2007 Sustainability Report
2007 Sustainability Report At UniCredit Group we are aware that our business activities have an impact on the environment, and we always factor environmental sustainability into our strategic decisions.
In 2008 the greenhouse gas emissions associated with the paper used for the publication of 2007 Annual Report and Sustainability Report have been offset by a contribution to a biomass-fueled district heating plant in Italy.
The offsets for the 2007 Annual Report and Sustainability Report were executed in association with AzzeroCO2.
Pictures
Cover and sorter pages Courtesy Education Department of the Castello di Rivoli Contemporary Art Museum
Top Managers Courtesy Ferruccio Torboli (UniCredit Group)
UniCredit S.p.A. Registered Office: Roma, via Minghetti 17 General Management: Milan, Piazza Cordusio Graphic development and Composition: Registration number in the Rome Trade and Companies Register, tax Code and VAT No. 00348170101 Mercurio S.r.l. Studi di promozione pubblicitaria - Milan Entered in the Register of Banks Parent Company of the UniCredito Italiano Banking Group Banking Group Register No. 3135.1 Member of the Interbank Deposit Protection Fund Printed: Grafiche Milani SpA (Segrate) Capital Stock: € 6,683,084,257.50 fully paid in April 2008 The Art Experience
2007 was a formative year for the bank’s international activities in culture. It was a year that saw intense engagement in all the territories in which we operate.
We believe that culture, when viewed as a strategic resource, can bring tremendous value and foster new ideas. These new ideas are fundamental to innovation and sustainable social and economic growth.
In this year’s Sustainability Report, we have decided to focus on images of the international events which comprised our work with important partners in art and culture rather than on individual pieces from our collection. Notable among these were events in partnership with the Education Department of the Castello di Rivoli Contemporary Art Museum.
These initiatives involving the broader public in art experiences illustrate the importance UniCredit Group attaches to entertain and promote an active dialogue with the communities in which our Group operates. The large gatherings pictured in this report were held in city squares and museums and involved thousands of people. What you see is a single spontaneously generated expression of thousands of hands united together in a joyful and creative concert.
Contact with international artists and leading facilitators of culture, through diverse languages, styles and techniques, shows how art stimulates the development of relational and cognitive skills and the potential of the individual. Art, above all, generates significant positive energy which can connect people, bridge differences and promote dialogue. It offers an extraordinary repertoire for learning, exploring, experimenting and interpreting the present to build the future.
Art brings people together.
Which is why we say: ART TALKS.
2007 Sustainability Report
Contents
Sustainability Report
Introduction 5
A culture of sustainability 19
Corporate governance 27
Our people 39
Our customers 63
Suppliers 95
Our communities 99
Investors and markets 121
Environment 127
GRI-G3 index 145
Report of the External Auditors 151
Glossary of acronyms and credits 155
UniCredit Group · 2007 Sustainability Report 3
Introduction
Letter from the Managing Director/CEO 6 Report structure 8 Reporting criteria 8 Reporting process 9 Reporting period and scope 9 External assurance 9 Relevant issues 9 UniCredit Group Profile 10 At a Glance: our Unique Franchise 10 Business Model 12 Master Brand Strategy: in Unity there is Strength 14 The value distribution 16
UniCredit Group · 2007 Sustainability Report 5 Introduction Letter from the Managing Director/CEO
A successful “company must continually reflect on whether its business model is appropriate to ensure long-term future growth and financial success. ”
Dear Stakeholders,
Recent turmoil in global markets, its effects on the economy and on people and businesses everywhere, clearly illustrate why sustainability needs to be at the forefront of our thinking. Ultimately banking is not about generating transient short-term profits, but about returning sustainable long-term value to our customers, our employees, the communities, and other stakeholders we depend on.
At UniCredit Group, we have been focusing on sustainability for some considerable time. We know there is still much to be done, but we have made significant progress through 2007 and into early 2008. This report details our progress in this important area.
Naturally, business success, as reflected in profit and shareholder return, is the first priority in a company’s efforts to achieve sustainability. Without it, a company is at the mercy of the market and loses
6 2007 Sustainability Report · UniCredit Group its capacity to shape its own future. A to the global economy and the structure recent GRI-G3 reporting standards. Rather successful company must continually of society that it has become essential than compiling separate reports for each reflect on whether its business model is that we go beyond providing just a strong of our legal entities as has been our past appropriate to ensure long-term future return to our shareholders and valuable practice, we have attempted for the first growth and financial success. support to our customers. We must provide time a consolidated articulation of our value for all of our stakeholders. This is complete vision of sustainability, detailing Yet sustainability is a multi-dimensional why we actively work with communities the initiatives and governance that apply to project and requires a comprehensive through our territorial committees to support the whole group, irrespective of market or approach. That is why our efforts in their economic and social development. customer segment. sustainability have expanded in scope and This philosophy also comes to life in our intensity in many areas. In our most recent cultural initiatives, through which we strive In this respect, we are particularly proud Annual Leadership Meeting (a two-day to generate broad public dialogues, rather that we were able to bring together relevant workshop), 400 senior leaders from our than just to provide diversions for privileged data for the first time from a number of our group focused their attention on the four insiders. Central and Eastern European operations. pillars we have identified as drivers of Given our dominant market position in sustainability: long-term economic value For the 180,000 of us who derive our this important growth region, we believe generation, customer-centricity, identity & immediate livelihoods from working at the group has a responsibility to be at people management and governance. UniCredit Group, sustainability will remain the forefront of developing a culture of a vital concern. The engagement of our sustainability in Central and Eastern Europe. Among many accomplishments, 2007 people with the company, with its identity It is certainly in our own best long-term witnessed a great effort by our Chairman and its goals is critical to the long-term interest to do so. and Board to strengthen our corporate generation of results. We view our people governance structure in line with as our greatest asset, and we place high In the coming months, we will continue to international best practices. We created a value on identifying talent early, providing work towards the capability to assemble dedicated Compliance Department, made structured development and career a fully comprehensive report, covering the significant progress in formalizing our opportunities and leveraging the competitive entire breadth of our group. We are working approach to reputational risk management advantages of diversity. hard to align all of our operations under and intensified our dialogue with our common master brand, which not only stakeholders. We also applied ourselves to Achieving full-fledged sustainability is provides us with greater leverage in the a wide variety of environmental initiatives, ultimately a holistic undertaking, requiring marketplace, but also aids in harmonizing involving both our own direct behaviors and a consistent and universal application of our collective efforts and will make possible our indirect influence on others through our underlying beliefs and values. a unified approach in our progress towards frequent role as an intermediator. achieving sustainability in everything we do That is why we have placed the UniCredit at UniCredit Group. Very few companies are as deeply involved Integrity Charter at the heart of our identity in all aspects of customers’ day-to-day lives and all of our activities. It is based on Sincerely yours, as those in the banking sector. Companies a core of our shared values - fairness, and individuals rely on banks to help transparency, respect, reciprocity, trust and them manage day-to-day challenges and freedom to act. We view the Integrity Charter to achieve long-term ambitions. These as the central mechanism that enables relationships are based on trust, and our people to act as entrepreneurs, while we know that our longevity depends on behaving responsibly towards each other, delivering consistent value as we empower our customers and all our stakeholders. people to “shape their tomorrow, today”. This is UniCredit Group’s first group-wide Alessandro Profumo In the same way, today’s international Sustainability Report. The report has been financial institutions are so tightly bound assembled in strict adherence to the most CEO
UniCredit Group · 2007 Sustainability Report 7 Introduction Report structure
The Sustainability Report (“the Report”), approved by UniCredit Group’s Board of Directors, reflects the full operational scope of UniCredit Group in 2007 and describes the connection between business strategies and stakeholder relationship management. In an effort to meet targets for improvement, the eighth edition of the Sustainability Report has been significantly expanded to draw particular attention to activities in Italy, Germany, Austria, Poland and in the key countries of Central and Eastern Europe (with a particular focus on Croatia and Turkey).
Reporting criteria GRI-G3 defines various application The UniCredit Group 2007 Sustainability levels (C, B and A) that reflect the level Report satisfies G3 requirements at the The Report was written in compliance of application of the GRI Reporting B+ level. with the guidelines published by Global Framework to the company’s activities. Reporting Initiative in 2006 (GRI-G3). A table summarizing the contents of Organizations that have been subject to the Report referring to GRI indicators is external assurance are permitted to add a provided on page 145. “plus” (+) to the level they have achieved.
8 2007 Sustainability Report · UniCredit Group Reporting process The merger with Capitalia, effective as of mission and values, concerns expressed 1 October 2007 is discussed in several directly by stakeholders and the most For data not available at the central group sections of the Report. For more detailed significant indicators of GRI. level, the process of collecting data from information on the merger, please refer to each legal entity of UniCredit Group was the UniCredit Group 2007 Annual Report. • Inclusiveness: UniCredit Group identified executed through a systematic use of “CSR its reference stakeholders and explains cards” created on the basis of GRI. in the Report how it has attempted to External assurance respond to their reasonable expectations In order to maximize the reliability of and interests. information reported, we have included This report has been subject to the only that data that can be measured review of KPMG S.p.A. in accordance • Sustainability context: The Report directly, and we have limited, as much as with the criteria established for review presents UniCredit Group’s performance possible, approximate calculations. This engagement by “International Standards on in relation to broader concepts of data is based on the best information Assurance Engagements 3000: Assurance sustainability. It defines the level and the available or on sample analyses. Data that Engagements other than Audits or Reviews method of contribution to regional local is approximate in value is clearly disclosed of Historical Financial Information”, issued development. as such in the Report. by the International Auditing and Assurance Standards Board (IAASB). On page 151 • Completeness: This Report covers An important focus area for the next years will there is a KPMG S.p.A. report describing material topics and indicators sufficient be the extension of the Sustainability Report’s the activities carried out and the resulting to reflect significant economic, scope through further standardization of data conclusions. environmental and social impacts and to gathering procedures in order to reach the enable stakeholders to assess UniCredit GRI Application Level A+ by 2010. Group’s performance within the reporting Relevant issues period. Reporting period The information on social, environmental and economic performance was identified as and scope relating to the most important issues to be examined. The selection was based on an The reporting period of the Sustainability approach that incorporated internal analysis Report, which is published annually, with an external view of UniCredit Group. corresponds to the period of the UniCredit Group 2007 Annual Report, unless We are implementing a number of otherwise noted. The present report methodologies aimed at identifying the provides information and data from the most relevant issues for our stakeholders. 2007 calendar year. In particular we are looking at those issues that could influence UniCredit Group from Economic and financial data included in the financial, social or environmental points the Sustainability Report are derived from of view, and we are working to identify the UniCredit Group 2007 Annual Report. concrete solutions for their management. In The social and environmental data in the identifying these issues UniCredit Group has Report excludes companies belonging to made reference to the following principles: the former Capitalia Group. Data relating to clients, communities and the environment • Materiality: A combination of internal and from Poland refer exclusively to Bank external factors was used to determine Pekao S.A., while data from Croatia refers whether information was material, only to Zagrebacˇka banka d.d.. including factors such as the corporate
UniCredit Group · 2007 Sustainability Report 9 Introduction UniCredit Group Profile At a Glance: our Unique Franchise
Highlights
UniCredit Group is a major international financial institution with strong roots in Europe. It has a strong presence in 23 European countries, as well as representative offices in 27 other international markets, and employs around 170,0001 people throughout the Group.
It provides a powerful combination of distribution and production capabilities as well as the full spectrum of financial services, financial products, and investment vehicles.
Over the years it has demonstrated its ability to generate profitable, sustainable growth and create significant value for its stakeholders.
UniCredit Group is well-positioned as one of the top European players in the global banking industry.
Market Capitalization (E billion) (as at 31 December)
75.7 69.2 60.3
26.7
2004 2005 2006 2007
Banking Sector Global Market Capitalization (E billion) (as at 31 December 2007)
ICBC 191.0 HSBC 135.6 CCB 130.2 Bank of America 125.2 Bank of China 110.0 Citigroup 100.3 Countries where the UniCredit Group has banking subsidiaries or banks in which it JP Morgan Chase 100.2 has a significant equity interest. SCH 92.5 UniCredit 75.7 Mitsubishi UFJ 69.6 Countries in which the UniCredit Group operates via its own branches, representative offices, small banking Wells Fargo & Co 69.2 subsidiaries, or investment centers (Pioneer).
10 2007 Sustainability Report · UniCredit Group (€ million) Operating Income* 29,655 Customers: 40 million Operating Profit* 13,346 Employees1: 170,000 ROE*3 17.0% Branches2: 9,714 Total Assets 1,021,758
* Pro-forma figures determined as if the business combination with Capitalia had occurred on 1 January 2007. 1. “Full time equivalent” data, calculated according to a new methodology which does not include unpaid leaves. These figures include all employees of subsidiaries consolidated proportionately, such as Koç Financial Services Group employees. 2. These figures include all branches of subsidiaries consolidated proportionately, such as Koç Financial Services Group branches. 3. Calculated on the basis of the average pro-forma shareholders’ equity (estimated using year-end capital and reserves, excluding reserves relating to AfS assets and cash-flow hedge, and including average non-distributable pro-forma net profit), net of goodwill arising from the business combinations with HVB and Capitalia, which were carried out with an exchange of shares and recorded in accordance with IFRS 3.
UniCredit Group · 2007 Sustainability Report 11 Introduction
UniCredit Group Profile (CONTINUED) Business Model
Organizational Model
CEO
MANAGEMENT COMMITTEE
DEPUTY CEO DEPUTY CEO
Asset Poland’s Private Retail CEE Household Corporate MIB Management Markets Banking Division Division Financing Division Division Division Division Division
The UniCredit Group’s business model is enhanced by a consistent organizational approach. Its aim is to fully exploit the dynamic potential of its global network to provide organic growth through deep and historical local roots of its subsidiaries in 23 European countries.
To improve synergies among its Divisions, increase speed of service, and to support continuous innovation, UniCredit Group has adopted an organizational structure with three managerial areas, each headed by a Deputy CEO.
12 2007 Sustainability Report · UniCredit Group Business Mix
UniCredit Group has a portfolio which is diversified across business and geographical lines, with a strong commercial banking footprint. This business mix allows UniCredit Group to better withstand market turmoil.
Retail banking is the most important source of UniCredit Group’s revenues, generating roughly 38% of the total. This is followed by Corporate banking, which accounts for roughly 21% of total revenues. DEPUTY CEO UniCredit Group is focused on international markets and this can be seen in its regional revenue breakdown. Italy is the principal market for UniCredit Group, however substantial revenues are derived from Germany, the CEE countries and Austria. Group Group Banking GBS Organization ICT Services CEE & Logistics Revenues by Division (%)
5.2 5.2 8.2 37.7 Retail Corporate 11.2 CEE MIB 11.6 Poland’s Markets Private Banking 20.9 Asset Management
Business Division Revenues by Geographic Area (%)
Business Department 8 3 9 Global Banking Services Function
Italy 51 12 Germany CEE Austria Poland 17 Others
UniCredit Group · 2007 Sustainability Report 13 Introduction
UniCredit Group Profile (CONTINUED) Master Brand Strategy: in Unity there is Strength
The UniCredit Group will now go forth as one bank under one banner in order to achieve our one goal: to be one of the top banks both in Europe and the world.
We will deliver one brand idea. We will live by one set of values. We will stake out one position. We will have one corporate mission. We will share one vision. We will be one brand – with one spirit, one identity, one personality.
That is the single-minded objective of our AUSTRIA master brand strategy, which will unify all of our business Divisions, and all of our communications, in all 23 countries in which we operate. It is being implemented now throughout UniCredit Group.
Our one banner is our new, bold corporate signature with the number one
pointing upwards and onwards. The red GERMANY UniCredit Group logo will be universally applied throughout our organization. It is a fresh, forward-looking brand symbol that is destined to become a new mark of distinction in global finance.
Our one idea, as a leading European financial institution, is empowering optimism in everything we do. What distinguishes our ITALY bank and our people from our competitors is the positive, can-do spirit that we bring to every personal transaction and every business transaction that we undertake. We are known for working in a close, forward-looking partnership with our customers, helping to empower them to make the right choices for their own future. CEE
Our one position is “Shape your tomorrow, today”. It is a core message that states simply and clearly that we are in the business of empowering optimism. It is an uplifting message that speaks to helping people and businesses shape their own future and achieve their full potential. It will not only be the soul of our advertising, and the emotional connection CEE to our customers, it will be the spirit of our brand. And to give our message a call to action, we will sign off with a compelling brand idea: “Let’s start”.
14 2007 Sustainability Report · UniCredit Group Our one set of values is empower our customers to achieve more and embedded in our Integrity Charter, which enable our own people to achieve more. now forms the strong backbone of everything we do at UniCredit Group. These Our one brand is UniCredit brand values are: Group. • Fairness – having one high standard in It is one brand that encompasses many
AUSTRIA all we do, applied evenly and without strong financial institutions that have come discrimination together in the unshakable conviction that in • Trust – a mutual code of honor between unity there is strength. people that governs everything we do. It is the strong basis of our reputation, and builds We are one brand united in the spirit of the confidence in our company that is so shared values and shared responsibilities, essential to our profitable, sustainable growth the spirit of openness and accountability, • Respect – we constantly drive to earn it, the spirit of total commitment to sustainable and willingly give it to those who deserve it growth achieved in a way that benefits not
GERMANY • Transparency – making certain that only our stakeholders, but the communities everything we do is always honest, we serve, the economies of the 23 countries relevant, and straightforward in which we operate, and society as a whole. • Reciprocity – actively seeking to help those around us, with the unspoken We are one brand with one clear identity – certainty that the way we treat others will an identity symbolized by our dynamic red have positive returns for us logo with the slanted white number one. • Freedom to act – fostering a culture of A brand known by our customers and by openness that enables our people to reach the financial community as a proud and
ITALY their potential and empowers them to distinguished financial organization. achieve more for our customers and more for our stakeholders. We are one brand with one personality. There are clear attributes that distinguish These are the values and beliefs that drive the character of our people, our the behavior of everyone associated with the communications, and the attitude we project. brand. They are the truths that we all live by. The result is a brand personality that is: • Warm – honest, engaging and nurturing • Open – democratic and involving
CEE Our one corporate mission is to apply our financial expertise to create • Progressive – restless for change, ahead a better future for our customers, to play a of the pack, innovative leadership role in shaping the future of the • Quietly confident – understated yet financial sector, and to achieve profitable, intriguing, with a knowledge and strength sustainable growth in a manner that benefits that is appealing society as well as our stakeholders. • Pragmatic – realistic and grounded, not over- promising but over-delivering on expectations. Under consideration Our one shared vision is the firm belief that everyone has both the right and That is who we are. That is the UniCredit CEE Under consideration the responsibility to shape their own future, brand. One bank under one banner. and that the financial expertise of UniCredit Our master brand strategy is now being Under consideration Group can help people – and businesses – implemented throughout our organization. Under consideration shape their future and achieve their potential. It proves that in unity there is strength. We see that by empowering optimism, we Let’s start.
UniCredit Group · 2007 Sustainability Report 15 Introduction
UniCredit Group Profile (CONTINUED) The Value distribution
Calculation and allocation of Value Added
Value added is calculated by reclassifying interacts, special reference being made we chose the formulation of value added consolidated Income Statement items with to its main stakeholders: shareholders, developed by ABI (the Italian Banking the aim of showing how it is allocated minority interests, the community, human Association) for banks. This takes into and expressing in monetary terms the resources, corporate structures and public account the special characteristics of the relationship between the business and bodies & institutions. As regards the level banking business. the socio-economic system with which it of aggregation of income components,
Breakdown of Value Added, 2007 (€ 1000s) 2007 2006 REVENUE 10. Interest income and similar revenues 42,021,881 34,294,958 40. Fee and commission income 11,353,707 9,966,526 70. Dividend income and similar revenue 1,055,569 823,730 80. Gains and losses on financial assets and liabilities held for trading 541,281 1,470,347 90. Fair value adjustments in hedge accounting 21,754 29,729 100. Gains (losses) on disposals of: 1,285,979 493,457 a) loans 13,654 16,486 b) available-for-sale financial assets 1,274,808 479,030 c) held-to-maturity investments 647 3,493 d) financial liabilities (3,130) (5,552) 110. Gains and losses on financial assets/liabilities at fair value through profit and loss (3,355) 41,347 220. Other net operating income 883,164 597,109 240. Profit (loss) of associates 223,093 283,443 310. Total profit or loss after tax from discontinued operations - 56,174 1. TOTAL NET REVENUES 57,383,073 48,056,820 CONSUMPTION 20. Interest expense and similar charges (28,056,647) (22,140,073) 50. Fee and commission expense (1,923,865) (1,618,851) 180.b Other administrative expense (4,742,730) (4,246,376) 130. Impairment losses on: (2,329,737) (2,296,038) a) loans (2,140,868) (2,196,408) b) available-for-sale financial assets (113,020) (47,440) c) held-to-maturity investments (54,383) 1,110 d) other financial assets/liabilities (21,466) (53,300) 190. Provisions for risks and charges (622,161) (765,131) 200. Impairment/write-backs on property, plant and equipment (841,084) (812,104) 210. Impairment/write-backs on intangible assets (614,939) (556,664) 260. Impairment of goodwill (144,271) (356,880) 2. TOTAL CONSUMPTION (39,275,434) (32,792,117) 150. Premiums earned (net) 114,921 89,058 160. Other income (net) from insurance activities (82,431) (67,817) NET RESULT OF INSURANCE MANAGEMENT 32,490 21,241 3. TYPICAL GROSS ADDED VALUE 18,140,129 15,285,944 270. Gains and losses on disposal of investments 530,345 794,685 4. TOTAL GROSS ADDED VALUE 18,670,474 16,080,629 180.a Cost of labor (staff expenses) (9,096,947) (7,860,299) 180.b Other administrative expense: indirect taxes and duties (347,670) (288,666) 180.b Other administrative expense: donations (13,922) (13,688) 5. PROFIT BEFORE TAX 9,211,935 7,917,976 290. Tax expense (income) related to profit or loss from continuing operations (2,533,713) (1,790,119) 330. Minorities (717,085) (680,116) 6. NET PROFIT FOR THE YEAR 5,961,137 5,447,741
16 2007 Sustainability Report · UniCredit Group Allocation of total gross Added Value (€ ‘000) 2007 2006
TOTAL NET REVENUES 57,383,073 48,056,820 TOTAL CONSUMPTION (39,275,434) (32,792,117) NET RESULT OF INSURANCE MANAGEMENT 32,490 21,241 GAINS AND LOSSES ON DISPOSAL INVESTMENTS 530,345 794,685 TOTAL GROSS ADDED VALUE 18,670,474 16,080,629 Allocated as follows: MINORITY INTERESTS 717,085 680,116 SHAREHOLDERS - Dividend 3,425,143 2,486,229 Private 3,025,121 2,138,629 Foundations* 400,022 347,600 HUMAN RESOURCES 9,109,947 7,861,299 Cost of labor: - direct 6,086,298 5,642,514 - indirect 3,010,649 2,217,785 Portion of net profit allocated to the medium-term Group staff incentive provision 13,000 1,000 PUBLIC BODIES & INSTITUTIONS 2,881,383 2,078,785 Indirect taxes and duties 347,670 288,666 Tax expense for the year 2,533,713 1,790,119 COMMUNITY 26,222 25,388 Donations 26,222 25,388 CORPORATE STRUCTURE 2,510,694 2,948,812 Retained profit and allocation to reserves 2,510,694 2,948,812 TOTAL GROSS VALUE ADDED 18,670,474 16,080,629
* Data refers to dividends provided by UniCredit Group to Foundations holding shares in excess of 2% of the bank’s capital and with missions pertaining to community oriented social interventions and the arts & sciences. Data refers to Foundations’ holdings as of 7 March 2008.
Allocation of Value Added 2007 (%)
3.84 0.14
13.45
Human Resources Corporate Structure Shareholders Minority Interests 15.43 Public Bodies & Institutions Community
48.79
18.35
UniCredit Group · 2007 Sustainability Report 17
A culture of sustainability
Our approach 20 Sustainability and UniCredit Group value creation 20 Empowering sustainability 21 Stakeholder engagement 24
UniCredit Group · 2007 Sustainability Report 19 A culture of sustainability Our approach
Sustainability and UniCredit Group value creation
Notwithstanding the significant expansion it has experienced in Sustainability is central to the mission and operation of UniCredit the last few years, UniCredit Group is a European bank with deep Group. and long-established local roots in nearly all of the communities it serves. While this is the first time we have assembled a group- Our complex community roots are crucial to understanding the role wide sustainability report, the general practices described in the of sustainability at UniCredit Group. We are the first truly European report are not new to the banks, Divisions and business lines that bank, with a presence in 23 countries. By virtue of our size and form UniCredit Group. scope, we recognize the substantial positive role we play in serving the local communities. As we continue to integrate our shared corporate culture across all Divisions of UniCredit Group, we are working to ensure that Ultimately it is our job and our desire to return the many benefits our efforts in and approach to the important field of sustainability accrued from our franchises to the regions in which we operate. will continue to be harmonized, streamlined and rationalized in Banks are indispensable participants in the modern communities order to generate synergies beneficial to both our stakeholders they serve, and the health of UniCredit Group depends on our serving and the world around us. This first group-wide report has primarily those communities responsibly, efficiently and cooperatively. been designed to provide our stakeholders with a thorough and accurate portrait of our approach to sustainability as it stands This report outlines the ways in which we can and do deliver value today. We have included snapshots of how our sustainability to our communities and other stakeholders. All of these practices are concept is evolving and expanding in the form of new initiatives, dependent on the underlying financial stability of our company. We harmonized approaches and an increasingly sophisticated reliance recognize that our day-to-day operations are an engine for financial on benchmarks, metrics and internationally sanctioned guiding growth, but it is the understanding of UniCredit Group that growth is principles. not enough. Sustainability is essential to long-term value creation for all our stakeholders, and we believe that sustainability is the way to This chapter provides a concise overview of what sustainability is put these beliefs into practice. for our group, of why it is important to us as a financial institution and, more importantly, to us as people. It might be possible to increase profits in the short run while disregarding sustainability considerations. But in the long run, The following text covers: sustainable practices are vital to the financial health of any large business, as you can see expressed in the following simple formula: 1. Sustainability and UniCredit Group value creation, including a discussion of the long-term added-value dimension Profits x Multiple = Long-Term Group Value of sustainable practices; 2. Empowering sustainability, including the four pillars of our Competitive profits are essential to ensuring shareholder satisfaction sustainability, which are: (i) long term Economic Value Added and long-term Group value growth; but while profits are a (EVA); (ii) customer loyalty; (iii) governance; and (iv) values, prerequisite, they are not sufficient on their own. identity & people management; 3. Stakeholder engagement, detailing our commitment to The multiple is a measure of the long-term impact of sustainable understanding and measuring up to the expectations of our practices. Better sustainability practices mean a higher multiple. stakeholders. Focusing only on profit may endanger the sustainability of long-term results, particularly in the context of the banking industry. To practice sustainability effectively, we must consider all our stakeholders.
The final value generated for stakeholders is the combined result of both our ability to generate consistent profits and the sustainability of UniCredit Group’s business practices and reputation.
20 2007 Sustainability Report · UniCredit Group Empowering sustainability
The framework we have developed to The UniCredit Group Sustainability Framework explain and analyze our sustainability agenda is based on four key pillars, which are the starting point for the extension and The first truly European Bank rationalization of our activities relating to sustainability. The four pillars of sustainability E H O L are: (i) long-term value creation; (ii) customer K D A E loyalty; (iii) governance; and (iv) values, Governance R identity and people management. T S S The influences of these pillars overlap and combine to produce UniCredit Group’s core Long-term of sustainability-based assets, generating Customer Empowering value benefits and long-term value. loyalty sustainability creation We continue to generate sustainable value in the long term for our stakeholders by embedding sustainable practices in the day-to-day working life, decision-making Values, identity processes, operational and business & people structures of UniCredit Group. Management
The first pillar: long-term EVA after a rate increase. We offered them of sustainability. Cultivating loyalty involves advantageous refinancing terms1. Such an such traditional business issues as customer At UniCredit Group, we are working to ensure approach may reduce revenue in the short satisfaction and complaint management. It that our whole organization understands term but ultimately ensures the financial is also intertwined with issues of trust and how to generate sustainable long-term health of the community and the bank. community. In all of its facets, customer value growth, by focusing, for example, on loyalty is fundamental to revenue and EVA sustainable revenue growth (e.g., through A financial institution’s choice of operational growth in the long run. innovation in products and advisory services). and commercial targets can have vast impact on the overall value it generates in At UniCredit Group, we are working to The creation of long-term economic value the long term. We are working to embed the ensure that our entire organization remains greater than the underlying cost of capital is concept of long-term sustainable value as focused on customer satisfaction, brand the essential prerequisite to maintaining a a central metric and objective in UniCredit awareness and referral leverage, which sustainable financial enterprise, as companies Group’s day-to-day business operations. together comprise our second pillar of that cannot overcome this constraint will not sustainability. long be viable entities. But a focus on long- term economic value growth is not the same The second pillar: CUSTOMER SATISFACTION thing as chasing short-term profitability. For UniCredit Group, listening to our customer loyalty customers is step one in maintaining and For example, our emphasis on long-term sustainably expanding the loyalty of our value creation led us to identify customers The concept of customer loyalty is not as with adjustable-rate mortgages who might simple a matter as it might at first appear, 1 This example is addressed in greater detail in the chapter face difficulties in meeting payments particularly in light of its interplay with issues entitled “Our Customers”
UniCredit Group · 2007 Sustainability Report 21 A culture of sustainability
Our approach (CONTINUED)
Empowering sustainability (CONTINUED) customers. That is why we continually To increase our referral leverage through To ensure an effective and efficient reporting stress the importance of customer our positive contributions to society, we and consultation system that will enable the satisfaction surveys and related activities are consistent in building on our standing Board of Directors to best perform its duties, to ensure that we are regularly talking as a responsible corporate citizen, several committees have been reorganized with and about our customers. Their through community outreach, cultural and within the Board. Each has specific areas of valuable feedback enables us to develop environmental partnerships, scholarship competence for providing consultation and concrete action plans to focus on and to programs and other people-based proposals. meet the constantly changing needs of our initiatives. customers and the market. On 3 August 2007, in order to improve governance-related processes and models Further details on our activities in this The third pillar: and oversee key aspects of UniCredit Group vital area are addressed in the chapter operations in keeping with international best entitled “Our Customers” in the Complaint Governance practices, the Board of Directors established Management and Customer Satisfaction the Permanent Strategic Committee and the sections on pages 80 and 83. Local and international M&A activity involving Corporate Governance, HR and Nomination European banks is increasingly cross-border Committee and renamed the Audit BRAND AWARENESS oriented. The evolution of the business mix Committee the Audit & Risks Committee. Our master brand strategy is currently and product diversification have increased At the same time, the Board decided to being implemented group-wide. We are the complexity of governance models, eliminate the Chairman’s Committee, convinced that strong brand awareness has requiring a tightening and centralization of Executive Committee and all other Board the potential to raise international awareness control structures and the adoption of matrix committees, with the exception of the Audit of UniCredit Group’s abilities and strengths. management structures. and the Remuneration Committees. It can enhance our revenue streams by positively influencing customer loyalty, As a result, the management challenge customer acquisition and the facilitation facing banking groups has been of cross selling. As the repository of our considerable. The need for increased The fourth pillar: values, reputation, strong brand awareness affects discipline has become more acute due to identity and people the sustainability of both our business stricter scrutiny by regulatory authorities, operations and our corporate culture. That fiscal and regulatory challenges posed by management is why we have begun to redefine our cross-border activities, more opaque risks brand architecture and have created a new connected with certain business activities, Ultimately, UniCredit Group is a community continuity in our brands in the countries of the greater involvement of institutional of people. As in any community, the CEE. Consistency enables our customers investors and the influence of consumer sustainability must be based on shared to see UniCredit Group for what we truly are, pressure groups. values, a clear sense of identity and mutual a strong, sustainable and unified financial respect and understanding. With these institution that represents more than the At UniCredit Group, we are working to build principles in mind, UniCredit Group has been sum of our parts. a robust system of governance that: working to grow this sense of community • Enforces transparency in rules, across its many territories, Divisions and REFERRAL LEVERAGE responsibilities and processes, converting business lines. To increase our referral leverage through complexity into opportunity and direct business operations, UniCredit Group competitive advantage; We are now focusing our attention on is working to enhance our trust-based • Is based on an effective organizational managing our human resources, developing relationships, to maintain a distinctive and model aimed at streamlining decision- our group-wide identity and identifying with innovative approach in our service model making processes and assuring our shared set of values, known within and to maintain our business reputation constructive feedback at every stage; UniCredit Group as the Integrity Charter. through responsible lending and other • Supports our business model and our Together these comprise our fourth pillar of sustainable business practices. approach to sustainable growth. sustainability.
22 2007 Sustainability Report · UniCredit Group MANAGING OUR PEOPLE by reflecting and respecting the different problems in the workplace and provides Our Human Resources Division is leading the nationalities and cultures that are vital parts appropriate reporting channels to address effort to optimize our people management of our network. business decisions and other behavior that processes. The goal is to make UniCredit may conflict with the values of the Integrity Group the employer of choice in the Our second priority is to upgrade our Charter. financial sector of every territory in which strategic approach to women’s career we operate. By building the most appealing development. It is essential that we properly Together the Integrity Charter and the workplace possible, by offering the greatest value and fully deploy our human capital Restorative Justice System provide our opportunities for personal growth and – male and female alike – throughout colleagues with the tools they need to be advancement and by providing energizing UniCredit Group. With this objective, some effective, productive and secure in their leadership, we aim to attract, develop projects undertaken in association with the work at UniCredit Group. The values we and retain the most talented and diverse Diversity Program Manager’s office include share have been protected and guaranteed workforce in our industry. an initiative to increase the number of through these institutions, thereby ensuring women in leadership positions (to be defined that UniCredit Group’s sustainable business Achieving this at all levels is central to and implemented in 2008) and an enhanced model will remain a permanent and central fulfilling the organization’s long-term needs focus on women’s promotions and access to feature of the company. for leadership, continuity and stability as development opportunities. we work to produce sustainable business DEVELOPING OUR GROUP-WIDE results. Part of UniCredit Group’s strength UNICREDIT GROUP INTEGRITY IDENTITY derives from its diverse, international CHARTER AND THE RESTORATIVE In the months to come, we will continue workforce, and, as we progressively JUSTICE SYSTEM the process of developing our group-wide integrate the group’s many parts, we are The core of our identity as a group has identity, which is vital to the shared sense striving to leverage this resource to greater been summed up in the values expressed of community and purpose that have been effect. in our Integrity Charter, which serves as the expressed in the Integrity Charter and backbone of everything we do at UniCredit the Restorative Justice System. Our long- With this in mind, we are developing a Group. These shared values are: Fairness, term master brand strategy is designed new diversity management strategy that Trust, Respect, Transparency, Reciprocity to articulate who we are and to nurture a is focused both on cultivating a more and Freedom. These drive the behavior long-term bond with all our stakeholders. international outlook and on properly of everyone associated with the UniCredit That is why UniCredit Group took significant valuing the under-tapped potential of our brand. They enable our colleagues to steps in 2007 to move forward as one female colleagues. A Diversity Program function effectively as entrepreneurs and bank under one banner as we grow to Manager has now been appointed at to maintain a consistently responsible and become one of the strongest banks in UniCredit Group level, as a member of the respectful attitude towards one another, Europe and the world. Executive Development Unit, to spearhead towards our customers and towards all our these efforts. other stakeholders. They are the truths that UniCredit Group encompasses many we all live by. sturdy financial institutions that have come Our first priority within this key initiative is together in the conviction that in unity we to shift from a multi-local to an international To ensure that these values retain power can achieve strength and sustainability. We outlook. One of the 12 areas of competence in action as well as in concept, we have are united in the spirit of shared values and within the UniCredit Group Leadership instituted the Restorative Justice System – a shared responsibilities, of openness and Competency Model is “Embrace Diversity, Be comprehensive internal system by which accountability. In this spirit we reaffirm our Globally Connected”. With these words for we ensure we are able to align our behavior total commitment to sustainable growth, guidance, the office of the Diversity Program to our values. The Restorative Justice achieved in a way that benefits not only our Manager is working to make sure that our System is designed to resolve company shareholders and employees, but also the leadership teams, our people management conflicts according to the principles of the communities we serve, the economies of approach and our internal communications Integrity Charter. It prescribes mediation the 23 countries in which we operate, and enhance the sustainability of our business or meetings to resolve inter-personal society as a whole.
UniCredit Group · 2007 Sustainability Report 23 A culture of sustainability
Our approach (CONTINUED)
Stakeholder engagement
As one of Europe’s leading financial Customers groups, we are proud of our geographical roots and the diverse heritage that forms We aim to be the bank of choice for all the foundation of our common identity. our customers by consistently putting their We are firmly committed to creating a interests at the forefront of every company new way to bank by constantly striving to initiative. Our relationship with our customers serve our clients with innovative products is based on trust and on a deeply rooted and solutions. Our reputation is built on culture of service that emphasizes reciprocal trust, accountability and the quality of our understanding, personal interaction, quality service. Our set of values is founded on products and solutions, transparency and a integrity – a prerequisite for our sustainable high level of competence. growth – making it possible to transform simple profit into broader value for our stakeholders. Investors and markets
In this report, we commit ourselves to Any viable business must earn a sustainable understanding and measuring up to the profit. We want the markets and our expectations of our stakeholders – by investors to be satisfied with our results means of cultivating employee and customer and pleased with the innovative ways in satisfaction and by participating in regular which we achieve them. We pay constant meetings with non-profit organizations and attention to building a leadership position in other NGOs. profitability and growth, which we steadily achieve with the help of our distinctive entrepreneurial attitude, with a firm grip on People governance and compliance and with total adherence to the principles of our Integrity We offer our people regular opportunities Charter. for professional growth and development, distributed on the basis of merit and professional accomplishment. It is our Communities goal to be the ideal company for highly skilled and motivated individuals, whose As a strong and innovative financial group, opinions we will always value and whose we are able to employ the most current suggestions we will always seriously global opportunities and strategies in the consider. As described above, the Integrity service of our local communities and their Charter, the Restorative Justice System development. Wherever UniCredit Group and our diversity initiatives are all parts operates we make every effort to promote of a comprehensive effort to ensure that sustainable economic growth and socially we attain this goal. We are devoted to responsible progress. Accepting our our people and endeavor to treat them all responsibilities and fully aware of our deep- alike with dignity and respect. We similarly rooted community heritage, we endeavor promote and encourage a consistent to play an important role within civil society and reciprocal application of respect and and the varied local communities where we consideration for different cultures within operate. the group.
