The Group, which for some years now has adopted an integrated strategy which is capable of combining growth in business and financial solidity with social and environmental sustainability, has identified a series of cross-divisional actions to help contribute to a more sustainable future in terms of reducing impacts on the environment, being sensitive to the issues of inclusion and diversity, and expressing support for the local community.
The aim of consolidating the responsible approach to banking, which has always been firmly rooted in the Bank’s traditions, has led to qualitative and quantitative objectives being set in the Plan guidelines and included in the staff performance evaluation and remuneration policies for the Group’s entire corporate population and senior management in particular.
The targets identified, which serve to integrate Environmental Social & Governance (ESG) topics even more firmly into the corporate strategy, involve the following main topics:
The Group is committed to achieving carbon neutrality by 2050 as a result of its membership of the Net-Zero Banking Alliance (NZBA) and has set an interim target of a 35% reduction in financed emissions intensity for the CIB loan book by 2030 (down 18% over the Plan time horizon), by which date it also expects completely phase out its involvement in the coal industry.
In order to take further steps on the path to addressing climate change, the Group also intends to continue its efforts to reduce its own direct impact on the environment, confirming its stance of using electricity 100% from renewable sources and maintaining carbon neutrality on its own emissions.
In addition to these actions, climate and environmental factors will be increasingly integrated into risk management, lending and investment processes.
The Group wants to make a positive contribution to social change by promoting a corporate culture based on diversity and inclusion (with over 30% of women Key Function Holders, over 20% executives, 50% of total hires, and gender parity in the career advancement rate), with over €20m in support for projects with social and environmental impact and suppliers screened using ESG criteria for at least 70% of the Group’s total procurement expenses.
With the aim of aligning Mediobanca Group senior management remuneration to measurement of the long-term performance on which the 2023-26 Plan is based, a new Long-Term Incentive Plan 2023-26 will be introduced. A weighting of 50% of total variable compensation will be introduced for the Group CEO and Group General Manager (vs 20% previously), and this incentivization instrument will be extended to include other selected Group figures considered to be strategic in reaching the objectives set. Payment will be entirely in equity over a long-term time horizon, with 20% of the ESG objectives focused on Climate Change and Diversity & Inclusion indicators.
The Plan will be submitted to the approval of shareholders at the AGM to be held in October 2023.
The desire to invest in people and engage them directly in achieving the 2023-26 Plan objectives will result in the launch of the first Employee Share Ownership and Co-investment Scheme for staff over the Plan time horizon. The purpose of this scheme is to foster engagement and ownership among Group employees who play an active role in the creation of sustainable value.
The Plan objectives will be pursued by offering solutions, products and advisory services to support clients in the transition towards a sustainable economy, helped by training programmes and awareness-raising campaigns to promote increased sensitivity to ESG topics both within and outside the Group.
Broad ESG product offering differentiated by business lines:
- Wealth Management: more than 50% ESG products (SFDR Articles 8 and 9 funds) in client portfolios, and 50% increase in ESG funds manufactured by the Group asset managers; green mortgages to account for some 20% of new production by the end of the Plan.
- Consumer Finance: ESG loans CAGR +15%.
- CIB: establishment of an experienced dedicated Energy Transition advisory team; 50% of bonds originated and 40% of new corporate loans with ESG or ESG-linked features.
- Group: at least two sustainability bonds issues.
Embedding an ESG culture
- ESG training for all staff and FAs, and EFPA certification for WM advisors.
- More than 35 million emails containing tips on green and financial education to be sent to clients by Compass.
- Engagement with corporate clients and support for them in the climate transition.
DIVERSITY & INCLUSION
100% employees trained in ESG.
>€20m support to projects with social and environmental impact.
Stop lending to/investing in tobacco2
70% of procurement expenses screened with ESG criteria
At least 2 Sustainability bond issues
New Long-Term Incentive Plan featuring:
Launch of the first Employee Share Ownership Plan to foster engagement and ownership at all levels.
Full adoption of Tax Control Framework for all the Group Italian banks .
- No exposure to coal mining and agriculture. Four sector targets published by September 2023 (Automotive and Power already published; Cement and Aviation will be added). The remaining NZBA sectors will be disclosed by September 2024
- In CIB lending (excluding Specialty Finance) and proprietary investment portfolio in all markets
- Key Function Holders: Group senior management
- Two proposed KPIs to be included in the 2026 LTI: % of female executives; reduction in financed emissions intensity