Management of ESG and climate change related risks

The Intesa Sanpaolo Group, in line with the principles outlined in the Code of Ethics, is aware of the importance of a correct and responsible allocation of resources, according to criteria of social and environmental sustainability. Therefore, it promotes a balanced development aimed at redirecting capital flows towards sustainable investments to balance interests such as the preservation of the natural environment, health, work, the well-being of the community as a whole and the safeguarding of the system of social relations.

Also the Rules for the environmental and energy policy and the Principles on Human Right provide for the consideration of the environmental, social and governance risks associated with the activities of customer companies in the investment and lending decisions by the Group.

To this end, the monitoring of these risks provides for:

  • their inclusion in the Risk Management framework, with particular reference to the governance of Environmental, Social and Governance Risks in lending transations, to the Management of reputational Risks and to the management of the Most Significant Transactions
  • their assessment as part of the processes relating to the implementation of the Equator Principles and Reputational Risk Clearing
  • a specific focus on reputational risks and Climate Change risk within the "Risk Appetite Framework"
ESG risks in loans: policies and guidelines

The Group has developed specific Guidelines for the governance of environmental social and governance (ESG) risks which define the general criteria aimed at excluding the financing of companies and/or projects with particularly relevant environmental, social and governance impacts.

Intesa Sanpaolo, in the evaluation of lending transactions, undertakes not to finance companies and projects that are characterised by their negative impact on:

  • UNESCO World Heritage Sites
  • wetlands under the Ramsar Convention
  • IUCN protected areas I to VI

In addition, the Bank undertakes not to finance companies and projects if these are located in areas of active armed conflict, or if evidence emerges, such as legal proceedings brought by the competent authorities, relating to:

  • human rights violations
  • forced or child labour practices

The sector policies regulating the financing to specific sectors of activities characterised by more relevant ESG and reputational risk profile are referred to this general framework.

The sector policies currently in force are the policy in the armaments sector (“Rules on the granting of credit and transactions in the armament sector”), the coal policy (“Rules for lending operations in the coal sector”) and the rules for the unconventional oil and gas sector ("Rules for lending operations in the unconventional oil & gas sector"). 

Moreover, within the Risk Management Framework the transactions with customers operating in sensitive sectors are subject to risk clearing, comprising an evaluation of ESG and reputational risk profile. Sensitive sectors are defined as those sectors that present a relevant ESG risk, including climate risk; a specific focus is provided for in relation to Most Relevant Transactions and to transactions subject to the application of the Equator Principles, voluntary guidelines for the management of social and environmental risks in project finance.

Also the assessment of creditworthiness conducted for corporate customers includes socio-environmental aspects. In particular, an innovative rating model has been developed in collaboration with Confindustria Piccola Industria and validated by the ECB. In the model, social and environmental aspects can also have a positive impact, leading to an improvement in the rating. In addition to the usual economic and financial assessments, the model aims to make it easier to access credit, with more favourable financial terms, by highlighting the intangible qualities of the business, such as trademarks, patents, quality and environmental certifications, research and development activities, innovation and digitalisation, development and competitive positioning projects, management of business risk and being part of a supply chain.

Further details

Guidelines for the governance of environmental social and governance (ESG) risks

Rules on the granting of credit and transactions in the armament sector

Rules for lending operations in the coal sector

Rules for lending operations in the unconventional oil & gas sector

ESG risk management: potential impacts and mitigation actions

The Group has implemented specific processes and responsibilities to understand and manage risks in such a way as to ensure long-term soundness and continuity, extending the benefits to its stakeholders. Below is an overview of the main ESG risks that are significant due to their potential impact on company activities and the related mitigation measures.

Potential risk
Potential impacts
Mitigation measures
Integrity in corporate
Compliance risks
with applicable legislation 
(corruption, money,
laundering, taxation, free
competition, privacy,
labour law) and ineffective
response to regulatory
Risk of providing
employees with insufficient
or no training related to external and internal regulations
Reputational risks