24 2007 Sustainability Report · UniCredit Group UniCredit Group · 2007 Sustainability Report 25
Corporate Governance
Recent evolution in governance models across Europe 28 The UniCredit case 29 Compliance 34 Reputation management 36
UniCredit Group · 2007 Sustainability Report 27 Corporate Governance
Recent evolution in governance models across Europe
Good governance is an indispensable This section details the role of increased The role of institutional component of a sustainable business model, mergers & acquisitions (M&A) activity, and UniCredit Group has been making a institutional investors, national governments, investors concerted effort to integrate and strengthen regulators and the European Commission on its initiatives on this important front. To the evolution of governance models across Corporate governance has started to be stay abreast of rapidly changing regulatory Europe. It also touches upon the capacity highly considered by institutional investors regimes while developing effective internal of governance to transform complexity into who view it as not only a compliance controls to minimize reputational risk, we opportunity. obligation but an ownership responsibility. require a comprehensive and coordinated strategy that covers all the Units and The growth in the direct power of institutional Divisions of UniCredit Group. Increased mergers shareholders and their internationalization have greatly increased their influence on In support of the recent rapid expansion of & acquisitions activity managements across Europe. our company, we have been consistently occupied with working to ensure that our M&A activity involving European banks and From the investor’s perspective, the essential governance structures have kept pace with UniCredit has sharply increased in the last elements of good corporate governance are: our evolving needs. This chapter provides years, becoming more and more cross- • Boards equipped and motivated to protect a survey of our activities in the sphere of border-oriented and thus increasing the and enhance shareholder value (long-term governance, broken down according to the complexity of governance models. investment returns); following sections: • executive compensation that aligns pay M&A activities have significantly impacted with performance; 1. The recent evolution in governance the business mix with strong product • transparent, accurate and timely financial models, addressing the key changes in diversification, which in turn has added disclosures that investors can trust; the marketplace, insofar as they have additional layers of complexity, requiring • the means for shareholders to monitor affected issues of governance in the a tightening and centralization of control corporate financial performance and to financial sector; structures and the adoption of matrix take action if it falters over the long term. 2. The UniCredit case, providing a detailed management structures. account of the existing governance structure As businesses have developed and more in place at UniCredit Group; Therefore, management challenges facing sophisticated services have been introduced, 3. Compliance, detailing the specific banking groups are considerable. A need for a matrix approach has become more procedures in place within UniCredit Group increased discipline has been given added common, providing a degree of external to ensure proper compliance with the emphasis by: management control and supervision that many regulatory regimes that affect us; • stricter scrutiny by regulatory authorities; did not previously exist. 4. Reputation management, addressing • fiscal and regulatory problems posed by the steps we have taken to minimize cross-border activities; potential repercussions from any • more opaque risks of some of the The role of national missteps that could conceivably have a businesses; negative influence on our reputation. The • greater involvement of institutional governments, regulators UniCredit Integrity Charter is central to investors; and the European these efforts; • influence of consumer pressure groups. Commission By maintaining a cutting-edge approach to corporate governance, UniCredit Group The growing complexity of financial expects to optimize its overall business organizations and some critical events in the model and to serve as an example of financial services industry have prompted sustainable business practice in the national governments, regulators and the financial sector. European Commission to issue a series of
28 2007 Sustainability Report · UniCredit Group The UniCredit case new regulatory measures to ensure: The overall Corporate Governance Since 2001 UniCredit Group has prepared • domestic conditions adapt to changing structure of UniCredit Group has been a special annual “Report on Corporate market structures; defined considering the applicable laws Governance” (based on the “comply • a degree of commonality. and the recommendations included in or explain” principle) intended for its the new Corporate Governance Code shareholders, institutional and other For example in Italy, the Corporate issued by Borsa Italiana S.p.A. in March investors and Borsa Italiana. This report Governance Position Paper issued by the 2006 (the “Code”). The Code was written provides appropriate information on its Bank of Italy asked all Italian banks to with the goal of increasing the clarity of Corporate Governance system. carry out, in a one year period, a Corporate responsibilities and roles, including those Governance Project showing the main of independent Directors and the Board’s UniCredit Group is a company that issues features of their corporate governance internal Committees, and its content was securities on regulated markets in Milan, organization and governance model. The improved as a result of experience acquired Frankfurt and Warsaw and, as such, it must Project was meant to illustrate the reasons in recent years. comply with legal and regulatory obligations why the model chosen was more likely to connected with listing in those markets. ensure efficient management and effective controls and describe the specific choices concerning, among others, organizational structure, accounting control systems, Governance organizational structure: incentive and compensation mechanisms, information flows and shareholders’ rights. the Board of Directors and its Committees
Transforming complexity BOARD OF DIRECTORS into opportunity BOARD OF AUDITORS However, governance is not only an organizational burden. Good governance can change complexity into opportunity and into Permanent Strategic Corp. Governance, HR and competitive advantage where it has been Committee (*) Nomination Comm. (*) designed to support clear and transparent Board processes. This requires: Committees Internal Control • clarity as to where or in which bodies the Remuneration Committee & Risk Committee decisions are made; • clarity as to who has responsibility in the decision-making processes. The Board must consist of an adequate number of CEO informed and qualified non-executive and independent Directors; • clarity and transparency of the information that must drive decision-making; Management Committee • clarity of the legal competence of the Board. It has a clear responsibility to approve strategy and to monitor its development on behalf of the shareholders. Deputy CEO Deputy CEO Deputy CEO
(*) CEO as member
UniCredit Group · 2007 Sustainability Report 29 Corporate Governance
The UniCredit Case (CONTINUED)
Governance organizational structures: the Board of Directors
UniCredit Group has a traditional ensure an effective and efficient reporting provided by each interested party or administrative organizational structure and consultation system within the Board, available to the issuer. The results of the based on the presence of two bodies several Committees have lately been Board’s assessments shall be communicated elected by the shareholders: the reorganized. to the market. administrative body (Board of Directors) and the Board of Statutory Auditors with INDEPENDENCE OF DIRECTORS With regard to Directors in office on 12 administrative control functions. The In accordance with the application criteria March 2008, the company’s Board of control of accounting is entrusted to an stipulated by the Code, the independence of Directors confirmed, and announced to external auditing firm in compliance with Directors is to be periodically assessed by the market, that 16 Directors met the the laws that regulate this function. To the Board of Directors based on information qualification of “independent director”:
Composition of the Board of Directors (%)
30
Independent 70 Non-independent
30 2007 Sustainability Report · UniCredit Group STATUS AND ACTIVITIES OF DIRECTORS
Board of Directors IN OFFICE INDEPEN. AS INDEP. AS % BOARD OF OTHER NAME POSITION SINCE LIST EXEC. NON-EXEC. PER CODE PER TUF DIRECTORS POSITIONS Dieter Rampl Chairman 16-12-2005 n/a X NO YES 100% 3 Gianfranco Gutty Deputy Ch. Senior 16-12-2005 n/a X YES YES 100% - Franco Bellei Deputy Ch. 16-12-2005 n/a X NO YES 100% 1 Berardino Libonati Deputy Ch. 3-8-2007 1 n/a X YES YES 100% 2 Fabrizio Palenzona Deputy Ch. 16-12-2005 n/a X NO YES 92.31% 4 Anthony Wyand Deputy Ch. 16-12-2005 n/a X YES YES 84.62% 5 Alessandro Profumo CEO 16-12-2005 n/a X NO NO 100% 3 Manfred Bischoff Director 16-12-2005 n/a X YES YES 84.62% 2 Vincenzo Calandra Buonaura Director 16-12-2005 n/a X YES YES 100% 3 Enrico Tommaso Cucchiani Director 18-9-2007 2 n/a X NO YES 50% 16 Donato Fontanesi Director 3-8-2007 1 n/a X YES YES 80% 3 Francesco Giacomin Director 16-12-2005 n/a X YES YES 100% - Piero Gnudi Director 16-12-2005 n/a X YES YES 92.31% 1 Friedrich Kadrnoska Director 16-12-2005 n/a X YES YES 100% 8 Max Dietrich Kley Director 16-12-2005 n/a X YES YES 84.62% 5 Salvatore Ligresti Director 3-8-2007 1 n/a X YES YES 100% 4 Salvatore Mancuso Director 3-8-2007 3 n/a X NO YES 60% - Luigi Maramotti Director 16-12-2005 n/a X YES YES 69.23% 10 Antonio Maria Marocco Director 20-5-2007 4 n/a X YES YES 87.50% 3 Carlo Pesenti Director 16-12-2005 n/a X YES YES 69.23% 5 Hans Jürgen Schinzler Director 16-12-2005 n/a X YES YES 92.31% 11 Nikolaus von Bomhard Director 16-12-2005 n/a X NO NO 38.46% 2 Franz Zwickl Director 18-9-2007 2 n/a X YES YES 100% 8
1. Co-opted on 3 August 2007 2. Co-opted on 18 September 2007 3. Co-opted on 3 August 2007; resigned on 31 March 2008 effective as of 1 April 2008 4. Co-opted on 20 May 2007 and appointed by the Shareholders meeting on 30 July 2007. LEGEND Position: Chairman, Senior Deputy Chairman, Chief Executive Officer, Director. List: M/m depending on whether the Director was elected from the list voted by the majority or by a minority (art. 144 (10) of the Issuer Rules (Consob); n/a: not applicable Exec.: Director who qualifies as executive Non exec.: Director who qualifies as non-executive Indep. as per Code: Director who qualifies independent according to the criteria set out in the Code Indep. as per TUF: Director who possesses the independence requirements established by article 148, para. 3 of the TUF (art. 144 (10) of the Issuer Rules (Consob) % Board of Directors: percentage of the Director’s participation in Board meetings (reference is made to the number of meetings that the Director has attended with respect to the number of Board meetings held during the period or after taking up the directorship) Other positions: Total number of positions held in other companies listed on regulated markets (both in Italy and abroad), including financial services companies, banks, insurance companies or other large companies, identified based on the criteria defined by the Board. There is a list of such companies for each Director attached to the Report on Corporate Governance, specifying whether the company that the position is held in belongs to the group that the Issuer is related to.
UniCredit Group · 2007 Sustainability Report 31 Corporate Governance
The UniCredit Case (CONTINUED)
Board Committees % % % AUDIT % AUDIT PERM. % PERM. EXEC. % EXEC. NOMIN. NOMIN. CGHRN CGHRN REMUN. REMUN. & RISK & RISK STRAT. STRAT. NAME COMM. 1 COMM. COMM. 1 COMM. COMM. 2 COMM. COMM. COMM. COMM. COMM. COMM. 2 COMM.
Dieter Rampl Ch 100% Ch 100% Ch 100% Ch 100% M 90.90% Ch 100% Gianfranco Gutty SV Ch 100% M 100% M 100% M 100% M 100% M 100% Franco Bellei DEP. CH. 100% M 100% -- M 100% M3 100% M 100% Berardino Libonati DEP. CH. 100% ------M 100% M 100% Fabrizio Palenzona DEP. CH. 87.50% M 88.89% -- M 83.33% -- M 100% Anthony Wyand DEP. CH. 75% M 77.78% -- M3 75% Ch 100% M 100% Alessandro Profumo CEO 100% M 100% M 75% -- -- M 100% Manfred Bischoff ------M 100% Vincenzo Calandra Buonaura -- -- M 100% ------Francesco Giacomin M 100% -- M 100% ------Friedrich Kadrnoska M 100% -- M 75% ------Max Dietrich Kley -- M 22.22% -- M 33.33% -- -- Salvatore Mancuso4 ------M 75% -- -- Luigi Maramotti -- -- M 100% -- -- M 66.67% Carlo Pesenti ------M 50% -- -- Hans Jürgen Schinzler ------M 66.67% Nikolaus von Bomhard M 25% ------Franz Zwickl ------M 100% --
1. Valid until 3 August 2007. 2. Since 3 August 2007. 3. Position held until 3 August 2007. 4. Resigned on 31 March 2008 effective as of 1 April 2008. LEGEND Exec. Comm.: Executive Committee; specify Ch/M for Chairman or Member of the Executive Committee % Exec. Comm.: percentage of Director’s participation in the Executive Committee meetings (reference is made to the number of meetings that the Director has attended with respect to the number of Executive Committee meetings held during the period or after taking up the office). Nom. Comm.: Nomination Committee; CGHRN.Comm.: Corporate Governance, HR and Nomination Committee Rem.Comm.: Remuneration Committee Audit & Risk Comm.: Audit & Risk Committee Perm. Strat. Comm.: Permanent Strategic Committee % Nom.Comm., CGHRN Comm., Rem.Comm., Audit & Risk Comm., Perm. Strat. Comm.: percentage of the Director’s participation in the Committee meetings (reference is made to the number of meetings that the Director has attended with respect to the number of Committee meetings held during the period or after taking up the office) Ch/M: for Chairman or Member of the Committee
Committees of the Board areas of competence, for the purpose of • Permanent Strategic Committee providing consultation and proposals. • Internal Control & Risks Committee 5 of Directors • Corporate Governance, HR and Nomination In order to further improve governance- Committee To ensure an effective and efficient reporting related processes and models and oversee • Remuneration Committee and consultation system that will enable the key aspects of UniCredit Group’s operations, Board of Directors to perform its functions in and in keeping with international best PERMANENT STRATEGIC COMMITTEE the best possible manner, several Committees practices, at its meeting on 3 August The Permanent Strategic Committee is have been created within the Board, as 2007, the Board of Directors revised the comprised of ten members, the majority of recommended in the Code, each with specific Committees structure as follows: whom are non-executive Directors.
5. For full details on the duties of the Committees of the Board of Directors, please refer to the Corporate Governance chapter of the UniCredit Group 2007 Annual Report - Annual Review.
32 2007 Sustainability Report · UniCredit Group The Committee is chaired by the Chairman accounting and corporate documents REMUNERATION COMMITTEE of the Board and carries out consultative and concerning the proper application The Remuneration Committee is comprised proposal-making functions. Specifically, the of accounting principles and their of seven members, the majority of whom Permanent Strategic Committee provides standardization for the purposes of are independent Directors. It carries out opinions to the Board in response to preparing consolidated accounts; consultative and proposal-making functions. proposals made by the CEO to the Board d) reviews quarterly and semi-annual Specifically, the Remuneration Committee concerning, inter alia: accounts and the Annual Report on provides opinions to the Board in response a) the preparation of UniCredit Group’s the basis of reports prepared by the to proposals made by the CEO to the Board Three-Year Plan; nominated official in charge of preparing concerning, inter alia: b) the determination of UniCredit Group’s accounting and corporate documents. a) the remuneration of UniCredit Group Annual Budget; Directors with specific functions, and c) the determination of UniCredit Group’s CORPORATE GOVERNANCE, especially with regard to the remuneration annual Capital Allocation; HR AND NOMINATION COMMITTEE of the CEO; d) the identification of UniCredit Group’s The Corporate Governance, HR and b) the remuneration of UniCredit Group’s annual strategy concerning equity Nomination Committee is comprised of General Manager if the latter is also the investment transactions (M&A/ seven members, the majority of whom are CEO; reorganizations); non-executive and independent Directors, c) the compensation structure for members e) the approval of equity investment and its duties are to make proposals and of the CEO office; transactions and extraordinary provide advice. Specifically, the Committee d) the remuneration policy for members transactions. provides opinions to the Board in response of the Management Committee (Senior to proposals made by the Chairman or CEO Executive Vice Presidents), Group AUDIT & RISKS COMMITTEE to the Board concerning, inter alia: Management Team (Executive Vice (RENAMED THE INTERNAL a) the establishment of UniCredit Group’s Presidents), Leadership Team (Senior Vice CONTROL AND RISKS COMMITTEE Corporate Governance system, corporate Presidents) and department heads who AS OF 22 JANUARY 2008) structure and UniCredit Group’s report directly to the CEO; The Audit & Risks Committee is comprised governance models and guidelines; e) approval of UniCredit Group incentive of five non-executive Directors, the majority b) the establishment of the policy for plans based on financial instruments; of whom are independent, and carries out the appointment of UniCredit Group’s f) the remuneration policy for company consultative and proposal-making functions. Directors and the policy for the representatives (members of the Boards Among other duties, the Audit & Risks assessment of the Board; of Directors, Boards of Auditors and Committee: c) the appointment of members of the Supervisory Boards of UniCredit Group a) assists the Board of Directors in issuing CEO office and other members of the companies). guidelines for the internal control system Management Committee (Senior Executive and, at least annually, inspects their Vice Presidents), members of general adequacy, efficiency and effectiveness management and department managers Board of Statutory and ensures that the main business risks who report directly to the CEO; are correctly identified and appropriately d) the establishment of policies concerning Auditors measured, managed and monitored; the appointment and succession plan for b) analyzes UniCredit Group’s guidelines members of the CEO office, members Five standing Statutory Auditors are elected for auditing activities and assesses the of the Management Committee (Senior by an ordinary shareholders’ meeting. A annual control plan prepared by the head Executive Vice Presidents), Group Chairman and two alternate Auditors are of the Internal Audit Department, receives Management Team (Executive Vice appointed. The standing and alternate periodic reports and may request the Presidents) and Leadership Team (Senior Auditors may be re-elected. performance of specific audit activities not Vice Presidents); covered in the annual plan; e) appointments of members of UniCredit The standing and alternate members of the c) reviews information received from the Group’s Board Committees at the proposal Board of Statutory Auditors are selected nominated official in charge of preparing of the Chairman. from lists of candidates.
UniCredit Group · 2007 Sustainability Report 33 Corporate Governance
The UniCredit Case (CONTINUED) Compliance
The Board of Statutory Auditors was market risks and operations. The guidelines The reorganization of the Compliance appointed by the shareholders at a meeting are approved by competent organs of the Department at the UniCredit Group level in May 2007 and remains in office until the Group Leadership (i.e., the Administrative was approved with the implementation of approval of the accounts for 2009. The Board Committee and the Risk Committee of Holding Company Internal Regulation No. is made up of Messrs. Giorgio Loli (Chairman), the Board) and circulated to all relevant 162/1. This reorganization was made in Gian Luigi Francardo, Siegfried Mayr, Aldo UniCredit Group entities. recognition of the importance and complexity Milanese and Vincenzo Nicastro (standing of compliance risk (i.e., the risk of incurring auditors). Massimo Livatino and Giuseppe In the discipline of compliance, the risk of judicial or administrative sanctions and the Verrascina are alternate Statutory Auditors. non-compliance is controlled and limited by potential for significant financial loss or means of a dedicated office that integrates damage to the UniCredit Group’s reputation and executes the structure of internal due to breaches of mandatory rules as Other control functions controls at the bank. defined by relevant laws, regulations and self-regulations) in line with the Italian The governance of UniCredit Group’s risks According to MiFID, these organizational Regulatory provisions. is defined by a series of guidelines and control structures perform a primary role in policies, regarding in particular credit and protecting the investor. The new organizational model for the Compliance Department provides that Compliance activities, currently handled by the Italian Legal Entities of the UniCredit Group, are to be centralized within the LAYERS OF THE INTERNAL CONTROL SYSTEM Holding Company, which will provide compliance services on an outsourced contract basis.
While this model will apply to all Italian Legal Entities, the holding company will also provide supervision, strategic guidance and control in the case of foreign Legal 3rd layer Entities and Sub-holdings. This arrangement INTERNAL AUDIT provides a practical solution to the varied, country-specific legislation related to compliance and ensures a consistent group- wide approach to compliance. 2nd layer RISK MANAGEMENT & COMPLIANCE The role of the Compliance Department
The regulations of Bank of Italy and Consob st 1 layer (Commissione Nazionale per le Società e ORGANIZATION / OPERATIONS - BUSINESS LINES la Borsa) detail the primary duties of the compliance office in banking and financial services.
In accordance with these provisions, the Compliance Department:
34 2007 Sustainability Report · UniCredit Group • conducts legal interpretation and Officer at the UniCredit Group level. The vulnerable and propose several steps in an continuous identification of applicable Compliance Officer of the main Legal Entity effort to mitigate risk: laws. This is accomplished through the of each country is also responsible for the • In all interactions with public authorities, issuance of Group Policies; monitoring and oversight of the other Legal employees must strictly adhere to the • handles requests made by other entities Entities within his/her country. The Bank regulations set forth in the Integrity and departments and provides opinions; Austria Compliance Officer also oversees Charter and maintain a transparent, loyal • provides support for the evaluation of the Legal Entities in each country within the and collaborative approach; potential impact on company strategies Central and Eastern Europe (CEE) Division. • When public officials make site visits, and processes of new laws; two employees must be present, where • conducts preliminary compliance practical, in order to mitigate the risk of evaluations of products, procedures, Anti-corruption conduct that might improperly affect the structures and projects within its own examiner. boundaries of competence and assesses and administrative the effectiveness of recommended responsibility: Legislative Particular attention is to be paid to changes; contributions to public officials that could 6 • monitors, in cooperation with the HR Decree 231/2001 be construed as bribery. Contributions and function, the coherence of the system sponsorships in particular are subject to a of rewards to assure consistency with In Italy, UniCredit Group’s strategy for the strict authorization procedure. compliance objectives; prevention of corruption is encompassed • provides counsel and assistance to Top in an Organizational and Management At the time of the development of UniCredito Management in all non-compliance risk Model According to Provisions of Art.6 of Italiano S.p.A.’s Organizational and Managerial matters; Legislative Decree 231/2001 Establishing model, a corruption risk map was made that • cooperates in learning activities; the Administrative Responsibility of included all Organizational Units in Italy. As a • maps non-compliance risks and plans Companies (the “Model”). result of this assessment, approximately 11 related activities; Units were indicated to be of high risk. • provides information to top corporate This Model is part of a wider Group policy bodies and other company’s functions; that is enforced through initiatives that During 2007 we have begun a new • monitors, manages and prevents conflicts involve all UniCredit Group employees. assessment to cope with the many changes of interest. These initiatives seek to raise awareness in UniCredit Group’s structure and to stay of each employee’s responsibility for the current with Legislative Decree 231/2001. The role of the Department is to create/ transparent and forthright management To date, ten of the 115 existing Operational consolidate value for the UniCredit Group: it of the company and its compliance with Units have been assessed. Sixty more is an originator and an agent of significant laws and upright business principles in the operational units will be assessed during the cultural change, influencing corporate workplace. first few months of 2008. culture at all levels. Through its work, it maintains the continuing high level of public In order to enforce the Model, UniCredit confidence in the integrity of UniCredit Group has issued several internal regulations Anti-competition laws Group’s operations and management. which lay out the principles by which all employees are to conduct their daily working and regulations To facilitate the central management of lives. disparate regulatory regimes in foreign Monitoring and evaluation of antitrust countries, the UniCredit Group proposes In order to monitor corruption-related risk, laws are a part of the wider duties of the the identification of Compliance Officers in the internal regulations adopted by the UniCredit Group’s Compliance Department. each country where the UniCredit Group is UniCredit Group address certain activities This includes the interpretation of law, present to liaise with the Chief Compliance in which the UniCredit Group could become the monitoring of new legislation and the assessment of its impact on the strategies 6. Legislative decree 231/2001 is Italian legislation. and processes of the UniCredit Group.
UniCredit Group · 2007 Sustainability Report 35 Corporate Governance
Reputation Compliance (CONTINUED) management
The Compliance Department examines A key element in our path to sustainable antitrust law and regulations issued by growth is our reputation, including the the Authority for Competition (“Antitrust trust we earn from our stakeholders, rating Authority”) and, in relation to European agencies, government bodies and the public legislation, has participated since the through our daily business activities. beginning in the process of its definition in cooperation with the Institutional Relations This section discusses the role of our with the European Union function. Integrity Charter, how we manage our reputation and methods by which Pursuant to the decision of the Italian we develop internal policies with our Antitrust Authority No. 17283/2007, stakeholders. which cleared the way for the merger of Capitalia S.p.A. into UniCredit S.p.A. at the end of October 2007, UniCredit started Leading with the Integrity the process, still ongoing, of selling 186 branches located in 16 Italian provinces Charter in order to eliminate any anti-competitive effects in the provinces with significant One of the ways we have built our market share concentration. reputation is by placing our Integrity Charter front and center in everything we do. As the framework through which Lawsuits / claims we pursue principled business behavior and sustainable growth, it helps us to connected with antitrust manage dilemmas that may arise in daily issues After the split, the New BPH and Pekao S.A. life. It reminds us of the values that are entered into a post-merger agreement which indispensable to doing our job well, to The following section provides summary established that Pekao will participate pro safeguarding our company’s reputation information on three lawsuits and/or claims rata in any costs in the event the verdict of and to enhancing our social legitimacy. It connected with antitrust issues: the Antitrust Court is unsatisfactory to BPH helps keep us focused on the duties and S.A. In the agreement, Bank Pekao S.A. responsibilities that come with being part of • Bank BPH S.A. was sued in the Antitrust committed itself to pay 66% of the above- the community, and it reminds us always to Court by the Antitrust Office (UOKiK). referenced penalty. be committed to transparency and to truth. The suit alleged that BPH along with a number of other banks had engaged • Bank Pekao S.A. appealed the decision of in the forbidden practice of price- the President of the Office for Competition Managing our reputation fixing interchange fees. On 19 January and Consumer Protection (UOKiK) relating 2007, BPH S.A. appealed the Court’s to the establishment of equal level of the Our reputation is one of the most valuable decision and fine in the amount of Zloty Interchange Fee limits. and hard-to-build assets of UniCredit 14,667,240 to the Regional Antitrust Group and at the same time is one of our Court. The appeal may last between one • BA-CA paid a fine for alleged illegal fixing most fragile assets, in need of constant and two years. BPH S.A. and the other of interest rates. In addition, the company protection. banks have combined their lawsuits into is undertaking several initiatives to comply one common suit. An expert witness will with the points raised by the Commission To manage reputation, we have to identify support the banks’ appeal and perform and the Austrian Antitrust Authority during its various sources, quantify its impacts a detailed audit of the credit card a 2006 inquiry into the retail banking and assess its possible consequences. In market. sector. addition, we have to understand how rapidly the world is changing and how these rapid
36 2007 Sustainability Report · UniCredit Group changes affect our definition of good and In developing our policies, we strongly proper management. rely on the contributions of NGOs with relevant expertise. In 2007, we increased Our framework to tackle reputational risk is the scope of our dialogue with NGOs, and twofold. First, we will develop a full-fledged we seek to develop those contacts. Our Reputation Risk Monitoring System aimed engagements have involved a wide variety at constantly assessing how reputational of NGOs, including WWF Germany and risk issues might affect our business. Italy, Greenpeace, Friends of the Earth Italy, Second, we will develop internal social and Urgewald and BankTrack. In December environmental safeguard policies in order to we were among a group of 25 Equator ensure adherence to our guiding principles Principles Financial Institutions that met across the UniCredit Group. with 15 NGOs in Amsterdam to discuss a variety of issues encompassing governance, The Reputation Risk Monitoring System, transparency and grievance mechanisms at once fully operational, will monitor the key the project level. drivers of reputation by means of internal and external measurements, advance Our policies are in accordance with World detection of critical events and avoidance Bank Standards (IFC Performance Standards of reputation impairment. It will also and World Bank EHS Guidelines) and the provide a selection process for corrective Equator Principles. As signatories to the initiatives and forecasts of relevant United Nations Environment Programme impacts. Finance Initiative (UNEP FI) and of the UN Global Compact, UniCredit Group has clearly signaled its commitment to the development Developing internal of multilateral solutions to society’s policies in cooperation most pressing social and environmental challenges. with our stakeholders In 2007, UniCredit Group was particularly As our internal policies have developed on focused on two industries: the defense this front, we have focused primarily on industry and the nuclear energy sector. the most vital issues for our stakeholders, This focus was conceived in order to define and we have engaged them - particularly group-wide ad hoc financing policies for our customers and non-governmental projects within these industries. We share organizations - in an ongoing open dialogue. these policies with key NGOs. For further We do this because we respect and value information, please refer to the “Responsible their views about the forces that affect Lending” section of the “Our Customers” our business and because we seek to chapter. base our long-term strategy upon the most progressive ideas and research. Our approach is to consider all viewpoints, to keep communication channels open, to understand and monitor reputational, environmental and social issues and to seek solutions that are truly in the best interests of our stakeholders and the reputation of UniCredit Group.
UniCredit Group · 2007 Sustainability Report 37
Our people
Key initiatives 41 Our people: a portrait in numbers 42 Compensation 44 Diversity 44 Career development 47 Training programs 48 Listening and communications 52 Labor relations 55 Work-Life Balance and Welfare 56 Health and safety 57 Appendix on industrial relations 60
UniCredit Group · 2007 Sustainability Report 39 Our people
Maximizing our human capital is a 1. Key initiatives, providing a brief UniCredit Group has rapidly expanded constant process at UniCredit Group. spotlight on two of our proudest through acquisitions and mergers in recent We fully understand that our people are achievements in HR; years, and our HR programs and processes key assets in our pursuit of sustainable 2. A portrait in numbers, offering an have expanded with it. In managing these growth. This is why People Management in-depth analysis of the UniCredit Group integrations, our approach to our people has is one of the four pillars on which our workforce and its composition, providing always been based upon our values. “empowering sustainability” strategy has data on distributions by geography, been built. gender, educational level and contract In order to leverage the human capital terms; of acquired companies, we make a Our workforce now numbers 179,938 3. Compensation, providing an overview practice of first conducting a professional individuals, and our network covers of our compensation and remuneration and thorough assessment of existing approximately 50 countries. Successfully philosophy and methodology; technical and managerial competencies. managing diversity and promoting 4. Diversity , including our current work on We universally seek to attain consistency international mobility are core strengths of supporting and broadening diversity in our across the board. We remain committed to our human resources team, and we aim to already highly multicultural workforce; the creation of a single corporate culture become the employer of choice in all of our 5. Career development, offering a survey that respects distinct entrepreneurial markets. of our programs designed to nurture and traditions, deep local roots and the power leverage our valuable human assets, and value of diversity. Two-way, open communication is at the including the Job Posting intranet portlet heart of our efforts. We communicate and international mobility programs; organizational changes across the entire 6. Training programs, including a broad UniCredit Group, consider unions to be array of learning and skills programs, partners and stakeholders and integrate ranging from basic technical training to feedback from our annual “People Survey” courses designed to sharpen managerial into the annual Executive Development skills; Plan. The resulting action plans are 7. Listening and communications, an considered binding documents that must introduction to our expansive internal be respected by our leadership at every communications offerings, from the level. People Survey initiatives to online outreach and networks; We have robust and efficient recruitment 8. Labor relations, providing an update processes that are consistent with our on our activities related to engaging and values and competency models; we always collaborating with our superb workforce; consider local residents for local needs; 9. Work-Life Balance and Welfare, and we make assignments to non-resident including a concise description of employees or managers when they are pension and healthcare offerings at clearly productive to the causes of group UniCredit Group; integration and cross-fertilization. 10. Health and safety, offering a detailed account of our initiatives In presenting the salient developments in aimed at ensuring our people a safe Human Resources at UniCredit Group, we and wholesome work environment, have organized our sustainability-related including the training programs and activities into the following categories: instructional drills in place to guarantee that our employees are prepared for any emergency; 11. Appendix on industrial relations, providing performance charts and additional data.
40 2007 Sustainability Report · UniCredit Group Key initiatives
This section introduces some of our key The Digi-Simplification project aims to LAUNCHING A NEW MODEL initiatives, including the Digi-Simplification strengthen business partnerships, harmonize The Digi-Simplification project will project, the new HR delivery model and the UniCredit Group culture and achieve cost introduce our new HR Delivery Model, UniCredit European Works Council. savings. In order to reach these goals the which focuses on “Treating Colleagues project will align HR processes throughout as Customers”. This model has four key UniCredit Group by using the same IT aspects. First, it features the improvement A transformational solution group-wide (based on a SAP of web-based, self-service features in system) to provide managers with reliable the HR Portal for Managers (“Manager realignment data and employees with transparent and Self-Service” or “MSS”) and employees accessible HR information. (“Employee Self-Service” or “ESS”). In the last few years, we have begun to Second, it introduces Shared Service transform Human Resources into a more The project began at the end of 2006. Centers as regional, central points of customer-oriented department. The Digi- The first phase consisted of mapping contact for all HR matters. Third, it Simplification project, representing a major and describing main managerial and provides for the empowerment of Line three-year investment, is a key initiative administrative processes. As a result, we Managers in terms of managing their that will radically enhance the efficiency, brought aspects of our new Headcount staffs. Finally, it creates the new position responsiveness and transparency of our Report Management system online in of the HR Business Partner, who acts as operations. 2007 for testing. We will implement new an advisor and consultant to managers SAP solutions, collect data from additional and executives on issues of general HR countries and open Shared Service Centers. strategy.
New HR Delivery Model
Online access to HR HR Gate: Global HR Homepage, MSS+ESS Portal and the flexibility Web based HR Portal providing access to Self Services and InfoBase of self-services
Personal point of HR Service: Shared Service Center contact to HR via HR Generalist, HR Specialist & back office phone or an email EMPLOYEE/MANAGER
Seeking more complex HR Partners: Business Partners HR advice Operationalized HR Strategy
HR Expertise Center MANAGER Specialist assistance Product and Process owner for Top Management
UniCredit Group · 2007 Sustainability Report 41 Our people
Our people: a portrait in numbers1
Highlighting group-wide Number of UniCredit Group employees by country and region, 2007 1,595 consultations 2007 % OF TOTAL 8,420 2 Italy 64,384 35.78% Italy In 2007, we also established the UniCredit Germany 26,657 14.81% 39,025 64,384 Germany European Works Council. The council Austria 12,734 7.08% Austria follows from an innovative agreement Poland Poland 27,123 15.07% 27,123 CEE concluded with the Special Negotiating CEE 39,025 21.69% 26,657 CIS Body highlighting the importance of CIS 8,420 4.68% 12,734 Others group-wide employee consultations. Others 1,595 0.89% The agreement also paves the way for Total 179,938 100.00% joint declarations in key areas including training, health and safety and equal opportunity policies. The majority of UniCredit Group employees are from Italy and the CEE, followed by Poland, Germany and Austria. UniCredit Group, with three percent of its employees (5,439) being protected class employees in 2007, complies with all national regulations regarding protected class employees.
Number of UniCredit Group employees by employment tier, 2005-20073 2005 % 2006 % 2007 %
Top Management 1,498 1.01% 1,719 1.17% 1,959 1.27% Executive & Middle Management 30,414 20.47% 31,332 21.25% 30,842 20.07% Staff 116,638 78.52% 114,410 77.59% 120,861 78.65% Total 148,550 100% 147,461 100% 153,662 100%
The distribution of our employees has remained relatively stable over the past three years.
100 Staff 90 80 Executives & Middle Management 70 Top Management 60 % 50 40 30 20 10 0 2005 2006 2007
1. In figures and in all following charts and tables in this chapter, CEE includes the Baltic states, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Serbia, Slovakia, Slovenia and Turkey; CIS includes Kazakhstan, Russia and Ukraine; Others includes Ireland, Japan, Luxembourg and USA; Headcount is as of 31 December 2007. 2. This is the only data in this chapter that includes Capitalia’s 26,276 employees. The data differs from the 2007 UniCredit Group Annual Report: Annual Review because these figures represent “headcount” whereas the Annual Report: Annual Review figures represent “Full- Time Equivalent (FTE)”. 3. “Top Management” in Italy includes the Dirigenti, and in all other territories includes CEOs, first-liners(CFO, COO, CRO, etc.), Board Members and Division Heads; “Executive and Middle Management” in Italy includes the Quadri (Q1, Q2, Q3, and Q4) and in all other territories includes second and third-liners (Directors, Divisional/Branch Managers, Heads of Units/Departments and Deputies, etc.); “Staff” in Italy includes the Categorie Professionali and in all other territories includes all other employees.
