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.

illimity consistently organizes a range of activities to promote dialogue and encourage two-way interaction with shareholders and the broader financial community.

The Policy for managing Dialogue with shareholders sets out the procedures for engaging with all shareholders, aligning with the recommendations in the Corporate Governance Code, which the Bank follows, and adhering to the latest national and international best practices, in accordance with the Bank’s internal rules on handling inside information and all applicable laws and regulations.

Additionally, illimity conducts an annual shareholder identification process, with the assistance of an external company, to map out its entire shareholder base and identify key institutional holders for engagement. Throughout the year, illimity’s management interacts with current and potential shareholders via conference calls, banking conferences, and meetings to discuss illimity’s ESG strategy and gather valuable feedback on implemented actions and goals.

Regarding the materiality analysis for the 2023 Non-Financial Statement (NFS), stakeholder engagement involved nearly 1,500 stakeholders, as detailed in the Materiality Analysis section of the Group’s 2023 Sustainability Report. An online questionnaire was used for both internal and external stakeholders to assign materiality scores (in terms of scale and scope) to impacts, enabling illimity to compile a list of prioritized material topics. The involvement of the Board of Directors, top management, and stakeholders was essential in this process.

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

In its 2023 Principles for Responsible Banking Report illimity Group reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

In 2023, illimity strengthened its client engagement strategy to collect detailed information on counterparties’ ESG issues.

The bank employs a model to assess the ESG risks of companies to be financed at the “customer level,” with a particular focus on environmental risks and climate change impact. This is achieved by gathering detailed information and ESG scores during the initial investigation phase, using specific questionnaires tailored by sector and counterparty size, or by acquiring scores from reputable third-party suppliers at a national and/or international level.

illimity uses the ESGLytics platform to conduct personalized questionnaires for its counterparts, aimed at calculating ESG scores. ESGLytics administers a customized qualitative-quantitative questionnaire based on the counterparty’s size and NACE industry sector. It then processes the responses to provide a score for each ESG pillar—Environmental, Social, and Governance—and an aggregated score to evaluate the overall sustainability level of the counterpart.

For companies that do not receive an ESG score from a direct survey or an info provider, the business divisions request assistance from the Risk Strategy & Group Control Area to perform a desktop analysis of the ESG profile based on the company’s business model and sector. The client engagement process involves guiding clients in transitioning their business models towards sustainability goals through various customer relationship channels. Sustainable economic activities promote a shift towards a low-carbon, resource-efficient, and sustainable economy.

If counterparties’ ESG assessments fall below the tolerance threshold set by the current Risk Appetite Framework (RAF), verified by the Chief Risk Officer (CRO), with reference to the overall ESG score, the feasibility of the operation is contingent upon submitting an action plan. This plan, defined and agreed upon with the financed party, aims to implement measures over a suitable period to address the identified shortcomings adequately.

Additionally, by using an automatic scoring methodology and granular data from an external provider, illimity has been able to analyse the ESG ratings of Italian counterparties within its credit portfolio.

 

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.

FBRH Principles for Responsible Banking (PRB) Assurance:

First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience

• • • FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
    • FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
    • FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

 

References:

This case study is based on published information by illimity Group, 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://a.storyblok.com/f/186519/x/3e102c9be9/illimity-prb-report-2023.pdf

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