (AFME) working groups on Sustainable Finance.
In addition, Intesa Sanpaolo has actively engaged various structures of the European Commission to raise awareness of the aspects of derisking that emerge from studies on the financing of the circular economy, supporting its Circular economy team and promoting the Group's initiatives in this area.
With regards to banking digitalization, an ongoing coordination of internal and external working groups active on issues such as FinTech and innovative digital payments, Distributed Ledger Technology and Blockchain, cloud, cybersecurity, artificial intelligence, data economy, privacy, new digital assets (such as crypto-assets) was ensured. The aim was promoting a regulatory framework in line with the Group's position at European level, according to an approach aimed at encouraging innovation on one hand and consumer and investor protection on the other. On these issues, the collaboration with European trade associations has continued, with the participation of Intesa Sanpaolo experts in thematic working groups that have defined the positions of the industry on the main European initiatives in the digital field.
The Group is also following the legislative process of the European Commission's proposed regulation on DORA (Digital Operational Resilience Act), which is part of the broader "Digital Finance" package. DORA aims at making the financial sector more resilient to cyber risks. The Group is continuing to play its role in the Public-Private Partnership on Cybersecurity, supported by the European Commission, through its membership in ECSO (European Cyber Security Organisation) to develop innovative European cybersecurity solutions.
The Bank is participating in a European project that has received funding to develop a "common application" for the harmonization of cyber incident reporting.
In relation to blockchain, the Group has become a member of INATBA – the International Association for Trusted Blockchain Applications - which offers DLT developers and users a global discussion forum to interact with regulators and policy makers and take blockchain technology "to the next level."
On cloud, the Group continues to oversee the activities of the Cloud Banking Forum, organized by the European Banking Federation, whose role is to facilitate the dialogue between relevant authorities, cloud services providers (CSPs) and banks with the aim of promoting a harmonized supervisory approach in relation to cloud computing and of supporting the rapid adoption of public/hybrid cloud solutions in the banking space.
From the point of view of banking regulation, the Institutional Affairs Department (DIA) in 2021 followed the legislative activities relating to i) the review of the legislation on capital requirements, ii) the management of banking crises and the completion of Banking Union, iii) initiatives on financial services and capital markets and iv) legislative proposals on retail credit. In particular, as part of the new banking package presented in autumn 2021, the Group's advocacy activity continued to support proposals aimed at encouraging green investments, infrastructure projects and support for the real economy, including trade finance.
With reference to prudential requirements, the bank is actively working both with ABI and with associations at European level on possible support factors for ESG assets. In particular, ISP, the Bank participates in the Energy Efficient Mortages initiative supported by EMF. Furthermore, for the relaunch of the securitization market, the Bank participated in associative roundtables with EBA and is contributing to the possible definition of green securitization.
The Bank also monitored the European Commission's new Action Plan on Non-Performing Loans and in particular the regulatory proposals regarding the directive on the creation of a secondary market for NPLs (credit servicers, credit purchasers). The appropriate calibration of these measures will enable the development of a sounder banking system, with a further protection of businesses and savers at EU level.
The bank also continued its monitoring and advocacy activities on the new European Commission's Action Plan on non-performing loans, in particular the proposals regarding the harmonization at EU level of the data to be provided for the purchase and sale of loan portfolios.
As regards the financial markets, the regulatory initiatives falling within the scope of the new EU action plan on the Capital Markets Union (CMU), and the contingency measures adopted by the European institutions following of Brexit (including the equivalence decisions of the British central counterparties responsible for clearing derivatives). As regards the CMU, we point out the ESAP (European Single Access Point Regulation) legislative initiative, published in November 2021 and currently being analyzed by the co-legislators. The initiative aims to promote the establishment of a platform that acts as a single and centralized point at EU level of free access to relevant information (including information on ESG matters) on EU, financial and non-financial, listed and unlisted companies (including SMEs) object of potential investment, in order to give them greater visibility towards investors.
Lastly, as regards retail credit, Intesa Sanpaolo followed the legislative proposal for the revision of the Consumer Credit Directive, published in June 2021 and currently under discussion among the co-legislators, and the work relating to the consultation on the revision of the Mortgage Credit Directive. (MCD), which will also be revised and updated. In the Consultation, particular attention was paid to the so-called green mortgages, testifying to the interest of legislators and the market in ESG credit categories
The Group functions involved are kept constantly updated through periodic newsletters concerning European policies for growth, innovation, support to businesses, digital policies and those relating to banking and financial market regulations. Targeted updates (so-called EU Regulatory Alerts) are also sent, in the presence of significant news related to regulations that require particularly attention due to the impact they may have on the Group's strategy and activities and, depending on the priority indicated, require the definition of the Group's position to be presented to the European institutions and other stakeholders.
In order to make the activities of the internal working groups more effective, support and training are provided to Group Departments and Services, in particular through seminars aimed not only at presenting the peculiarities of the European legislative process and the possibility for the Group to influence its final decisions, but also at illustrating the status of the art of the most relevant incoming regulations.
Since the SSM (Single Supervisory Mechanism) was launched at the end of 2014, the Department maintains an ongoing relationship with the Single European Supervisor, coordinating the Group's annual supervision plan, aiming to ensure due consistency and uniformity in interaction processes with the supervisor and to promote a widespread culture of "supervisory awareness" to increasingly strengthen the capacity to respond to Supervisor's requests. The Bank also maintains, through its dedicated structures, an ongoing relationship also with the Single Resolution Board, the EU authority responsible for managing the resolution of large banks in difficulty.