42 2007 Sustainability Report · UniCredit Group The CEE Division is the largest in terms of employees in UniCredit Group, while the Number of UniCredit Group employees by Business Division, 20074 Asset Management Division is the smallest. 3,737 2,343 3,775 The percentage of UniCredit Group CEE Division 9,968 employees by contract type has remained Retail 10,225 44,813 Poland’s Markets relatively stable since 2005, with the biggest Global Banking Services change being the slight increase in the 13,724 Corporate Division Corporate Center percentage of full-time staff in 2007 as 26,687 Private Banking 38,360 compared to 2006. Markets & Investment Banking Asset Management
Percentage of UniCredit Group employees by contract type, 2005-2007 (part-time vs. full-time) 2005 2006 2007 PT FT PT FT PT FT
Executive & Middle Management 0.54% 19.93% 0.68% 20.57% 0.56% 19.51% Staff 8.39% 70.13% 8.17% 69.42% 7.89% 70.76%
Germany and Poland have the highest Percentage of UniCredit Group employees by contract type, 20075 (fixed term vs. not fixed) percentage of fixed term contracts, while FIXED NOT FIXED Italy and the CIS have the lowest. Italy 2.25% 97.75% Germany 6.04% 93.96% Austria 2.44% 97.56% Poland 5.73% 94.27% CEE 3.47% 96.53% CIS 1.03% 98.97% Others 4.20% 95.80%
Different ages groups are well-represented Percentage of UniCredit Group employees by age, 2007 at all organizational levels with the exception TOP EXECUTIVE & MIDDLE REMAINING of young employees (up to 30 years), which MANAGEMENT MANAGEMENT STAFF are highly represented in the Remaining Above 50 years 31% 21% 14% Staff category because most entry-level 41-50 years 45% 38% 24% positions are at this level. 31-40 years 23% 36% 32% up to 30 years 1% 5% 29% Total 100% 100% 100%
Percentage of UniCredit Group Employees by education level, 20076 TOP EXECUTIVE & MIDDLE REMAINING 4. The Corporate Center refers to the functions dealing with MANAGEMENT MANAGEMENT STAFF coordination of guidance, support and control within UniCredit Group. 5. Regional designations are as above. Advanced Degree 10.61% 5.04% 2.09% In European business terms, a “fixed contract” refers to an Bachelor’s Degree 55.03% 45.57% 42.99% employment arrangement terminating by a fixed date; “not fixed” refers to employment arrangements intended to continue High School Diploma 31.39% 46.55% 46.29% indefinitely. Others 2.97% 2.84% 8.63% 6. Headcount is as of 31 December 2007 and includes only 90% of the total number of employees. Total 100.00% 100.00% 100.00%
UniCredit Group · 2007 Sustainability Report 43 Our people
Compensation Diversity
Within UniCredit Group, we base our Compensation UniCredit Group’s ability to attract, develop remuneration and incentive plans on and retain talented employees at all levels common principles with a view to achieving methodology is crucial to fulfilling the organization’s our strategic objectives, while recognizing needs for leadership, continuity and stability personal effort and directing motivation Components of Compensation Package: in order to produce sustainable business towards the medium and long term. • base salary: related to experience, results. responsibilities and skills; Our assessment, remuneration and • variable annual incentive: closely related UniCredit Group aims to become an incentives systems aim to achieve higher to the performance of the individual over employer of choice in every market in which levels of excellence among our people. the year. it has a presence. Therefore, Diversity plays a central part in our People Management The package also offers colleagues a philosophy and practices. Compensation philosophy number of benefits: • financial facilities: to provide support Our compensation philosophy has its at key moments in their lives, including A new strategic approach foundation in performance management. provision of our group’s professional services and skills; We are developing a new Diversity UniCredit Group performance management • supplementary social security plans: to management strategy that is currently is based on: provide substantial guarantees for staff focused on developing an international • performance appraisal: we take well-being on retirement; outlook and a proper valuation of women’s into consideration results (individual • supplementary health benefit plans: to potential as a starting point for this key and business ones) as well as the provide healthcare guarantees for staff initiative. competencies and values of our well-being. competency model; TOWARDS AN INTERNATIONAL • compensation and benefits: we constantly OUTLOOK review our compensation structure to Performance Our first priority is to shift from a multi-local assure the alignment with UniCredit Group to an international outlook. A key part of strategic priorities and current market management stages this shift involves the development of the practices. Within the job analysis process UniCredit Group Leadership Team based we use broadbands in order to facilitate In most countries, the percentage of on a clearly articulated UniCredit Group organizational flexibility, encourage employees involved in the performance Leadership Competency Model. individual career development and ensure assessment process is well above 70%. market competitiveness. The UniCredit Group Leadership Competency Model addresses four areas and 12 competencies, one of which is “Embrace Diversity, Be Globally Connected”. We are working to make sure that our leadership GOAL MONITORING INDIVIDUAL REWARD teams, our people management approach SETTING AND FEEDBACK APPRAISAL and our internal communications enhance the sustainability of our business by reflecting and respecting the different nationalities and Business Manager On the basis of Incentive cultures that are vital parts of our network. & individual, and employee the competency scheme / qualitative responsibility model, appraisal Bonus & quantitative to track results with individual PROPER VALUATION objective performance development plans Merit OF WOMEN’S POTENTIAL settings for all employees increases Our second priority is to upgrade our Informal feedback during an annual takes place as discussion with Promotion strategic approach to women’s career needed their managers
44 2007 Sustainability Report · UniCredit Group development. It is essential that we We understand that a positive dialogue for SUPPORTING NEW INITIATIVES continue to properly value and fully deploy our people must necessarily also be positive We continue to support new initiatives. our human capital throughout UniCredit for the bank, and we encourage the growth For example, in 2007 we proactively opted Group. By doing so, we will be ideally of new ideas and performance-oriented to participate in Italy’s experimental phase placed to successfully compete for top solutions. of the “Bollino Rosa – SONO” project talents. (“Pink Ribbon – Same Opportunities, New Opportunities”). Launched by the “BEYOND PARITY” A new organizational Italian Ministry for Employment and During 2007, the HR department of the Social Security, this program is aimed at Retail Division developed a project called approach developing a gender-equality certification “Beyond Parity” within the wider Diversity system. For now, the program is a Management project. Over the past few years, we have also voluntary system that enables private and adopted a new organizational approach to public companies and organizations to The project recognizes the value created Diversity management. demonstrate their commitment to real non- by the many talented women in the Retail discriminatory strategies and practices. The Division. Tightly linked with this initiative, Our actions in this area include creating results of the project will be available in the we established the Equal Opportunities dedicated positions, designing learning first half of 2008. Committee in 2007. Composed of programs, supporting new initiatives and management delegates and trade-union appointing a Diversity Program Manager. THE DIVERSITY PROGRAM MANAGER representatives, the committee is charged Since 2007, a Diversity Program Manager with generating positive action plans in the SUPPORTING DEDICATED POSITIONS has been appointed at UniCredit Group arena of equal opportunities. We support organizational positions level, as a member of the Executive dedicated to Diversity management Development Unit. Some projects One of the most important aspects of within some of our largest Divisions undertaken in association with this office “Beyond Parity” has been the “listening” in Italy, Germany and Austria. These include an initiative to increase the number initiative. Promoted by UniCredit Banca positions are imbued with responsibility of women in leadership positions, which through a survey, “Women in UniCredit for the implementation of programs will be defined and implemented in 2008, Banca,” it represents a concrete with dedicated budgets, including and an enhanced focus on women’s commitment to equal opportunities childcare, talent development initiatives promotions to leadership roles and access at the company. and mentoring programs designed to to development opportunities, making foster and support women’s professional use of such existing HR programs as the The survey is addressed to all the female development. Executive Development Plan. personnel at the bank and is designed to synthesize opinions and inputs relating to DESIGNING LEARNING PROGRAMS On a group-wide basis, while women issues that bear on all our professional We designed a learning program entitled received more promotions than men in lives. “Cross-Cultural Diversity and Inclusion”. 2007, these figures generally reflect the The program is now available at our group’s overall gender composition. The survey is organized according to UniManagement training facility, which is professional development and growth, job discussed in detail in the following sections. satisfaction and motivation, fairness and work-life balance (including family leave and part-time options). Percentage of female UniCredit Group employees with part-time contracts out of all women by organizational tier We expect this survey, along with our other 2005 2006 2007 listening initiatives (including the annual survey on overall workplace conditions), to Executive & Middle Management 0.76% 0.93% 0.84% be of great use and benefit to our company. Staff 13.24% 12.76% 12.32%
UniCredit Group · 2007 Sustainability Report 45 Our people
Diversity (CONTINUED)
Percentage of UniCredit employees by gender, contract type (fixed vs. not fixed) and Promotions to higher contractual country/region, 2007 job grade by gender (%) MF FIXED NOT FIXED FIXED NOT FIXED
Italy 6.68% 51.21% 3.30% 38.82% Germany 6.99% 37.95% 6.31% 48.75% Austria 3.33% 26.79% 2.34% 67.54% 45 55 Poland 2.34% 21.11% 5.12% 71.44% CEE 4.58% 27.97% 13.63% 53.82% F CIS 12.09% 24.03% 18.59% 45.28% M Others 0.76% 55.93% 3.47% 39.84%
Although there has been a slight increase Number of UniCredit Group employees by employment tier in the number of female top managers, and gender, 2005-2007 men continue to dominate the top employment tier. Staff Executive + Middle 7. Headcount is as of 31 December 2007 and includes only 90% 75,513 Management of the total number of employees. 40,216 74,194 41,940 78,921 41,125 Top Management 19,838 10,576 19,933 11,399 19,216 11,626 1,332 166 1,503 216 1,675 284 M F MF MF 2005 2006 2007
Number of UniCredit Group employees by contract type, organizational tier and gender, 2007
Staff Executive 41,007 + Middle 933 11,192 67,729 Management Top Management 19,121 95 767 10,859 17 1,658 6 278 MF MF PT FT
Number of UniCredit Group employees by educational level and gender, 20077
40,821 36,593
24,180 23,381
5,001 5,230 1,968 1,946
MF MF MF MF Advanced Degree Bachelor’s Degree High school Diploma Others
46 2007 Sustainability Report · UniCredit Group Career development
UniCredit Group heavily invests in developing DEVELOPING LEADERSHIP Facilitating international our people’s leadership and professional The Executive Development Plan (EDP) is skills. We design methods and means to the centerpiece of our effort to develop mobility identify and develop competencies at both leadership across UniCredit Group. Its the individual level and across UniCredit central objective is to accelerate the Our International Mobility Project has Group as a whole. professional growth of UniCredit Group become a powerful and enriching career leaders by means of a culture of feedback development tool, exceeding its origins as a We run a variety of programs to match the and continuous development. About 1600 means of aligning group business models. diverse needs of our employees, and all of executives were involved in the process in Designed to ensure that the best resources them are based on a common principle: a 2007. were properly matched to the most culture of continuous feedback designed appropriate positions, the project continues to nurture development. One of the many NURTURING TALENT to target and draw in an increasing number benefits of this approach is that we are The Talent Management Review is of talented and highly skilled personnel. constantly developing a strong UniCredit dedicated to those professionals who Group Leadership Team. demonstrate the potential to achieve In the past cross-border transfers mainly UniCredit Group leadership roles. consisted of senior managers charged The sharp focus on development at The program is focused on the early with carrying out diplomatic roles to or UniCredit People Management strengthens identification of UniCredit Group talent from branches and representative offices our employees’ shared sense of identity, to feed the pipeline for next-generation worldwide. This traditional approach has affiliation and purpose. The program leadership. About 400 employees were changed in recent years as international enables us to invest in qualified people involved in 2007. work experiences are crafted to facilitate through dedicated development processes, career growth, exposure to diverse work to guarantee equity and transparency in LINKING PERFORMANCE TO VALUES styles and the development of talent. managing appraisal and development A Performance Management System is processes throughout UniCredit Group, to also in place in most countries. Employees Increasingly, non-executives are being leverage our international structure, to take are evaluated according to a Competency tapped for international assignments. advantage of cross-cultural opportunities Model that assesses the consistency and to invest in our Diversity. between their achievement of established targets and the suitability of the manner Accordingly, this section describes how in which they are achieved. The core we implement specialized appraisal competencies and behaviors in question and development processes, facilitate are aligned with the UniCredit Group international mobility and connect people Integrity Charter. with positions.
Specialized appraisal Number of cross-border transfers by host country, 2007 MIDDLE MANAGEMENT and development COUNTRY EXECUTIVE & REMAINING STAFF TOTAL processes Italy 10 58 68 Germany 10 19 29 We have developed different appraisal and Austria 11 26 37 development processes for different groups Poland 9 14 23 of employees. These processes include CEE 48 39 87 the Executive Development Plan, the Talent CIS 9 8 17 Management Review and a Performance Other 21 51 72 Management System. Total 118 215 333
UniCredit Group · 2007 Sustainability Report 47 Our people
Career development (CONTINUED) Training programs
Connecting people At UniCredit Group, we offer our employees learning process is a continuous experience opportunities and tools to help them shape that integrates both personal and business with positions their careers. For us, investing in our people development. is the natural way to develop a sustainable UniCredit Group makes it easy for its people business capable of meeting the long-term The UniCredit Group Learning and to find or fill open positions through Job challenges posed by an increasingly global Development Expertise Center offers learning Posting, an online tool launched in October and complex market. programs, executive and group-wide training 2003 that promotes internal mobility and courses and a framework for the widespread helps employees meet their personal and This section details our approach to learning dissemination of basic skills and language professional goals. and development, fostering creativity, key training. training data, UniCredit Group Leadership PROMOTING INTERNAL MOBILITY Programs and specialized training. ADAPTABLE TRAINING MODELS The Job Posting portlet, accessible to all While executives may become individually our employees, allows them to identify involved in UniCredit Group learning and monitor internal career opportunities, activities, all Competence Lines and interact with colleagues directly and A principled approach Divisions additionally determine their own transparently, stimulate intercultural and to learning and training needs and select their own content professional exchanges and identify and for general basic skills training, maintaining encourage internal competencies. Since development consistency with UniCredit Group’s shared 2003, the Job Posting portlet has steadily training framework under the Golden Rules. become a means for our employees to We pursue our training objectives according Furthermore, they define, design and deliver seek out international postings. Since its to our UniCredit Group Golden Rules – a set necessary technical training and manage inception, more than 15,000 colleagues of precepts that codify our belief that the and coordinate the process internally. have submitted their curricula vitae.
MEETING PERSONAL AND PROFESSIONAL GOALS The UniCredit Group’s Golden Rules of Learning All colleagues are authorized to apply through Job Posting as long as they have and Development been with UniCredit Group for at least two years and in their current jobs for at least • Learning is a life-long experience that can assist both personal and business one year. Specific job requirements for the development posting are specified by the posting entity. • Learning and development processes and activities must be aligned with the Candidates are pre-screened centrally Integrity Charter and then forwarded to the appropriate • Learning activities foster innovation, cross-cultural development and knowledge HR office. The selected candidates are sharing interviewed, and the successful ones are then transferred, taking care to respect • Learning and development activities must be linked to appraisal or assessment the timeframe needs of the candidate’s mechanisms previous office. • Every individual is in control of his or her own learning and development program, within company guidelines and according to their interests and aspirations • Learning and development activities must be consistently measured and monitored • Leadership and managerial development activities must be based on established competence models • Learning activities are designed to take into consideration different learning styles • Trainers and facilitators for learning activities must comply with UniCredit Group’s requirements and values
48 2007 Sustainability Report · UniCredit Group All leadership training activities are changes on the fly and react immediately is organized around different activities developed in accordance with the and effectively to the resulting scenarios. according to the target group: Basic courses, Leadership Competency Model, which has such as Building Blocks, are for the personal been designed to highlight market and FOLLOWING A COMMON skills development of the first managerial product knowledge, adherence to UniCredit FRAMEWORK levels; leadership programs, such as Group values, leadership abilities and The UniManagement Center offers a wide Learning Labs, are for higher managerial personal character. variety of learning experiences that levels; and Leadership Programs (UniQuest make up the UniCredit Leadership and UniFuture) are for selected groups Curriculum - a development path providing of participants at different stages of their Fostering creativity a common framework for leadership leadership growth. development. The Leadership Curriculum UniCredit Group designed UniManagement to meet the growing training and development needs of its leaders, who will Number of UniCredit Group Employees guide the Group through the demanding Number of UniCredit Group trained, 2007 challenges of today and, more importantly, employees trained by type of TRAINING RATIO 8 tomorrow. training received, 2007 5,382,593 Total hours of training 153,662 Employee headcount Headquartered in Turin, UniManagement 16,595 Training hours per is a key initiative that takes a completely 35.02 person 30,804 innovative approach to achieving one of Technical training UniCredit Group’s key objectives: becoming 147,051 Managerial a place where different but complementary training entrepreneurial skills and culture come Foreign 8. “Managerial Training” indicates training related to career Language development and management of resources (e.g., leadership, together to develop an exciting and training communication skills, etc.); “Technical Training” indicates all training strictly related to activities performed by the employees stimulating exchange. (e.g., customer assistance, training for sales of new products).
The highly innovative spirit of this center Number of training hours by organizational tier and type of training, 2007 is demonstrated by the architecture and MANAGERIAL TECHNICAL FOREIGN LANGUAGE organization of the work spaces. These TRAINING TRAINING TRAINING were designed to maximize the opportunity Top Management 17,040 15,331 24,886 for associates to interact, cooperate and Executive & Middle Management 214,842 1,161,543 182,079 grow together. UniManagement has used Remaining Staff 421,558 2,722,581 622,733 architecture to create flexible new spaces Total 653,440 3,899,455 829,698 that can stimulate the thought processes, concentration, creativity, and inventive power of our managers. We hope that these spaces will help us to fully unleash the human Number and percentage of training hours by type potential contained within today’s UniCredit of training and employment tier, 2007 Group. Remaining Staff Executive and Middle The flexibility of these spaces and the Management speed with which they are changed reflect 421,558 2,722,581 622,733 Top Management the strong interest UniCredit Group has in developing capable leaders who can face strategic and operational challenges with 214,842 1,161,543 182,079 confidence and clarity, quickly interpret 17,040 15,331 24,886 Managerial Technical Foreign Language Training Training Training
UniCredit Group · 2007 Sustainability Report 49 Our people
Training programs (CONTINUED)
The UniCredit Group encourages employees to share experiences who have been prepared and certified by and to take the necessary time for individual Teleos. leadership programs development and learning. The L4R Basic program is for employees UniQuest and UniFuture are key elements DEPLOYING THE LATEST preparing to assume managerial roles. of the UniCredit Group Leadership Project. INSTRUCTIONAL APPROACHES Each program is designed for select groups Other components of our Leadership L4R ADVANCED of employees at specific stages of leadership Curriculum include Learning Labs and This program revolves around four separate development. Building Blocks. These two training two-day seminars, each devoted to one programs, based on the latest findings in of the distinct quadrants of emotional DEVELOPING PROMISING YOUNG adult learning research, follow two different intelligence. Every manager chooses one PROFESSIONALS instructional approaches. of the four. Each seminar is followed by UniQuest is an international development voluntary individual coaching for six months. program aimed at promising young The Learning Labs present our more professionals working at UniCredit Group. It experienced managers with powerful peer- One hundred and eighty managers have was established to achieve two main goals. to-peer knowledge-sharing experiences. participated, and 13 coaches chosen from The Building Blocks challenge new among UniCredit Banca managers have First, UniQuest is tasked with facilitating managers with a combination of interactive been prepared and certified by Teleos. the integration of UniCredit Group’s various learning methods, direct experimentation entities and fostering the development of and shared experiences. L4R COACHING a European corporate culture based on a Our coaching service consists of meetings shared belief in the value of differences, a between the managers who enroll and a common set of values and a single objective “Leadership for Results” professional coach employed by the bank. – sustainable growth. Second, UniQuest’s The coach has been certified by the Teleos mission is to invest in internal growth and (L4R) Leadership Institute and selected from ensure that there is a steady supply of within the L4R facilitation and coaching young and promising talent in our leadership Leadership for Results is an experimental department. pipeline. program of the Retail Division that is based on the Emotional Intelligence The coach makes use of targeted UniQuest is designed to encourage a Model developed by Daniel Goleman. The questionnaires and activities to help diverse workplace environment where underlying concept is that developing one’s the manager fully explore the situations employees can experience international and emotional intelligence will lead to resonance, he or she is experiencing and discover multicultural exchanges by making use of which in turn can generate results. It was his or her own development objectives. innovative technologies and distance-work created through a partnership between the The facilitation process clarifies these systems to interact with colleagues from Teleos Leadership Institute in Philadelphia objectives and highlights the actions and different countries. and the UniCredit Training Department. strategies necessary to achieve them. The coach supports the manager’s self-reliant PROMOTING CHANGE We have executed two complementary translation of these goals into practice. AND PROVIDING PATHS programs, L4R Basic and L4R Advanced. UniFuture is a leadership development track for senior managers in UniCredit Group. The L4R BASIC program has two objectives. First, UniFuture This three-day intensive immersion program, is intended to promote change, sustainable in the form of an experimental workshop business, product development and process supported by facilitators, is designed to innovation. Second, UniFuture is tasked support the personal development of with providing individuals with tailored individual Leadership Team members. We leadership development paths. This program employ our own UniCredit Banca facilitators
50 2007 Sustainability Report · UniCredit Group Specialized training STRENGTHENING TECHNICAL technical training activities involved 1,600 AND LINGUISTIC SKILLS people in 2007, an increase of 80% over UniCredit Group provides its employees Specialized training is also offered by the 2006. with excellent opportunities to pursue UPA Technical School, which is evolving specialized training, including through to include a wider array of professional SPECIAL PROGRAMS special master’s programs, UPA Technical training courses. In 2008, UPA Technical Team@work is a special event-based School, special programs and financed will launch the Lifelong Learning Center, the program designed to encourage creative trainings. aim of which is to develop the technical and problem solving, increase decision-making linguistic skills of UniCredit Group employees efficiency in complex organizations and OPPORTUNITIES FOR DEVELOPMENT on an ongoing basis. facilitate the integration of the nationalities, AND ADVANCEMENT cultures and organizational components The Master’s in Banking and TRAINING FOR NEW HIRES embraced by UniCredit Group. In the course Entrepreneurship, Master’s in Private UniCredit Group’s technical training for new of this program, UniCredit Group enrolled Banking and Master’s in Corporate hires is conducted by the UPA Technical 1,416 participants in 21 events during 2007. Banking programs were established in School. UPA’s core training competencies collaboration with prestigious international cut across the activities of the entire FINANCED TRAINING universities to provide employees with highly UniCredit Group. They provide professional Financed training aims to strengthen the specialized training and an opportunity for training for new hires with a focus on professional skills of UniCredit Group in-depth professional development and establishing a strong foundation of basic employees in order to strengthen their advancement. The Master’s in Banking knowledge and basic technical training individual professional profiles. Financed and Entrepreneurship particularly targets preparing participants to take on specific training supports activities designed students from the CEE who want to begin a roles in UniCredit Group’s Retail, Corporate specifically for employees over the age of 45. career at UniCredit Group. and Private Banking Divisions. UPA’s “WELCOME BACK” “Welcome Back” is a training program for employees who are returning to work after extended leaves of absence (over five months) and need to be updated on changes to their work environment, if any.
The program is designed to facilitate the return to work process through a thorough and well-structured briefing on key changes to the company and to support our employees by staying positive in the context of a work environment that can be every bit as changeable and dynamic as our personal lives.
Thomas Struth, Museo del Prado 7, Madrid, 2005 Credit: ©2008 Thomas Struth
UniCredit Group · 2007 Sustainability Report 51 Our people
Listening and communications
Our approach to maintaining an open the reputation to function effectively there. Integrity Charter Day is an excellent dialogue with our employees includes the example of senior management’s Integrity Charter, the Restorative Justice Because today’s market landscape is commitment to the full engagement of System, the Ombudsmen Network, action increasingly characterized by complexity, a our employees in jointly developing and plans put in place after the “Your Voice, business made up of thousands of people working according to our shared set of Our Future” People Survey, and an array of cannot be successfully run with a pure values. On 1 October 2007, Integrity intranet channels, among others. “command and control” approach. Thus, Charter Day was held in all UniCredit in order to free up our people to act as Group territories. Months of preparation entrepreneurs, we rely on our shared set preceded the event, with more than 1,600 The Integrity Charter of values as our handbook in a competitive colleagues participating in nearly 100 focus marketplace. groups to explore how we could better The Integrity Charter represents the set of apply our core values to our daily working shared values that form the foundation of The Integrity Charter is the result of an on lives. Colleagues were engaged in open UniCredit Group’s identity. These common going process that brought UniCredit Group’s discussion within teams in order to review values provide guidelines for our behavior employees together to discuss our corporate what has been achieved so far and to and support in handling the dilemmas culture and to draw up a set of principles. develop a deeper understanding of how to that may sometimes arise in our everyday The process started in 2003 with a project apply our values when interacting with our professional lives. The Charter was built up designated “the Values Laboratory,” in customers, local communities and other from a core set of values we describe as which over 1,500 colleagues participated in stakeholders. Managers moderated the “the Foundations of Integrity”. They include corporate values workshops. open discussions and collected the main Fairness, Transparency, Respect, Reciprocity, suggestions emerging from the discussions. Freedom to Act, and Trust. INVOLVING ALL OUR EMPLOYEES The success of Integrity Charter Day, now a The Integrity Charter is not a static UniCredit Group tradition, was underscored ONLY INTEGRITY CAN PRODUCE document, but rather a living tool intended by the feedback received afterwards from a SUSTAINABILITY to evolve over time in order to stay up to remarkable 80% of those polled. The Integrity Charter focuses particularly date with the ever-changing needs of all of on the concept of integrity because, as a UniCredit Group’s diverse entities. As such, Integrity Charter Day 2007 was also driver of social legitimacy and reputation, all Integrity Charter projects are linked important in that it provided us with the only integrity can produce sustainability. together and based upon the concept opportunity to welcome our new colleagues Sustainability, in turn, enables profit to be of participation; every Integrity Charter from recent acquisitions. The Integrity transformed into value for our stakeholders. projects are not just a one-off initiative, but Charter booklet was distributed to all new UniCredit Group is keenly aware that a are part of a continuing effort, in which all colleagues from Aton Capital and the business can play an active part in any our employees are involved. former Capitalia Group. market only to the extent that it possesses
Number of UniCredit Group employees using the Restorative Justice System by country/region and case status, 20079 CASES NOT EFFECTIVE MONTHS OF CASES CASES NOT CONTINUED CASES COUNTRY OPERATIONS SUBMITTED ADMITTED WITH TAKEN ON MEDIATIONS REPORTINGS MEETINGS
Austria 8 12 1 1 10 1 6 3 Hungary 3 11 2 9 9 Germany 12 36 8 5 23 3 16 4 Italy 14 87 6 32 49 15 13 21 Slovakia 1 1 1 1 Total 147 17 38 92 19 45 28
92 cases were taken on by the Restorative Justice System as of 31 December 2007.
9. The Restorative Justice System was launched in Poland in September 2007, and an Ombudsmen network has been established there. At the moment, Restorative Justice System data for Poland is not available. The Restorative Justice System was launched in Bulgaria, Croatia and Slovenia in January 2008.
52 2007 Sustainability Report · UniCredit Group The Restorative The Ombudsmen are independent DEDICATED SECTIONS ON ONEGATE appointees who liaise directly with the office AND THE LOCAL INTRANET SITES Justice System of the UniCredit Group’s Chairman. They These pages provide our employees are responsible for assessing the validity with vital information on how to apply for UniCredit Group designed the Restorative of the claims of each submitted case. The Restorative Justice. From January 2007 to Justice System to resolve internal conflicts Mediators are third parties from outside of January 2008, nearly 14,000 employees and guarantee the proper and uniform UniCredit Group who specialize in facilitating visited the Integrity Charter pages on application of our Integrity Charter. dialogue between conflicted parties. The OneGate. Ombudsmen and Mediators guarantee The Restorative Justice System promotes confidentiality in their dealings. individual responsibility and the voluntary “Listening Road Show” resolution of conflicts between parties. If relationships within UniCredit Group Communicating The Listening Road Shows, which have been damaged by behavior deemed generate a dialogue between our top inconsistent with the values set forth in the our values management and our people in the Italian Integrity Charter, the Restorative Justice Retail Division, are important because System provides a forum in which the We have developed many different channels they leverage the voices of our loyal dispute can be mediated. to keep our employees informed about employees. Since 2004, our top managers the Restorative Justice System and its have traveled from site to site to attend The Restorative Justice System works functions, including “Values in Action,” the open forums with our employees, to hear through three distinct tools: Ombudsmen Road Show and dedicated a broad range of opinions and to identify • Mediation - the most appropriate tool for areas on the intranet sites. evolving needs and potentially critical resolving violations of the Integrity Charter situations. Afterwards, our top managers between individuals; “VALUES IN ACTION” develop a synthesis of what they have • Reporting - to pinpoint corporate policies “Values in Action” is one of the UniCredit heard and design and implement or decisions that appear to be in conflict Group newsletters. Published on OneGate, it initiatives accordingly. with the values of the Charter; provides all of our employees with updates • Meetings - the best tool to remedy a on how the Integrity Charter is being applied shortage of transparency in employer/ in our everyday working lives and how “Your Voice, Our Future” employee relationships. we are bringing it to life throughout our corporate network. Since February 2007, In 2007 we developed and implemented Currently the Restorative Justice System is four editions of the newsletter have been targeted action plans born out of the fully functioning in nine of the countries in published on OneGate. constructive comments and feedback we which UniCredit Group operates: Austria, received from the very first “Your Voice, Bulgaria, Croatia, Germany, Hungary, Italy, OMBUDSMEN ROAD SHOW Our Future” People Survey, held in 2006, Poland, Slovakia and Slovenia. The Ombudsmen Road Show is an open involving approximately 84,000 of our forum on the Restorative Justice System. In employees, or 65% of our total workforce. a series of sessions with UniCredit Group Translated into 15 languages and with colleagues, the Ombudsmen explain what different sections to receive feedback on The Ombudsmen the system is, how it works and when it UniCredit Group, general comments and is put into action. To date, the road show specific comments about each employee’s Network has traveled to Milan, Bologna, Turin, particular bank, the first People Survey was Verona, Rome, Naples, Vienna, Munich and a big success. Our “second-generation” A group-wide Ombudsmen Network works to Hamburg and has reached out to more than People Survey, launched in January 2008, bring the Restorative Justice System to life. 500 colleagues. Other road show events made a specific effort to engage all of our The network is composed of Ombudsmen have also been organized by the Central new employees from the former Capitalia and Mediators. Ombudsmen in cities across Europe. Group, ATF Bank and Ukrsotsbank.
UniCredit Group · 2007 Sustainability Report 53 Our people
Listening and communications (CONTINUED)
Senior managers at the division and country This coincided with the launch of the new in the arts and humanitarian projects. levels analyzed comments and suggestions version of our group-wide intranet portal For UniCredit Art Day, a number of leading over a two-month period last winter in order “OneGate”, accessible across the whole museums and institutions opened their to work on putting employee views into action. group. doors to thousands of UniCredit Group By early spring of last year, UniCredit Group’s employees and their families this past CEO had reviewed and approved roughly 280 The new OneGate allows us to connect October. The event was part of UniCredit action plans derived from the People Survey. directly with our entire company network, Group’s broad commitment to create, The implementation of these action plans has to make all employees throughout UniCredit through contemporary art, a common been included in the evaluation process for all Group aware of our strategic goals, and to language capable of bridging differences Divisional Heads and the top 1,600 managers update all colleagues about our activities. between cultures, religions and traditions. of UniCredit Group. The objective was to create a virtual space in which all employees could share their This corporate initiative was designed for The final step in the process has been to best practices and ideas from all Divisions the benefit of our employees, their families communicate, via our intranet, progress and across all business lines. This tool has and their communities and was just one of made on the action plans so far. In this way, allowed us to welcome our new colleagues the many ways in which UniCredit Group we have been keeping our colleagues up to into UniCredit Group and to present is realizing its vision of bringing the people date on the implementations of the many ourselves in a clear and coordinated way. of Europe closer together through art. initiatives yielded by the survey. The new OneGate contains more than Through art, the UniCredit Group aims to 1,500 pages of pertinent and consistent engage more cultures and communities “HOW ARE WE?” information in three different languages. in an extended dialogue on the value of The “How are we?” project was created by differences and diversity. the Retail Division in 2006 to support and elaborate on the results of the group-wide Communicating strategy Many of our employee-related activities People Survey “Your Voice, Our Future”. in humanitarian and other initiatives are “How are we?” enables us to measure our and results to our people detailed elsewhere in this report. For overall environment, to assess current levels information on Unidea and the UniCredit of staff satisfaction, and to identify our We believe that a well-informed employee Gift Matching Program, please refer to strengths and avenues for improvement. is better equipped to do his or her job. the “Employee-community involvement” Therefore, we regularly communicate section on p. 118. Further information on Since it is more frequent than the People key economic results and strategy, “Supporting charities and research” may be Survey, the “How are we?” project can and the CEO himself delivers a video found on p. 111. identify subtle changes in our work commentary on our quarterly results via environment and help us to make OneGate. These reports are periodically adjustments on a rolling basis. supplemented with updates on our most “Two Years Together” significant business initiatives. On 13 June 2007, UniCredit Group Our intranet channels: organized “Two Years Together,” a Supporting celebration of our rapid evolution into a new emblems of transparency and proven force in European banking on and reciprocity active engagement the second anniversary of the announcement of the UniCredit-HVB deal. Part of the On 1 October 2007, the same day that Internal communications play a key role festivities included an employee-only contest UniCredit Group merged with Capitalia, in supporting our employees’ active for the best photographic representation of we began the process of providing former engagement in the company’s corporate the integration process. The contest photos Capitalia employees with access to the new responsibility initiatives. In 2007, internal have since been transformed into a unique Italian intranet portal. This process was communications activities focused in artwork that expresses the power and poetry completed in January 2008. particular on UniCredit Group’s involvement of integration.
54 2007 Sustainability Report · UniCredit Group Labor relations
UniCredit Group management and employee 2007 Accomplishments agreements were reached with trade unions representatives have a long tradition of making possible a cooperative approach working together to promote a transparent Our labor relations accomplishments include to some of the legal, economic and social and constructive dialogue in line with agreements made at the Holding level as issues with the potential to affect employees. UniCredit Group’s Integrity Charter. well as on a national level in Italy, Germany, Austria, Poland and Croatia. Three agreements of particular note were In 2007, the Group Labor Relations Units made in 2007, providing employees with dedicated themselves to the smooth An appendix with additional data on Labor a voluntary early retirement incentive plan, management of the transitions resulting Relations may be found at the end of the resolving financial and equitable aspects of from our latest acquisitions – particularly chapter. the merger of Capitalia S.p.A. into UniCredit the merger with Capitalia Group. This S.p.A. and standardizing, within Italy for a commitment will be renewed in 2008 as HOLDING LEVEL three-year period, the privileges extended Labor Relations seeks shared solutions with The UniCredit Group European Works by UniCredit Group and Capitalia to their trade unions at the national and international Council (UEWC) was established this past respective trade unions in order to ensure levels, particularly in relation to the year. The UEWC is a governance body an uninterrupted and productive labor- completion of the Capitalia integration. responsible for developing a genuine social management dialogue at every level all dialogue across UniCredit Group. It receives through the integration phase of the two The principles that guide UniCredit Group in relevant information from management on groups. this field are drawn from the “ILO Tripartite cross-border operations and consults with Declaration concerning Multinational management on related issues. The Council The company-level agreement between the Enterprises and Social Policy,” from the ILO’s will hold two regular meetings per year. Holding and the trade unions provides an eight core conventions, and from the OECD’s innovative welfare package for UniCredit “Guidelines for Multinational Enterprises”. On 26 January 2007, the agreement creating Group’s Italian employees in terms of health UniCredit Group is wholly committed to these UEWC was signed after a constructive insurance, supplementary pension schemes, principles and to following the guidelines negotiation with a special body composed of credit facilities and maternity policies. In adopted within the United Nations’ Global employee representatives from EU countries. accordance with the goal of transparent Compact framework. The appointment of all UEWC members communications, a special section on the followed. In all, 44 members were selected Capitalia integration is now available on the Many related initiatives are already in place, from all 27 countries where the UniCredit OneGate intranet portal. including the first UniCredit Group workshop Group has an active operational presence. on labor relations, “The UniCredit European GERMANY Works Council: Improving Cooperation With the appointment of its members In 2007, HVB successfully completed to Strengthen Social Dialogue,” an event completed by the middle of 2007, the agreements with the Central Works Council co-promoted and co-financed by the UEWC became operational and held its first to implement a defined bonus system European Commission. meeting on 20 September. Since then, a for employees in the following Divisions: continuous and productive dialogue between Retail, Corporate and Commercial Real The OneGate intranet portal provides central management and the UEWC Select Estate Financing and Wealth Management. employees with detailed information on all Committee has ensued. The UEWC will also This covers the final terms of the planned these initiatives and commitments. have the ability to develop joint statements bonus system as well as several transitional on training, professional development, equal arrangements for the year 2007 to manage As a company in the financial sector, we opportunities, non-discrimination, working the change from the existing bonus system have a workforce comprised of highly-skilled conditions, and health and safety with to the defined one. personnel. Problems relating to human rights central management. and child or forced labor are not material HVB and the Central Works Council came to the daily internal operations of UniCredit ITALY to an agreement to implement UniCredit Group, though we are aware these are This past year UniCredit Group focused on Group’s Integrity Charter in the companies issues of serious concern in other industries. its acquisition of the Capitalia Group. Several of the HVB subgroup. Within the framework
UniCredit Group · 2007 Sustainability Report 55 Our people
Work-Life Balance Labor relations (CONTINUED) and Welfare of the HVB Transformation Program, HVB A substantial reorganization of the bank was Our efforts to provide for the welfare of our concluded a number of agreements with implemented as of 1 January 2008, which employees are centered on our provisions the Central Works Council covering the included the appointment of line managers for healthcare expenses, childcare and our alignment of new divisional structures and for a finite term of office; line managers pension plans. the implementation of its credit process were previously appointed for undefined redesign. Pursuant to German law, this terms. “Reconciliation of Interests” will enable Healthcare HVB to implement the new structures and In 2007 an effective dialogue was entered substantially new processes. into with the Works Council and union The healthcare expenses of UniCredit representatives to address results and action Group’s Italian employees are covered AUSTRIA plans related to the People Survey; the by the UniCredit Cassa di Assistenza The most relevant agreements reached objective is to ensure a strong response rate (UniCA). UniCA is a special fund whose in 2007 concern pension funds and and smooth implementation of the action directors and auditors are partly appointed modified provisions for UniCredit Group’s plans. by UniCredit Group companies and contributions thereto. Additionally, partly elected by its unions. UniCA has agreements were concluded on work-life been operational since 2007 and offers balance extending the option of family leave employees a variety of insurance policies. up through a new child’s third birthday, Of the 780 available healthcare facilities, in addition to the legally required leave 202 are hospitals and 578 are diagnostic of absence. There were also agreements centers. In 2007, UniCA successfully on the implementation of a performance handled more than 120,000 cases. management system and on the issue of compensation salary bands. Childcare POLAND10 Bank Pekao and the trade unions signed a In order to facilitate the return to work of key labor agreement providing for changes new parents, UniCredit Banca has created in the bank’s compensation structure. (in collaboration with specialized service In particular, the agreement provides for companies) many new company nursery an increase of each employee’s monthly schools in many of our cities, to serve salary, the introduction of a rate adjustment the employees of all UniCredit Group mechanism set at 12%, depending on the companies. We have already opened degree of deviation from Bank Pekao’s schools in Rome, Milan, Turin, Verona and gross profit plan execution, and an increase Vicenza; Bologna and Modena are now of severance pay from 30 to 36 times the under construction, and we plan to open employee’s monthly compensation. them by the end of 2008.
