Dialogue with stakeholders and materiality matrix

The Intesa Sanpaolo Group 2021 Materiality analysis process was set out according to the following macrophases:

• Stakeholder mapping of Intesa Sanpaolo Group
• identification of the relevant issues for the Intesa Sanpaolo Group and its Stakeholders based on benchmark analyses, national/international documentation and with respect to the strategic priorities defined in the 2018-2021 Business Plan
• prioritisation of the issues through the involvement of Intesa Sanpaolo’s Sustainability Managers (key contacts for ESG issues identified in each Area and internal Division) and the Stakeholders of the Group, in order to define the positioning of the relevant issues within the materiality matrix. In addition, the Steering Committee collaborates in identifying potentially relevant sustainability issues (ESG) for the definition and updating of the materiality matrix
• validation of the materiality matrix.

In 2021, the material issues identified in 2020 in response to the requests contained in Italian Legislative Decree no. 254/2016 were mostly confirmed, including in terms of positioning. The analyses carried out made it possible to update the nomenclatures and descriptions of some issues, with the aim of providing a better explanation of some of the key aspects found. Furthermore, through the stakeholder engagement and by listening to the Sustainability Managers, it was possible to detect slight changes also in terms of positioning both from the point of view of the X axis (relevance for stakeholders) and from that of the Y axis (impact on strategies). The main changes introduced in 2021 include the new topic “Climate change”, confirming the Group’s strong emphasis on strategic and regulatory aspects. Thus, the Group formalised new and important objectives towards environmental transition, such as joining the United Nations Net-Zero Alliances for the reduction of net emissions down to zero by 2050, thereby expressing its active role in the collective pursuit against climate change. The new topic also incorporated the one previously referred to as “Direct environmental impacts” in the 2020 CNFS. In addition, the meaning of the topic “Innovation and digital transformation”, which has now become “Innovation, digital transformation and cybersecurity”, was changed in order to further highlight the relevance of IT security related aspects.

The related issues refer to: fight against corruption, fight against money laundering, compliance with tax legislation, protection of free competition, respect for privacy and data protection, compliance with labor law, audit activities, litigation and sanctions.

Risks and Opportunities

• Corruption prevention
• Compliance and data breach risk management
• Investments in sensitive sectors
• Fight against organised crime

Trends and national and international objectives

• Spread of organised crime
  
• Incentive of ethical conduct
• Fight against active and passive corruption
• Protection of free competition
• Compliance with labour laws
• Privacy, Cyber & data security
• Anti-Money Laundering
• Fraud prevention 
  

Being a solid Bank, with growing profitability, allows the Group to contribute favorably to the interests of shareholders and all other stakeholders.

Risks and Opportunities

• Credit quality
  
• Efficient use of capital and diversification
  
• Attraction of sustainability aware investors 
• Management of business, ESG and reputational risks 
• Changes in the organisational structure
  

Trends and national and international objectives

• Globalisation and competitiveness
  
• Evaluation of long-term scenarios including climate-related risks and opportunities
• Promotion of transparent, efficient and ESG friendly financial markets
• Dissemination of ESG values and culture
• Assessment of the financial implications linked to ESG impacts
• Integration of ESG issues into strategic business planning processes 
• Growing focus on corporate resilience and business continuity

The Group is focused on supplying excellent banking, financial and insurance products and services to customers, activating development levers for the local areas in which it operates.

Risks and Opportunities

• Proximity to customers and operational streamlining
• Product innovation and service models
• IT risk
• Unfair commercial practices
• Reputational risks associated with the application of ESG factors/criteria

Trends and national and international objectives

• Growth in bank deposits and increase in loans, due to or in relation to the uncertainty linked to the pandemic context
• Business continuity and consumer satisfaction
• Reorientation of the financial system towards an offer that incorporates the ESG criteria
• Customer health and safety
• Service digitisation
• Multichannel services and customised offering
• Increasing interest in cryptocurrencies and non-fungible tokens (NFTs)

Savings management and customer insurance protection are central to the Intesa Sanpaolo Group's activities, also from an ESG perspective.

Risks and Opportunities

• Offer diversification
• Management of reputational and ESG risks in investments and in relation to insurance products

Trends and national and international objectives

• Investors' attention to ESG aspects and to the measurement of the sustainability of investments, also as tools to combat climate change
• Customer satisfaction with asset management by financial operators
• Integration of ESG risk factors into investment management and insurance activities
• Promotion of sustainable lifestyles
• Dissemination of ESG integration practices negative/positive screening, impact investing
• Growing focus on sustainability reporting for financial services
  

Our commitment to supporting the transition to a low-carbon economy through direct mitigation of its emissions and supporting green initiatives and projects for our customers.