Fines and penalties,
limitations to conducting
Damage to reputation and
Compliance system divided into different levels to monitor
the compliance risk, with specialised functions 
Internal control system 
Definition of corporate internal regulations 
Specialist training for employees 
Introducing a whistleblowing system 
Adoption of internal regulations for the 
conduct of company operations also in 
relation to ESG issues 
Adherence to UNEP FI’s
Principles for Responsible Banking (PRB)
Service quality and
customer satisfaction
Unfair commercial
Inadequate customer
service levels
Inadequate customer
Loss of access to
dissatisfaction with loss 
of competitiveness, 
customers and market 
shares leading to 
reduced profitability
Disputes and complaints 
Fines and penalties 
Damage to reputation and 
Model focussing on the level of
service, on personalised advisory services,
and on transparency
Process of clearing for new
products and services
Careful and proactive
management of complaints
Dialogue with Consumer Associations
Initiatives aimed at ensuring 
accessibility to services
Business continuity plan
Innovation, digital 
transformation and 
Ineffective transition 
from traditional to 
digital channels
IT risk
Business continuity 
in the event of an 
emergency, blocking 
or malfunctions
Loss of 
customers and market 
shares leading to 
reduced profitability
Disputes and 
Fines and penalties
Damage to reputation 
and brand
Prevention of IT risk 
Careful assessment of emerging risks 
Development of an innovative offering/ 
Physical network integration with online 
Dissemination of the digital culture 
Innovations aimed at ensuring 
accessibility to services for people with disabilities
Financial inclusion and 
supporting production
Inadequate offering of 
products/services to 
Reputational risks
Loss of 
customers and market 
shares leading to 
reduced profitability 
Damage to reputation 
and brand 
Offering development in favour or 
financial inclusion for vulnerable people 
Development of solutions in support of 
the third sector 
Offering development to
support production
Sustainable investments
and insurance
Assessment and control
of ESG risks in the
investment portfolios
Investments in controversial
Reputational risks
Failure to comply with 
Loss of competitiveness,
market shares and
customers who are
conscious of ESG aspects,
leading to reduced
Damage to reputation and
Fines and penalties

Integration of ESG factors into the 
Investment process
Development of the range of ESG 
Company engagement activities
ESG training 
Internal control system
Subscription to PRI (Principles 
for Responsible Investment) 
and the Principles of 
Subscription to PSI (Principles 
for Responsible Insurance)
Community support Reputational risks
Damage to reputation 
and brand
Development of investments and 
partnerships with a social impact in the 
Development of training and work 
projects for the next generations 
Initiatives supporting the promotion of 
culture for social cohesion 
Development of institutional initiatives 
in support of the community
Employment protection Conflicts and related 
labour dispute risks
Strikes with impacts on
service continuity for
Employee dissatisfaction
with impacts on
Investments in the Group’s people 
Responsible management of corporate 
restructuring processes, with the 
reallocation of employees to other 
New hires to promote generational 
Management of labour dispute risks 
System of labour relations
enhancement, diversity
and inclusion
of the Group’s people
Inadequate employee
growth and motivation
Incapacity to acquire and
maintain talents 
Termination of 
the employment 
relationship with 
managers holding 
relevant roles
Insufficient focus on 
diversity and inclusion issues
Employee dissatisfaction
with impacts on productivity
Lack of adequately trained
and qualified personnel
Inadequate customer
service levels
Damage to reputation 
and brand
Investments in training activities 
Talent Attraction strategy (short and 
long term) which, broken down by 
various communication actions and 
on different channels, is defined with 
respect to the different targets of 
Talent management programmes (e.g. 
Future leaders) 
Recognition of employees’ merit 
New incentive plans (including LTIP) to 
foster individual entrepreneurship 
Succession plans for business 
Initiatives to enhance diversity and 
inclusion, including training with a 
specific focus on the topic 
Diversity & Inclusion Principles 
Sexual orientation and identity diversity 
Rules for combating sexual harassment 
Commitment to the United Nations 
“Women’s Empowerment Principles” 
Request for certifications on relevant topics
e.g. ISO PDR 125:2022)
Health and safety
of customers and
Accidents in the workplace
Occupational diseases
Risks associated 
with the COVID-19 pandemic
Inadequate employee 
Work/life balance
Employee dissatisfaction
with impacts on productivity
Damage to persons 
arising from the 
COVID-19 pandemic
Damage to persons and objects
during robberies
Damage to reputation 
and brand 
dissatisfaction with 
impacts on productivity 
Loss of skills as a result
of employee exits
Health and safety training 
Certification of the health and safety 
management system (ISO 45001) in all 
branches and buildings in Italy 
Assessment and management of 
infection risk 
Risk assessment for workplaces and 
work processes 
Preventing and combating robberies 
Risk assessment of subjective and 
social conditions 
Assessment of work-related stress 
Work-life balance initiatives 
Flexible working and new 
organisational models 
Offering of solutions for welfare and 
quality of life in the company
Development of climate surveys
Employee well-being
Inadequate employee 
Work/life balance 
Employee dissatisfaction
with impacts on productivity
Loss of skills as result of
employee exits
Risk assessment of subjective
and social conditions
Assessment of work-related
Work-life balance initiatives
Flexible working and new 
organisational models 
Offering of solutions for welfare and  
quality of life in the company
Development of climate surveys
Transition to a  
sustainable, green and 
circular economy
Management of social
and environmental risks
in loans
Transactions or loans in
controversial sectors
Reputational risks
Loss of 
competitiveness, market 
shares and customers 
who are conscious of 
ESG aspects, leading to 
reduced profitability 
Problematic loans or 
need for provisions 
Damage to reputation 
and brand