CROATIA11 Four years into the project, it is clear that At Zagrebacˇka banka, the Collective it has been a resounding success. We Agreement that expired on 31 December have generated high levels of employee 2007 has been extended for a one-year satisfaction by offering them lower prices period with the same level of rights for all than the alternatives on the market, high employees as in the previous year. service levels, flexible schedules (i.e., daily drop-off and pick-up times) and tax facilities on the monthly price.
10. Information and figures refer only to Bank Pekao S.A. 11. Information and figures refer only to Zagrebacˇka banka.
56 2007 Sustainability Report · UniCredit Group Health and safety
Pension plans UniCredit Group endeavors to provide a safe Germany and healthy work environment in compliance The pension plans of employees working with all legal requirements and in line with In Germany, there is a joint management/ in UniCredit Group’s Italian companies the Integrity Charter. One of the primary workers’ council committee on health and are generally implemented as closed goals of UniCredit Group is to ensure the safety for HVB. As the works council is pension funds through the Pension Fund well-being of its employees. To this end, we part of this committee, all non-managerial for Employees of UniCredit Group’s Italian constantly monitor working conditions and employees are represented. HVB has not Companies. In compliance with Italian provide numerous health and safety training entered into any formal agreements with regulations and the pension fund bylaws, sessions. trade unions specifically on health and its directors and auditors are partly safety. appointed by UniCredit Group companies Our approach to health and safety is and partly elected by its members. Pursuant discussed in national terms covering Italy, to collective labor agreements between Germany, Austria, Poland and Croatia. Austria UniCredit Group companies and trade unions, it is the only closed pension fund In Austria, regular formal meetings between available to new employees or to current Italy the Works Council and management are employees who are not yet members of any required by employee protection laws. These pension fund. In Italy, Legislative Decree no. 626/94 formal meetings are held twice a year. The provides the legal framework for health “Employee Protection Act” specifies in detail In Italy 37,290 employees are enrolled in and safety in the workplace, specifying the the company’s obligations with respect to UniCredit Group’s closed pension funds. obligations of employers and employees, health and safety. Compliance is monitored The standard percentage of an employee’s the qualifications of doctors and technicians by qualified doctors and technicians and salary contributed to the pension is 2% employed by the company, and the paid for by the company. from the employee and either 2% or 3% requirements for a company safety and from the employer, depending on whether prevention bureau (SPP, from the Italian) and 12 the employee has been a member of the for an employee representative body (RLS, Poland pension scheme since before 1993. from the Italian). In Poland, a joint management-worker The RLS is made up of members committee on health and safety was nominated directly by the employees. When established in 2001 under the joint events occur that may affect the health leadership of a management representative or safety of employees, meetings are held and the company Social Labor Inspector. among the SPP, Labor Relations and the The committee functions as an advisory and RLS. The RLS is entitled to control working consultative body to Bank Pekao on matters conditions and to verify compliance with concerning workplace safety and health. The legal requirements. committee meets at least once a quarter and consists of ten employee representatives Within UniCredit Group, the RLSes were and ten management representatives. established by company agreements with the trade unions. They received training Safety and health issues at Bank Pekao in safety issues (e.g., first aid and fire are governed by two formal agreements safety) and on workplace health and safety between the bank and the trade unions. obligations. The agreements also covered The Joint Company Labor Arrangement the main aspects of health and safety specifically provides benefits connected with practices at UniCredit Group (e.g., training accidents on the job. and education, safety inspections and safety audits). 12. Information and figures refer only to Bank Pekao S.A.
UniCredit Group · 2007 Sustainability Report 57 Our people
Health and safety (CONTINUED)
National labor regulations obligate crisis situations (including the death of a ITALY employers to provide their employees family member, long-term illness, etc.), as In Italy, UniCredit Group provides a variety of with safe and healthy labor conditions, specified in our Collective Agreement. Also, programs to enhance the health and safety as well as to conduct trainings on health in instances of employees requiring medical of its workforce. These programs include and safety and on employees’ health and services not covered by health insurance, worksite visits, basic first aid training for safety obligations. the Committee on Donations may disburse designated employees, fire safety and funds under specified criteria. evacuation training, eye checkups, general preventive health checks and mental health 13 Croatia crisis management for change-induced or Training, counseling, post-traumatic stress crises (e.g., following Legislation in Croatia obligates employers prevention and risk a bank robbery). to provide their employees with safe and healthy labor conditions and to conduct control programs Since 2006, UniCredit Banca has preliminary training in the fields of work inaugurated a psychological support service safety, health and fire safety. Accordingly, Our approach to training, counseling, designed for such special situations as a Committee on Health and Safety has prevention and risk control is discussed trauma generated from experiencing a been established at Zagrebacˇka banka. in national terms covering Italy, Germany, robbery at a branch, being the victim of The committee is to function as an advisory Austria, Poland and Croatia. a violent robbery and/or assault and the and consultative body to management. It death of a person in the workplace or of a meets at least quarterly and includes an colleague, etc. occupational medicine specialist, a work Workplace injuries by country, 2007 safety coordinator, the head of HR and the NUMBER OF WORKPLACE These services are provided following a head of Work Safety. Work safety inspectors INJURIES specific request from an employee or group are invited to every meeting. Italy 552 of employees. The services are provided Germany 119 by outside psychologists with a specialty To ensure workplace safety, internally Austria 40 in workplace issues. To date we have held supervised inspections are carried out at all Poland 85 36 group counseling sessions and provided bank locations every three years. Every two Croatia 43 six individuals with psychologist support years, fire drills and evacuation drills are Total 856 services. held at all bank locations.
The bank’s healthcare system focuses on the promotion of health and the prevention of illness, as prevention and early detection generally serve to reduce sick leave absences. The program is built around a variety of preventive measures, of which the most important are mandatory general checkups for all employees every two years and athletic programs organized through the ZABAšport society.
Social programs include the disbursement of distress allowance to employees in
13. Information and figures refer only to Zagrebacˇka banka.
58 2007 Sustainability Report · UniCredit Group Addressing healthcare emergencies worksite visits, ergonomics training, basic traumatic stress crises (e.g., following for isolated employees first aid training for designated employees, a bank robbery) and physical fitness At UniCredit Banca, we have many fire safety and evacuation training, eye courses. branches where there are normally only checkups, vaccination programs, general one or two workers present at a time. The preventive health checks, mental health Since 2003 training in safe work methods bank has therefore introduced the use of crisis management for change-induced or has been regularly conducted by expert special electronic devices that allow these post-traumatic stress crises (e.g., following instructors. This has ensured that training employees to summon medical help in case a bank robbery) and physical and mental programs are organized in a flexible of a healthcare emergency. This program fitness courses. manner tailored to the needs of the bank. is in place at 148 braches, and we are In 2007, work safety training has also planning to add more in 2008. POLAND14 been implemented through e-learning In Poland in 2007, 944 Bank Pekao channels. GERMANY employees attended occupational In Germany, HVB has a very successful safety and health training sessions that health management system that focuses addressed administrative and managerial on healthy behavior and sickness concerns. Fire prevention issues were also prevention. It involves representatives discussed. from HR, company medical services, food service facilities, social advisory services, In December, the development of paramedic services, the works council, e-learning and periodical training the HVB Sport Club and the company programs in occupational safety and health insurance fund, all of whom serve health was completed. The Training & together in a committee dubbed the Skills Management Office is now running a “Gesundheitsforum”. Trade unions are not pilot version of the training program in the directly represented. Południowo-Wschodni Region.
The Gesundheitsforum is responsible The training program is structured with two for a wide variety of health-related separate sections for administrative and promotions and services, including nation- managerial employees. Both sections include wide public service campaigns on colon modules for first-aid and fire-prevention cancer, diabetes, substance abuse, heart skills. Under Polish law, administrative disease, high blood pressure, and influenza employees must take part in such training vaccinations. It also offers medical exams once every six years and managerial staff for managers and brief medical checkups once every five years. for all employees, workshops on workplace ergonomics, seminars and counseling for CROATIA15 stress and change management, personal In Croatia we manage a variety of crisis management, nutritional information programs to enhance the health and campaigns, healthy food choices in the safety of our workforce, including worksite cafeterias and in-house support and visits by internal supervisors, ergonomics counseling following bank robberies and training, basic first aid training for other traumas. designated employees, fire safety and evacuation training, general preventive AUSTRIA health checks, specialized preventive Bank Austria’s Health Center delivers a health checks (e.g., vaccination programs wide variety of programs to enhance the and ultrasound), mental health crisis 14. Information and figures refer only to Bank Pekao S.A. health and safety of its workforce, including management for change-induced or post- 15. Information and figures refer only to Zagrebacˇka banka.
UniCredit Group · 2007 Sustainability Report 59 Our people
Appendix on industrial relations
Performance Charts Notice periods negotiations about the implementation of the measures are possible. Employees covered by collective A minimum number of weeks’ notice 26 bargaining agreements (%) is typically provided to employees and POLAND their elected representatives prior to the National regulations do not specify the 2007 implementation of operational changes notice period for consulting with employee Italy 100% that could substantially affect them. representatives, i.e., the Council of Germany16 61% Explicit notice periods and/or provisions for Employees. They only require informing the Austria 100% consultation and negotiation are specified in Council of Employees in a timely fashion to 17 Poland 87% collective agreements. enable them to become acquainted with the 18 Croatia 97% matter and conduct consultations. 16. This figure is calculated based on the number of employees excluding delegates, apprentices and unpaid leaves. Details are provided on a national basis for 17. Information and figures refer only to Bank Pekao S.A. Italy, Germany, Austria, Poland and Croatia. CROATIA27 18. Information and figures refer only to Zagrebacˇka banka. In Croatia any significant operational ITALY change that could affect employees must In Italy, there are different legal and first be communicated to the works council Employee relations contractual provisions. The law states that for confirmation. According to Croatian DISPUTES CONCERNING 2007 unions must be informed and consulted legislation, such information must be LABOR AND WELFARE ISSUES NUMBER 25 days prior to any changes becoming provided to the works council at least eight Italy 30019 effective. The National Collective Bargaining days prior to the implementation of the Germany 7620 Agreement of the credit sector provides change. Confirmation by the works council Austria 31021 for different notification and consultation is not obligatory, which means that the Poland22 0procedures that may vary from 15 to 50 employer can implement the change even if Croatia23 2days, depending on the nature of the the works council does not confirm it.
19. This data includes disputes filed by both employees and changes undertaken. companies. 20. This data includes lawsuits from employees and works councils in all the companies of HVB Group. GERMANY 21. In Austria there are over 300 legal actions against Bank Austria by former employees regarding the outsourcing of the National regulations do not specify the pension claims of the employees to pension funds in 1999. notice period for consulting with employee The works council is suing Bank Austria for increasing working hours in 2005. There are about ten individual lawsuits (e.g., for representatives. The information must be wrongful termination). 22. Information and figures refer only to Bank Pekao S.A. provided to the works council before any 23. Information and figures refer only to Zagrebacˇka banka. decision is made by the management, so that substantial negotiations about the implementation of measures are possible. Hours on strike Employer and works council have to 2007 reconcile their interests in connection NUMBER with the operational changes. Major alterations may not be initiated unless this Italy 45,600 reconciliation of interests is achieved or at Germany 0 least attempted. Austria 0 Poland24 0 Croatia25 0AUSTRIA Austrian legislation does not specify any 24. Information and figures refer only to Bank Pekao S.A. 25. Information and figures refer only to Zagrebacˇka banka. notice period for this issue. In general, information must be provided to the works council before any major change 26. Information and figures refer only to Bank Pekao S.A. by the management, so that substantial 27. Information and figures refer only to Zagrebacˇka banka.
60 2007 Sustainability Report · UniCredit Group UniCredit Group · 2007 Sustainability Report 61
Our customers
Responsible lending 64 Responsible investing 71 Transparency 73 Service innovation 76 Complaint management 80 Corporate derivatives 82 Customer satisfaction 83 Security 88
UniCredit Group · 2007 Sustainability Report 63 Our customers
Responsible lending
Creating a healthy and mutually beneficial Our stakeholders are concerned about Renegotiation of family relationship with our customers, serving unsustainable levels of debt. As a financial them well and responsibly in accordance institution, we see it as our role to ensure mortgages with our Integrity Charter, is at the heart that our customers can accommodate of everything we do at UniCredit Group. regular repayments without ending up in UniCredit Group is committed to being a Sustainability plays a central role in that financial difficulty. We also feel it is our responsible partner for our customers. relationship. role to grant credit to our customers in That is why in Italy we developed a special a way that ensures positive social and extension program and refinancing solutions Accordingly, this chapter provides environmental outcomes. for Retail customers with floating-rate information on the company’s efforts to family mortgages. We activated our special maintain good customer relationships and to Our actions in this area include the program in December 2007, when we address social, economic and environmental renegotiation of family mortgages, provision noted that the economic climate in Europe issues in a responsible manner. of niche financing, defense and nuclear was changing dramatically. Because we energy sector policies, support for SMEs, work to stay in close contact with our Retail Our activities in this sphere are as follows: environmentally responsible lending customers via email, among other channels, 1. Responsible lending, detailing actions practices, adherence to the Equator and contact about 200 customers a week, and initiatives to promote responsible Principles and group-wide Equator it was possible for us to quickly identify and lending practices; Principles alignment processes. contact 17,215 at-risk Retail customers 2. Responsible investing, detailing by mail and provide them with the option investment products designed to provide to refinance, free of charge. 14,930 of socially responsible and sustainable them responded to our query and opened investment options; refinancing discussions with us. 3. Transparency , detailing open approaches to customers, markets and stakeholders; 4. Service innovation, detailing the Customer care actions for our Italian customers development of specialized services, products and channels; with high default risk 5. Complaint management, detailing systems, processes and organizational initiatives in this vital field; 6. Corporate Derivatives, including RENEGOTIATION information on our actions regarding this topic; 7. Customer satisfaction, tools and Customer care actions analysis techniques and actions to 1 determine customers’ perception of all Clients invited to check up by e-mail 17,215 87% aspects of our business Clients contacted and informed 14,930 8. Security , detailing innovations and actions to protect our stakeholders wherever practicable. 2 Spontaneous contacts By continuing to develop strong, synergistic Weekly average 200 relationships with our customers, UniCredit Operations in December 458 Group hopes and expects to contribute to sustainable economic, environmental and social developments in all of our markets.
64 2007 Sustainability Report · UniCredit Group Providing niche financing A CRITICAL AND CONTROVERSIAL KEY DEFENSE INDUSTRY POLICY ISSUE CRITERIA UniCredit Group wants to make sure students, UniCredit Group understands the concerns 1. Any involvement is restricted to countries immigrants and customers with a checkered of many people regarding the financing that comply with international guidelines and credit history have access to financing that of an industry that presumably derives regulations on the following issues: nuclear matches their situations and needs. its profits from conflict and instability. We weapons, biological & chemical weapons, are fully aware of the dilemma this critical conventional weapons, missiles, small arms, FINANCING FOR STUDENTS and controversial issue presents, and we light weapons and dual-use goods. Ad Honorem loans are specifically structured understand how rapidly the debate that to help university students address their surrounds this issue is evolving. 2. UniCredit Group abstains from academic financial needs. We provide any involvement with companies guarantee-free loans to students who intend We are concerned about the variety of manufacturing, maintaining or trading to enroll in specialized universities or training unconventional weapons being produced such controversial products as nuclear or courses or to seek master’s degrees. In Italy, in the world today. It is our responsibility biological weapons of mass destruction, for example, UniCredit Banca and Clarima to take a strong position against the cluster bombs, mines and Uranium 238. Banca designed these special loans in financing of such weapons. At the same close cooperation with several major Italian time, it would be irresponsible to refuse to 3. Any involvement with counterparties universities. acknowledge that certain types of weapons manufacturing, maintaining or trading small are necessary to the effective pursuit of arms and light weapons must be avoided, FINANCING FOR IMMIGRANTS such morally sound and internationally owing to a dearth of international regulation. An innovative project implemented by accepted goals as peacekeeping and UniCredit Group, Agenzia Tu, is one of the national self-defense. 4. The recipients or end-users of arms many ways we respond to the needs of must be governments, governmental the customer segment made up mainly of In a complex and ever-changing world, one of organizations, state-owned companies or workers who are foreign nationals, as well our most important tasks as an institution is to supranational organizations. Exceptions as segments of the population with non- translate our resolutions into concrete actions are permitted for hunting and sporting standard work contracts. Agenzia Tu branches in every business line and region where we weapons (excluding automatic rifles), in offer products focused primarily on loans are active. While the defense industry is not a cases where national regulations measure and tailored to segments of the population mainstay of our business, as we grow in size, up to international standards. that, despite their growing impact on the scope and complexity, it is increasingly likely Italian economy, are still under-served by the that we will interact with large conglomerates banking system and by financial companies. whose diversified holdings may include OPEN STAKEHOLDER DIALOGUE operations in the defense sector. In keeping with our commitments to maintain an open dialogue with all of Defense sector policy THE TWIN FOUNDATIONS OF OUR our stakeholders, at the end of 2007 we DEFENSE INDUSTRY POLICY organized a series of meetings with NGOs In our increasingly globalized society, the UniCredit Group’s policy is based on two and a selection of representatives from large borders between countries, industries and unshakeable principles. First, UniCredit European conglomerates to stay abreast peoples are being rapidly redrawn and Group will not be a party to the production of the latest issues and developments sometimes even erased altogether. New (or use) of controversial weapons banned by concerning our key stakeholders. dynamics emerge, injecting fresh urgency international treaties. Second, the ultimate into many of the issues that motivate both recipients of arms products must furnish us private and corporate citizens. The debate with credible guarantees that all weapons surrounding the role of banks in financing purchased will be used for defense and the defense industry is a case in point. security reasons.
UniCredit Group · 2007 Sustainability Report 65 Our customers
Responsible lending (CONTINUED)
Nuclear energy sector KEY NUCLEAR ENERGY SECTOR in support of small and medium Italian POLICY CRITERIA enterprises. policy 1. Financing the development or construction of nuclear power plants is For Italian enterprises Basel II represents an We understand the resurgent relevance of permitted, subject to the application of important chance for SMEs to reduce their nuclear energy, the subtleties involved in its the strictest safety standards and the best risk level and an opportunity to grow. proper handling, and our responsibility to available technology. future generations and society with respect UniCredit Banca d’Impresa developed to the environment, public health, safety and 2. Financing of nuclear energy production consulting services and products to help pollution. This is why UniCredit Group has companies is subject to WANO1 the entrepreneurial system acclimate to the entered into an ongoing dialogue with the membership and location in countries changes. One example, the “Capitalizzazione main environmental NGOs in Europe. belonging to WENRA2. Companies that Flessibile e Progressiva” (flexible and do not comply with both criteria are progressive capitalization) product, is a Already this dialogue has prompted us evaluated on a case-by-case basis. modular, long-term funding program offering to avoid any involvement in financing the installment options and a flexible equity renovations of the Belene Nuclear Power 3. Financing of tailor-made products or scheme in the context of a syndicated or Plant in Bulgaria. We have also recently services for the nuclear energy industry public-potential warranty. adopted a group-wide nuclear energy policy, is limited depending on compliance with which was developed with input from NGOs relevant international regulations and best and a wide range of stakeholders. Our market practices. Environmentally policy is designed to address the special challenges posed by the nuclear sector and 4. Financing of the production, trading responsible Corporate to minimize our environmental, social and and reprocessing of nuclear fuel is lending practices credit risks. highly restricted owing to the increased reputational risks regarding proliferation Environmental issues are a key concern In making any financing decision, it is our and safety issues. for many businesses and institutions. At responsibility to require the most thorough, UniCredit Group we are keenly aware that reliable and highest quality assessments of 5. Financing of the transport, processing, unresolved environmental risks and/or issues all outstanding issues. This responsibility storage or disposal of nuclear waste will can have a distinct impact on the credit takes on an even greater importance for be evaluated on a case-by-case basis ratings of our Corporate customers, not to us in the context of our role as one of the according to the regulations in force in mention the value of the collateral they rely most active financial institutions in Central the country of origin as well as in the on. At the very worst, environmental issues and Eastern Europe. To help us to fulfill our transit and destination countries. can sometimes result in our customers’ responsibility, we have developed a nuclear defaulting on their loans. UniCredit Group is energy sector policy. This policy has been committed to marshalling its resources to formally approved by the UniCredit Group help our customers better understand the Risk Committee and will be implemented Supporting SMEs environmental risks they face and to help once our legal entities complete the process them come up with the most responsible of formally approving the policy in 2008. The During the last few years changes to the lending solutions both for their business and details of our nuclear energy sector policy Italian and international financial regulatory for the environment. are as follows: systems and the advent of Basel II principles led UniCredit Group to develop a set Our actions in this area include innovative of sophisticated products and services Corporate environmental technology
1. The World Association of Nuclear Operators is an organization dedicated to improving safety at every nuclear power plant in the world. 2. The Western European Nuclear Regulators’ Association is a non-governmental organization comprising the senior staff members of nuclear regulatory authorities in European countries with nuclear power plants.
66 2007 Sustainability Report · UniCredit Group financing, special Corporate lending need to catch up with modern environmental and regional level and other EU member- programs and compliance with the technology (primarily in the CEE states) and state governments. They usually support World Bank Performance Standards and many Corporate customers who produce such beneficiaries as the founders of new Environmental, Health and Safety Guidelines, modern environmental technologies (primarily businesses, Small and Medium-sized and the Ilisu hydropower project. in Italy, Germany and Austria). We are Enterprises, or individual regions through continually looking for new ways to broker low-interest loans, grants toward the cost of INNOVATIVE CORPORATE business between these two significant capital expenditures or loan guarantees. ENVIRONMENTAL TECHNOLOGY customer groups, and we see great potential FINANCING in financing capital spending for modern Many of these programs support investment In 2007, following an agreement with the environmental technology. As a founding in environmental protection. For example, Italian Ministry of Economic Development, member of the Central and Eastern European some of these programs include assistance UniCredit Banca d’Impresa offered its Small Task Force of the United Nations Environment for capital spending on solar power, and Medium Enterprise customers with a Programme Finance Initiative (UNEP-FI), renewable energy sources, CO2 reduction “plafond” of €500 million to encourage UniCredit Group is deeply involved in and energy savings for residential lending
SMEs to reduce CO2 emissions and increase developing tools for reviewing environmental projects, wind farms, biomass power plants their energy efficiency. risk and building up appropriate expertise for and waste incinerators. our banks in the CEE. For years, the countries of Central and As a leading bank for SMEs in Germany, Eastern Europe (CEE) have had a great SPECIAL CORPORATE LENDING HVB is among the largest lenders in various need for capital investment to renovate their PROGRAMS special environmental lending programs. In industrial infrastructures. With our network We are expanding our volume of innovative 2007, HVB’s total volume of environmentally of banks in Italy, Germany, Austria and the special loans. In general, these special loans related special loans (not including programs countries of the CEE, we have a large number cover a variety of assistance programs for the housing industry) was €303 million. of Corporate customers with a pressing sponsored by Germany at the federal That represented 20% of all new business
UniCredit Group · 2007 Sustainability Report 67 Our customers
Responsible lending (CONTINUED) in special loans for the year. In programs for the housing industry sponsored by KfW Bankingruppen, HVB approved a total of €89 million for environmentally relevant purposes during 2007, including a CO2 building renovation program and a solar power program.
WORLD BANK PERFORMANCE STANDARDS AND ENVIRONMENTAL, HEALTH AND SAFETY (EHS) GUIDELINES In order to advance responsible financing and protect against adverse ecological and social impacts, UniCredit Group voluntarily complies with the World Bank Performance Standards and Environmental, Health and Safety Guidelines. These standards relate to various ecological issues, define minimum is part of our credit rating for the company experts on environmental, social and standards, best practice procedures with and drives the terms of financing. A credit cultural issues to assume responsibility regard to emissions and pollution, and application with a level of environmental risk for the project’s compliance with the relate to social issues including involuntary that is too high may be rejected. World Bank Standards. Additionally, the resettlement of local populations, treatment state export credit agencies of Austria of indigenous peoples and cultural property. UniCredit Group is also in the process (Oesterreichische Kontrollbank/OeKB), The EHS guidelines are intended to prevent of developing a foreign trade financing Switzerland (SERV) and Germany (Euler- environmental, health and safety risks. screening tool to assist us in assessing the Hermes) have scrutinized the project to ecological, social and reputational risks in ensure its compliance with the World Bank We review all of our Corporate Customers’ the importers’ or exporters’ country. Standards and have issued 153 terms credit applications in line with UniCredit of reference regarding the environment, Group’s General Credit Policy, using THE ILISU HYDROPOWER PROJECT resettlement, cultural assets and locally effective national and international In 2007, Bank Austria joined an international neighboring states, which must be fulfilled laws as well as the environmental and banking consortium to finance the Ilisu by the project managers. social standards of the World Bank Group hydropower plant in Turkey. We repeatedly (Performance Standards and EHS Guidelines). assessed the Ilisu project using the best A committee of experts report published possible information at our disposal, in March of 2007 concluded that Turkey Environmental risk assessment by our including awareness of the arguments has not made much progress in fulfilling Corporate credit specialists is a key part and protests against the project. Our 150 terms of reference. Consequently, of the credit ratings we generate while preconditions for involvement in the Mr. Rudolf Scholten, CEO of the Austria working on credit applications. As part of project were strict. It was essential that the ECA (OeKB) announced that all involved this process, our Corporate credit specialists project sponsors be fully conscious of their ECAs (OeKB, Euler Hermes of Germany consider sector information and analyses, environmental and social responsibilities and and SERV of Switzerland) have arranged sector checklists and contamination be committed to comply with the World Bank to meet in Ankara to discuss this vital questionnaires. If the credit specialist Standards. issue with the Turkish authorities. We trust perceives any risk, we may call in our sector that the ECAs who are taking the lead in specialists, environmental experts and, if It was significant that the project sponsors this strict monitoring process will be able warranted, external assessors to assist in agreed to establish a committee of to work with the Turkish government to assessing the risk. The result of the analysis independent and internationally renowned resolve these issues, and keep the project
68 2007 Sustainability Report · UniCredit Group implementation on track as planned FORMING A GLOBAL INDUSTRY cancelled for breach of such covenants if and in accordance with international STANDARD the breach is not cured within a predefined standards. UniCredit Group follows the HVB joined with other banks in 2003 period. further development closely and will keep a to formulate a global industry standard keen eye on the fulfillment of the terms of that defines a thorough environmental REVISIONS TO THE EQUATOR reference. and social review process. The standard PRINCIPLES enables financial institutions to better In 2006, the Equator Principles were revised assess, mitigate and avert potentially to reflect financial institutions’ experience The Equator Principles negative effects of projects on society and with existing rules and to incorporate new the environment. In addition to requiring IFC performance standards. In a broad and project finance compliance with the Performance Standards stakeholder dialogue process, customers, and the EHS Guidelines of the World Bank civil society and development agencies The Equator Principles, a voluntary Group, financing must comply with host commented on the new principles. HVB industry benchmark and framework for country environmental and social laws strongly supported the Equator Principles assessing and managing social and and regulations. According to the Equator revision process and became the Chair of environmental risks in project finance, were Principles, projects must be classified and the Steering Committee. developed by various financial institutions categorized according to impact as follows: including HVB. The Equator Principles high risk (A), medium risk (B) or low risk (C). In 2007, HVB coordinated the IFC comment are based upon the International Finance Management capacity of the client must also period among Equator Principal Financial Corporation Performance Standards and the be assessed. Institutions (EPFI) and played an important Environmental Health and Safety Guidelines role in the stakeholder dialogue process of the World Bank Group. For projects considered high risk or related to the revision of the World Bank’s medium risk, project sponsors are obliged EHS Guidelines. The EHS guidelines are This section offers details on project to prepare an environmental and social sector-specific guidelines that replaced finance and the environment, forming impact study as well as an environmental the Operational Directives Handbook of a global industry standard, revisions to management plan. The identified risks the World Bank. Since July 2007, HVB the Equator Principles, the UniCredit MIB determine the scope of the analysis. In has headed the Outreach Working Group competence center, reporting, project the case of high-risk projects, an external within the EPFI Management Structure categorization and group-wide Equator review of the impact study is required. and has worked to spread the spirit of the Principles alignment processes. In order to mitigate risk, the client must principles. Regional events in cooperation provide an action plan that is satisfactory to with the IFC are planned around the world PROJECT FINANCE UniCredit MIB and demonstrate compliance in 2008. AND THE ENVIRONMENT with the Equator Principles. Some Project finance is used for large industrial exceptions for medium-risk projects in In addition to involvement with the EP projects and for investment in emerging high-income OECD countries may apply. Outreach Working Group, HVB in its role markets. Cash flow from the underlying as member of the Steering Committee is asset is the main source of repayment of Social and environmental requirements are co-chairing two working groups, “Scope loans under this form of financing. There covenanted in loan documents, and the Review” and “Stakeholder Dialogue”. The may be cases where ecological and social client has to report on a regular basis on shared experience of participating in the risks increase the probability of loan defaults the implementation and compliance with working groups has yielded positive effects and of reputational impact. those covenants. Reporting frequency is on our internal implementation of the dependent upon the risk category of the Equator Principles. Other key ecological and social risk factors project. The Equator Principles stipulate that we scrutinize include governance in a that financial institutions will endeavor For its efforts, HVB and ten other EPFIs project’s host country and management’s to bring a non-compliant client back into received the Chairman’s Award for capacity and experience in coping with compliance if social and environmental Leadership in Sustainable Project Finance such risks. covenants are breached. Credits can be in London on 7 June 2007. This prize was
UniCredit Group · 2007 Sustainability Report 69 Our customers
Responsible lending (CONTINUED) awarded by the Financial Times together The UniCredit MIB Equator Principles Team Reports on activities during the fourth quarter with the International Finance Corporation engages in discussions with its peers at of 2007 were not available at the time of during the FT Sustainable Banking Awards. other banks on a regular basis and meets printing of this report. with them at least twice a year. The team THE UNICREDIT MIB COMPETENCE also meets under the auspices of the PROJECT CATEGORIZATION CENTER Equator Bank Initiative with civil society and Of the 31 projects financed or advised by Prior to the adoption of the Equator export credit agencies once a year. The EP UniCredit MIB as of 31 December 2007 to Principles in 2003, HVB had formed a Team monitors and integrates the feedback which the Equator Principles apply, one was team comprised of members from the of stakeholders in various ways, such as the an (A) project, 29 were (B) projects and one Project Finance and Corporate and Social development of sector-specific guidelines, was a (C) project4. Responsibility departments to focus on credit policies and the calibration of its the application of World Bank Standards implementation processes and screening GROUP-WIDE EQUATOR PRINCIPLES in Project Finance. This team became tools. The EP Team is involved in the ALIGNMENT PROCESSES the Equator Principles Team within development of best practices within EPFI UniCredit Group is in the process of aligning UniCredit MIB. The EP Team serves as initiatives that reflect the input of external all business Divisions and business lines to the competence center for staff involved stakeholder groups. the Equator Principles. in Project Finance. It organizes Equator Principles training and updates Project Projects financed and/or advised by UniCredit A public announcement of our group-wide Finance management and staff on new MIB to which the Equator Principles apply3 adoption of the Equator Principles will be developments. It has developed analysis were categorized on 31 December 2007. made at the appropriate time. tools and implementation manuals that assist Project Finance staff in assessing and categorizing projects, and has UniCredit MIB’s projects by sector and risk category4 integrated Equator Principles assessment PROJECT TYPE CATEGORY A CATEGORY B CATEGORY C into UniCredit Group’s credit policies and Resources5 114 processes. The competence center receives Renewables 9 1 Energy expert support from qualified trainers. Fossil Fuels Infrastructure 6 In 2008, a training seminar on labor and human rights issues is planned to help project officers build awareness of these Number of UniCredit MIB projects by region risks. IFC Performance Standards and NUMBER OF PROJECTS the EHS Guidelines are included in sector EU 4 policies currently under development. Europe non-EU 2 The record of accomplishment and the North 11 America management capacity of each client are South 3 analyzed, and covenants appropriate to Africa 1 each credit facility are incorporated into Asia 8 documentation. Australia & Oceania 2
REPORTING The UniCredit MIB Division regularly engages civil society, rating agencies and core clients on the progress made in transparent communication, as well as 3. As defined by Basel Committee on Banking Supervision, International Convergence of Capital Measurement and Capital in implementation and development of Standards (“Basel II”), November 2005. http://www.bis.org/publ/bcbs118.pdf 4. High risk (A), medium risk (B) and low risk (C) sustainable policies. 5. Includes oil & gas, mining & metals
70 2007 Sustainability Report · UniCredit Group Responsible investing
At UniCredit Group, many of our customers ETHICAL COMMITTEE In fact, seven out of eight members of are committed to providing real benefits The Global Ethical Equity Fund and the the Audit Committee are Independent to society while maximizing their financial Obbligazionario Euro Corporate Etico Directors. returns. That is why we provide our benefit from input and counsel from an customers with the option of implementing Ethical Committee. Active in research and These important Independent Director socially responsible and sustainable analysis in a number of sectors, the Ethical majorities enable Pioneer Investments investment strategies. Committee conducts in-depth research to manage its corporate governance into climate change, African investment independently from UniCredit Group. Our actions in this field include offering opportunities, banking and finance, skin Pioneer has significant autonomy in the Socially Responsible Investing (SRI) asset graft and stem cell research, zero energy areas of operations, staff recruitment products and adjusting the business model buildings and energy-plus buildings. and the selection of many of its service of HVB Wealth Management (WEM) to providers (investment tools, custodians, accommodate sustainable investment. In order to ensure efficient, streamlined fund administrators and investment feedback and greater independence in research) and financial intermediaries. research and evaluation, the operating Socially responsible rules of the Ethical Committee stipulate that CAPITALIZING ON SKILLS, it may include a maximum of 12 external TARGETING RESOURCE 6 investing members and a maximum of two UniCredit ALLOCATIONS Group members. Following a strict set of The investment process for Pioneer Pioneer Investments, the core of our Asset criteria, the members were selected from Investments’ SRI funds was designed to Management Division, offers three asset the fields of science, academia and the capitalize on the Ethical Committee’s skills management products designed to enable private sector. and to target the allocation of resources to investors to balance their need to maximize promising and sustainable companies. The returns with their desire to adhere to ethical GOVERNANCE AND INDEPENDENCE ethical portfolios are constructed by the values. Presently two equity funds, the Pioneer Investments was the first asset Portfolio Manager with the advice of the Global Ethical Equity Fund (€203 million management company in Italy to sign Ethical Committee and the Ethical Advisor. AUM) and the Global Ecology Equity Fund7 the “Protocollo di Autonomia” of the The ethical portfolios of Pioneer Investments (€1,425.9 million AUM), are on offer and Italian Association of Asset Managers feature two main types of investments. are complemented by a bond distribution (Assogestioni) in 2001 and to add to fund, the Obbligazionario Euro Corporate its corporate constitution an article that The majority of investment in ethical Etico (Euro Bond Corporate Ethical Fund with defined the responsibilities of Independent portfolios consists primarily of securities €253.2 million AUM). Directors. In this vital area, the company included in ethical databases recognized has made steady progress, nominating by the financial community (FTSE4Good This section offers details on the role of a significant number of Independent Global for equities, and ECPI Ethical the Ethical Committee, on governance and Directors to its Board since 2000. Index Euro Corporate Bond for bonds) independence, on capitalizing on skills Currently seven out of 13 board members, and the ECPI database. The remainder and targeting resource allocations, on the including the Chairman, are unaffiliated is devoted entirely to securities issued Pioneer Global Ecology SRI fund, and on with UniCredit Group. Independent by companies that have a proven the European Sustainable and Responsible directors play a major role in the corporate record of accomplishment in ethical and Investment Forum. governance and monitoring of the internal environmental areas (hereafter known as control system at Pioneer Investments. Distinctive Investments).
6. Disclaimer: We aim to provide accurate and current information on this report. However, we accept no liability for errors or omissions, or for loss or damage arising from using the information. We are not responsible for the content of other web-sites (or reports) linked to this report. 7. The Global Ecology Equity Fund formerly was an Activest Fund (the HVB asset manager). After the merger in March 2007 the fund became a Pioneer fund. Therefore, performance under Pioneer is related only to the period from 30 March 2007 to 31 December 2007. The one year and three year performance figures may only be reported through the inclusion of the Activest time range.
