Case study: How Mediobanca works with its clients and customers to encourage sustainable practices

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

Mediobanca considers it essential to take into account the perspectives and expectations of its stakeholders—those who have an interest or stake in the company’s operations for various reasons. These stakeholders are categorized as follows: “Shareholders and investors,” “Clients,” “Staff,” “Trade union organizations,” “Entities and institutions,” “Community,” “Suppliers and commercial partners,” and “Agents and promoters.” Mediobanca organizes various engagement activities for each of these categories.

In 2017, the Mediobanca Group conducted its first materiality analysis, resulting in the creation of a materiality map that has been updated annually through multi-stakeholder forums and online surveys to identify increasingly sensitive issues and to concentrate actions and reporting on them. Beginning in 2023, the methodology was revised to align with “GRI 3 – Material Topics 2021,” which emphasizes evaluating the most significant positive and negative impacts the Group has on society and the environment (impact materiality). In 2024, initial steps were also taken towards adopting the European Sustainability Reporting Standards (ESRS) developed by EFRAG to prepare the Group’s materiality framework for the upcoming EU Corporate Sustainability Directive (“CSRD”), expected to take effect in the next financial year.

Stakeholders within each of these categories have been invited to share their opinions. The results from this engagement have shaped the identification and prioritization of material topics. Key issues include “Ethics and integrity in business,” “Sustainable finance,” “Customer satisfaction and quality of service,” “Support for the ecological transition,” “Environmental protection and focus on climate change,” “Inclusion and financial education,” and “Digitalization, innovation, and cybersecurity.” These findings have informed the ESG targets set out in the 2023-26 Strategic Plan as well as the selection of PRB impact areas.

The Mediobanca Group believes that adhering to ESG criteria can enhance long-term performance for investors. Therefore, it encourages the companies it invests in, or plans to invest in, to engage in discussions about their sustainability approaches. The Group is also dedicated to “active ownership” practices, as applicable to various activities, participating in annual general meetings of the companies it has invested in, guided by their specific voting policies and directives.

Relations with suppliers are managed according to principles of fairness and integrity, with suppliers required to sign a declaration affirming that they treat their employees equally, without distinction and/or discrimination (in terms of policy, religion, etc.). They must also reject forced and child labour, denounce any form of harassment, and ensure decent working conditions for all staff. Any suppliers that do not accept the Mediobanca Group’s Code of Ethics or decline to sign this declaration are excluded from the Group’s supply chain. To achieve the goal stated in the 2023-26 Strategic Plan of having 70% of procurement expenses assessed according to ESG criteria by the end of June 2026, Group Procurement has evaluated a total of 155 counterparties so far, representing 68% of the suppliers managed by the Group and 65% of turnover (compared to 28% and 4% at the end of June 2023).

Mediobanca also actively collaborates with various public entities, institutions, trade union associations, and internationally recognized frameworks to promote a sustainable business approach. The Group plays an active role in its local community and aims for long-term growth and value creation that benefits all stakeholders while respecting people, the environment, and society as a whole.

On the climate side, during 2024, the Mediobanca “Ufficio Studi” conducted an analysis in partnership with Centro Studi Tagliacarne and Unioncamere (the Italian association of chambers of commerce) to evaluate the sensitivity of Italian mid-cap family businesses to green issues. This comprehensive review assessed the actions these companies have taken, the related investments, the challenges faced in implementation, and identified best practices. The analysis also sought to uncover any sectoral, geographical, or size-related trends. The study was based on a detailed survey distributed to around 4,100 mid-sized Italian family-owned manufacturing firms, while an additional 500 medium-to-large family-owned manufacturing companies received the survey for benchmarking purposes.

Mediobanca also collaborates with ABI (Italian Banking Association) and ABI Lab (ABI’s research and innovation centre) on ESG and climate-related initiatives, including the ABILab “Green Banking” Survey, which focuses on energy efficiency and environmental reporting.

Since June 2021, Mediobanca SGR has adhered to the Italian Stewardship Principles established by Assogestioni, which outline guidelines for engaging with investee companies on environmental matters.

For further information on climate-related interactions, please refer to Mediobanca’s TCFD 2023-24 report.

The Mediobanca Group believes that an inclusive society is built on mutual respect and solidarity, ensuring equal opportunities and a decent standard of living for all. To support this belief, the Group participates in various initiatives. In particular, in the area of financial inclusion, Mediobanca has partnered for several years with Junior Achievement, the largest global non-profit organization for economic and business education in schools. In October 2023, they launched a new financial education and career guidance program, “CONTA SUL FUTURO!” (“Count on the Future”), aimed at middle school students. This partnership underscores the Group’s commitment to enhancing financial literacy among younger generations, with Group volunteers serving as “company experts” to assist teachers in the middle and senior schools during lessons on economics, business studies, and personal finance.

How did Mediobanca work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2024 PRB Report Mediobanca reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

Mediobanca is dedicated to making a positive impact on society and to assisting its clients through their transition processes, while conducting engagement initiatives to raise awareness of sustainability issues among its counterparties.

The Group’s ESG Policy, which has been adopted by all Legal Entities within the Group, outlines the guidelines for integrating ESG criteria into lending, investing own funds, and providing investment advice to clients. This Policy is founded on a blend of negative and positive screening criteria.

In addition to the overarching principles applicable across all business types, the Group has established specific positive and negative screening criteria tailored to different areas of activity. Notably, for financing and proprietary investment activities, distinct policies have been created concerning biodiversity and excluded materials, as well as sectors deemed sensitive from an ESG perspective. These sectors include defense and firearms, forestry and the use of forested areas, agricultural production, mining, energy production, sale and consumption, and infrastructure and transportation.

The Policy incorporates new restrictions on sectors and operators that negatively impact the climate, including commitments to exit from tobacco globally by 2026 and from thermal coal by 2030. Additionally, it includes a dedicated section addressing engagement activities with clients in high-impact sectors, particularly those counterparties misaligned with net-zero objectives for their sector.

Mediobanca actively engages with and supports its clients and portfolio companies in their efforts to achieve net-zero emissions, thereby facilitating the achievement the Group’s own transition goals.

The Group is committed to supporting the transformation of high-impact sectors, continuing to finance them in the short term, provided that those involved develop replacement technologies. While withdrawing financing can incentivize decarbonization, it may also unintentionally extend the operational lives of high-impact assets or exacerbate their greenhouse gas emissions profiles if such assets are sold to less climate-conscious parties. This strategy, referred to as “managed phase-out,” allows the financial system to effectively reduce the carbon footprint of the real economy, taking ownership of it rather than transferring the responsibility elsewhere. It also helps prevent the financial marginalization of firms with credible decarbonization plans in crucial sectors, thus supporting their transition and engaging various stakeholders in facilitating a “just transition” that ensures the continued provision of essential services.

To this end, Mediobanca has adopted an engagement framework outlined in its 2024 PRB Report to assist counterparties in transitioning to more climate-responsible business practices while aligning the Group’s investments with Net Zero Scenarios. For an update on the level of implementation, please refer to Mediobanca’s 2023-24 TCFD Report.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

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References:

This case study is based on published information by Mediobanca, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.mediobanca.com/static/upload_new/prb/prb_report_2024.pdf

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