Inclusion of ESG, climate change 
and reputational risks within the Risk 
Appetite Framework 
Rating model which also includes 
company qualitative aspects on ESG 
Risk clearing processes which include 
environmental, social and governance 
Equator Principles for project finance 
Group Guidelines for the Governance 
of Environmental, Social and 
Governance (ESG) risks 
Inclusion of ESG factors into the 
credit framework with Rules for the 
classification of sustainable credit 
products and lending transactions 
Development of a specific offering to 
facilitate the transition with dedicated 
plafond, including with a view to derisking 
of loans 
Drafting of a transition plan for the 
target sectors 
Employee, customer and stakeholder 
training and engagement 
Research development

Management of risks related to climate change

Intesa Sanpaolo takes into account the social, environmental and governance risks, associated with the activities of its customer companies and the economic activities it invests in and pays particular attention to the in-depth study of sustainability issues related to sectors considered sensitive, i.e. those with a significant socio-environmental risk. In this context, the Bank pays particular attention to the risk arising from climate change (both physical risk and transition risk). Key activities in climate risk management  concern:

  • the identification, assessment and measurement of such risks; 
  • the implementation, development and monitoring of a company-wide risk management framework, including risk culture, risk appetite and credit limits.

Within the Risk Appetite Framework (RAF), the Group has introduced a specific reference to climate risk, working to develop its integration into the existing risk management framework with particular reference to credit risk and reputational risk. 

The potential impacts, the related time horizon (short, medium, long) and the mitigation and adaptation actions taken for each potential risk observed are identified annually, with reference to both indirect and direct risks.

Indirect risks related to climate change

Potential risks
Timeframe* Potential impacts
Actions Opportunities


Changes in public policies 
Technological changes
Changes in customer/
consumer preferences



Reduction of business 
or increase in costs for 
customer companies with 
possible consequences 
on creditworthiness and 
Reputational impacts


Consequences of
climate change on
companies in the
portfolio with consequent
reduction in the
value of assets under
Documentary impacts
Impacts on the offering 
of products and services 
to customers 
Impacts on internal and 
IT procedures
Reputational impacts


Assessment of ESG and 
climate risks on loans 
Inclusion of ESG risks when 
assessing creditworthiness 
Assessment of the materiality 
of ESG risks in business 
Counterparty ESG scoring  
Implementation and updating  
of self-regulation policies 
for the assessment and 
management of the socioenvironmental  
risk of loans in 
sensitive sectors

Participation in Net-Zero 
initiatives with reduction of 
the emissions associated 
with loans

Active monitoring of ESG regulations


Assessment and control of ESG risks in
the investment portfolios
Implementation of sustainability 
self-regulation policies 
Participation in Net-Zero initiatives 
with reduction of the emissions 
associated with investments 
Active monitoring of ESG
IT investments 


Energy transition support through funding to the Green 
Economy and Circular 
Economy and related 
advisory services


Adaptation and expansion 
of the range of products and 

Changes in public policies
Technological changes
Changes in customer/
consumer preferences
Reputational impact,
negative perception
from Stakeholders and
in particular from ESG
investors due to nil or
inadequate management
of such risks
Possible exclusion from
sustainability (ESG)
indices or a worse ESG
position or lower rating

Inclusion of ESG risks
when assessing creditworthiness
Implementation and updating of self-regulation
policies for the assessment
and management of the socio-environmental
risk of loans in
sensitive sectors
Stakeholder engagement initiatives
Participation in international
working groups on climate change
Participation in Net-Zero initiatives 
with objectives to reduce financed 
Active monitoring of ESG
Changes in environmental 
Introduction of new
greenhouse gas emission
limits or new related
reporting systems
Short/medium term
Financial implications
of environmental
regulations and emission
limits and/or taxes
imposed on customers
operating in certain
economic sectors
Participation in working 
groups and initiatives relating 
to climate change 
Active collaboration with 
policy makers to highlight 
the need for stable and clear 
environmental and ESG 
Target setting initiatives 
for the reduction of credit 
portfolio emissions
Offering of dedicated 
financial solutions and 
specialist advisory services 
for customers in the field of 
renewable energies, energy 
efficiency and the transition