UniCredit Group · 2007 Sustainability Report 71 Our customers
Responsible investing (CONTINUED)
The Ethical Committee set research objectives in 2007, which are indicative of our approach. Distinctive Investments now account for 11.52% of the Global Ethical Equity Fund’s portfolio.
PIONEER GLOBAL ECOLOGY SRI FUND In March 2007 a new SRI fund, Pioneer Global Ecology, was added to the Pioneer Funds portfolio. Its investment strategy is designed to achieve capital appreciation over the medium to long-term by investing a minimum of two-thirds of its assets in a range of equities and equity-linked instruments issued by companies producing environmentally friendly products and technologies. Such companies include those operating in the fields of air pollution control, alternative energy, recycling, waste incineration, wastewater treatment, water purification and biotechnology.
Stock selection is monitored for significant value and is a crucial factor that section of our Italian website to SRIs in order sustainability issues by Oekom Research AG. enables conscious choice and promotes a to highlight this important issue. To avoid conflicts of interest in evaluating culture of social responsibility. sustainability issues, Pioneer Investments relies on external advisors to screen Pioneer Investments is committed to the Sustainable investment opportunities. Eurosif transparency guidelines. Pioneer Global Ecology Fund will be included UniCredit Group has taken note of the EUROPEAN SUSTAINABLE within the scope of this commitment. enormous potential sustainable investments AND RESPONSIBLE INVESTMENT Pioneer Investments has clearly defined its have demonstrated in the recent past, the FORUM (EUROSIF) search, investment, control and monitoring development of a comprehensive portfolio of We believe that transparency within the processes in line with Eurosif’s transparency sustainable investment products over the past scope of socially responsible finance brings guidelines and has dedicated an entire five years and a rising interest on the part of the public in environmental and climate- related issues. Thus in Germany our Private Banking Division, through HVB’s division SRI key figures of wealth management (WEM), moved to make sustainable investment part of its core business in 2007 and was properly positioned Annualized one year return Annualized three year return to benefit from the fact that sustainable Global Ethical Equity: -7.81% Global Ethical Equity: 8.70% mutual funds outperformed “classic” funds Global Ecology SRI Fund: 11.01% Global Ecology SRI Fund: 23.24% by 0.5% in Germany in 2007.8 In order to integrate sustainability into the WEM business Obbligazionario Euro Corporate Obbligazionario Euro Corporate model, we set a long-term goal of having ten Etico: -1.14% Etico: 0.13% percent of our Private Banking customers’ assets in sustainable investments. 8. FER-report, January 2008.
72 2007 Sustainability Report · UniCredit Group Transparency
UniCredit Group is committed to providing for the successful completion of the transparency and ease of comparison our customers with straightforward and transfer process, freeing the customer from among banking products. In doing so, the transparent information that empowers them spending their valuable time deciphering and bank is simply continuing in its tradition of to make the best decisions according to executing the kind of administrative chores empowering customers, with the instruments their own financial interests and needs. that we specialize in handling effectively and and information they need to make better efficiently. choices. Our aim is to continually broaden Our activities in this field relate to innovative the foundations of a relationship with our transparent approaches, Cittadinanza We extended the Trasloco Facile service customers that is based on a high level of attiva, communicating with our customers, to our SME unit in May of 2007 and the trust and mutual understanding. PattiChiari, financial literacy initiatives, MiFID service was available at Banco di Sicilia, The initiatives of PattiChiari concentrate and the Consolidated Banking Services Banca di Roma and Bipop Carire by October on concrete, finite issues, connected with Agreement, and standardizing Personal of the same year. By the end of 2007, retail banking services, savings accounts Financial Advisor processes. UniCredit Banca provided this service to and lending. Among the main activities of more than 56,000 Retail customers and to the consortium in 2007, two initiatives in more than 2,000 SMEs. particular are worthy of note: Cambio conto Innovative transparent and L’indicatore sintetico di prezzo are both GENIUS RICARICABILE designed to ensure that customers are approaches Because some of our Retail customers are fully aware of the comparative terms of the increasingly sophisticated about financial different types of bank accounts available In 2007, our commitment to innovative services and account-related costs, we to them. transparent approaches to our Retail developed Genius Ricaricabile. This product customers and markets was centered on financially empowers our customers by two key initiatives – Trasloco Facile and putting them firmly in control of the fee Cittadinanzattiva Genius Ricaricabile. structure of their bank accounts through the responsible management of well-defined (“Active Citizenship”) TRASLOCO FACILE usage rules. This credit account has limited Our Trasloco Facile service in Italy provides fees that can be reduced to zero by making UniCredit Group has collaborated with fluid current-account mobility for our Retail use of its recharging features. CittadinanzAttiva, a prominent Italian customers. The first service of its kind Genius Ricaricabile includes all the tools consumer rights organization, on the in Italy, Trasloco Facile was designed to our Retail customers need: two international subject of “investigating the use of simplify and standardize our customers’ ATM cards, internet banking services, electronic monetary and payment systems”. ability to initiate or terminate their banking automatic bill payments, no limit on ATM The project investigated levels of public relationships. Trasloco Facile offers a transactions and a fixed number of branch understanding, changes and developments concrete response to the suggestions made transactions. Because customers are given in payment methods and the issues that by several consumer associations and public control of their own fee structure, it is easier affect usage patterns. At the end of the authorities on this issue. for them to keep a close eye on account- investigation, an informative brochure was related costs and credit card functions. developed, offering advice to consumers on When activated, the service enables our the proper and secure use of these tools. Retail customers to delegate authority to UniCredit Banca, our primary Italian retail PattiChiari bank, to terminate their previous bank Communicating accounts and transfer all relationships (“plain bargaining”) and related services to the bank of their with our customers choice. We do the job whether we are During 2007, Unicredit Banca continued transferring a new customer from another to participate in the PattiChiari Project - a We know that our customers appreciate bank to UniCredit Banca, or the other way broad consortium of Italian banks working transparent and open channels of around. Our staff takes full responsibility to provide their retail customers with greater communication, because they want
UniCredit Group · 2007 Sustainability Report 73 Our customers
Transparency (CONTINUED) and need to know about our products Easy access to account statements online daily expenses while allowing parents to and services and the value that we can is important to our customers, and we control their children’s economic safety generate for them in comparison with have taken steps to meet their needs. without impinging on their sense of our competitors. We make an effort to For example, we have integrated account autonomy. In Italy, for example, we have periodically review all documentation sent statement printers at all branches into the developed Genius Teen, a free deposit to customers (e.g., account statements HVB Direct B@nking system to enable our account for our Retail customers who are 13 and communications related to changes Private Banking customers to access their to 17 years old. We offer participants special in pricing) to ensure that clear and simple latest account statements online and save financial products to meet such personal language is used. paper. needs as buying a personal computer or going on holiday. Genius Kids is another We use multiple channels to keep our Retail Retail Banking product that is aimed at and Corporate customers up to date on Financial literacy the parents of children 12 years old and important upcoming events and potential younger. items of interest, and to provide them with initiatives detailed information on our products and WORKSHOPS AND ROAD SHOWS services, interest rates, fees and expenses. UniCredit Group supports initiatives that In cooperation with the eight banks that promote the financial literacy of our are members of the Croatian Banking For example, Zagrebacˇka banka in Croatia customers, including financing for young Association, we implement free workshops has launched a new campaign called, adults, teens and children and workshops to educate the public on the successful “With expert advice, achieve more!” and and road shows. management of personal and family finances produced a thematic booklet called, “Life as a part of a project to promote the concept as an investment horizon” that seeks to FINANCING FOR YOUNG ADULTS and practice of socially responsible business raise general awareness about savings We support the first banking needs of in Croatia. Our awareness-raising activities and investment and the need to preserve young adults, and we seek to enhance in Turkey in 2007 include the Independent the value of assets. These materials are their financial literacy and empower them Film Festival and the Cinema Concept Road available to our customers through branches to increase their savings and reduce their Show, which travel to universities and are and the website. In credit financing, costs. In Italy, for example, we designed aimed at improving financial literacy among Zagrebacˇka banka has made it easier for Genius Giovani for our 18 to 30-year-old young people. our customers to compare products with our Retail customers. Genius Giovani provides competitors by highlighting “effective rate of participants with specific payment tools, interest” (EKS), as regulated by the Croatian services (e.g., international ATM cards, credit The Markets in Financial National Bank. Our customers are not cards, unlimited transactions and internet 9 only presented with the actual price of the banking services) and special rates on Instruments Directive product during negotiations, but they also loans to enable our young adult customers receive Zagrebacˇka banka’s payment table. to meet their financial needs and become Following the implementation of the accustomed to managing their assets MiFID Directive in Italy on 1 November Our commitment to transparency is also through a zero-fee investment account and 2007, UniCredit Group adapted its service evident in our efforts to comply with local dedicated personnel support in branches. model and products to comply with MiFID regulations (e.g., the Italian regulation Dlgs For university students 27 years old or regulations. 385/1993 and subsequent updates). These younger, Genius Giovani is free. regulations require maintaining a high level The retail business has been primarily of efficiency in internal processes and they FINANCING FOR TEENS AND affected, and the principal changes have improve our ability to provide information CHILDREN impacted customer classification, investment to our Corporate customers in a clear and We aim to enable teenagers to learn how advice, inducements, information to transparent manner. to manage their first savings accounts and customers and conflicts of interest.
9. i.e. with respect to its dictates on selling the appropriate products to the appropriate customers both in terms of responsible lending and in terms of investment products.
74 2007 Sustainability Report · UniCredit Group CUSTOMER CLASSIFICATION - “Suitability evaluation of specific orders consolidation in order to identify, manage All customers are now classified (e.g., as initiated by the customer,” in which the and disclose, if needed, the existence of eligible counterparties, professionals and bank will advise on the suitability of a potential conflicts of interest. Retail customers). Most customers have financial instrument that the customer been classified in the Retail customer has ordered. category, which affords the highest level of protection. In most cases, customers may INDUCEMENTS Standardizing Personal request a different classification. The introduction of the MiFID Directive has Financial Advisor significantly affected the asset management INVESTMENT ADVICE business. As of June 2008, banks may no processes UniCredit Group has determined that it longer receive any implicit management will always provide retail customers with fees. Therefore, UniCredit Group has UniCredit Xelion Banca is our specialized investment advisory services together reviewed its range of asset management Private Banking company that focuses with other investment services, such instruments on offer to customers and has on the provision of independent advisory as order reception and transmission of put into place a procedure for the disclosure services. It promotes transparency for our orders, execution of orders, subscription of inducements both paid and received Private Banking customers by standardizing and placement of financial instruments, where the inducement itself is lawful. PFA processes through its Xelion Advice and trading on account (including OTC program, which is MiFID compliant. derivatives negotiation). Only suitable INFORMATION TO CUSTOMERS Xelion has also created a dedicated unit financial instruments may be recommended We have drawn up new materials to provide to support our PFAs, to conduct training and a suitability test is always performed. the customer with adequate information on courses and to assess the impact of Xelion In light of this, we have taken the following the nature of financial instruments, the risks Advice. actions: associated with them and the measures for • A questionnaire has been drawn up to the execution of orders intended to ensure collect information evaluating the suitability the best conditions for the customer (e.g., and appropriateness of investments; Execution Policy, Transmission Policy, etc.). • Two main investment advisory processes have been implemented: CONFLICTS OF INTEREST - “Advice given at the bank’s initiative,” The MiFID Directive significantly improves in which the bank offers only suitable approaches to conflicts of interest. Specific financial instruments; policies and related procedures are under
UniCredit Group · 2007 Sustainability Report 75 Our customers
Service innovation
UniCredit Group believes that profitability for 2,000 consultants. The initiative also “I’m a Customer” is specifically defined as is the inevitable byproduct of delivering includes a component designed to provide an organizational training project because superior service and appropriate solutions mentoring for consultants who might benefit it intervenes directly into the company’s that meet the needs and aspirations of from one-on-one guidance. organization, leading in the end to a stronger customers. Our service innovation strategy corporate identity and culture. is based upon business sustainability ENHANCING OUR SERVICES principles. We consistently generate value We know that effective customer service SIMPLIFYING OUR PROCESSES for our customers and stakeholders through requires dedicated teams who can provide In order to simplify the mortgage process our network, through specialization, through high quality service, monitor service for our Austrian customers in 2007, optimizing our retail-banking channels, quality, enhance processes and coordinate we designed and established housing through our niche focus and through our operations throughout our bank in order finance centers in each of our four market attention to socially marginalized customers. to provide fast and appropriate solutions regions in Vienna. By bundling knowledge to customer service issues. One of our and tools from our larger branches into Our actions in this field include the many initiatives to enhance our services each center, our relationship managers’ development of specialized customer support, last year was to prioritize the formation capacity to service our customers was innovative products, niche products and and placement of Customer Service Teams optimized. services, optimized retail banking channels & (CSTs) at each of our 27 Bank Pekao hubs services and internet banking services. in order to improve service for our hub UPGRADING OUR CAPACITY customers. A further enhancement to our current service model in the CEE is the rollout of Specialized customer “I’M A CUSTOMER” dedicated teams and products for cross- The Retail Division’s “I‘m a Customer” border customers. In each CEE Corporate support initiative is one of the largest and broadest department, a specific international desk organizational training projects ever realized with Italian, German and English speakers At UniCredit Group, we seek to provide our by a bank. Designed for all our Italian mass- has been created to provide a one-stop customers with highly specialized customer market assistants and bank tellers, the “I’m shop to support customers from abroad support and to increase their satisfaction a Customer” workshop devotes two and in developing businesses in the local with our work. Our actions in this area a half days to the principles of emotional market. Our customers benefit from this include sharpening our skills, enhancing intelligence and customer satisfaction. efficient access to tailored international our services, simplifying our processes, The program began in March 2007 and products, as well as from the easy access upgrading our capacity, deploying best aims to reinforce the culture of excellence to UniCredit Group’s international network. practices, launching pilot projects and embedded in the services offered to our As an additional service to our Corporate customizing our analyses. customers. Customers, CEE corporate departments are also providing access to European Union SHARPENING OUR SKILLS This project goes to the heart of the most funds and other UniCredit Group financing Last year one of the many special customer important aspects of our work. Not only products. support initiatives we launched was does it contribute to our bank’s customer- the Best in First service model in Italy. oriented identity, but also it leverages the DEPLOYING BEST PRACTICES Designed to sharpen the service skills of competitive advantages we already possess. We continue to improve our retail service our Personal Banking consultants, this UniCredit Banca is investing in organizational model in the CEE, mostly in the area of initiative capitalizes on lessons learned and training projects without equal in terms advice. With regard to the investments of improves the quality of service delivered of importance, scope and the number of individuals, a structured approach was to our Retail customers through a rigorous resources involved. We are pleased to be developed from UniCredit Group best training regimen. We have already developed investing in our bank tellers and in our practices that allowed us to listen better to a modular training program for our elite mass-market assistants - in other words, customer needs and objectives, to propose performers (through the European Financial those colleagues who have first contact with consistent courses of action and to conduct Planning Association’s certification program) our customers. regular follow up.
76 2007 Sustainability Report · UniCredit Group LAUNCHING PILOT PROJECTS for these customers that features strong busy training our core German team of 40 We conducted a thorough assessment transparency features. specialists who will focus on the needs of of small business service models and this innovative group of customers, including market potential at the CEE level. Following AUTOMATED BILL PAYMENTS small entrepreneurs. this assessment, at the end of 2007 We develop new and convenient ways for we started a pilot project with two of our customers to conduct transactions SERVICES FOR THE DISABLED our banks to improve upon our current and meet their financial obligations. For UniCredit Group is working to increase model and service delivery for customers. the convenience of our Polish customers, the accessibility of our financial products Other banks will follow in 2008. We also for example, we are in the process of and services. In Germany, for example, we launched a project offering credit protection developing the Wygodne Rachunki system were the first service provider in Europe insurance to safeguard borrowers against of automated bill payments. Bank Pekao to introduce Braille-imprinted service and death, disability and unemployment, and is extending its network of cooperating savings cards. By collaborating with the a microfinance program was dedicated to agents, dramatically expanding the German Federation of Blind and Visually small enterprise. number of payment drop off centers where Impaired People, HVB and the card customers can pay their cable TV, gas and manufacturer Giesecke & Devrient, which CUSTOMIZING OUR ANALYSES energy and telephone bills among many exclusively supports this project, have set We are focused on serving our affluent others. Soon there will be roughly 2,000 an important example for supporting people Retail Customers better. In Austria, for payment centers. with disabilities. The aim of this joint initiative example, we developed AssetCheck to is to offer our blind and visually impaired analyze the asset allocation of our clients. customers easier-to-use plastic cards. The customized reports, advisory services Niche products and an individually balanced asset allocation We are working to break down barriers for our for each customer’s investment have and services disabled customers in other areas within our elevated the quality of services that we can control as well (e.g., seeking wherever possible now offer through Bank Austria. Along with UniCredit Group is working hard to ensure that to make our branches and ATMs wheelchair- the risk/return analysis that we now provide, everyone has equal access to our financial accessible). The optimized channels described we also are able to provide our customers services. That is why we proactively develop below are a key component of our efforts with direct feedback on ways to improve the customized products to meet the financial to improve the accessibility of our banking asset allocation in their portfolio. access needs of our niche customers, including services for people with disabilities. high-tech startups and the disabled. Innovative products FINANCING FOR HIGH-TECH Optimized retail banking STARTUPS UniCredit Group continues to develop We support high-tech startups through channels and services innovative financial products to meet the purpose-designed credit granting processes many needs of our extremely large and and services. For example, UniCredit The growth and development of innovative diverse customer base, which now spans Banca looks forward to strengthening this banking channels increases our ability 23 countries in Europe. Our new products vital sector in 2008 by granting low initial to reach more customers and to offer include special business accounts and mass indebtedness rates to meet the sector’s packages at lower prices. The self- bill payment systems. financial needs, while in the German service approach represents a significant market we implemented Concept GrüN (i.e. opportunity to provide our customers with SPECIAL BUSINESS ACCOUNTS Gründung und Nachfolge is translated as new ways to save time, simplify their We find it important to come up with “startups and successors”) for startups with transactions and increase their overall level products for our Corporate SME customers’ a view to supporting both entrepreneurs of comfort while at the same time reducing private and business banking needs. and the German economy. We offer specific expenses (e.g., Genius One costs €1 per Willkommenskonto Business in Germany is product packages to meet the diverse needs month and Imprendo One costs €5 per a special business account that we designed of each entrepreneur, and at present we are month).
UniCredit Group · 2007 Sustainability Report 77 Our customers
Service innovation (CONTINUED)
We offer our Retail customers a broad through Confidi. This section further Our multimedia kiosks now play a positive range of value added services, saving them details our optimized services including role in our Italian Retail Customer’s banking money because today’s customers deserve purpose-designed credit granting processes experience, permitting them to execute to have a modern and efficient relationship and standardized credit-products and almost all types of non-cash transactions with their bank. According to the agency, collateral for small business customers and and make payments via ATM. Grandi Numeri, more than 60% of all Italian professionals. Online banking, which is a key customers still use branches, at least once optimized channel, is also addressed below TELEPHONE BUSINESS SERVICE a month. 96% of them go to branches to in its own section. CENTERS (BSC) withdraw cash, while 59% of them go to In response to feedback from our Austrian deposit cash, spending an average of 15 IT’S EASY TO SAVE TIME customers, we set up Business Service minutes in line for each transaction. 95% of In Italy, our “It’s easy to save time” project Centers (BSC) in Austria to allow our Retail all people interviewed preferred ATMs, and in 2005 was designed to meet evolving Customers to conduct their banking by 66% evaluated financial institutions based customer needs through the development telephone, email or fax from 8.00 am to upon the self-service personal banking of optimized retail banking channels for our 6.00 pm. The project began with a small options they could provide to the customer. traditional branches. We invested €176 pilot program involving roughly 5,500 million over five years (2005 to 2009), and customers in one region of Vienna in March Optimized Retail Banking channels now by 2007 we had 1,980 second generation of 2007. The pilot program was a success account for 69% of all major transactions ATMs, 2,100 multimedia kiosks and a full and we decided to roll out the concept (e.g. deposits, withdrawals, bank transfers, complement of online personal banking across Austria in the spring of 2008. tax payments, MAVs and utilities) options in Italy. Following the rollout, we project that we will traditionally executed at the branch level. have serviced roughly 16,400 customers This positive trend is a direct consequence Between 2004 and 2007 we reduced our in the BSC in three locations - Vienna, of our investment of €34 million to train cash operations by 20% and succeeded in Klagenfurt and Salzburg. 800 employees in ATM and Kiosk client shifting many core operations to our ATMs coaching. in Italy. Our total number of transactions CONFIDI has increased to 96.3 million in 2007, In Italy, UniCredit Banca has developed a This section details our optimized channels significantly increased from 66 million in strong partnership with Confidi, a consortium including our it’s easy to save time project, 2004, and we have approximately 6,140 guaranteeing the credit exposure of SMEs Telephone Business Service Centers, and ATMs (including second generation ATMs) and facilitating short, medium and long-term exclusive channels and innovative products installed in our branches, up from 5,820 in loans. Confidi has long been a preferred and tools to serve our SME customers 2006 and 5,167 in 2005. financial partner for Italian SMEs. This is why
78 2007 Sustainability Report · UniCredit Group UniCredit Banca has developed exclusive the Interactive Key Award 2007 “Best including “Straight Through Processing” for channels and innovative products and tools Corporate Web Site” and the 2007 Web foreign payments, the development of a to serve our SME customers better through Oscar of LABItalia System and Associazione trade finance module and the introduction Confidi. These include specialist teams in della Comunicazione Pubblica. of EuropeanGATE, which will enable our every Regional Office dedicated to Confidi and Corporate Customers to manage their its member companies. They identify products 1-CLICK ADVICE accounts in Poland and abroad within and solutions that address local needs, In Italy we established a new finance portal UniCredit Group. including locally issued bonds, tranched credit for our Private Banking Customers called risk protection and local networking. Confidi 1 Click Advice. Additionally, we created We are finding that our Polish customers are credit ratings have significantly reduced the innovative products including certificates and also enthusiastic about our Pekao24 retail time from application to loan approval and structured products that are channeled to and SME internet-banking platform, as well delivery for its member companies. relevant customers by specialists from the as our PekaoFirma24 SME internet-banking Global Investments Division. platform. [email protected] In December 2007, [email protected], a process E-ZABA The total number of our customers with providing support for standardized credit- In Croatia, 38,087 business entities had access to our internet banking platforms products and collateral for small business internet accounts in 2007. Our e-zaba continues to increase, from 2.1 million customers and professionals in the Austrian Corporate internet-banking platform handled in 2005 to 2.6 million in 2007. Of Retail network, was fully deployed to more than 18 million cashless payment these customers, roughly 500,000 had maximize our efficiency in granting credit. orders in 2007. Our Corporate Customers internet current accounts, compared to use the e-zaba platform to execute approximately 300,000 internet current payments abroad as well, with 230,428 accounts in 2005. Internet Banking orders for payments in 2007. RETAIL AND CORPORATE INTERNET The internet enables our customers to PEKAOBIZNES24 BANKING IN TURKEY conveniently execute financial transactions In Poland, we continue to develop our In Turkey, the number of internet current from anywhere at anytime. At UniCredit PekaoBiznes24 Corporate internet-banking accounts at YKB has remained relatively Group, we are paying close attention to the platform. PekaoBiznes24 is a modern stable over the past two years. We now potential of internet banking to transform our on-line banking system that substantially have roughly 950,000 individual Retail relationships with our customers in all of our facilitates funds management and allows internet banking customers and more markets. our Corporate Customers to settle their than 80,000 Corporate internet banking payments on-line throughout the entire customers. BANCA MULTICANALE business day. By the end of 2007, 1.7 million of our PRIVATE BANKING ON THE INTERNET Italian Retail Customers had purchased the In 2007, we made several modifications to There were 23,547 internet current Banca Multicanale service, up 28% from enhance security and system ergonomics. accounts at UniCredit Private Banking in Italy the previous year, with an increase of 38% We also added payment features and in 2007, an increase from 20,641 accounts year on year of enabled current accounts. targeted process improvement. Our registered in 2006. Italy also accounted The number of individual customers rose to Corporate Customers are increasingly for 494,122 internet-banking transactions nearly 1.4 million, while the number of small interested in our internet-banking platform, in 200710, which represented 49% of the enterprise customers rose to 355,000, up and we have seen a jump in the number total number of Private Banking internet 70% from the previous year. of our corporate clients holding internet transactions we processed. current accounts from 1,500 in 2005 to Because of Banca Multicanale’s fine 8,500 in 2007. performance, UniCredit Banca received the 2007 Financial Innovation award from We look forward to launching several new 10. The figure refers only to trading transactions and money Milano Finanza for “Sportello ATM Evoluto,” and important internet channels in 2008, transfers
UniCredit Group · 2007 Sustainability Report 79 Our customers
Complaint management
Managing our customers’ complaints is a The average time we took to resolve the Listening and responding vitally important part of our business, both complaints from Retail Customers was from a regulatory and a customer service reduced in 2007, while in the same time to suggestions point of view. Complaint management period we managed and closed almost is the formal process that allows us to 110,000 recommendations with the Q48 We try to listen and respond to all of our properly record and resolve a complaint. complaint solution process. customers’ legitimate comments and This process incurs not-insubstantial direct Customer satisfaction with our handling complaints. For example, in Croatia, we fielded and indirect costs but is well worth the of their complaints was slightly above the and recorded 47,443 complaints delivered expenditure because each complaint reflects average for the banking sector. in person, by email or by telephone in 2007 the direct experience and opinion of one of (21,244 of which were from Corporate our customers, and provides an excellent Customers) and were able to send responses reference point from which to improve our Increasing our capacity to all of them. We received the most Croatian performance. customer complaints about Giro accounts, Our numbers for Germany are not directly Go!Card, e-zaba Corporate internet banking, At UniCredit Group, we strive to transform comparable with Italy, primarily because at Maestro cards and MasterCards. the knowledge that we derive from our present we are using the HVB Complaint customers’ complaints into tangible value Management System to measure the The Go!Card is a new product that we to ensure the long-term sustainability of volume and nature of complaints. Germany are working hard to improve in line with our business. is steadily increasing its capacity in this our Croatian customers’ comments and vital field, better enabling us to identify suggestions. We also field complaints about Our actions in this area include handling specific areas of concern, to openly address our ATM and Point of Sale (POS) devices. complaints within 48 hours, increasing and resolve challenges, to demonstrate We will continue our efforts to resolve these our capacity, relaunching systems and our interest in our Retail and Corporate issues. According to the data we have standardizing processes, listening to Customers’ needs and to settle complaints collected, the highest number of complaints suggestions, creating special Units, in a professional manner. relates to customers’ Kuna accounts and implementing quality control projects, e-zaba Corporate internet banking. Most of coordinating our Units, maintaining open The percentage of our Retail customers these complaints stem from unrecognized lines of communication and pending with a complaint in Germany has remained transactions per account, which are a result of lawsuits. steady over the past two years, varying the way our business counters are currently between 7.3 percent and 7.8 percent. set up and the way we have been processing orders through our direct channels. We are Handling complaints committed to changing these processes and Number of recorded complaints we expect the number of complaints to be within 48 hours by country, 2006-2007 significantly reduced in the near future. NUMBER 2007 2006
One of the steps that we have taken Italy 4,271 8,737 to improve our response time was the Germany 39,496 24,271 Fine-tuning complaint development and implementation of the Austria 7,969 7,846 Q48 complaint solution process for our management processes Retail Branch network in Italy. This provides for the handling of complaints within 48 The sharp increase in recorded complaints Our efforts to make specific adjustments hours of their being lodged. Our strength in for Germany is due to the implementation to complaint management processes acting on complaints is a core component of simplified procedures that facilitated include creating special Units, re-launching of our culture, as reflected by the numbers: the complaint recording process. The low systems and standardization, implementing from 2005 to 2007, written complaints numbers for Italy are because complaints quality control projects, coordinating Units, decreased by 71%, and from 2006 to that are successfully managed and closed maintaining open lines of communication 2007, by 51%. through the Q48 process are not recorded. and resolving disputes through Ombudsmen.
80 2007 Sustainability Report · UniCredit Group CREATING SPECIAL UNITS in Austria. As a result, we have implemented working to develop a single integrated tool Special Units facilitate the monitoring of all a new system of reporting to determine the to be deployed within all YKB complaint steps involved in the complaint management reasons for customer complaints and to Units. Our goal is to develop a standardized process (e.g. a complaint examination evaluate customer complaint behavior to approach to managing the complaint cycle. and registration process, definition of facilitate a more proactive form of customer statistical data for complaint reporting and satisfaction management. MAINTAINING OPEN LINES a recommendation process to relevant OF COMMUNICATION bank offices to transform complaints into We maintain several contact channels strategies to improve our service to the IMPLEMENTING QUALITY CONTROL (e.g. representatives, email, SMS and clients). In Poland, for example, we tasked PROJECTS traditional call centers) to receive our Retail a special unit to handle the complaints UniCredit Group supports specific initiatives & Corporate Customers’ complaints. We of companies with annual revenues to promote quality in everything we do. work to understand our customers and between €2.5 and €65 million that form For example, we continued to implement their needs and we do our best to resolve our Mid-Corporate customer base in this two key quality control projects that were complaints as quickly as possible. We country. In response to their comments launched in Poland in 2006. The first of leverage modern technology to process and suggestions, we have established a these projects was designed to enhance customer requests and ideas quickly so that mechanism to manage claims and monitor our credit processes, e-banking, claims, we can provide feedback and develop a the time and quality of our responses. We cooperation and coordination processes. The comprehensive improvement process. have also nominated Operational Officers and second project actively implements tools Managing Directors to oversee the complaint to measure Corporate customer comments management process within all of Bank and the reasons they gave for closing their Pending lawsuits Pekao’s branches and regions. All complaints accounts. and details are recorded in a central system At the end of 2007, the UniCredit Group was called REK. In Poland in 2007 we received COORDINATING UNITS involved in three lawsuits for damages and approximately 40,000 complaints from In Turkey, YKB has an extensive program that in several revocatory lawsuits brought by both Retail and Corporate customers, down works in concert with the Quality Department some of the Parmalat Group Companies. slightly from the approximately 43,000 (Kalite ve S¸ ikayet Yönetimi) to deal with our complaints we received in 2006. Turkish customers’ requests and complaints. There were also pending some lawsuits We continue to diversify our products opposing the winding-up balance. RELAUNCHING SYSTEMS and services in Turkey with a careful eye AND STANDARDIZING PROCESSES towards Customer Relationship Management The UniCredit Group believes it will be able We relaunched our Private Banking complaint (CRM) tools and statistical models, the sub- to prove that it was not, nor could have management system and standardized segmentation of customers and ongoing been, aware of the situation of insolvency of processes at BankPrivat and Schoellerbank research on customer expectations. We are the Parmalat Group; that being said, as far as are concerned, the revocatory lawsuits provisions have been made for an overall amount considered consistent with the risk of loss on the various lawsuits.
More details, about both the most relevant among the above lawsuits and the lawsuits originated by the criminal investigations carried out between the end of 2003 and the end of 2005 on some employees and managers of the former Capitalia, presently UniCredit, may be found in the consolidated UniCredit Group annual report.
UniCredit Group · 2007 Sustainability Report 81 Our customers
Corporate derivatives
Derivatives products are financial At the end of 2007, the total number well as the customized management of our instruments whose characteristics and value of UniCredit Banca d’Impresa corporate individual accounts. This has led to improved depend upon the characteristics and value customers with an interest rate derivative response time to customer complaints and of an underlier typically a commodity, bond, was around 8,600 (~8% of UBI client base). consulting requests. equity, interest rates or exchange rates. The main varieties of derivatives are futures, Due to the MiFID regulatory framework forwards, options and swaps. Claims (1 November 2007), UniCredit Banca d’Impresa adapted its service model and A swap is a contract in which two parties Since the number of claims registered on products to comply with the regulation. agree to exchange periodic interest corporate derivates increased in 2007 as a payments, based upon a notional principal result of market developments and media UBI offers a dedicated investment advice amount. coverage, UniCredit Banca d’Impresa has service for the negotiation of derivatives further strengthened its assistance for products. To this end, new processes for Italian companies are historically customers in this area, thereby facilitating advice and sales of derivatives together with characterized by high level of debt that is the settlement of the majority of claims. new contractual terms for this asset class indexed at a floating-rate. In 2001, most have been defined. of the interest rate swaps dealt by Italian In 2007, UBI received a total of 793 claims companies were structured convert the concerning the derivatives business - a In addition, under MiFID provisions, in order floating interest cost of the loan into a fixed number considered to be within normal to comply with offsite offerings, UniCredit one. In this way, the companies protected bounds for a banking operation of our size Banca d’Impresa’s financial advisors shall themselves against any rise in floating rates. and scope. Around 80% of these claims subscribe the dedicated register. have been resolved. In 1999 UniCredit Group reorganized its business model in order to offer specialized and diversified services to different kinds of Reorganization clients, such as families and companies. In 2007, UniCredit Banca d’Impresa This reorganization drove the Group completed the business process of to answer specific needs, such as the reengineering for derivatives products, with companies’ requests for derivative products. a focus on the reorganization of sales force activity. UniCredit Banca d’Impresa (UBI) corporate derivatives business reached its peak in The sales force has been segmented to align 2002. From December 2001 to December with the complex of customers’ needs and 2002, the notional amount of interest rate to meet the criteria of our customer-centric derivatives increased to around €31 billion, approach. then decreased slowly down to around €26 billion at the end of 2007. A Customer Care Unit has been set up, with the aim of providing an effective aftersales At the end of 2007, the weight of interest service to the clients. rate derivatives was approximately 95% of the total UBI corporate derivatives business. Also, a Customer Care Derivatives Executive During the 2007 fiscal year, in a context Committee was established at the beginning of rising interest rates, the net negative of the second half of 2007. Mark-to-Market of interest rate corporate derivatives decreased by ~40% from €1.5 The result is a significant improvement of billion to approximately €900 million. the monitoring of post-sale operations, as
82 2007 Sustainability Report · UniCredit Group Customer satisfaction
We build long-lasting relationships based TRI*M index for Germany and Italy, 2004-2008 on dialogue and cooperation by constantly focusing on our customers’ needs. 70 Italy 68 Germany We endeavor to pool and leverage all the 66 64 64 banking know-how available at UniCredit 61 62 62 Group in the service of our customers, 60 58 regardless of location. This approach 58 enables sustained growth in the European 56 market, which has undergone a remarkable 54 52 transformation in the last several years 52 50 49 in terms of increased competition and monetary and fiscal policies. 2004 2005 2006 2007
UniCredit Group’s international profile poses certain challenges to our capacity to meet the expectations of all the communities we comparative satisfaction levels in all 23 front-line insights of branch employees serve. In response, we have made significant countries where UniCredit Group operates. and managers. In this way, we generate investments, which allow us to maintain The TRI*M Index is a proprietary scoring value for our customers and stakeholders. our local personality while operating on an system that measures the quality of Those customer-satisfaction ratios are a key international basis. For example, the Retail the consumer experience based on a factor in the Retail Division’s bonus system, Division has made extensive investments in synthesis of four questions in customer illustrating our commitment to transforming cross-border strategies and service models, satisfaction surveys. These four questions customer satisfaction data into concrete which can effectively be scaled across a are: How much are you satisfied with the action. common service-oriented culture. service provided by the bank? Would you recommend the bank to a friend? Should In Italy, we have succeeded in raising our Our actions in this area include you have the chance of changing banks, TRI*M retail customer satisfaction levels implementing the TRI*M Index and acting on would you choose our bank again? and from 49 in 2004 to 62 in 2007 and, in results, customer surveys and developing How is the service provided by the bank Germany, from 61 in the second half of new customer satisfaction tools and compared to competitors? 2006 to 64 in 2007. In Austria, Bank Austria initiatives. scored a 60 and a 68 on the TRI*M Index Answers are weighted and a score of one to in the Affluent and Mass Market segments 100 is assigned. The TRI*M Index measures respectively. The TRI*M Index customer satisfaction in terms of products, processes, service quality, sales networks, TRI*M AND PRIVATE BANKING UniCredit Group uses the TRI*M Index to etc. It also monitors customer loyalty, Since 2004 we have measured the monitor the satisfaction of its customers identifies opportunities and challenges with Customer Satisfaction Index annually. In across our Divisions. While the Index is in reference to different territories, products this time, it has increased a great deal, use in the CEE Division as well, this section and/or services, determines priorities for from a rating of 66 in 2004 to a rating of primarily details the role of the TRI*M Index intervening in products and processes 72 in 2007. At Xelion, our personal banking in our Retail and Private Banking Divisions. in order to improve service quality and customers’ satisfaction with their Personal response time, and compares performance Financial Advisors was measured as 77 RETAIL DIVISION METHODOLOGY over time. on the TRI*M index, a slight decrease from The Retail Division has established a clear 78 in 2006 and 79 in 2005. In Austria methodology built around the TRI*M Index, In order to improve our understanding of in 2007, our BankPrivat scored a 66 on a licensed model of the TNS research our Retail customers’ needs, we match the TRI*M Index, while our Schoellerbank company, to reliably assess customers’ highly aggregated information with the scored a 72.5.