Risks and Opportunities

• Risks linked to climate change
• Management of reputational and ESG risks in loans and insurance products

Trends and national and international objectives

• Support to the growth of demand and supply of low carbon products and services
• Increase in Italian companies' green competitiveness
• Transition to a sustainable economy through a collaborative network and the promotion of circular development models
• Support to loans for environmental projects 
• Growing focus to the circular economy, as well as to the protection of biodiversity and ecosystem services
• Dissemination of the environmental protection culture

Intesa Sanpaolo generates significant environmental impacts both deriving from its direct activities and from its business; as a financial operator therefore plays a fundamental role in orienting capital towards a sustainable economy in the short and long term.

Risks and Opportunities

• Risks related to climate change
  
• Operational protection in risk situations
• Fluctuation of energy costs and related impacts on business costs and investments 
  

Trends and national and international objectives

• Increase in global average temperature
• Sea level rises and increase in their temperature
• Increased frequency of extreme weather events
• Adverse impacts for biodiversity and competition for natural resources
• Increased set of regulations applicable nationally and internationally
• Identification, management and reporting of governance, strategy, climate risk management, climate-related objectives promoted by the TCFD
• Reduction and reporting of atmospheric emissions to combat climate change
• Responsible use of energy and natural resources (including correct waste management with a view to circularity)
• Clean and accessible energy and water
• Promotion of actions aimed at mitigation and adaptation to climate change
  

Thanks to their professionalism, their different skills and their growth paths, the people of Intesa Sanpaolo continue to guarantee excellence in the quality of the service. merit, as well as attention to the issues of diversity and inclusion.

Risks and Opportunities

• Talent attraction and retention
• Investments in training
• Diversity, equity & inclusion management
• Enhancement of human resources

Trends and national and international objectives

• Incentive of the banking consultant's proactivity for the dissemination of ESG products
• ESG criteria in the incentivisation and inclusion of employees
• Gender diversity, equity and inclusion
• Dissemination of periodic performance evaluation models integrated with ESG elements

For Intesa Sanpaolo, the protection of employment is a priority issue to ensure economic solidity in the medium to long term and one of the elements that also characterized the 2018-2021 Business Plan

Risks and Opportunities

• Employment
• Labour law risks
• Changes in the organisational structure
• Lifelong learning

Trends and national and international objectives

• Consultation and inclusion of employees
• Continuity of employment/Welfare, well-being and social safety nets
• Growing digitalisation and distribution of hybrid ways of working
• Job mix transformation
• Increasing work mobility and competition for the best talents
  

Intesa Sanpaolo attributes a central role to the economic and social growth of the areas in which it operates, a fundamental element rooted in the history and way of operating of the Group.

Risks and Opportunities

• Financial inclusion
  
• Support to SMEs
  
• Management of reputational and ESG risks in loans
  

Trends and national and international objectives

• Increased levels of financial education including in terms of sustainability
• Integration of ESG risk factors into credit management
• Actions to eradicate poverty
• Support for young people and the production sector

Intesa Sanpaolo attributes a central role to projects aimed at the social, cultural and civil growth of the communities in which it operates.

Risks and Opportunities

• Brand enhancement
• Group's leadership in society for the dissemination of the sustainability culture
• Promotion and measurement of activities with high social impact
• Investments in sensitive sectors and reputational risk
• Management of current socio-demographic changes

Trends and national and international objectives

• Social and economic development of local communities
• Strengthening cooperation to achieve global sustainable development goals
• Dissemination of social finance instruments
• Increase in social inequalities
• Rising average age of the population

For Intesa Sanpaolo, the definition of concrete approaches, policies and measures for the development, management and strengthening of a modern and integrated corporate welfare system, also central to maintaining high levels of satisfaction for its people, is of fundamental importance.

Risks and Opportunities

• Company welfare initiatives
• Work-life balance and flexibility
• Management of employees' health and safety risks

Trends and national and international objectives

• Attention to company climate
• Attention to employees' health and safety
• Dissemination of welfare and well-being practices
• Application of protocols for the prevention and mitigation of biological risks

Intesa Sanpaolo intends to maintain sustainable business growth by leveraging the active involvement of people and a cutting-edge digital infrastructure

Risks and Opportunities

• Compliance and data breach risk management
• Service quality
• Privacy
• IT risk
• Market and services diversification

Trends and national and international objectives

• Digital transformation/Digital identity, online payments and billing
• New technologies to ensure greater accessibility, effectiveness and excellence in the services provided
• Digital customer experience
• Dissemination of the use of Home Banking services
• Increasing attention to the development and continuous improvement of data governance processes, cyber attack prevention and IT infrastructure resilience
• Dissemination of artificial intelligence, blockchain technology, Distributed Ledger Technology (DLT) and robotics
  

Network personnel, staff personnel, junior employees, senior employees, managers, top management, Trade unions.

