ESG in Investments choices
The UnipolSai strategic investment policy defines the investment activities on the entire asset base of the Company in accordance with the nature, scope and complexity of the risks inherent to the company business activities in line with the prudent person principle, and sets out the “Guidelines for responsible investing” to identify and manage specific risks that are significant with reference to ESG Factors (Environmental, Social and Governance) and to financially support sustainable development in accordance with the Group’s support of the UN Principles for Responsible Investment.
The guidelines were approved by the Board of Directors in December 2019, which updated them in February 2021, and define the Group’s engagement in the following:
- integration of the ESG factors with the analysis of the investments and related decision-making process, the selection criteria of the issuers and management of the investments themselves;
- progressive expansion of the oversight of financial assets in terms of ESG performance and extension of its offer of financially sustainable products;
- thematic investments and investments that make an impact, through which the Group can play an active role in helping to reduce environmental or social problems such as the challenges of climate change, the depletion of resources, and economic and social inequality.
ROLE OF ESG FACTORS IN THE DEFINITION OF INVESTMENT CHOISES
The ESG Factors are integrated into decision-making processes relating to financial investments by adopting the following sustainable and responsible investment strategies:
- Screening based on international agreements (norm-based screening) which help define the conduct-based exclusion criteria;
- Product-based and conduct-based exclusions.
The evaluation of the eligibility of issuers is carried out with the support of a specialised provider who analyses the ESG performance on the basis of a methodology defined jointly with the applicable Group divisions, on the basis of the most widely-recognised international rules and standards. By integrating the results of this analyses with the investment decision-making process, the Group monitors the sustainability risks and the responsible behaviour of both corporate and government issuers.
Every quarter, the Group tracks what portion of its assets meets the sustainability criteria defined by the Guidelines; the results of the tracking for the year 2020 are shown below.
THEMATIC AND IMPACT INVESTING
Alternative investments (thematic and impact) concentrate on areas or businesses related to the development of sustainability, and focus on one or more ESG issues.
Part of the Group’s portfolio is dedicated to the development of thematic investing to support the achievement of the 2030 Agenda. The Unipol Group views thematic investing as an opportunity making it possible to channel financial resources towards social or environmental targets, with the advantage of being able to measure the results achieved.
Due diligence has been developed for the selection and reporting of these alternative investments, which, in addition to the usual financial analysis, envisages constantly renewed and updated environmental, social and governance (ESG) criteria and the mapping of non-financial risks that can have a reputational impact.
Thematic and impact investing are the subject of a specific target of the Unipol Group’s 2019-2021 Strategic Plan; more specifically, Unipol has undertaken to increase these investments by 83% over the three-year period, going from 326 million in 2018 up to 600 million in 2021.
Investments with these characteristics grew by a total of 18.1% in 2019.
In the table below, investments are classified based on their positive impact on the various SDGs.
ROLES AND RESPONSIBILITIES IN THE APPLICATION OF THE SRI INVESTMENT POLICY
The Board of Directors approves the results of SRI screening in the Group’s Integrated Report; it approves the objectives of the SRI strategy every three years and monitors them annually.
The Chief Investment Officer and the Investment Committee discuss and approve the investment process and the related activities.
The Manager of the Alternative Investment office, with the support of staff dedicated to SRI investments, researches sustainable investment opportunities (positive impact on SDGs) within the asset classes and make investments in compliance with the SRI policy; in particular, the managers of ESG portfolios make investments according to the SRI Policy of the Fund.
The sustainability department oversees the process for integrated sustainability reporting.
INTEGRATION PROCESS OF ESG FACTORS