UniCredit Group · 2007 Sustainability Report 83 Our customers
Customer satisfaction (CONTINUED)
In Germany, WEM measures the satisfaction Customer Surveys We conducted more than 80,000 Retail of our Private Banking customers through customer interviews in Germany in 2007, standardized comprehensive and structured Customer surveys are one of the primary completing roughly 120 interviews per interviews several times a year and relies ways that UniCredit Group listens to our branch. As a result, our quarterly service on the TRI*M Index as a benchmark, scoring customers’ comments and suggestions. reports provide a wealth of detailed and a 71 in both 2007 and 2006. In Turkey in Accordingly, this section details how we actionable information that enables each 2006 at YKB our overall Mass TRI*M Index listen to our Retail, Corporate, Private branch to understand its strengths and score in 2006 was 74, our Upper Mass Banking, Asset Management and CEE potential areas for improvement in terms of TRI*M Index was 75, our SME TRI*M Index customers. its customer relationships. was 68, our Private TRI*M Index was 76 and our Corporate & Commercial TRI*M Index Listening to our Retail customers We conducted more than 1,900 telephone was 89.11 We conducted more than 200,000 Retail Retail customer interviews in Austria in 2007. customer interviews in Italy in 2007 We dedicated part of Bank Austria’s 2007 ALTERNATE MEASUREMENT with UniCredit Banca customers and customer satisfaction survey to conducting SYSTEMS 20,000 interviews with our competitors’ an initiative called Small Business One-Stop Results in the table below show significant customers. Comprehensive monthly results Shopping, in which a single Relationship growth in our Croatian customers’ are delivered to management, while Manager handles a given customer’s private satisfaction with Zagrebacˇka banka when branches receive a full report annually, and business banking needs. measured on a scale of 1 to 5. Impressive with tri-annual updates. At the end of growth was recorded in the family banking each year, analysis of this information is We measure the satisfaction of our segment. developed into 2,500 branch action plans, customers periodically throughout the year, 198 market action plans and 11 regional depending on the division, country or legal Customer satisfaction in Croatia has action plans. These plans generally call entity involved. For example, we measure increased steadily from 2005 to 2006, with for the development and implementation the overall satisfaction of our customers the largest gains made among the MASS of advanced training-based initiatives in Turkey once a year, while branch-based segment, where it jumped almost by 0.5 to enable us to meet the ever-changing customer satisfaction is measured six times points (one is the lowest score and five is needs and expectations of our customers per year using either computer-assisted the highest). and the market. telephone interviews (CATI) or face-to-face methodologies according to the customer segment we plan to engage. Additionally, Retail Customers satisfaction index in Croatia we solicit feedback from our customers 2005 2006 2007 through “contact us” forms on our website, MASS 3.94 4.39 4.45 the Head Office Customer Complaints AFFLUENT 4.42 4.56 4.71 Team, the Credit Cards Customer Service SMALL BUSINESS 4.37 4.59 4.19 Team, the General Customer Satisfaction Research team and Branch Based Customer Satisfaction Research. Corporate customer satisfaction index in Croatia Our surveys yield important results that 2005 2006 2007 help us do our job better. For example, MID CORPORATE 4.25 4.53 4.58 we discovered that approximately two- thirds of our Austrian Retail Customers were taking advantage of the extra level of convenience and service provided by Small Business One-Stop Shopping, and we are moving swiftly to build upon this 11. YKB 2007 scores were not available as of the time of the printing of this report. insight in 2008 by stepping up our training
84 2007 Sustainability Report · UniCredit Group and communications activities. In order to customers at home. We also provide sales staff that integrates the results of the to consolidate our significant gains in automated services such as online banking satisfaction surveys, feedback initiatives customer satisfaction and service quality, through our virtual branches, telephone and mystery shopping that allows our staff we implemented incentive-based systems to banking through HVB Direct, and service to become familiar with the latest customer reward our elite service-delivery performers. terminals, including cash machines and satisfaction data. This data informs our account statement printers. product development, which has led to the The results of our cumulative surveys development of such new products as HVB further demonstrate the importance of direct Additionally, we provide our corporate sales FirstPaket and the WEM-Beratungsdialog personal relationships with customers. For teams with the latest in technical tools for advisory tool. example, we discovered that Zagrebacˇka customer relationship management. With banka’s customers derive the most them, relationship managers can collect Comprehensive, structured and satisfaction from their interaction with our comprehensive, up-to-date customer data at standardized telephone interviews to solicit personal bankers and business relationship any time. This enables those involved in the our customers’ views, comments and managers. This insight into our customers’ advisory process to recognize a customer’s suggestions are also used, for example at preferences has led us to develop a service particular requirements and to provide BankPrivat and Schoellerbank in Austria. similar to personal banking in the family customized service. banking segment. We have also removed When appropriate, UniCredit Group the counters from our branches and offer LISTENING TO OUR PRIVATE will call upon the services of external comfortable seating arrangements to our BANKING CUSTOMERS companies such as GfK Eurisko Finance to customers. In order to monitor the quality of Private perform customer satisfaction analyses for Banking customer service, we use several our legal entities such as Xelion in Italy. In Group-wide, we work to incorporate the different methodologies. 2006, the results from an external survey results of customer satisfaction surveys into of Xelion customers found high levels of efficiency measurements of the entire sales At HVB’s WEM Division, for example, we satisfaction. and management staff and aim to develop have two main methodologies. For the action plans when the results are received Externes Servicebarometer, which is a The results from our surveys are translated and analyzed. quantitative survey designed to assess the into action. For example, as a direct result satisfaction and mood of our customers, of our Private Banking customer satisfaction we use CATI to deliver a standardized surveys in Italy, we plan to expand our questionnaire which takes 15 to 20 range of products to provide more dynamic Key figures regarding our minutes to complete. Our survey sample is and innovative offerings, including Internet Retail customers in Italy, approximately 1,000 interviews. Banking and Certificates to meet the needs of our younger clientele. Germany and Austria For the Private Banking Monitor, which is a competition survey to assess the satisfaction LISTENING TO OUR ASSET LISTENING TO OUR CORPORATE of Wealth Management clients across MANAGEMENT CUSTOMERS CUSTOMERS several banks, we use standardized 25 Pioneer Investments has deployed UniCredit Group now encompasses to 35 minute computer-assisted personal a sophisticated customer research many strong traditions of listening to interviews (CAPI) to explore the attitudes, and satisfaction model that combines customers from our legal entities. For wishes, financial needs and product usage quantitative and qualitative analyses example, we have carried out Corporate of wealthy private clients. The sample size to produce methodologically strict and customer surveys in Germany since 1994 for this second survey is approximately 300 fundamentally sound results. Last year and we pride ourselves on establishing interviews per survey. we contacted more than 4,000 customers and maintaining relationships with our worldwide, representing €158 billion Corporate customers. We take the time to HVB WEM has developed several projects of assets under our management, personally engage our customers during based on our customer satisfaction and listened carefully to what they had their branch visits and make private visits initiatives, such as a training program for to tell us.
UniCredit Group · 2007 Sustainability Report 85 Our customers
Customer satisfaction (CONTINUED)
LISTENING TO OUR CEE CUSTOMERS customer satisfaction and to launch a Customer satisfaction The overall program of integrating the CEE permanent process to improve customer Banks of UniCredit Group, HVB and Bank service levels. The survey results showed tools and initiatives Austria into the UniCredit Group structure that our CEE Customers’ level of satisfaction was initiated in 2006. The program focused was in line with our major competitors. In UniCredit Group selectively employs specific on maintaining a high standard of service the countries involved in the integration tools and initiatives to further our customer for our customers and minimizing negative program, our customers’ perception of satisfaction goals. Accordingly, this section impacts that might have resulted from our the quality of our service was only slightly details our Mystery Shopping program, ongoing merger activities. affected by the mergers. responses to specific feedback, connecting In 2007, we conducted a broad survey, Based on these survey results, each CEE our Private customers, developing new involving most of the CEE countries, country developed a specific action plan programs, guaranteeing service excellence to measure the satisfaction of our CEE for implementation in 2008. Among other and committing ourselves to our customers. Corporate and Retail Customers, making initiatives, some banks decided to undertake use of the TRI*M Index when possible. improvements in the complaint management MYSTERY SHOPPING The survey aimed to provide an updated process to achieve better levels of customer In our Mystery Shopping program, we and comprehensive monitoring of current retention. send undercover representatives to shop
86 2007 Sustainability Report · UniCredit Group for products and services from all relevant complementary and functions independently In addition to the Service Level Agreement, Divisions. The resulting data provides us from a customers’ Private Banker. The Pioneer Investments has established an with impartial and objective critiques of the Osservatorio sulla Clientela provides an ideal Internal Quality Unit that will monitor the customer experience at the branch level and means to monitor customer satisfaction total quality of processes that have an permits us to study and analyze how best to surveys, identify priorities and test new impact on our distributors and our clients. improve as necessary. products and initiatives. The unit will proactively seek to identify potential shortcomings and actively propose For example, we organize more than 1,300 DEVELOPING NEW PROGRAMS corrective actions. Mystery Shopping visits each year in Italy In 2007, we set up a new program that and more than eight Mystery Shopping visits will manage all of our Corporate customers COMMITTING OURSELVES TO OUR per branch in Germany, sharing data with all in Italy, Germany and Austria beginning in CUSTOMERS branch and market-level teams to ensure a 2008. The mission of the new program is We take firm action to ensure that we stay full 360-degree awareness of our competitive to develop, implement and launch a new committed to our customers. In Germany, environment. When necessary, we redesign customer satisfaction program called Listen for example, our Living Service Culture our programs at the branch level to improve to Act. The aim of the new program will be initiative calls for our WEM team to be our overall picture of branch service and to guide, support and coordinate a common always on-call, always able to uphold performance and do our best to ensure strategic approach across the Corporate best-in-class service levels and always uniform standards to achieve top rankings in Division by providing key analyses from the to be prepared to travel to meet our comparative mystery shopping tests. project to top management. Private Banking customers whenever and wherever. Our people are also required to RESPONDING TO SPECIFIC FEEDBACK During the 2007 pilot phase of this program, be deeply engaged in our communities Initiatives including customer surveys and we developed a simple methodology based and to contribute to networks, charity Mystery Shopping generate accurate and on best practices and a short questionnaire organizations and volunteer work. anonymous, aggregated information. Yet a tailored to our Corporate customers’ needs. bank that seeks to remain close to its clients We interviewed more than 6,300 customers must also be ready at all times to receive from all segments including new customers and respond to specific feedback from from Capitalia. The Listen to Act rollout individuals. began in February of 2008 and engaged 30,000 of our Corporate customers in Italy, That is why we encourage our customers to Germany and Austria. talk to us in a variety of ways. For example, we encourage our Retail customers to GUARANTEEING SERVICE complete suggestion cards in branches, to EXCELLENCE contact us online and to send emails directly As part of a drive to enhance our Asset to the Deputy CEO of the Retail Division. Management customers’ investment In fact, more than 2,000 customers from experience, Pioneer Investments concluded Italy and Austria have opted to contact the a Service Level Agreement in 2007 Deputy CEO directly. Responses are sent with UniCredit Banca, one of our key out within 48 hours of receipt of the initial distributors. This agreement guarantees contact. that Pioneer Investments will provide the level of service that UniCredit Banca’s KNOWING OUR PRIVATE BANKING clients expect. In particular, the agreement CUSTOMERS clearly sets forth measurable key In Italy, we created the Osservatorio sulla performance indicators that cover the full Clientela in 2007 to serve as a direct link spectrum of services. Starting in 2008, the between our top management and our Service Level Agreement will be extended Private Banking customers. This link is to UniCredit Private Banking.
UniCredit Group · 2007 Sustainability Report 87 Our customers
Security
At UniCredit Group, we are implementing Our data shows that this preventive pilot Integrated Security System project that every reasonable precaution to protect our strategy is paying dividends, as UniCredit deploys remote video surveillance and other customers and their information. Banca bucked the trend by successfully high-tech monitoring systems to intercept decreasing the total number of thefts and and interpret unusual trends, signals and Our actions in this area include establishing robberies in 2007 by 32% in comparison activities. We also initiated a program a new Global Security Department, with 2006. Robberies are not just an Italian in Italy to keep our employees informed reducing robberies and theft, increasing problem. With 5,406 robberies in the entire regarding the latest security issues and surveillance, cooperating with law European banking system (numbers include topics so that they too can be a part of our enforcement agencies, cards and fraud Italy) in 2006, we continue to analyze and overall effort to enhance branch and office prevention strategies, internet security recommend security adjustments on a security group-wide. measures, Business Continuity Planning group-wide basis. (BCP), corporate cash management and data security. As a result of other security initiatives and Cooperating with law tweaks, we have an extremely low number of robberies in our banks in other parts enforcement agencies Establishing a new of Europe. In Austria, for example, bank robberies decreased from 26 in 2004 to We develop strong and collaborative Security Department 15 in 2007 due to better safety measures. relationship with local law enforcement Poland as well experienced decreased rates agencies. For example, in Italy we have In January 2007, we established a new with only four incidents over the past three participated in joint signings of the “Protocols Global Security Department to develop all years. We experienced a sharp decline in on Robbery Prevention,” while in Poland, we the activities related to safety, logistical thefts in Poland in 2007, with only six thefts minimized external and internal threats that security and protection of privacy. We as compared with 13 in 2006 and 14 in may cause losses to our bank by cooperating employed an innovative global approach 2005. Theft incidents involving our own with law enforcement agencies and with based upon a close relationship with personnel remain low, with only one incident threat analysts in the banking sector. businesses and local territories. The in 2007 as compared with two incidents in new Security Department is focused on 2006 and two incidents in 2005. protecting customers both as “people” and Cards and fraud as “customers”. In Turkey, risk exposure to robberies and theft has decreased throughout the years. prevention strategies Compared with 2005, the number of events Reducing robberies decreased 54% in 2007 (from 24 to 11 Our actions in this area include adopting incidents), indicating that our preventive new technology, free SMS alerts, anti- and theft measures have been effective. skimmer devices, in-sourcing credit card fraud management activities and robust With 3,346 robberies in the Italian banking monitoring systems. system in 2007 (an eight percent increase Increasing surveillance from 2006), we are focused on protecting ADOPTING NEW TECHNOLOGY our customers and our employees from this In many of our branches and offices, As of January 2008 in the Single European security threat. As cash is still heavily favored we have replaced the old, push button- Payment Area, all credit cards are for many different types of transactions in activated cameras with permanent security required to include microchip technology. Italy, our primary strategy in 2007 has been systems that are always active and, where We proactively launched the Bancomat to reduce the amount of cash circulating in practicable, deployed the latest technology Microchip project in 2007 in Italy. Since our branches in Italy. The amount of cash in instead of relying solely on traditional then, we have delivered roughly 800,000 each branch every day is strictly monitored guards to provide physical security for microchip cards and adapted all Points and controlled to meet average daily our customers and employees. We also of Sale (POS) to this innovation. All of our requirements. support innovative projects such as the Bancomat Maestro cards now utilize both
88 2007 Sustainability Report · UniCredit Group microchip and magnetic tape technology. payment and withdrawal activities potentially ROBUST MONITORING SYSTEMS Microchip technology provides a significantly vulnerable to fraud. At YKB, we view authorization as another higher level of security than magnetic tape tool for risk management and fraud control. technology because microchips cannot be DEPLOYING ANTI-SKIMMER DEVICES While executing authorization decisions, we cloned. In early 2008, our Retail Customers Skimmers (electronic readers that capture are careful to balance the need for fraud can also look forward to the progressive and copy magnetic tape data on an ATM control with our customer service objectives. replacement of magnetic tape cards currently card when it is inserted in the ATM) have We have daily merchant and card activity in circulation with new microchip cards. posed a constant threat to consumers using monitoring in place to identify potentially magnetic tape cards. To effect a smooth fraudulent activities. Following the migration to Chip & PIN in transition between magnetic tape and Turkey, we observed a striking decrease microchip technologies, our ATMs continue Internal and external fraud loss events in fraud. The wide usage of PIN codes has to deploy anti-skimmer devices to prevent are collected and monitored closely on proven to be an effective countermeasure to criminals from utilizing skimmers in Italy and a web based loss database. Operational mitigate loss, theft and counterfeit fraud. Turkey, for example. Risk Management performs measurement, analysis and evaluation of the fraud events. FREE SMS ALERTS IN-SOURCING CREDIT CARD FRAUD Fraud events are analyzed and potential We conducted a massive drive in 2007 to MANAGEMENT ACTIVITIES losses are mitigated via effective insurance register our Italian Retail Customers’ mobile In Italy in 2007 we in-sourced credit card management. Internal and external fraud telephone numbers and have achieved in fraud management activities, both for events are monitored and shared with the excess of a 60% adoption rate of all ATM issuing (credit/debit card duplicating) and Audit department. With our Key Operational cardholders. We extended our free SMS acquiring processes (fraud on POS devices). Risk Indicators (KORI) project, internal and alert service to cover many different types This increased the level of security in credit external fraud risk indicators are collected of transactions made with ATM cards in card services thanks to a faster and more from related departments, and the trend of Italy including refilling pre-paid cards and effective intervention. risks, including potential losses from theft &
UniCredit Group · 2007 Sustainability Report 89 Our customers
Security (CONTINUED) robberies, are tracked monthly. KORI is a risk protective software tools to aid them in ITAN PROCEDURES indicator based on an early-warning system, the safe use of internet banking services; We seek to protect our customers from all which allows countermeasures to be taken types of third party fraud with respect to quickly when risk becomes acute. 2. Providing customers with appropriate our banking services. To counter Internet training and advice on basic precautions; fraud (“phishing”) our banks in Germany ACHIEVING FRAUD REDUCTION were among the first to introduce the RESULTS 3. Developing effective fraud management iTAN system of transaction number codes, Our efforts get results. In Turkey, for example, systems. which is a further evolution of the TAN our combined actions have resulted in the system currently in use. In the event our reduction of credit card fraud from more STATE OF THE ART ELECTRONIC KEYS direct banking system in Germany was to than 1,200 incidents in 2005 to less than Based upon a careful study of internet fraud, be compromised, measures are in place 400 incidents in 2007. In the same period, UniCredit Banca has effectively mitigated to liaise through a central evidence center we succeeded in cutting the total US dollar customers’ risk of online fraud by providing with other major private banks in order amount of fraud in half. The statistical and them with the UniCredit Pass, a state of to exchange information about current behavioral models we use to monitor fraud the art electronic key that generates single Internet attacks. in Turkey allow us to recognize peculiar use temporary passwords valid for no more transactions by factoring in actual cardholder than 60 seconds at a time. UniCredit Pass NEXT GENERATION ITAN behavior as well as known fraud patterns. represents the best current technology PROCEDURES to protect against such online frauds as We support the modern alternative phishing. TAN procedure for OnlineB@nking. Internet security measures The mobileTAN procedure is the next UniCredit Banca distributed more that generation of the iTAN procedure (indexed In addition to traditional card and authorization 700,000 UniCredit Passes in 2007. The TAN) and is the safest TAN procedure fraud, we are keenly aware that internet UniCredit Pass initiative is a part of our currently available because of combined crimes are on the rise. Cyber-crimes including broader online security program that works two channel authentication. Using the phishing are often difficult to track and are to develop security and educational tools mobileTAN procedure, our Austrian Retail the result of highly sophisticated syndicates to support our online personal banking Customers will now receive a mobileTAN of criminals that operate in countries where customers. Our partnership with Symantec, on their mobile phone every time they need there are no legal regulations. We conduct the leading software company in the field of to authorize a transaction. As they will annual threat assessments of internet fraud IT safety, has been renewed, thereby making receive mobileTANs via SMS on demand, to identify risks and to gauge the risks posed it possible for our customers to download a no more TAN letters will have to be kept to our customers and stakeholders. As range of security software (including anti- or distributed by mail. This quick and easy internet banking becomes increasing popular, virus, firewall and anti-spam products) for way of authentication is available free at preventing internet fraud will become one of free or at discounted prices from our online any time around the world. our biggest security challenges. banking website. At the end of 2007, Bank Austria had PHISHING Similar initiatives to the UniCredit Pass are 518,000 OnlineB@nking users, of which UniCredit Group takes a proactive approach on offer group-wide. For example, we provide 300,000 used OnlineB@nking frequently. toward online fraud. For example, since our customers in Turkey with the latest Roughly 17% of frequent users had already 2005 in Italy at UniCredit Banca, we are technologies such as smart keys, smart SMS, switched from iTAN to mobileTAN and took no longer restricting ourselves to securing smart cards, electronic signatures, single use advantage of this convenient and secure our own information systems, but are password technology, customizable security authentication procedure, while a quarter of undertaking broader initiatives as well. This settings, an e-keyboard to combat phishing all OnlineB@nking transactions are currently more comprehensive online safety program and spyware, Turkcell Mobil Signatures and signed via mobileTAN. consists of a three-pronged strategy: personalized virtual keyboards.
1. Providing internet customers with
90 2007 Sustainability Report · UniCredit Group SPECIALIZED MONITORING GROUPS Reducing fraud-based losses to zero A monitoring group was established in 2005 at UniCredit Banca will result from improved to identify, follow up and work together with official departments to analyze fraud technology, innovative systems and constant and offer solutions. In Turkey, for example, we monitored 1,689 incidents of phishing communication with customers in 2007. This represents almost a 100% increase from the 939 incidents we monitored in 2006.
BANKING SECURITY • Code generator confirmation system KEEPING OUR STAKEHOLDERS IN THE KNOW SYSTEMS • VerySign In 2008, we plan to provide all of our branch staff with a series of training courses in internet fraud. We will begin a Smart Fraud Detection System in the second half of Symantec Partnership: 2008. Our Internet Banking Department regularly updates our Turkish customers • Free tools and information on the latest fraudulent schemes on the for antivirus analysis PC PROTECTION internet, and we have proactively initiated • 40% discounted price for Norton several programs to prevent fraud. Complete products Business Continuity
• Online and offline education Planning (BCP) CLIENT EDUCATION for Customers on how to avoid Business continuity is an area of constant navigation problems and errors concern to the UniCredit Group. Over the past few years, all of UniCredit Group’s legal entities have implemented Business Continuity and Disaster Recovery plans. • Monitoring of suspect operations To address external events, changes in TRANSACTION regulations and increased pressure from • Precautionary closing MONITORING customers, we continually upgrade these of compromised accounts procedures in all our businesses throughout our territories. In 2007, group-wide coordination became an integral part of our approach to global business continuity, • Collaboration with the Polizia Postale helping us to provide a clear cross- functional perspective across the rapidly leads to prompt and effective COOPERATION growing UniCredit Group and resulting intervention on ongoing frauds or in the implementation of numerous local tentative frauds initiatives.
UniCredit Group · 2007 Sustainability Report 91 Our customers
Security (CONTINUED)
ORGANIZING CONTINUITY EFFORTS 2. Determining BCM strategies. This allows Corporate cash Business Continuity is organized around an appropriate response to be chosen three main pillars: for each product or service enabling management and data the organization to continue to deliver 1. Group Security defines standard business those products and services at an security continuity policy and guidelines applicable acceptable level of operation and within across UniCredit Group. an acceptable timeframe during and The confidentiality and security of our following a disruption. Corporate Customers’ data and transactions 2. Sub-Holding/Regional Security are one of our top priorities. Our customers Departments issue specific 3. Developing and implementing a BCM can have confidence that we are constantly methodologies, rules and regulations response. Procedures are drawn up adopting new strategies, procedures and based on defined guidelines. These for triggering continuity solutions in policies to tighten the security of their money departments act in accordance with the each crisis situation. Organizational, and data. principles of consistency and oversee the functional and technical procedures are implementation of strategy. documented and updated a minimum of We have implemented a series of activities once per year. to address corporate internet banking 3. Our legal entities formulate, implement security, which is the most important and test their continuity plans. 4. Exercising, maintaining and reviewing channel used by Corporate customers for BCM arrangements. Business continuity cash management activities. The Group Security team has been set up to plans are regularly tested and relevant coordinate the implementation of a proactive documentation is updated in line with We anticipate making a one-time and effective group-wide crisis management changes in the technical or regulatory password smart system mandatory for policy. environment. all of our Corporate Customers and we will continue to promote the use of OPERATIONAL MANAGEMENT While it may be difficult to protect against electronic signatures. Furthermore, we OF BUSINESS CONTINUITY PLANS all eventualities, over the past few years, have developed a new IT infrastructure, All UniCredit Group legal entities are UniCredit Group has significantly increased CBI2, for Italian remote corporate banking. directly responsible for identifying their its resilience. Business continuity is a This new IT platform increases security of continuity requirements and drawing up requirement imposed by banking regulations data transmission, thanks to its compliance appropriate business continuity plans. and it is a major focus of attention for the with digital signature services. The ability They regularly test the effectiveness of UniCredit Group. We seek to offer clients, to transmit digitally signed electronic their plans and then define and implement shareholders and employees a stronger invoices increases the level of security specific crisis management procedures. and more resilient bank in an increasingly and timeliness in Business-to-Business These responsibilities are part of a standard complex and volatile environment. This transactions. UniCredit Group methodology designed to imperative is reflected in the business ensure that continuity plans are effective. continuity plans we have in place, which This methodology, which is compliant with help improve the performance of operational BS:25999 standards, consists of four risk control and crisis management systems main phases embedded in an overall BCM while ensuring that resources are efficiently program management and integrated in the allocated. awareness program of the UniCredit Group:
1. Understanding the organization. This includes providing information that enables prioritization of an entity’s processes and services and the urgency of the activities that are required to deliver them.
92 2007 Sustainability Report · UniCredit Group UniCredit Group · 2007 Sustainability Report 93
Suppliers
The Integrity Charter and suppliers 96 Supplier selection and management 96 Socially responsible procurement 97
UniCredit Group · 2007 Sustainability Report 95 Suppliers
The Integrity Charter Supplier selection and suppliers and management
The Global Sourcing Area’s (GSA) mission Acting in concert with the UniCredit GSA chooses suppliers based on objective is to assume responsibility for procuring all Group’s core principles, we provide equal qualitative criteria. goods and services necessary for our legal opportunities to all suppliers who transact entities. Currently, GSA’s operational scope business with us. We use multi-parametric includes Italy and Germany, with a view to tenders on our web platform (i-faber) to Selection criteria assuming responsibility for procurement in choose our supplier partners. Prior to Austria in the near future. GSA complies with tenders, we define the qualitative scores Economic criteria play a key role in the all laws and regulations of the countries and attributed to invited suppliers and in order supplier selection process. We evaluate all regions in which we operate. to minimize exceptions we respect tender prospective suppliers to ensure that they results as much as possible. comply with relevant laws, regulations Our activities in this area are as follows: and environmental values. Among other Our suppliers are important business criteria, we ensure that they provide quality 1. The Integrity Charter and suppliers, partners and stakeholders of UniCredit services and goods with sufficient delivery providing information on how we apply Group. We base our interaction with them lead-time, use technology that minimizes our values to our supplier relationships; on our Integrity Charter, which calls for the environmental impact and comply with 2. Supplier selection and management, development of supplier relationships that the technological requirements of our discussing our criteria and evaluation are grounded in fairness, trust and mutual technology center. processes; respect. This means that agreements are 3. Socially responsible procurement, made to the satisfaction of all parties. In the initial appraisal phase, although addressing key considerations and Through our collaboration with suppliers, we ISO14001 and EMAS are not compulsory, methodologies in our approach to social seek to infuse CSR principles and initiatives we require that our suppliers adhere to responsibility and procurement risk. throughout the entire supply chain and sustainable development and environmental aim to raise the long-term value of all the best practices. We involve all relevant UniCredit Group companies involved. Units in the process of procuring services and products in order to achieve the Management of highest degree of objectivity. We consider it our mission to guarantee that the locally-based suppliers most innovative and reliable solutions are implemented while approaching this We do not distinguish between local and important process with respect and open global organizations. We require that all communication. suppliers comply with the local laws and regulations in the countries and regions in which they operate. They must comply with commercial codes, foreign exchange laws, international copyright laws and child and forced labor laws.
In Italy, for example, in order to gauge suppliers’ compliance with the Integrity Charter, we require suppliers to complete a thorough electronic “certification” questionnaire focusing on quality and on suppliers’ social and environmental record.
The electronic questionnaire is designed to elicit information on the supplier’s balance
96 2007 Sustainability Report · UniCredit Group Socially responsible procurement sheet, economic results, organizational We align our internal procurement processes Our approach structure, number of employees, with UniCredit Group’s CSR commitments. environmental and CSR certificates, and To that end, we will implement a risk class in action: recycling at quality certification. model to evaluate potential risk levels of all prospective suppliers, products and services. UniCredit Group The automatic evaluation process yields a point based rating, which allows our buyers Outlined below are our approach to risk Even before UniCredit Group was formed, to accept new proposals in our Suppliers evaluation, risk minimization plans and an the board of HypoVereinsbank and Book and vet a potential new vendor. example of our approach in action. UniCredito Italiano determined that the companies would use only recycled paper for internal communications. Procurement risks We continue these strong recycling traditions The highest CSR-related procurement risks by purchasing Forest Stewardship Council relate to reputational risks arising from critical (FSC)-certified paper to ensure that UniCredit sources (e.g., products or raw materials Group’s reputation for taking a responsible associated with a particularly high level of approach to the environment is upheld reputational risk) and child labor. These risks by our paper procurement decisions. Our can stem either directly from the suppliers European global tender for 2008 is designed themselves or from the product delivered. to select suppliers with the best prices and the best environmental compliance record In order to minimize these product to supply and product selection (e.g., Totally Chlorine chain risks, we evaluate products based Free recycled paper). upon specific CSR criteria (child labor, critical sources and health considerations including emissions, particulate matter, noise, chemicals and dust).
We minimize procurement-related risks by:
1. requiring suppliers to complete questionnaires on a regular basis;
2. requesting certifications whenever possible;
3. requiring compliance with GSA’s internal risk model and evaluating products for compliance with specific environmental, social and labor risks;
4. setting up a CSR work-stream team within Global Procurement with the goal of developing methodologies and tools to apply procurement’s CSR risk class model;
5. training procurement staff.
UniCredit Group · 2007 Sustainability Report 97
Our communities
The Italian Territorial Committees 100 Art and culture 106 Research and institutional relations 109 Contributions 111 Universities and scholarships 113 The Unidea Foundation 114
UniCredit Group · 2007 Sustainability Report 99 Our communities
The Italian Territorial Committees
For UniCredit Group, it is essential not Our activities in this sphere are as follows: UniCredit Group energetically embraces the only that we provide a strong return for concept of making our expertise available our investors and excellent products 1. The Italian Territorial Committees, and assuming our responsibilities on the and services for our customers, but that including information on the project’s local level, as well as bringing together we achieve social legitimacy by adding origins, mission, methodology and different viewpoints and seeking out significant value for all of our stakeholders. initiatives; common perspectives. We are confident 2. Art and culture, including the art in the knowledge that the process of As a large financial institution, we occupy collection, UniCredit & Art project enhancing pluralism and community a privileged position at society’s crossroads and musical, literary and academic dialogue is essential to the continued and thus bear a great responsibility to partnerships and initiatives; growth of the company in all markets, assume a constructive and proactive role in 3. Research and institutional relations, and this is the philosophy on which we the communities in which we operate. We including community-oriented economic, have founded the Territorial Committees. do so not only because we would like to be social research and institutional relations Currently, there are 21 territorial good corporate citizens, but also because initiatives; committees in Italy with 315 members. strong local markets are essential to the 4. Contributions, including donations, Their task is to objectively assess and future growth of UniCredit Group. emergency aid and employee interpret the socio-economic conditions volunteerism; specific to their local communities and Accordingly, this chapter provides 5. Universities and scholarships, to develop concrete project proposals, information on our efforts to make significant including international scholarships, identifying solutions that promote balanced contributions to the economic, social and research fellowship competitions for and sustainable regional economic cultural development of our communities economic and financial disciplines and development. through specific initiatives as well as funding for universities; partnerships with local people, organizations 6. The Unidea Foundation, including and institutions. details on ongoing projects in Africa and Central and Eastern Europe. The Italian Territorial In 2007 we invested approximately Committees are advisory €69 million in these areas, of which approximately €3 million was allocated bodies appointed by € for Territorial Committees, 40 million UniCredit Group’s Board for Partnerships, and €26 million1 for Contributions. The Unidea Foundation in of Directors. Their € 2007 utilized more that 10 million for its members are prominent activities. figures drawn from Many of the partnerships we formed in 2007 local businesses, trade were cultural in nature, with a particular focus on classical music and contemporary associations, research art, but also including literature, sports, institutions, NGOs, academia, institutional events and conferences, among others. cultural institutions and voluntary organizations, serving alongside regional 1. This figure of €26 million is comprised of the approximately €14 million for donations by UniCredit Group’s legal entities plus €12 million which has been set aside in reserve and is UniCredit Group segment normally utilized for the financing of the Unidea Foundation’s activities. bank managers.
100 2007 Sustainability Report · UniCredit Group The committees therefore represent the interface between corporate culture and Members by professional background local culture. They possess shared objectives and work in an inclusive atmosphere that 6 embodies the spirit of UniCredit Group. Four 8 years after their establishment, they are 10 33 Entrepreneurs regarded today as unique and vital entities, Representation Autonomous operators 13 a source of competitive advantage and Culture and Charity work added value. They serve as organic venues University 30 where citizens can meet, discuss and set Self-employed priorities for their localities, and in which UniCredit Group acts as a valued facilitator of community interaction.
Our activities in this area include developing on subjects of mutual interest, as well as better conveys the goal that UniCredit Group roots, sharing viewpoints and identifying seminars and training courses organized for has set itself, which is not simply local in concrete projects, organizing committees, the engagement of regional companies and scope, but seeks rather to organize whole projects on infrastructure, tourism, representative associations. territories by linking up existing social internationalization, business, agriculture and business networks into cohesive new and immigration, outreach and The development of concrete projects is the entities. communicating with our stakeholders. final, creative stage of the committees’ work. Initiatives are devised that aim to synergize the inputs of all the participants and to put Projects on infrastructure, Developing roots, sharing to best practical use the energies both of tourism, internationalization, viewpoints and identifying the committees and of the social, cultural and economic parties with whom they have business, agriculture concrete projects engaged. and immigration From the outset, the committees’ modus operandi has been characterized by Organizing the committees Over the course of 2007, the Territorial three key objectives: developing roots in Committees jointly convened a series of the community, sharing viewpoints and To date, 21 committees have been working groups to identify areas of need identifying concrete projects. organized, those in the South being the most in which multiple territories had expressed recent. Over the course of 2007, UniCredit an interest. They established the following Establishing deep roots in a territory to us Group’s profile at the local level was common areas of action: infrastructure, means building strong ties to the people, consistently strengthened and consolidated. tourism, internationalization, business, institutions and other components that In particular, the company’s strategy to agriculture and immigration. This approach define it. It means identifying and respecting extend its regional roots produced the made it possible to initiate a series of the local customs, economic considerations Puglia-Bari Committee, established in high-level projects of common interest to and cultural identities of the region, and July, the Campania-Naples Committee, more than one territory and that involved adapting ourselves to specific local needs. established in September and the Sicily- all relevant business Units within UniCredit The constructive sharing of perspectives Palermo Committee, established at the Group. results when the culture of a large beginning of 2008. organization such as UniCredit Group meets THE SAMORIN PROJECT the culture of a regional community in all of Still more recently, a name change was Of these, one international initiative is worth its many facets. This interchange can take carried out, from “Local Committees” to a special mention. The Samorin Project was the form of local initiatives and public events “Territorial Committees,” as the latter term developed by the Territorial Committee of
UniCredit Group · 2007 Sustainability Report 101 Our communities
The Italian Territorial Committees (CONTINUED)
Vicenza, based on a concept suggested by environmental development in the Alpine INFRASTRUCTURE IN ROME its chairman, Massimo Calearo, with the Arc, stretching from Valle d’Aosta in the The topic of infrastructure was addressed support of the local industrial association. West to Friuli-Venezia Giulia in the East. by the Territorial Committee of Rome, which Designed to enhance the competitiveness of Altogether seven territorial committees in developed a joint effort with the Roman the regional industrial cluster, it is the first the region participated in identifying new Chamber of Commerce. The “Master Plan for example of an agreement between an Italian frameworks and unexplored avenues for Large-Scale Works,” supported by a study business association and a foreign local environmentally sensitive development. conducted by Censis, examined current and authority. The consortium of Vicenza-based The hospitality sector received particular future infrastructure plans for the Rome companies that are part of the project had attention. A broad survey of the area, with an emphasis on identifying high- heretofore enjoyed considerable financial region, while recognizing distinct local priority projects and analyzing the nature subsidies under EU expansion policies. characteristics, identified a shared and adequacy of their funding mechanisms. To remain competitive, the consortium awareness of the value of the region’s established an industrial and technological “natural capital” as a resource of prime INTEGRATION AND SOCIAL COHESION park in Samorin, Slovakia. There, 15 Italian importance to future development in the Additionally, the Modena-Parma-Piacenza- companies have so far set up operations, area. The study noted the importance of Reggio Emilia Committee addressed the including a permanent training center, an developing a shared planning approach increasingly topical issue of integration and office for related industrial associations and engaging the territories of all seven social cohesion, conducting a research a one-stop administrative office. A Unibanka committees. project in collaboration with the AASTER AS branch and a Service Center are also Consortium. The project is designed to being built, along with a Cross-Border Desk. The Alpine cooperation attracted the monitor and support the initiatives carried interest of other committees in northern out in the Province of Modena on the issue THE NORTH-WEST PROJECT and central Italy, resulting in the creation of accommodation. It examines the impact Another undertaking jointly developed by of similar working groups, which have of immigration on local communities and of several Territorial Committees, “the North- conducted further studies, research and programs designed to introduce immigrants West Project” emerged from synergies surveys in collaboration with universities to local school systems and training among the Alessandria-Asti-Cuneo and regional experts to explore other programs. Committee, the Pedemontana Lombarda facets of the impacts of tourism. Notably, Committee, the Torino-Canavese Committee Territorial Committees in Vicenza, Umbria and the Valle d’Aosta Committee. With and Rome have all taken up the issue, Outreach the objective of supporting and promoting with the intention of identifying possible the culture and economy of the region, strategies to enable joint action in support The committees’ role as a liaison with the project addressed the topic of of the tourism sector, which has historically the territories also entails promoting the collective assets as a basis for economic served as a fundamental economic driver in territorial projects to enable them to reach competitiveness, identified the distinguishing these regions. a wider audience. To this end, events and features of the region’s production model, studied factors that could encourage cooperation among local organizations, and Territorial Committee Projects examined the issue of a common cultural TYPE OF PROJECT AT 2007 NUMBER identity. The topic of strengthening the port Corporate Social Responsibility 3 system in Liguria received special attention. Social Cohesion - Immigration 20 The project entailed numerous research Enterprise - Innovation 15 initiatives and public discussions. Enterprise - Internationalisation 6 Enterprise - Continuity 2 ENVIRONMENTAL DEVELOPMENT Infrastructure - Logistics 3 IN THE ALPINE ARC Sector Research 6 Another multi-committee project Development (Territorial - Environmental - Agricultural) 23 addressed the question of regional and Tourism 6
102 2007 Sustainability Report · UniCredit Group conferences have been organized, engaging share their experiences and to exchange the topics addressed by the committees’ the active participation of high-profile ideas within the territorial network, thereby various projects. academics and important representatives increasing their own visibility, enhancing from institutions, non-profits and the world the image of the membership and The events held during the year, listed in of economics, as well as key local figures. demonstrating the value provided to the some detail in the table below, enjoyed territories in question. The 2007 program excellent coverage by local and national The experience thus far has confirmed featured a wealth of opportunities for media, thus underscoring the strong bond the usefulness and effectiveness of these discussion and debate, both at the local between the UniCredit Group and the public events, which enable committees to level and in the broader societal context of territories in the eyes of the general public.