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Retail and household customers, SME customers, Large corporate customers, Consumer Associations, Public authorities and Public Administration, Third sector, Professional associations.

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Small investors, Foundations, Institutional investors, Shareholders' associations.

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Large-scale suppliers, Small-scale suppliers, Trading partners, Sub-suppliers.

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Environmental Associations, Future generations, Scientific community.

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Associations representing our stakeholders; Regulatory authorities; National and international public institutions; Media.

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For the Intesa Sanpaolo Group, the institutionalised forms of stakeholder engagement are opportunities for listening and dialogue, that are essential for understanding the level of satisfaction of its stakeholders in relation to the work carried out by the Bank. For certain Departments, stakeholder engagement is at the heart of their work - for example Customer Satisfaction Service, Relations with Consumer Associations Office and Investor Relations Service. 

For several years, ESG & Sustainability has been promoting ways of engagement that are focused on social and environmental responsibility and an increasing inclusion of these issues in the traditional and institutionalised engagement activities.

In this period, the process of including stakeholders in CSR issues has progressively developed: from an initial phase where listening was substantially aimed at resolving critical situations, to the definition of structured processes which are planned each year and are increasingly based on business and management activities. Preventative listening to our stakeholders (not as a result of a "reputational crisis") aids us in establishing a relationship of trust between the company and stakeholders, and, at the same time, in identifying new opportunities with a view to competitive positioning on the market

Generations of Stakeholder Engagement (AA1000, AccountAbility, 2015)

Third Generation: strategic and integrated engagement for sustainable competitiveness

Second Generation: systematic engagement aimed at managing risk and understanding the key stakeholders of the organization
 

First Generation: engagement triggered by external conditioning factors to reduce contingent problems

The strength of the relationship with stakeholders is evaluated on the basis of three criteria:

• Dependency: the stakeholders’ degree of dependency on the Bank, in economic terms as well as geographical, relational, etc.
• Influence: the degree of influence the stakeholder has over operational or strategic decisions of the Bank, the impact that the stakeholder may have on the Bank’s “licence to operate”
• Proximity: the degree of frequency and intensity of the relation between the Bank and the stakeholder.

To define and implement its stakeholder engagement process, Intesa Sanpaolo identifies the following principles as the foundation on which to build highly effective stakeholder engagement:

• Inclusion, meaning promoting stakeholder engagement in developing and attaining a responsible and strategic response to sustainability
• Materiality, meaning understanding the relevance and importance that an issue holds for an organisation and its stakeholders
  
• Responsiveness, consisting in providing an adequate response to issues raised by stakeholders, through decisions, actions and results as well as through communication activities.

The stakeholder engagement process implemented by Intesa Sanpaolo was developed along two levels:

• the operational (or overall) level aims to verify the degree of consistency perceived by several categories of stakeholders between the commitments undertaken and the actions effectively implemented by the Bank. The most suitable methods for this type of engagement are questionnaires and quantitative surveys, and structured forms of listening such as focus groups 
  
• the strategic (or planning) level aims at engagement involving strategic issues for the Bank and at offering stakeholders an opportunity to contribute to the planning of the Bank’s future strategy. For this type of engagement, the most suitable methods are in-depth interviews or multistakeholder engagement methods which also involve the Bank in direct contact with the stakeholders involved 

Intesa Sanpaolo annually conducts the stakeholder engagement according to the process defined by the AA1000 reference standard of AccountAbility and uses specific engagement methods for the various categories of stakeholders, also addressing the issues represented in the materiality matrix.

The choice of the engagement method depends not only on the type of involvement to be achieved (Operational or Strategic), but also on the degree of maturity of the issue to be addressed and on the representativeness of the stakeholder to be involved.

For example, in the case of issues that have a transversal impact on several of the Bank's activities, such as climate change or the issue of internationalization, the most suitable methods for strategic involvement have been selected (in-depth interview and multi-stakeholder forum), conversely, for issues relating to a single stakeholder such as employee incentive systems or the quality of customer relations, methods such as focus groups or quantitative questionnaires have been adopted.

The methodology provides for following activities: