Sustainability Report

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Sustainability Report Consolidated non-fi nancial 2019 statement pursuant to Legislative Decree No. 254 of 30th December 2016 Sustainability Report Dichiarazione consolidata di carattere non fi nanziario non fi consolidata di carattere Dichiarazione 2019 Unione di Banche Italiane Joint Stock Company in abbreviated form UBI Banca Spa Head Office and General Management: Piazza Vittorio Veneto 8, Bergamo (Italy) Operating offices: Bergamo, Brescia and Milan Member of the Interbank Deposit Protection Fund and the National Guarantee Fund Belonging to the IVA UBI Group with VAT No. 04334690163 Tax Code, VAT No. and Bergamo Company Registration No. 03053920165 ABI 3111.2 Register of Banks No. 5678 Register of Banking Groups No. 3111.2 Parent company of the Unione di Banche Italiane Banking Group Share capital as at 31st December 2019: EUR 2,843,177,160.24 fully paid up PEC address: [email protected] www.ubibanca.it This document has been written with no account taken of the public exchange offer on all the Bank’s shares launched by Intesa SanPaolo S.p.A. on 17th February 2020. The images reproduced in this document have been taken from the book entitled “Le nostre immagini, la nostra immagine” published by Mondadori in March 2020, which contains a collection of photos taken by Group employees in the photographic competition of the same name held in 2019. On the front cover: Oscar Babucci – Val di Chiana Consolidated non-financial statement pursuant to Legislative Decree No. 254 of 30th December 2016 Sustainability Report 2019 Letter to our Stakeholders Ever since its foundation, UBI has been very aware of and focused on sustainability issues. This is clear from the wide range of environmental, social and governance initiatives organised and/or sponsored by the Bank and described in our Sustainability Reports, and from the national and international awards and recognition it has received over the years. In line with EU guidelines and Italian law, the selection and reporting of non-financial activities is based on a materiality analysis, with reference to the Global Reporting Initiative (GRI) recommendations. The use of a standardised set of indicators has increased information transparency for stakeholders and allowed comparisons to be made between time periods in order to identify development trends. A materiality analysis has many practical benefits, but also some drawbacks. If on the one had it helps produce a more structured description of priorities, on the other it tends to restrict the choice of priorities within an established framework, not necessarily appropriate for the performance and especially the ambitions of a bank such as UBI. From a methodological point of view, a materiality analysis is not always able to grasp the effective importance or impact of the various initiatives or to accurately interpret the input from stakeholders. As many experts have pointed out, these are general limitations, inherent to the nature of a materiality analysis. These limitations may be partly superseded within this type of analysis by improving and refining criteria and procedures. However, in order to do so, it is important to step outside of the box and to take an objective look at the appropriateness, consistency, efficiency and effectiveness of the Bank’s entire sustainability strategy. A materiality analysis is not only required to comply with current regulatory requirements, it is above all a tool for the overall strategy. This is why from this year, as part of the 2020-2022 Business Plan, which involves strengthening the sustainability strategy, we have decided to reconsider the ESG medium to long-term agenda (environment, social and governance), in order to move beyond the goals established for the period covered by the plan. The process will move in four different directions. Firstly, there will be an in-depth examination of the directions being taken by the UN and the EU with regard to sustainability (or rather, “sustainable prosperity”), and in particular the paradigm known as “fair and sustainable finance”. The UN has recently launched its initiative Decade of Action, which aims to accelerate achievement of the Sustainable Development Goals (SDGs) set for 2030. Governments will be asked to make a greater and more solid commitment to climate change in the run-up to the climate change conference COP26, to be held in Glasgow in October 2020. All those playing a role in the economy and civil society will be asked to make a more active contribution to the macro-objectives and targets, particularly those that more directly concern people in need and the young. For its part, in January 2020 European Union approved a Plan of Action entitled A Strong Social Europe for Just Transitions. The aim is to make the interaction between the environmental and social dimensions of sustainability more direct and effective. From this year the European Semester will incorporate the SDG indicators into its monitoring and specific country recommendations. From 2021 it will also include the indicators relating to implementation of the European Pillar of Social Rights. New financial instruments are expected within the framework of the Green New Deal, including a Just Transition Fund and Modernisation Fund for disadvantaged social groups and areas that are underdeveloped and/or more affected by the needs for energy and digital transformation. Important projects in the new Commission’s social agenda include reform of The Youth Guarantee, establishment of a Child Guarantee scheme, launch of a new gender equality strategy, a plan of action to promote a social economy, another to update workers’ skills, and the establishment of the European Education Area. As far as sustainable finance is concerned, there is a proposal for a European Regulation on the establishment of a framework to facilitate sustainable investment, complete with a new classification system, or taxonomy, to classify and assess non-financial initiatives and risks (starting with those concerning the environment). The Commission has announced the publication of an update to the Sustainable Finance Agenda by summer 2020. The European Banking Federation recently stated its hope that the banking world would raise the bar of its ambitions and review its modus operandi in light of the new shared regulatory framework and the more general strategic directions for the next few decades. The second direction will involve self-assessment. The annual sustainability reports and other more detailed information will be used to reconstruct and map UBI’s total non-financial activities in the last five years, based on new criteria that will capture the areas of intervention, types of beneficiary and measures, trends and - as far as possible - the impacts with greater precision and in a more systematic manner. The purpose of this exercise is to identify the Bank’s strengths and weaknesses as regards sustainability, and the consistency and overall balance of the strategy adopted thus far. The third direction concerns the comparative framework. Global best practice in European and US banking will be examined and studied in order to identify substantive and methodological opportunities and to select benchmarks with which to compare UBI’s non-financial activities and improve its positioning in the national and international panorama. Finally, the fourth direction - which will move in tandem with the others - will aim to draw up a set of proposals to update and structure the Bank’s medium to long-term agenda and its methods of implementation as clearly as possible. Based on the indications and outcomes of other investigations and studies, the aim is to set out an organisational and functional framework to enable UBI to take a leading position with regard to: 1) the continuous acquisition of usable knowledge concerning sustainability that can be used to precisely define and update the ESG and the Materiality matrix in line with the EU agenda; 2) the selection of a range of lines of activity that best fit these goals; 3) impact assessment and monitoring, also in order to boost organisational learning. The future framework will affect the bank internally (what, how and who) and externally: listening to stakeholders, communication and dissemination of information to reach public opinion including through the effective branding of initiatives, and awareness-raising about sustainability issues among institutional players and civil society, in line with the priorities of the Decade of Action. The Mission UBI has set itself from the outset is “to bank fairly and well”. This motto takes on particular significance and value when it comes to sustainability. This has been the driver behind the decision to undertake a period of reconsideration as described above, which we can summarise as follows: to capture the various aspects that define sustainable prosperity as a collective “good” in order to pursue it in a “good” way. Chair of the Board of Directors The Chief Executive Officer Letizia Brichetto Moratti Victor Massiah Content Index THE UBI BANCA GROUP 6 CUSTOMERS 60 Group profile 7 Customer satisfaction 61 Key changes taking place during the year 12 Digital and product/service innovation 62 Transparency, privacy and IT security 63 SUSTAINABILITY STRATEGY 14 COMMUNITY 65 2019 Objectives 15 Commitment to the local economy 66 Stakeholder engagement and the Materiality matrix 17 Commitment to the community 70 Key impacts, risks and opportunities 17 Financial education and inclusion 79 The 2020-2022 Business Plan 22 Protection of
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