16 March, Vicenza “An alliance for business continuity: promoting collaboration between private enterprise, banks and professionals to support and develop business capital”
16 March, Trento “Trentino: a new boost to the development of tourism. What is the contribution of the banks and the financial system?”
13 April, Genoa “Passage to the North-West – businesses, territories and banks: a network for Europe”
24 May, Bolzano “UniCredit Desk Bolzano-Innsbruck-Trento” (introductory press conference)
31 May, Milan “Famiglia Spa: generational cohabitation and company longevity”
3 July, Mantova “Banks and agriculture: energy, environment and territory”
9 July, Bard (AO) “The alpine platform between network capitalism and local development”
19 July, Bevagna (PG) “Territorial networks: UniCredit Local Committees and the soft economy”
EVENTS 2007 28 September, Ancona “Finance, enterprise and research centers” (introductory press conference)
5 October, Bergamo “Towards the biomedical platform of Bergamo and Brescia: a potential avenue for the evolution of industrial clusters”
24 October, Rome “RES Roman solidarity” (introductory press conference)
24 October, Codroipo (UD) “The sea of Central Europe and territorial resources. The role of the bank in supporting tourist services and the hospitality supply chain”
26 October, Brescia “Brescia, between innovation and change: the new bank-company relationship”
9 November, Bolzano “Local small and medium enterprise and the challenges of a Europe expanding towards the East. The support of the institutions and banks”
14 November, Treviso “The local territory as a tourism system. The role of the bank to support the chain of tourist services”
19 November, Milan “Samples of Italian quality” (introductory press conference)
21 November, Rome “The plan for large-scale works in the Rome area. Development prospects and funding opportunities”
23 November, Rho-Pero “Responsibility and territory: a comparison of experiences”
27 November, Modena “Migration: from working within the city walls to living in the territory”
UniCredit Group · 2007 Sustainability Report 103 Our communities
The Italian Territorial Committees (CONTINUED)
“SAMPLES OF ITALIAN QUALITY” In 2007, the value of UniCredit Group’s territorial relations strategy was underscored by our successful participation – in the dual roles of exhibitor and organizer – in the “Samples of Italian Quality” exhibition, held at the Rho-Pero Exhibition Center from 22 to 24 November. The exhibition, evolving from an agreement with the Symbola Foundation, Fiera Milano and Expocts, was a trade-fair event presenting an array of high-quality Italian products and services, ranging from manufactured and handmade goods to cutting-edge industrial products, from research to regional marketing, from architecture and design to innovative hospitality services, from new technologies to high-quality food, wine and other agro- industrial products, from cultural goods and information to style and fashion creations, and from regional production centers to innovative new service enterprises.
Although the exhibition was international in THE “GRAND RE-TOUR” PROJECT the AASTER Consortium. The events bring scope, its close ties with the surrounding Another case in point is the “Grand together economists, business leaders and region were illustrated by the strong Re-Tour” project, subtitled “a journey other national and local figures from the presence of those territorial organizations through Italy to the bel paese of the third worlds of production, finance and credit. and business clusters that characterize Italy millennium”. This extensive calendar of and which generate so much economic, symposiums takes the form of a modern The objective of the project is to provide social and cultural value. The event proved version of the Grand Tour, the legendary answers to questions on the role of our to be an excellent opportunity to reaffirm our voyage en Italie that, from the sixteenth national culture, identity and economy in leadership in supporting the “Made in Italy” to twentieth centuries, served as an the new global arena, and it serves as brand and to express our deep regional indispensable educational rite of passage an opportunity to assemble a portrait of roots in the energizing context of a pan- for generations of European intellectuals. Italy in transformation - beginning with European business network. the ever-evolving interplay between global The “Re-Tour,” which was inaugurated and local dynamics and moving on to the The UniCredit Group’s support of projects back in 2006, is broken down into a series emerging challenges of cultural and social that bring together, analyze and promote of stops from south to north, journeying change and of transnational economic the incubators of territorial economic and through the great artistic and cultural competitiveness. financial innovation is critically important capitals of each territory. Each city on and demonstrates the value that we place the Grand Re-Tour route has hosted a In 2007, the Re-Tour events were held on maintaining close ties with the territories, roundtable discussion on cultural topics, first in Bologna, with a conference entitled as well as with the new local leaders as well as a socio-economic conference, “Between Via Aemilia and the Adriatic City”; stepping forward to guide the process of in conjunction with an extensive wave of then in Turin, with “From a one-company consolidation and growth. interviews conducted across the territory by town to a regional capital”; and concluded
104 2007 Sustainability Report · UniCredit Group in Milan, with a discussion on “A Hanseatic ITACA Strengthening our network city: the five circles of production and the Itaca, the Territorial Reports Magazine, social stratification of Milan”. enjoyed further considerable success in Following UniCredit Group’s mergers, first 2007. This periodical has been developed with HVB and then this past year with “THE DAYS OF ROME” into a proven link between the territories Capitalia, we are developing plans to Another local initiative underwritten by and UniCredit Group. A valuable resource, expand the territorial community program UniCredit Group in 2007 was the “History it comes out every four months with the to additional local and international Lessons” cultural program on the topic goal of presenting historical information, regions. Even as UniCredit Group’s scope “The Days of Rome,” which enjoyed analysis and data in the context of inter- of operations becomes increasingly global, success on a national scale. The event, organizational exchange and outreach. it is critical for our community outreach which was promoted and organized by capabilities to maintain a consistently local Laterza in collaboration with the Music Itaca’s central objectives include examining focus. Foundation for Rome, the Parco della current issues of strategic importance Musica Auditorium and the City of Rome, to local economies, supporting socio- Thus we need to continue to strengthen generated a wide public response. The economic analysis with illustrative success and expand the network of Territorial presentation included nine prominent stories, providing UniCredit Group with Committees, as we reflect on the lessons historians discussing nine days that shaped the tools to develop its own “culture of learned to date from the local relationships Italy and the world, based on seminal events social accountability” and offering a basis we have already established in Italy. At the that transpired in the Eternal City. Among for constructive dialogue with territorial national level, UniCredit Group’s plans to the strikingly contemporary lessons drawn organizations and local institutions. In order strengthen the current Territorial Committee from the discussion was the implication to make the magazine available to the program include the following initiatives: that globalization may be a more ancient whole community, an electronic edition is in • the launch of the third biennial phenomenon than it may seem. development to be published on the website. Territorial Committee mandate and the reassessment of the underlying reference territories; Communicating Consolidating our • the previously planned establishment of new committees covering new territories; with our stakeholders reputation at the local level • the development of innovative new joint projects that have a high added-value The Territorial Committees also owe much Our experience with the Territorial component - particularly projects common of their impact to their ability to rally public Committees has enabled UniCredit Group to multiple committees, designed to opinion and corporations around their to build and consolidate its already mobilize the skills and expertise of our initiatives. For this reason, in 2007 the strong reputation at the local level, with local banks. groundwork was laid to develop a structured measurable positive impacts in terms of and coordinated communications framework, business opportunities and institutional implementing dedicated new IT tools and relations. These constructive synergies will enabling the committees to forge ongoing receive further attention and development relationships with local media outlets. in the years to come, as we identify and develop dynamic new strategies of territorial MENTELOCALE cooperation. We continue to redraw the Thus 2007 witnessed the launch, at the development model by opening dialogues “Samples of Italian quality” exhibition, of with key local institutions. Proper cultivation the newsletter Mentelocale, a monthly of these relationships will continue to publication providing information on the contribute to the public perception of committees’ activities and projects and on UniCredit Group as an organization of all initiatives affirming UniCredit Group’s ties international scope with strong roots in the with the territory. local community.
UniCredit Group · 2007 Sustainability Report 105 Our communities
Art and culture
The banks that combined to establish belief that when communities have a vibrant Italy, Austria, Germany and every other UniCredit Group have a centuries-old culture, they will also have sustainable social country in which we have a presence. As a tradition of caring deeply about the cultural and economic development. whole, the collection encompasses the entire and artistic expressions of the countries in history of art from Mesopotamia, through which they operate. This section details our actions related to the such old masters as Canaletto and Carracci, UniCredit Group Art Collection, the UniCredit and up to masters of contemporary art, At UniCredit Group our commitment to art is & Art project, music and literature initiatives, including Léger, Klein, Beuys, Cragg, Christo, integral to our corporate culture. It reflects study grants, academia, awards and Richter and Baselitz. There are also more on our approach to customers, employees competitions and institutional events. than 4,000 historical and contemporary and the public. It informs our sense of photographs in the collection. We view our responsibility to society. collection as a reflection of Europe’s history, The UniCredit Group Art heritage and identity. Our goal is to contribute to the creation of a dynamic and progressive Europe Collection Our commitment to art extends beyond the through the projects we have designed in simple maintenance of our historical collection close cooperation with our partners in the UniCredit Group’s commitment to the arts is and can be seen in our dynamic and evolving world of art and culture and from the many expressed in its vast historical art collection collection of works by young artists from the communities we call home. It is based on a of 50,000 pieces that include work from countries in which UniCredit Group operates.
106 2007 Sustainability Report · UniCredit Group A PUBLIC RESOURCE among universities, academies, artists, outside audiences, its enrichment of the The UniCredit Group Art Collection is a museums, institutions, collectors, auction contemporary art scene and the way resource for museums and public outlets houses, galleries, critics and the art press the project has inspired other corporate throughout the world. In 2007 hundreds of serve to spotlight new talent. leaders to chart out serious long-term artworks were loaned to public exhibitions, commitments to art and culture. and works from the collection were on A NEW APPROACH public display throughout UniCredit Group’s This new approach to the contemporary art Six of our partnerships are detailed below headquarters, offices and branches as part world premiered as a formal strategic project to provide further information on how the of our program, “Sharing Passion”. in Austria and Italy in 2004. Developed UniCredit & Art project is being implemented in close cooperation with the Ministry of in our communities. Works from our collection travel extensively. National Heritage and Culture, the project HypoVereinsbank mounted the Cityscapes aims to promote young artists from Italy, CASTELLO DI RIVOLI, MUSEUM OF exhibition at the Spazio Milano in UniCredit Germany, Austria and new European Union CONTEMPORARY ART, TURIN Group’s Piazza Cordusio retail branch, member countries including Poland and the UniCredit Group is a member, together while a collection of Italian photographs Czech Republic, as well as Turkey. Its results with the local authorities, of the Board of was displayed by the Cultural Institute are impressive, resulting in more than 700 Directors of this leading Italian contemporary of Munich, the large French Artfair, Paris works from 95 Italian artists alone since its art museum. Its location in the gorgeous Photo and our branches in London, inception. Residenza Sabauda makes it unique. The Brussels and Paris. Our Munich head office museum’s Educational Department and hosted exhibitions by Gerhard Richter with UniCredit & Art yielded important work in UniCredit Group have teamed up to enable works from the HVB collection as well as 2007, and the success of the program thousands of socially disadvantaged families, an exhibition Reale sensationen - junge has enabled the young artists involved employees and others to experience the kunst aus Bulgarien und Rumänien. Bank to launch their careers at major artistic vitality of art. Austria has displayed its newest acquisition events. Of particular note was Vezzoli’s in the exhibition, “Wann immer vorerst,” by work, Democrazy, which was highly praised FONDAZIONE ARNALDO POMODORO, Michael Kienzer. at the Venice Biennale, presented at the MILAN Pinakothek der Moderne in Munich, and This newly converted former industrial In 2007 we held a total of 36 exhibitions. now is on loan to the MAXXI, the National building, designed by the architect Highlights of our program can be found Museum for 21st Century Art in Rome. Paolo Cerri, opened in September 2005. by visiting our virtual exhibition online at Supported from its inception by its main www.unicreditgroup.eu and clicking STANDING OUT AMONG OUR PEERS partner, UniCredit Group, the foundation “More” under the UniCredit & Art banner. UniCredit Group’s long term collaborative and the artist aim to involve young artistic approach with local partners and platforms talents and stage exhibitions focused on stands out among our peers for its ability sculpture in order to better explore the vast Beyond collecting to generate real value for communities. variety of 20th-century artistic modes of Pier Luigi Sacco, Professor of Cultural expression. Our collections are continually updated Economics and Head of the Department of through an acquisition program led by a Arts and Design, IUAV University of Venice, MAMBO, BOLOGNA commission of top experts in the fields examined UniCredit & Art and commended Founded in May of 2007, MAMbo has of art and culture. This program is part the project for its sustainable community- worked with the UniCredit Group to design of our strategic project, UniCredit & Art, oriented approach that embraces a three year program of commissions under which we support young talent experimentation and risk taking. He also which focus on Italian artists producing and encourage creativity in the European made note of the project’s commissioning collaborative international projects. visual arts. We are always on the lookout promising but little-known outsiders as Commissions included works by Luca for innovative and fresh perspectives. Our well as established artists, its emphasis on Pancrazzi, Loris Cecchini and Alessandra whole operation is geared to support the innovative art-based learning techniques Tesi, which were presented at the Shanghai, contemporary art system, where interactions for UniCredit Group stakeholders and Valencia and Moscow Biennales. These
UniCredit Group · 2007 Sustainability Report 107 Our communities
Art and culture (CONTINUED) works are now on loan to the museum’s dialogue with the communities in which Advancing music, permanent collection. our group operates. The large gatherings pictured in our annual report were held in literature and the study KUNSTHALLE DER HYPO- city squares and museums and involved KULTURSTIFTUNG, MUNICH thousands of people. What you see is a of the arts HVB founded and supports this exhibition single, spontaneously-generated expression space in Munich. It has hosted more than of thousands of hands united together in a Music forms one of the cornerstones of 70 exhibitions and receives over 350,000 joyful and creative concert. our cultural engagement. As with art, we visitors per year. In 2006, the institution have a strong focus on young talent that is received its six millionth visitor. Exhibitions in Art is also a way to enhance group demonstrated by our support for orchestras, 2007 included works of August Rodin and dynamics, as it can open minds, connect international events and young musicians, Serge Poliakoff among others. people and inspire them to share their artists and writers, as well as the study of values and embrace their differences. music. BA-CA KUNSTFORUM, VIENNA Austria’s leading exhibition space for Art initiatives in 2007 included UniCredit Art SUPPORTING ORCHESTRAS classical, modern and contemporary art is Day, Art-Based Learning, Art in the Square AND INTERNATIONAL EVENTS visited by 300,000 visitors per year and and Acrobazie 3, among many others. HVB supports the HVB Europakonzert is supported by Bank Austria. The “trésor” in collaboration with the European exhibition spaces made possible by Bank UNICREDIT ART DAY Youth Orchestra, and the Bank Austria Austria, in cooperation with KulturKontakt Held in Bologna in October of 2007, this Creditanstalt Artist of the Year in Austria, offers young artists from Central and event involved more than 3,500 colleagues collaboration with Jeunesse. We are Eastern Europe a forum for their work. and their families and was a one-day involved in other prestigious international program involving the special opening of events such as the Bayreuth, Munich YAPI KREDI CULTURAL CENTER, more than 27 museums in Italy, Germany, and Salzburg festivals. HVB promotes ISTANBUL Austria, Turkey and Croatia. regional events including the Festspiele in UniCredit Group will support the 60th Rheingau, Passau and Würzburg and the anniversary celebration of the Yapı Kredi “ART-BASED LEARNING” Richard Strauss Festival. We collaborate Cultural Center, an important institution that This special art education program enables with the Filarmonica della Scala, the Arena is a symbol of pride for all of Turkey. UniCredit Group managers to meet with di Verona, the Orchestra Filarmonica del artists, collectors and museum directors ‘900 in Turin and the Vienna Philharmonic to stimulate creative and entrepreneurial Orchestra. The art experience approaches to work and life. ENGAGING YOUNGER GENERATIONS The art experience fosters the potential of “ART IN THE SQUARE” Concerts and operas touch music-lovers, individuals, strengthens relationships and UniCredit Group holds big, public and free but they also bring the younger generations encourages dialogue. creative events for children, families and closer to an art form at risk of exclusion elderly people in the main squares of cities and neglect within the young cultural In the 2007 UniCredit Group Consolidated and towns in cooperation with our partner mainstream. In collaboration with the Vienna Annual Report, we decided to focus on museums. Philharmonic, Bank Austria Creditanstalt set images of the international events which up a course for young and highly talented comprised our work with important partners ACROBAZIE violinists in Trenta, Slovenia. in art and culture rather than on individual This project at the Psychiatric Hospital in pieces from our collection. San Colombano al Lambro, Milan, enables PROMOTING YOUNG ARTISTS young artists whose works are part of the AND MUSICIANS These initiatives involving the broader UniCredit collection interact with mentally We organize several important programs public illustrate the importance UniCredit challenged patients to demonstrate the directed at promoting young artists and Group attaches to promoting an active therapeutic benefits of art. musicians, including the Jugend Kulturell
108 2007 Sustainability Report · UniCredit Group Research and institutional relations
Competition for young classical music UniCredit Group knows that innovative ideas environment and producing high-quality dairy composers in Germany, the BA-CA Artists must be firmly rooted in solid research and products. CAP reform yields a reduction in of the Year award for young musicians or vetted by appropriate external experts and subsidies and provides strong incentives for musical ensembles and the Georg Eisler institutions. This is why we strongly support farmers to operate according to market rules. Prize for young Austrian artists. research initiatives and institutional events. Our response was to make our research SUPPORTING YOUNG WRITERS This section details our research activities available to branch employees through The Eastern European Literature Award, on key community-oriented topics and our a specially designed thematic portal to which was created in 2005 as the first institutional relations initiatives. sensitize and strengthen our employees’ award of this kind, comprises all CEE awareness of the agricultural sector. This countries that are part of UniCredit Group. It portal contains a variety of materials that is one of the widest cross-border projects for Addressing key topics range from general-perspective documents young writers, launched in cooperation with to specific sub-sector analyses. KulturKontakt Austria and Wieser Publishing for our communities Company. SUPPORTING SMALL The Research and Competitors ENTREPRENEURS INVESTIGATING THE ECONOMICS Benchmarking Department of our Retail We conducted a study on the state of OF CONTEMPORARY ART Division worked on three socio-economic small retailers in Italy for our 2007 Report UniCredit Group provides significant grants projects on poverty, agriculture and on SME’s. Our research showed that the to support the Giovanni Agnelli Research commerce in 2007 while UBI and Bocconi small retail sector has experienced a very Scholarship for the study of the economics University together are currently researching high turnover in the past ten years as of contemporary art at the Fondazione regional and local economic dynamics. large retailers, e-commerce and regulatory Agnelli in Turin. reforms have radically changed the economic SHEDDING LIGHT ON POVERTY environment in Italy. Our research led us to Although no evidence of increased poverty recommend among other actions that small has been cited by the Italian National entrepreneurs specialize, innovate and create Institute of Statistics (ISTAT) or the Bank of networks in order to stay competitive. Italy, Italian households evidence a growing sense of impoverishment. Our analysis has The report, titled “Business in Italy, shed light on this through our focus on between tradition and innovation. Paths those segments of society often termed and perspectives of small entrepreneurs” “vulnerable categories” (e.g., immigrants, was presented during the event “Rapporto the elderly and young, employees) and the piccole imprese, 4th edition,” held in dynamics of real wages. December 2007 in Rome.
RAISING AWARENESS HIGHLIGHTING GLOBALIZATION’S OF AGRICULTURAL ISSUES LOCAL CONSEQUENCES We conducted research on the present UniCredit Group and Bologna University are and future status of Italian agriculture. working together on the RegiosS project, The extensive reforms being made in which seeks to analyze Italian regional European Common Agricultural Policy and local economic dynamics in order to (CAP) and the importance of environmental highlight the similarities and differences sustainability were a particular focus of between communities. our work. We found that the main result of these two processes was the recognition The project highlights the local impact of of the important role that manual farming corporate globalization and provides stable systems and farmers play in preserving the short-term analysis for quick reference
UniCredit Group · 2007 Sustainability Report 109 Our communities
Research and institutional relations (CONTINUED) relevant to forecasting economic cycles that explored the potential of highway Institutional relations and trends. Project findings are regularly shoulders to be used as sites for published in “Il Sole 24 Ore”. environmental recovery, green energy generation and landscape redesign. The The UniCredit Group is on the front line research project was carried out with the of institutional relations, and one of its Research by communities objective of raising public and institutional priorities is to uphold and defend the awareness of the deterioration of some financial system from potential risks from for communities parts of Vicenza that overlook highways. inaccurate information. The UniCredit To date, the research has been circulated Group’s leadership position on many In 2007, the Vicenza Territorial Committee throughout Vicenza and its environs and to issues within the European financial sector conducted two studies on highway shoulders neighboring municipalities located along generates value for both its customers and and caregivers, which were relevant to the the stretch of the highway between Brescia its stakeholders. This is why UniCredit Group community. The primary role of the committee and Padova. maintains regular contact with the many in these types of initiatives is bringing relevant European and national institutions together the interests of the public and private RAISING AWARENESS OF HIDDEN that address the challenges facing the sectors, institutions and social and economic PROBLEMS European financial sector. researchers in order to develop pragmatic The Vicenza Territorial Committee solutions for community issues. also researched caregivers in order to In order to strengthen relations with raise awareness of the socioeconomic institutions at both the national and RESHAPING OUR ENVIRONMENT challenges related to the widespread use European levels, UniCredit Group promotes The Vicenza Territorial Committee of caregivers. To date the study has been research, conferences and seminars researched and drafted a document circulated within the Vicenza area. identifying innovative ideas to foster a
110 2007 Sustainability Report · UniCredit Group Contributions full European integration process. Some UniCredit Group and all its subsidiary banks UniCredit Group main of the activities we promote include have a longstanding tradition of leading the donations by category (%) the organization of a variety of forums, way in contributing to society in the countries roundtables and conferences, including: and regions in which we operate. Within UniCredit Group, social responsibility is an 10 The Venice Forum is an international integral part of our day-to-day activities. Conference organized each year in Venice 14 42 with the aim of bringing together qualified UniCredit Group’s Gift Matching Program representatives from the worlds of politics, is just one way that we demonstrate our 15 economics and academia. UniCredit Group commitment to our values and to leveraging 19 provided €810,000 in support of this event. the goodwill of our employees. This example of our dedication to social responsibility is in The Italian-Turkish Forum is regularly effect group-wide in all of the countries in Social Culture held in cooperation with the Ministries for which we operate. Health care Foreign Affairs of both countries. Others One of the fundamental aims of UniCredit University/science Two closed-door roundtables including Group is to play an active and meaningful legislators and civil society actors focused role in society and ultimately to make an on actions to enhance private equity funds’ important contribution to a healthy and participation in the Small and Medium sound social structure - a structure that Verona to facilitate their work with disabled Enterprises sector. is held together by people and a sound people, to Lega del Filo d’oro to assist them environment. In this pursuit, the charitable in their work with deaf-blind children and to A forum on German-Turkish economic projects backed by UniCredit Group provide numerous universities across Italy in support relations was held in Munich, in support of support for children and young people, help of research projects. German endorsement of Turkish accession for socially disadvantaged people, activities to the European Union. to preserve a sound environment and rapid response to disasters. Promoting sustainability The publishing of bimonthly magazine east is intended to focus on economic, Our actions in this area include supporting initiatives in Germany political and cultural themes in the EU and charities and research in Italy, promoting its relationships with Asia. UniCredit Group sustainability initiatives in Germany, HVB has been involved in sustainability provided €510,000 in support of this campaigning against poverty in Austria, initiatives at the regional, national and magazine. employee volunteering in Poland, charity international levels for years. For example, drives in Croatia, emergency aid in Romania HVB became involved in the UN Decade of Support for the Italian government is and help for children with special needs and Education for Sustainable Development by provided through analyses and studies of the local contributions in Slovenia. being a founding member of BenE Munich, implementation of effective youth policies one of 50 regional centers of expertise for to finance academic studies and of the sustainable development affiliated with the innovative use of solidarity funds in support Supporting charities United Nations University. of families with real estate loans. and research in Italy HVB is also a member of the Verein für Research on Italy’s role in Umweltmanagement in Banken, Sparkassen Mediterranean countries is supported UniCredit Group makes many and varied und Versicherungen, an association by UniCredit Group through the provision contributions in Italy. Some of our more for environmental management in the of €36,000 to analyze the prospects for notable contributions in 2007 include those finance and insurance sectors; the Forum enhancing economic relations between Italy made to AIRC and CERBA in the field of Nachhaltige Geldanlagen, the Panel for and other Mediterranean rim countries. research and science, to Circolo Ippico di Sustainable Investment; and the Arbeitskreis
UniCredit Group · 2007 Sustainability Report 111 Our communities
Contributions (CONTINUED) für Umweltbewusstes Management, a social role to fulfill. Our relationship with this initiative transcends the boundaries of working group for ecologically-minded the Great Orchestra of Christmas Charity, pure corporate philanthropy. Zagrebacˇka is management. Poland’s largest charitable initiative, is contributing to the creation of new social emblematic of our methods of contributing networks and the expansion of a culture At the international level, HVB participates in to society. The fundamental principle of civil engagement in working to solve the Finance Initiative of the United Nations that underpins this involvement is the entrenched social problems. Environment Program and is a co-founder of combination of financial support with the the UNEP-FI Regional Task Force in Central active participation of our Bank Pekao and Eastern Europe. employees. Emergency aid in Romania
In each event, several dozen employees from Following the catastrophic floods in Romania Campaigning against Bank Pekao assume the task of counting in 2005 and 2006, UniCredit T¸ iriac Bank and sorting cash and other donations in helped with the rapid reconstruction of poverty in Austria the television studio where the orchestra’s 100 houses and donated €30,000 for headquarters is based during the Grand emergency aid to 3,500 children who Two of the many Austrian projects that Finale, as well as in regional studios. Every needed hygiene products and books to start we are involved in are the campaign by year, they are assisted by hundreds of their school. This became a model of how rapid Volkshilfe Österreich (People’s Aid Austria), colleagues working behind the scenes. disaster relief can also be combined with a “Armut tut weh” (“Poverty Hurts”) and the focus on children. Bank Austria Family Fund. Almost 10,000 of our Bank Pekao employees have volunteered for the Great Through the Volkshilfe Österreich’s “Armut Orchestra of Christmas Charity since Help for children with tut weh” campaign, we help children 2000. Under the Gift Matching Program, special needs and local with chronic illnesses, accident victims, Unidea matches every euro donated to the children with disabilities and, above all, Orchestra by the bank’s employees. contributions in Slovenia disadvantaged children who live below the poverty line even in a rich country like UniCredit Bank Slovenia is supporting Austria. This initiative, whose patron is the Donation drives in Croatia projects that bring together healthy wife of the Federal President of Austria, children and children with special needs endeavors to provide rapid financial help in With the goal of responding as relevantly as to encourage the development of social acute emergencies. possible to the needs of society, Zagrebacˇka responsibility at an early age. Instead of banka announced the first public Donation buying New Year’s gifts, UniCredit Bank The Bank Austria Family Fund seeks to Drive in 1999. The idea of implementing Slovenia donates funds for partially sighted quickly and effectively help Austrian families a systematic contribution program was children, providing them with notebook with children in crisis situations. The fund subsequently replicated by other Croatian computers with adapted programs. was established in 1994 and is administered companies as well. Since 2003, the event Furthermore, whenever we open a new by the Archdiocese of Vienna’s Caritas has included works in the following four branch in Slovenia, we contribute to a local organization. areas: humanitarian activity, children and humanitarian organization. young people, cultural heritage and the arts.
Employee volunteerism Although the model of public and transparent allocation of donations has in Poland encouraged other companies to follow suit, Zagrebacˇka banka enjoys the Our public involvement stems from the longest-standing tradition of implementing awareness that, as one of Poland’s largest systematic contribution programs. The financial institutions, we have an important allocation of contributions on the basis of
112 2007 Sustainability Report · UniCredit Group Universities and scholarships
At UniCredit Group, we firmly believe in All applications and any accompanying Business Administration, where we have supporting academic endeavors to enrich documentation, including graduation committed €134,000 per year for three public discourse and invest in our future. theses and transcripts, are evaluated by a years to the sponsorship of the UniCredit committee of seven university lecturers. CEE Student Circle. Another €97,000 has Our activities in this area include international been earmarked for the study of advanced scholarships, research fellowship competitions financial mathematics and structured for economic and financial disciplines and A new fellowship finance in 2008. funding for universities. in corporate social Major contributions have been made to responsibility Vienna University, the Medical University International scholarships of Graz, Graz University, the University of In 2005, a new fellowship initiative was added Salzburg, Leopold Franzens University of Two financial aid fellowships were to the list of scholarships administered by Innsbruck, the University of Applied Sciences awarded in 2007 following the fifth annual UniCredit Group. This fellowship competition for Banking and Finance, the Vienna scholarship competition held in memory was designed to promote studies in the field University of Technology and the Johannes of Giovanna Crivelli. One of the two of corporate social responsibility, with the Kepler University of Linz, where we have scholarships was awarded to a woman. express objective of stimulating the ongoing sponsored the founding of a new Research “brain return” to Italy; thus the contest was Institute for Banking and Finance. The Giovanna Crivelli scholarships are designed to provide grants to returning awarded in support of advanced training for scholars. Other major contributions have been made researchers specializing in theoretical and to the University of Trier, the University empirical studies in political economics and In the competition’s first year, an Italian of Cologne, University Hospital Munich- the economics of financial markets. researcher who returned from Spain to Grosshardern and the Ludwig Maximilian continue her studies at Rome’s Tor Vergata University of Munich. The fellowships require enrollment and University was the winner of a grant attendance at a foreign university. The awarded by UniCredit Group for €50,000 Of note is the strong bond we have forged candidate’s chosen program must be in line per academic year. with the Technical University of Munich. with his or her previous studies. Fellowships At its highly regarded School of Business are applied to the standard academic year of Administration we have funded a long- nine months and are renewable. University funding term sponsorship of the HVB-Institute for Mathematical Finance. Over the course of In 2007 we launched the sixth competition. UniCredit Group supports education and ten years, ending in 2012, we will have The application deadline was 31 October research at a variety of institutions. For contributed more than €5 million toward the 2007, and two €25,000 scholarships, example, in 2007 we sponsored research Institute’s operating budget. including travel expenses, health insurance centers and funded scholarships at 24 and university fees, were granted in January different universities in Austria. Our single UniCredit Group would like to see CSR 2008. The table below provides applicant data largest collaboration has been with the made into a required field of study for all from the six annual competitions held to date: Vienna University of Economics and university students who plan to pursue a career in business. That is why we created Giovanna Crivelli scholarships the “UniCredit Chair on Economic Ethics NUMBER OF NUMBER OF ACADEMIC and Corporate Social Responsibility” at the CONTEST YEAR APPLICANTS FEMALE APPLICANTS YEAR University of Trento in 2003. The degree program is supplemented by two research 2003 89 45 2003/2004 2004 103 57 2004/2005 centers - the “Observatory for ethics, 2005 73 40 2005/2006 rational decisions and corporate social 2006 51 25 2006/2007 responsibility” and the “Observatory for 2007 36 14 2007/2008 corporate social responsibility”. 2008 57 25 2008/2009
UniCredit Group · 2007 Sustainability Report 113 Our communities
The Unidea Foundation
Unidea is a non-profit foundation created in Unidea is funded solely by UniCredit distinguished citizens drawn from civil March 2003 to help bring to life the values Group and is a separate legal entity, with society. and ideals of UniCredit Group. its own Board of Directors composed of
Board of Directors
Chairperson Paola Pierri
Deputy Chairmen Marc Beckers UniCredit Group - Head of Group Identity and Communications Salvatore Piazzola UniCredit Group - Head of Human Resources Department
Directors Roberto Bertazzoni Smeg Spa - Chairman Giuseppe De Rita Censis Foundation - Secretary General Marco Gaudiomonti Uilca - National Secretary Severino Salvemini Bocconi University, School of Management, Milan - Chairman Chiara Saraceno University of Turin, Faculty of Political Science - Professor of Family Sociology Jean-Léonard Touadi Municipality of Rome - Youth Policies, University and Security Councilor Don Gianni Zappa Diocesan Administration, Milan - Moderator Curiae
Secretary General Paolo Cocchi
Unidea is an acting foundation, which, on the Unidea focuses on themes of social Group employees, the foundation renewed basis of its own strategy, is directly involved economy, with an emphasis on the meaning or initiated several employee-community in the implementation of its projects. of business philanthropy and, more involvement programs. Through its activities it endeavors to promote generally, on the relationship between for- a culture of volunteerism, civic commitment profit and non-profit organizations. This and giving, which must measure up to an same dialogue entails directing attention increasingly professional, conscientious and to social enterprises, including through the motivated standard. world of social cooperatives.
Unidea also serves as a bridge between In 2007 Unidea continued or started our colleagues - who are willing to direct projects in Sub-Saharan Africa (Benin their energy and skills towards serious and and Burkina Faso), in the countries of structured volunteer work - and the needs of Central and Eastern Europe, and in Austria, the target communities. Germany and Italy. As regards UniCredit
114 2007 Sustainability Report · UniCredit Group Allocation of funds for financial year 2007
Total allocation of funds (%) Project: allocation of funds by sector (%)
7 6 14 Health Support for social enterprise Local development 55 48 38 Project 14 employment support Activities for UniCredit Group Employees Other (ECI - Employee Community Involvement) Support for local communities General administrative costs 18 and social inclusion
In 2007, Unidea received €10 million from extend the availability of essential health The general aim of the project is to UniCredit Group in support of its institutional services with actions intended to improve contribute to the improvement of the basic activities. social and economic conditions of the local health of the inhabitants of the Department population. of Atakora, in northwestern Benin, in particular for women of child-bearing age Projects in Africa The foundation’s current initiatives are and children under five years old. The focused on the rural areas of Benin and project is being carried out in collaboration Unidea’s decision to work in Sub-Saharan Burkina Faso. with health service managers in Benin’s Africa by planning and implementing social public administration. It is intended to and healthcare projects testifies to a firm THE “TATA SOMBA” PROJECT improve access to primary health services, intention to tackle these issues in regions • Country: Benin particularly in rural areas, through direct where they are at their most complex. • Region: Upper Benin, Department of support for the existing healthcare Atakora, District of Tanguiéta infrastructure, and always in coordination Unidea’s projects promote a multi-sectoral • Period: 1 January 2005 - 31 December with the local personnel. approach - combining actions designed to 2010
Some of the initiatives completed, 2005-2007 BUILDINGS EQUIPMENT TRAINING Cobly Health Centre Teaching equipment for the Health District COURSES NUM. PARTICIPANTS Reproductive Hospital medicine store Medical and health equipment for health centers Health 7 210 Training room and storerooms for the Health District Radio system for the hospital ambulance Management of Health Facilities 13 441 N’Dahonta Health Centre Motorcycles Study bursaries 20 - Four houses for hospital trainees Teaching equipment for the Health District Primary Health Care 4 575 Porga Nutrition Centre Ambulances Departmental training: SIMR 5 157 Mamoussa Maternity Unit Endemic prevention tools: mosquito nets Wells
UniCredit Group · 2007 Sustainability Report 115 Our communities
The Unidea Foundation (CONTINUED)
The project provides for: • institutional consolidation of the local and Cascades regions, in southwestern • the restoration of several health centers AMCES association (a non-profit working Burkina Faso, through infrastructure and improvement of basic equipment; to strengthen the “private-social” sector improvement, expansion of basic services, • infrastructure improvements to Saint Jean within the national health service). greater accessibility to health centers and de Dieu Hospital in Tanguiéta and the reinforcement of community participation. construction of housing for motivated and THE “AN KA HERE SSO” PROJECT qualified medical personnel; • Country: Burkina Faso The project is carried out in partnership • training of healthcare workers; • Region: Hauts Bassins and Cascades with the NGO ProgettoMondo of Verona and • improvement of coordination between the • Period: 01 January 2004 - 31 December consists of activities that can be divided into hospital and rural clinics; 2010 two key functions: • community-based activity: campaigns 1. activities on the supply side, designed to to raise awareness, to train community- “Paths to Health” (An Ka Here Sso) is improve the performance of local public based health officers and to train health an integrated health cooperation project healthcare services: center management committees; the goal of which is to help improve • medical training and requalification of • reinforcement of management skills at access to primary healthcare services health center personnel, with particular health service facilities; for the inhabitants of the Hauts Bassins attention to on-the-job training designed
116 2007 Sustainability Report · UniCredit Group to improve the skills of primary SOME OF THE INITIATIVES COMPLETED, 2005-2007 healthcare personnel; • supplies of medical and generic Healthcare work Literacy materials and structural renovations for • 443 visits accompanying healthcare staff; • 1,776 participants in literacy courses; 16 health centers; • 97 operators of 16 health centers have • 1,218 participants in primary • medical studies and research and their received on-the-job training; complementary training; associated applications; • 1,062 people trained; • 532 participants in technical training; • introduction of the Community • 19 training courses (totaling 914 • 20 literacy centers activated through Epidemiology Studies Program at the classroom hours); three local associations (Gradi Association, National Nursing School. • 14 health centers renovated and equipped Union Dogori, Munyu Association); with standard equipment, medical • 20 community libraries created in the 2. activities on the demand side, aimed materials and means of transport; same number of villages; at guaranteeing greater access to • renovation of the office of the Regional • 9 publications/teaching aids. healthcare services and community Health Department of Banfora and participation in the management of provision of equipment; Income-generating activities health issues: • introduction of “single ticket” (fixed price) • 87 loans disbursed; • fostering greater economic accessibility health treatment in two centers; • 92 applications transmitted to the to health services, through the • “Paracheck®” epidemiological study for microcredit lender to obtain loans; promotion of income-generating the introduction of a rapid test for the • 177 requests for credit with applications activities and through microcredits; diagnosis of malaria; being prepared; • health education campaigns; • feasibility mission for the initiation of • 169 requests for credit awaiting • community epidemiology studies. community epidemiology studies; preparation of credit applications. • feasibility study on the possibility of developing a system of insurance. Projects in Central and Eastern Europe
Unidea’s approach in this region, which has Geographical distribution of Unidea projects in Africa been refined over the years, focuses on supporting youth employment through the creation of professional placement services for entry-level employment, business development services for entrepreneurial initiatives, and microcredit programs, giving priority to rural areas characterized by under-employment and emigration. In pursuing these aims, Unidea collaborates with specialized local non-profits.