Introduction of regulation on
climate risks for the financial



Changes in customer/
consumer preferences

Short/medium term

Short/medium term

Reduction of Group
revenues deriving from
excessive exposure to
more vulnerable sectors
to climate risk




Reduction in Group 
revenues due to the   
increased competition   
generated by the   
growing demand for  
ESG products and the  
fall in demand for non-
ESG services/products

Inclusion of climate risk in risk 
management systems 
Target setting initiatives 
for the reduction of credit 
portfolio emissions 
Counterparty ESG scoring 
ESG sector mapping

Identification of sustainable 
credit products on the 
basis of the “Rules for the 
identification of sustainable 
credit products and lending 
transactions” as part of the 
Group’s Product Governance 
Expansion of the offering of 
transition-related products 
and services 
Rebalancing of portfolios  

Strengthening of the offering 
of products and services for 
the Green economy, Circular 
Economy and the ecological 
Green and ESG bond issues

Extreme atmospheric 
events (floods, landslides,
avalanches, rains, 
hailstorms, heavy 
snowfalls, tornadoes, 
hurricanes, cyclones 
and storm surges)
Financial implications
for corporate and retail
customers damaged
by extreme weather
events, with possible
consequences on their
creditworthiness and solvency
Suspension or moratorium of 
repayments of loans issued 
to customers who incurred 
New subsidised loans 
intended to restore damaged 
Insurance products for 
damage caused by extreme 
climate events

* 0-5 years short term; 5-10 years medium term; 10-30 years long term.

Direct risks related to climate change

Potential risks
Timeframe* Potential impacts
Changes in environmental
Short/medium term
Possible fines in
the event of failure
to comply with new
Constant and precautionary
monitoring of possible changes to
national and European regulations
Introduction of new
greenhouse gas emission
limits or new related reporting
Increased cost of raw 
Short/medium term
Costs for upgrading
heating and air
conditioning systems
and for new monitoring
Costs related to eventual 
taxes connected 
with greenhouse gas 
Increase in costs of
energy supply
Own Emissions Plan 
implementation and monitoring 
Energy efficiency actions 
Increase in the use of renewable 
energy sources 
Preventive actions to replace old 
systems with next-generation 
systems with a low environmental 
impact, as well as consumption 
monitoring systems during the  
renovation of branches and buildings 
Changes in environmental
regulations and standards
that the Group voluntarily
adheres to (ISO standards)
Short/medium term
Costs of changing the
processes of certification
in the event of changes
to standards
Continuous and precautionary 
monitoring of possible changes in
Participation in specific training
courses and workshops
Physical - acute

Extreme atmospheric
events (floods, landslides, 
avalanches, rains, hailstorms, 
heavy snowfalls, tornadoes, 
hurricanes, cyclones and storm surges)
Possible damage to the
Bank’s infrastructure and
possible disruption of
Precautionary assessment of the
hydrogeological risks for buildings
Adoption of a business continuity
plan and measures to prevent/
mitigate/manage physical damage
to the Bank’s structures
Creation of a platform aimed at identifying 
a risk of danger for each real estate asset 
of the Intesa Sanpaolo Group
Physical - chronic
Increase or reduction in
average temperatures
Short/medium/long term
Increase in energy supply 
costs connected with 
greater heat or electricity 
Blackout risk due to 
increased energy demand 
Sea level rise with 
consequent impact on 
buildings located nearby 
Possible fires due to 
increasing heat also in 
areas adjacent to
the bank’s buildings
Energy efficiency actions 
Increase in the use of renewable
energy sources
Preventive actions to replace old
systems with next-generation
systems with a low environmental
impact, as well as consumption
monitoring systems during the
renovation of branches and
Precautionary assessment of sea 
level rise risks Adoption of a business 
continuity plan and actions to mitigate/
manage possible power blackouts 
ISO 14001, ISO 50001 and ISO 45001 
certifications that take into account the 
risks associated with climate change 
Creation of a platform aimed at identifying 
a risk of danger for each real estate asset 
of the Intesa Sanpaolo Group

* 0-5 years short term; 5-10 years medium term; 10-30 years long term.

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