YOUTH EMPLOYMENT PROJECTS The unemployment rate of young adults in the CEE, at roughly 18%, is the highest in the world after Northern Africa and the Middle East. In CEE countries, young adults between the ages of 18 and 30 experience unemployment rates that are nearly double
UniCredit Group · 2007 Sustainability Report 117 Our communities
The Unidea Foundation (CONTINUED)
Geographical distribution of Unidea’s projects in the CEE
Pomerania (PL) Podlasie (PL) Liberec (CZ) Timisoara (RO) Malopolska and Zilina (PL, SK) Bucharest (RO) Banska Bystrica (SK) Razgrad (BG) Eastern Slavonia (HR) Vratsa (BG) Bratunac (BiH) Gabrovo (BG) Herzegovina-Neretva and Bratunac-Srebrenica (BiH)
POLAND
CZECH REPLUBIC SLOVAKIA
ROMANIA CROATIA BOSNIA HERZEGOVINA
BULGARIA
the national averages. Rural areas lack Business development services include: Youth employment projects in the CEE, from adequate employment support services and • motivational training; 2004 to 2007, have resulted in: are negatively impacted by the emigration • business start-up training; • 4,178 beneficiaries; trends of the young in search of employment • microloans and microbusiness • 1,181 jobs created; in larger metropolitan areas and abroad. monitoring. • 730 people hired; Hence, Unidea partners with local non-profit • 451 new microbusinesses supported with associations to organize training courses, job Microcredit initiatives, carried out in training, advisory services and microcredit; placement services and job counseling. many of the projects implemented in • €937,000 in microcredit loans. this area, are managed by Unidea’s Job placement services include: local partners. Loans are provided to PROJECT FOR SOCIAL AND ECONOMIC • professional training; satisfy investment and/or working capital INTEGRATION OF MIGRANT WOMEN • on-the-job training; requirements. Microcredit initiatives have IN THE HEALTHCARE AND SOCIAL • intermediation between entrepreneurs and been undertaken in six countries: Bosnia WELFARE SECTORS (POLAND) unemployed young people; and Herzegovina, Bulgaria, Croatia, Poland, This project addresses the complex theme • job search support. Romania and Slovakia. of female migrant workers. In the last
118 2007 Sustainability Report · UniCredit Group decade, the number of women migrating • to extend to additional regions a service • counseling the banks of UniCredit Group has been rising steadily. These women are model that is effective in the training and on philanthropic initiatives that are seeking employment opportunities, as men placement of these workers. sometimes related to banking activities; do, and, since they are not bound by family • arranging visits of UniCredit Group obligations, they are no longer passive The second component of the project employees to Unidea project sites; participants in this dynamic. In certain involves support for cooperatives in • establishing employee volunteer pilot cases, women have become the first wave Poland. The long-term aim of the project programs; of new emigration patterns, so that we can is to support the introduction into social • providing training courses on issues appropriately talk about a “female exodus.” cooperatives of nurses and caregivers who related to the non-profit sector; wish to return to their own countries. The • running the Gift Matching Program. The project, which will last three years (2007- action plan is designed to engage both 2010), has as its aim the integration into the “shores” of the migration process, building THE GIFT MATCHING PROGRAM economy and society of immigrant women on an assumption that migratory flows are Through the Gift Matching Program - now from Poland and Ukraine, particularly in the largely temporary. With this in mind, the in its fifth edition and open since 2007 to healthcare and social welfare professions - project is designed to ensure that, upon all the countries of UniCredit Group - Unidea fields with growing needs in many European the migrant’s return to her own country, matches donations made to any eligible countries in recent years. The relevant her experience and qualifications obtained non-profit organization by UniCredit Group professions include nursing, social work and abroad are fully appreciated and put to employees. assistance to families (caregiving). good use. For this to be achieved efficiently and effectively, the process requires the The 2007 Gift Matching Program’s key The project will leverage and strengthen the harmonization of standards sharing of figures are: existing instruments of social cooperation experiences between the Polish social • more than 7,600 UniCredit Group - particularly by establishing structured cooperatives and the Italian ones. employees from 17 countries have partnerships with non-profit social participated to date; cooperatives in Poland. This approach is The project is being carried out in • more than €1,600,000 disbursed by intended to address the relevant challenges partnership with the Consorzio Nazionale Unidea to match eligible requests; and to ensure respect for human and labor della Cooperazione di Solidarietà Sociale • matching funds contributed for 100% of rights within a context of transnational Gino Mattarelli (CGM). all eligible requests; European cooperation. • more than 250 different non-profit organizations supported through the The project’s first phase is directed at Initiatives for UniCredit program. job placement for immigrant Polish and Ukrainian women in Italy in the sectors Group employees identified, with the following main objectives: • to provide career and language training, Unidea and UniCredit Group work together with job placements for 120 nurses, 80 to lead a broad range of initiatives to social work auxiliaries and 100 caregivers; support the engagement of UniCredit Group • to support the management of the flow employees in community-oriented activities of migrant workers and to support the and projects. process of developing temporary work opportunities; The initiatives include: • to provide tutoring and counseling to • designing and implementing tailor-made migrant workers during the job placement projects for UniCredit Group legal entities process; (e.g., “LocatForBenin” for Locat SpA, “A Si • to facilitate the provision of services by Jiwe” for UniCredit Private Banking, and these workers to healthcare facilities and “Street Children – Keoogo Association” families that need them; linked to the 2008 People Survey);
UniCredit Group · 2007 Sustainability Report 119
Investors and markets
Shareholder communications 122 Pending issues 124 Sustainability indexes 125
UniCredit Group · 2007 Sustainability Report 121 Investors and markets
Shareholder communications
UniCredit Group is committed to providing At UniCredit Group, we report on the results Geographical distribution investors and markets with straightforward of our group-wide and divisional strategies of ordinary shares (%) information to enable them to accurately promptly and transparently to institutional evaluate and assess our strategies and investors, financial analysts, brokers and results. rating agencies.
We greatly value the markets’ assessments This section provides data on UniCredit Group’s 44 56 of our progress and priorities as we work geographical distribution of ordinary shares and towards establishing a sustainable business a brief description of how we communicate Italy capable of generating long-term value for all with our investors and the markets. Other countries our stakeholders. We especially appreciate it when the market recognizes our sustainable Number of shareholders ~370,000 business practices by including us on key Communicating with sustainability indexes. investors and markets Accordingly, this chapter provides a brief We have launched a section of our website overview of our activities in these areas and In relaying information, our financial dedicated to our various share prices. We is broken down into the following sections: communications staff makes use of have made use of interactive tools that multiple channels, including institutional help users to create charts and graphs 1. Shareholder communications, presentations, conference calls, sector to compare the performance of our stock providing a brief overview of the conferences, road shows, one-on-one against our competitors. geographical distribution of ordinary meetings and our institutional website. shares and of the various channels we In 2007, UniCredit Group held five use to relay information to both investors ENHANCING INTERNET TOOLS institutional presentations including two and markets; We consolidated our webcast system in financial meetings, one of which was Capital 2. Pending issues, including a discussion 2007 to allow the financial community Markets Day-a one day meeting between top of issues related to Bank Austria’s to follow our presentations live on our management and the financial community minority shareholders and its finalization website, www.unicreditgroup.eu. This to present and discuss topics of interest. In of the acquisition of a 91.8% stake in the webcast system is one part of our broader 2007, Capital Markets Day was focused on share capital of JSC ATF Bank; effort to enhance our use of the internet to the CEE. 3. Sustainability indexes, detailing communicate financial information to the UniCredit Group’s inclusion on a number market. We have added user-friendly tools Top management and UniCredit Group of major international sustainability to our website to facilitate our stakeholders’ Investor Relations attended nine international indexes and rankings. ability to understand our financial statements conferences on the financial industry. and quarterly and half-year reports. UniCredit Group held 29 road shows (20 in These tools include interactive versions of Europe, seven in the United States and two documents and the “interactive analyzer,” elsewhere). Furthermore, UniCredit Group which is a tool for stakeholders who are participated in approximately 400 one-on- unskilled at reading balance sheets. This tool one meetings and met with almost 500 facilitates the downloading of charts and data. companies.
Rating agencies MEDIUM/ SHORT-TERM LONG-TERM PUBLISHING AGENCIES INDEBTEDNESS INDEBTEDNESS OUTLOOK DATE 23 November Fitch Ratings F1 A+ POSITIVE 2007 Moody’s Investor Service P-1 Aa2 STABLE 5 October 2007 Standard & Poor’s A-1 A+ STABLE 18 July 2007
122 2007 Sustainability Report · UniCredit Group Share Information 2007 2006 2005 2004 2003 2002 2001 2000 1999 Share price (€) - maximum 7.646 6.727 5.864 4.421 4.425 5.255 5.865 6.115 5.787 - minimum 5.131 5.564 4.082 3.805 3.144 3.173 3.202 3.586 3.845 - average 6.541 6.161 4.596 4.083 3.959 4.273 4.830 4.976 4.606 - end of period 5.659 6.654 5.819 4.225 4.303 3.808 4.494 5.572 4.924 Number of outstanding shares (millions) - at period end 1 13,278.4 10,351.3 10,303.6 6,249.7 6,316.3 6,296.1 5,046.4 5,024.2 4,976.2 - shares with dividend 13,195.3 10,357.9 10,342.3 6,338.0 6,316.3 6,296.1 5,131.1 5,024.2 5,014.2 of which: savings shares 21.7 21.7 21.7 21.7 21.7 21.7 21.7 21.7 21.7 - average1 11,071.6 10,345.2 6,730.3 6,303.6 - - - - - Dividend - total dividends (€ millions) 3,431 2,486 2,276 1,282 1,080 995 724 649 648 - dividend per ordinary share 0.260 0.240 0.220 0.205 0.171 0.158 0.141 0.129 0.129 - dividend per savings share 0.275 0.255 0.235 0.220 0.186 0.173 0.156 0.137 0.137
1. The number of shares is net of company-owned shares (19,4 million for 2004 average and 8,7 million from end 2004 onwards).
Earnings Ratios IAS/IFRS ITALIAN GAAP 2007 2006 2005 2004 2004 2003 2002 2001 2000 1999
Shareholders' equity (€ millions) 57,724 38,468 35,199 14,373 14,036 13,013 12,261 9,535 8,644 7,708 Group portion of net profit (€ millions) 5,961 5,448 2,470 2,069 2,131 1,961 1,801 1,454 1,395 1,287 Net worth per share (€) 4.35 3.72 3.42 2.30 2.21 2.06 1.95 1.89 1.72 1.55 Price/Book value 1.30 1.79 1.70 1.84 1.91 2.09 1.96 2.38 3.24 3.18 Earnings per share (€) 0.54 0.53 0.37 0.33 0.34 0.31 0.29 0.28 0.28 0.26 Payout ratio (%) 57.6 45.6 92.1 - 60.2 55.1 55.2 49.8 46.5 50.3 Dividend yield on average price per ordinary share (%) 3.97 3.90 4.79 - 5.02 4.32 3.70 2.92 2.59 2.80
Earnings per share (E)
0.53 0.54
0.34 0.33 0.37 0.29 0.31 0.26 0.28 0.28
1999 2000 2001 2002 2003 2004 2004 IAS/IFRS 2005 IAS/IFRS 2006 IAS/IFRS 2007 IAS/IFRS
UniCredit Group · 2007 Sustainability Report 123 Investors and markets
Pending issues
This section details two pending issues standards, “Standards for the Valuation BA-CA with ATF’s majority shareholders. The related to the minority shareholders of Bank of Companies” (IDW S 1). In addition, an offer was to remain open for 30 days, but Austria and Bank Austria’s finalization of the opinion was issued on the appropriateness one of ATF’s minority shareholders obtained acquisition of a controlling stake in the share of the price by Warth & Klein, an an emergency order from the competent capital of JSC ATF Bank (ATF). independent auditing firm appointed by the Kazakh court that blocked its completion. competent court of Munich. However, UniCredit Group believes that the action of the minority shareholder has no Squeeze-out of With regard to the squeeze-out at BA-CA, merit and has taken all possible steps with UniCredit’s Board of Directors and BA-CA’s the competent authorities to reach a timely Bayerische Hypo- und Management Board met in March 2007 and resolution to the dispute with the resulting Vereinsbank AG (“HVB”) set a cash price of €129.4 for each of the completion of the offering period. 7,374,016 bearer shares, equal to about and Bank Austria 3.65% of total share capital. This amount Still, it should be noted that at the time the corresponds to a total cash payment of mandatory public offering was blocked, Creditanstalt AG (“BA-CA”) about €954 million. The squeeze-out price BA-CA had legally purchased additional was determined on the basis of an appraisal shares of ATF, increasing its stake to 92.9% At its meeting on 23 January 2007, the carried out by Deloitte Valuation Services of share capital. Total payment for the whole UniCredit S.p.A. Board of Directors, in GmbH in accordance with Austrian valuation stake was about €1,592 million. its capacity as majority shareholder of standard KFS BW1. In addition, an opinion Bayerische Hypo- und Vereinsbank AG was issued on the appropriateness of the As announced on 21 June 2007, pursuant (“HVB”) and Bank Austria Creditanstalt AG price by TPA Horwath Wirtschaftsprufung to the agreement signed by BA-CA and (“BA-CA”) voted to initiate the squeeze-out GmbH, an independent auditing firm several private shareholders of ATF, the price procedure at both banks. appointed by the competent court of Vienna. paid will be increased through the pro-rata The squeeze-out transactions of HVB and payment of 50% of ATF’s 2007 net profit, On that date UniCredit held 95% of the BA-CA were approved by the respective adjusted for any accounting differences share capital of HVB after acquiring 1.23% shareholders’ meetings on 26-27 June and reported in the audited consolidated on the market, and 96.35% of the share 3 May 2007. These resolutions were the accounts for 2007 (compared to the capital of BA-CA. Thus, it was possible object of a voidance action brought forward accounts for 2006). to initiate this procedure based on the by HVB’s and BA-CA’s minority shareholders. provisions of German and Austrian law As of 31 December 2007, ATF was one of respectively. the largest Kazakh banks with customer JSC ATF Bank deposits of €2.2 billion (+8% over 2006 With regard to the squeeze-out at HVB, at its in local currency), net loans to customers meeting on 9 May 2007, the UniCredit Board On 13 November 2007, BA-CA finalized of €4.4 billion (+50% over 2006 in local of Directors set a cash price of €38.26 the acquisition of a 91.8% stake in the currency) and a network of 140 branches. for each HVB share. Based on the fact share capital of JSC ATF Bank (“ATF”). that, after the transfer of UBM’s investment To be specific, BA-CA acquired 95.6% of banking business unit, HVB’s minority ordinary stock and 85% of preferred stock. shareholders held 36,534,957 shares in In addition, in accordance with Kazakh the company (equal to about 4.55% of total law applicable to joint stock companies, capital), the unit price set corresponds to on 17 November 2007 BA-CA launched a total equivalent of about €1,398 million. a mandatory public offering for remaining The squeeze-out price was determined on shares at a price of KZT 10,180.93 (equal the basis of an appraisal performed by Ernst to US$84.37) for each ordinary share and & Young AG Wirtschaftsprüfungsgesellschaft KZT 5,675.11 (equal to US$47.03) for Steuerberatungsgesellschaft, Stuttgart, each preferred share, which, in both cases, Germany, based on the German IDW represents the price per share agreed to by
124 2007 Sustainability Report · UniCredit Group Sustainability indexes
UniCredit Group has successfully built a highest score in the category of social reason, UniCredit Group is honored to be strong reputation for sustainable business reporting and human capital development. included on the list. practices and is recognized worldwide as a sustainability-driven company. This is UniCredit Group has a significant opportunity demonstrated by its inclusion in a number to improve its overall environmental Oekom Research AG of major international sustainability indexes performance, particularly in the categories and rankings. of globally recognized CSR standards, UniCredit Group’s pragmatic and forward- sustainable development and climate looking sustainable development strategies This chapter details our inclusion on the disclosure. were validated with a Status Prime ranking Dow Jones Sustainability Index, FTSE4Good in the Oekom Research AG annual review. Index Series, the Ethibel Sustainability Our Status Prime ranking was earned Index’s Excellence Global Register and the FTSE4Good Index Series because of our position among the world’s Climate Disclosure Leadership Index (CDLI), best financial companies and our fulfillment as well as in Oekom Research AG’s annual UniCredit Group is a member of the of the minimum best-in-class requirements review. FTSE4Good Index Series. Created and for the financial industry. Oekom Research, managed by the FTSE Group, the index is a German-based primary rating agency, an innovative series of real-time indexes gave UniCredit Group particularly high marks Dow Jones Sustainability designed to reflect the performance of in the social and cultural category, with companies that meet globally recognized our social and ethical policies and external Index CSR standards and to promote investment reporting receiving top scores. in those companies. A committee of UniCredit Group has been selected as independent SRI and CSR experts an index component of the Dow Jones periodically review the indexes to ensure Climate Disclosure Sustainability Index (DJSI). As holders of one that they are an accurate reflection of of the 60 DJSI licenses issued to financial current CSR best practices. Leadership institutions in 14 countries, UniCredit Group is able to use the DJSI as either a The Carbon Disclosure Project (CDP), an benchmark or a base for financial products Ethibel Sustainability independent not-for-profit organization, and funds. The companies that are part chose to include UniCredit Group in its of this sustainability index represent the Index’s Excellence Global Climate Disclosure Leadership Index (CDLI) top 10% of corporate social responsibility Register for the first time in 2007. Further details performers in terms of economic, on the CDP and CDLI are provided in the environmental and social issues out of In the field of sustainable development following chapter on the Environment. 2,500 companies included in the Dow Jones our transparency has proven to be one World Index. of our greatest assets and is one of the reasons why UniCredit Group was listed According to the rating agencies, UniCredit on the Ethibel Sustainability Index’s (ESI) Group has improved in terms of its overall Excellence Global Register at the end of performance year-on-year in absolute value 2007. Ethibel, an independent non-profit and in relative terms when compared with organization, has provided banks with the rest of the financial sector. The core SRI advisory services and has promoted strength of UniCredit Group clearly lies in the open dialogue between companies, economic area, with strong performances in governments, unions, NGOs and investors the categories of stakeholder engagement, in Europe since 1992. Those included on customer relationship and risk and crisis Ethibel’s list of standout companies for management. UniCredit Group was highly best practices in the area of sustainability rated in the social area, achieving the undergo rigorous screening. For this
UniCredit Group · 2007 Sustainability Report 125
Environment
Environmental Policy 128 Environmental Management System (EMS) 130 Projects & partnerships 131 Sustainability initiatives 132 Direct impacts 135 Indirect impacts 140 Goals 142
UniCredit Group · 2007 Sustainability Report 127 Environment
Environmental Policy
UniCredit Group understands the significant role a bank can play in meeting large- At UniCredit Group, we are aware that our scale environmental challenges. We are committed to leveraging our position as a business activities have an impact on the large financial institution to protect the environment and meet the climate change environment even though we are a part of challenge. the service sector. Therefore, we always factor environmental sustainability into our Our climate change initiatives in 2007 signaled our progress towards the adoption strategic decisions. of a clear climate change strategy. Our long-standing memberships in international organizations mark our cooperative approach to environmental issues. Our values inform our interactions with all our stakeholders. Our institution of ISO 14001/EU Eco-Management and Audit Scheme (EMAS)-certified Environmental Management Systems at UniCredit Group, HVB and soon Bank Austria demonstrates our commitment to measurable targets, evaluation and public communication.
This chapter provides information on our work under the Environmental Management System to manage UniCredit Group’s direct and indirect impact on the environment.
Our activities in this sphere have been broken down into the following categories:
1. Environmental policy, including the full text of the policy signed by the UniCredit Group CEO in 2007; 2. Environmental Management System (EMS), including details on the history of our EMS implementation; 3. Projects and partnerships, including memberships and networks; 4. Sustainability initiatives, including a breakdown of activities at the Holding, Divisional and Legal Entity levels; 5. Direct impacts, including real estate, energy efficiency, water consumption, paper consumption and waste management initiatives and our goals; 6. Indirect impacts, including details on our lending policy and environmental This is why UniCredit Group adopted an guidelines; Environmental Policy in 2000 and has 7. Goals, including specific projects planned for 2008. since firmly embedded it within all of our operations. In keeping pace with the rapid By continuing to invest in innovative environmental initiatives, strong partnerships and changes underway in the financial industry adopting progressive environmental guidelines and policies, UniCredit Group expects and the world, UniCredit Group recently and intends to have a positive and lasting impact on the environment in all of our developed a new Environmental Policy, markets. signed by UniCredit Group CEO Alessandro Profumo in 2007. It is presented beside.
128 2007 Sustainability Report · UniCredit Group UniCredit Group Environmental Policy
Our mission is to generate value over time for society and our We pledge to continually make technical and organizational customers, employees and shareholders, and for current and innovations in our business and in our relationships with future generations. Our identity is based on strong, common customers in an effort to constantly improve our performance. values and is built through specific actions that are incorporated in strategic decisions and operations. Individual creativity must be encouraged and promoted in order to take advantage of new solutions that will enable us The essential process of integrating the Group with other European to achieve excellent results in the environmental sustainability and Italian entities was recently completed and resulted in an of the company’s “core business” and thus in its profitability expansion of the company’s horizons, thereby creating a new over time. The individual actions of those who work in the challenge for the Group. The creation of an entity with international Group are essential to achieving an overall improvement in our roots and a presence in countries with different cultures and laws environmental performance, and it is our specific responsibility has required us to make a greater commitment to pursuing the to foster a widespread awareness among staff in all countries goals of sustainable development, which we have set for ourselves where the Group has a presence that each person’s ideas and over time, in terms of dedicated resources and a focus on various involvement can often make a substantial contribution. The aspects of banking operations. The Environmental Management Group has a priority to provide suitable training and ensure the System incorporates these new developments and allows us to involvement of all employees at various company levels in order make appropriate decisions for the entire Group. At the same to foster their professional development. time, it offers us a unique opportunity to make business decisions affecting the impact of our presence on the economic and social We realize that our efforts alone will not allow us to achieve the structure in a more effective manner in all areas. goals we have set, and thus we are also directing our efforts to our stakeholders in order to listen to their needs, discuss A key priority for the Group is its ongoing oversight of the most possible solutions and initiate a dialogue that will allow us to grow significant environmental repercussions that are directly related to together. We feel it is essential to communicate with those outside our operations, such as the consumption of natural resources and the Group (the public, local communities, environmental groups waste production. The Group also places considerable emphasis and customer and consumer associations) by providing continual on preventing so-called “indirect” environmental impacts caused information and taking into account their needs and suggestions. by outside entities whose actions we can influence through The main reason for establishing these lines of communication is targeted decisions in the area of purchasing and loan approval to create long-term relationships in the areas where we operate policies, and in the innovation of services and determination of and to make the best use of the specific characteristics and strategic action plans. opportunities in these areas in terms of protecting environmental In this regard, UniCredit is strongly committed to the fight against resources and creating awareness. climate change, a significant environmental issue for our time. The Group reiterates its commitment to foster a culture of sustainability The best way to make our commitment credible is to ensure and the achievement of the goals of the Kyoto Protocol in all the transparency of our actions and the results achieved in countries where it has a presence. In addition to the Group’s long- environmental management. To this end, we measure and monitor standing consortium involvement, the long-term strategic decision our ability to achieve the goals we have set using a system to reduce emissions of climate-altering gases is a key decision- incorporating indicators that are easy to understand and can be making factor in the creation of products and credit policies. compared over time, and we voluntarily ask independent entities to check and assess these indicators. Acting responsibly means obeying the rules. For this reason, in addition to ensuring our compliance with existing environmental laws, we have renewed our commitment to participate in voluntary initiatives and programs such as the Global Compact, UNEP, the Alessandro Profumo European EMAS regulation and the Equator Principles. CEO UniCredit Group
UniCredit Group · 2007 Sustainability Report 129 Environment
Environmental Management System (EMS)
A certified Environmental Management first certification under ISO 14001 and 70% of UniCredit Group’s employee headcount System (EMS) is a hallmark of quality and EMAS in 2002. UniCredit Processes & for 2007. This represents the first results of our is highly rewarded and appreciated both Administration (UPA) has been certified long-term plan to extend the EMS we have in by sustainability rating agencies and by ISO 14001 since 2006 and will receive the place in Italy, Germany and Austria to the CEE. stakeholders. An EMS, combined with a EMAS certification in 2008. Bank Austria commitment from top management, helps will follow in 2008. Reliable data relating to energy and water an organization to clarify responsibilities, consumption, business travel and paper define targets and report on results. is the basis for an effective EMS. These Extending EMS to Central status reports are a starting point and In contrast with manufacturing firms, a blueprint for further action in this region. bank’s direct environmental impact largely and Eastern Europe Some of the environmental data has stems from building and office operations, been estimated based on costs. Due to procurement and mobility. To make these For the first time, the UniCredit Group is variations in environmental regulations and as sustainable as possible, a functional capable of presenting a status quo report on data collection procedures from country to environmental control system is essential. existing figures and activities from eight of the country, it is not always a simple matter to Recording material and power flows makes countries in Central and Eastern Europe where consolidate data that may not be directly it possible to identify and realize potential we have a presence - Croatia, the Czech comparable in its underlying content. One of savings by cutting costs and protecting the Republic, Hungary, Romania1, Serbia, Slovakia, UniCredit Group’s next steps will be to align environment. For many years, UniCredit Slovenia and Turkey - representing more than our collection methodologies. Group in Italy and HVB in Germany have been using an EMS that tracks improvement in these areas.
UniCredit Group’s EMS consists of a set of processes and practices designed to continually enhance: our environmental efficiency and implement our environmental policies; the commitment of top management; and our consistent efforts to address the direct and indirect environmental impact of our financial institution.
EMS and UniCredit Group
The EMS concept was gradually introduced in Germany and Austria in the early 1990s. Eventually a small subsidiary, Vereinsbank Victoria Bausparkasse, obtained certification under ISO 14001 and EMAS in 2002. HypoVereinsbank was certified in 2006. UniCredit received its
1. For Romania, only 2007 figures are available, due to the merger of three differently structured banks (Banca T¸ iriac, HVB Bank Romania and UniCredit Romania) in 2006/2007.
130 2007 Sustainability Report · UniCredit Group Projects & partnerships
This section summarizes the environmental This year the CDP launched the Climate Accordingly, we have developed a significant projects and goals of UniCredit Group in Disclosure Leadership Index (CDLI), a partnership network and have either Italy, Germany, Austria and the CEE including prestigious honor roll for global corporations initiated, led or been active partners in many climate change projects, memberships and addressing the challenges of climate important environmental initiatives. partnership networks. change. The CDLI is comprised of 68 FT500 companies that show distinction in their Initiatives we participate in include the responses to the CDP survey based on their Global Compact, the United Nations Addressing climate change reporting of greenhouse gas emissions Environment Programme’s Finance and their assessments of climate change Initiative (UNEP-FI), the Carbon Disclosure During 2007, the media and the public strategies. CDLI members are further Project (CDP), the Italian Forum for focused their attention on global climate distinguished by the disclosure of their Sustainable Finance, the Italian branch of change and UniCredit Group stepped awareness of the risks and opportunities of Clean Up the World, the Kyoto Club, the forward to address this vital issue. climate change, as well as by the quality Munich Regional Center of Expertise, the and effectiveness of programs they have put Forum of Socially Responsible Investment, The financial industry has only a modest in place to reduce overall greenhouse gas the Austrian Society for Environment direct impact on climate change. In fact, emissions. UniCredit Group is proud to be and Technology (ÖGUT), respACT, and
CO2 emissions from the banking sector included in the index. brownfield site partnership. are demonstrably well below the averages generated by the oil and gas, energy and Our participation in the Carbon Disclosure THE GLOBAL COMPACT automotive sectors. Indirectly, however, the Project demonstrates our support for the The Global Compact is an international financial sector plays a pivotal role. Because concept of encouraging companies to initiative of former United Nations Secretary- climate change will most likely have a serious publicize their own policies concerning General Kofi Annan that seeks to promote negative impact on the global economy if it is climate change as well as our desire to fundamental social and ecological principles left unchecked, it is an issue that the financial make institutional investors aware of the around the world by cooperating with sector cannot afford to ignore. importance of investing in organizations businesses, trade unions, private sector
committed to reducing CO2 emissions. organizations and the United Nations. UniCredit Group takes a broad view of UniCredit Group endorses these principles the climate change issue. We believe that KYOTO CLUB in Italy and is an active participant in the banks can contribute to the development UniCredit Group is among the founders initiative. of real solutions. We are prepared to play of the Kyoto Club, an Italian non-profit a progressive leadership role within our organization launched in 1998. Composed UNITED NATIONS ENVIRONMENT industry and our community. For instance, of companies, institutions, associations PROGRAMME’S FINANCE INITIATIVE we have already assembled a team of and local authorities, the Kyoto Club is (UNEP-FI) specialists to conduct a feasibility study that committed to tackling greenhouse gas UniCredit Group is a signatory to UNEP- will assess all near-term climate change abatement targets under the provisions FI, a global partnership between the risks and opportunities. of the Kyoto Protocol. To achieve those United Nations Environment Programme targets, the Kyoto Club promotes awareness, and the financial sector. Together, we are CARBON DISCLOSURE PROJECT (CDP) information and training on issues of energy working to understand the impacts of UniCredit Group has long been a member of efficiency, renewable energy and sustainable environmental and social considerations the CDP. As the world’s largest collaboration mobility. on financial performance and to partner of institutional investors, the CDP represents on the international level in the promotion 315 entities managing over US $41 trillion and development of integrated banking and in assets and provides the largest and most Partnerships environmental sustainability policies. comprehensive database of strategies from the world’s largest corporations regarding UniCredit Group is committed to raising In June, UniCredit Group signed a the impact of climate change on shareholder public awareness of the financial industry declaration that called on heads of state to value. and its environmental achievements. support formal emission reduction targets to
UniCredit Group · 2007 Sustainability Report 131 Environment
Sustainability Projects & partnerships (CONTINUED) initiatives avoid the high costs that will be incurred by AUSTRIAN SOCIETY FOR UniCredit Group takes action at the Holding, global climate change. ENVIRONMENT AND TECHNOLOGY Divisional and Legal Entity levels to leverage (ÖGUT) our financial knowledge to promote At UniCredit Group, we are committed to Bank Austria is a founding member of sustainable approaches to the environment the UNEP-FI’s CEE Task Force. We are ÖGUT, a society that aims to initiate in all of our markets. actively promoting a consistent approach to and promote solutions that benefit the sustainability along with best practices and environment and the economy and to monitoring tools for environmental risk in improve communication among relevant Holding level initiatives the CEE. interest groups. Our Holding level initiatives include ITALIAN FORUM FOR SUSTAINABLE RESPACT - AUSTRIAN BUSINESS investing in the reduction of greenhouse FINANCE COUNCIL FOR SUSTAINABLE gases, addressing wildlife sustainability
As a partner in the Italian Forum for DEVELOPMENT issues, offsetting CO2 emissions, and Sustainable Finance (Forum per la Finanza Bank Austria is a member of respACT - sponsoring renewable energy research Sostenibile), we are dedicated to supporting Austrian Business Council for Sustainable programs. this multi-stakeholder organization, which Development, an association that is a was created in 2001 to promote dialogue point of contact for all issues concerning JOINTLY DEVELOPING among actors interested in the topic of the practical application of sustainability, SUSTAINABILITY STRATEGIES sustainable development from a financial corporate social responsibility and ethical In December 2007, we signed an perspective. business conduct. agreement with the World Wildlife Fund to develop a joint program with an initial focus CLEAN UP THE WORLD BROWNFIELD SITE2 PARTNERSHIPS on Italy, but with the potential to expand UniCredit Group contributes to the planning Bank Austria is a member of several on an international scale. The program will and organization efforts of the Italian branch organizations that are working to implement a strategy addressing issues of of Clean Up the World (Puliamo il Mondo), address brownfield sites, including the environmental sustainability. the largest voluntary environmental project Austrian Society for the Management of in the world. Contaminated Sites (ÖVA), and the ÖNORM OFFSETTING CO2 EMISSIONS Workgroup (Arbeitskreis ÖNORM), which In 2007 UniCredit Group continued
MUNICH REGIONAL CENTER deals with contaminated sites and is its policy of offsetting CO2 emissions OF EXPERTISE responsible for developing a new standard generated from the production of the HVB is a founding member and head of covering “Documentation and Assessment UniCredit Group Consolidated Annual the Munich Regional Center of Expertise, of the Environmental Conditions during Report by purchasing certificates from a worldwide United Nations University Property Valuation - Subsequent Use and the Valtellina biomass district heating initiative. Through the Center, HVB engages in Cost Calculation for Brownfields”. Bank plant, located in the Lombardy region of sustainable development education with other Austria also holds a seat on the Working northern Italy. corporations, the City of Munich, universities, Group on Economic Issues of the European schools, NGOs and other institutions. CABERNET project (Concerted Action on We also purchased credits from a wind
Brownfield and Economic Regeneration farm in Turkey to offset CO2 associated with FORUM OF SOCIALLY RESPONSIBLE Network), which was launched in 2001 the holding of our annual Venice Forum, INVESTMENT and aims to establish a pan-European which was dedicated to energy markets HVB is a founding member of the Forum competence network on the rehabilitation and renewable energy this year. UniCredit of Socially Responsible Investment, and we of industrial brownfield sites and the Group was pleased with the very high currently head the organization. economic regeneration of urban areas. level of panelists in attendance and was particularly proud that Carlo Rubbia, the winner of the 1984 Nobel Prize in Physics, was on hand to deliver the Venice Forum’s 2. The term “brownfield site” generally is understood to mean real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. keynote address.
132 2007 Sustainability Report · UniCredit Group ISTITUTO DI ECONOMIA E POLITICA DELL’ENERGIA E DELL’AMBIENTE (IEFE) UniCredit Group, as a member of IEFE at Bocconi University in Milan, sponsored an 18-month research program on renewable energy under the European platform called 20-20-20 (i.e., –20%
CO2, +20% renewable energy by 2020). The research aims at assessing possible positive scenarios in the hope of achieving long-term targets for reduced energy consumption and increased use of renewable energy sources in the Italian economic system.
ENHANCING SECURITY OF SUPPLY THROUGH RENEWABLE ENERGY INITIATIVES The Venice Forum is hosted by UniCredit Group on a biannual basis to stimulate innovative ideas that can contribute to and strengthen the European integration process. The 2007 theme was European energy policy: enhancing security of supply by creating a single EU energy market?
Starting with the need to create a single CO2 REDUCTION AND RENEWABLE Global Ecology equity mutual fund, which European energy market, major energy ENERGY PROJECT FINANCING targets retail and institutional investors, is issues were discussed, including climate UniCredit MIB, with more than 20 years focused on renewable energy, ecological change, renewable energy, missed of project finance experience, is a leader themes and eco-friendly companies. The energy opportunities, European policies in the field and is taking action in 2007 to Clean Energy Fund is a closed-end fund towards Russia, nuclear energy and the meet the growing need for CO2 reduction for Italian institutional clients focused on implementation of the Kyoto Protocol. and the subsequent increase in demand renewable energy and investing in private for renewable energy project financing. The equity, carbon credits and venture capital division ranks among the market leaders participation. Divisional level initiatives in the financing of wind power projects (as the number three Global Mandated Lead OFFERING FAMILIES FINANCING At the Divisional level, we reaffirmed our Arranger in 2006). FOR RENEWABLE ENERGY approach to such traditional environmental SOLUTIONS fields as project finance and carbon finance PROVIDING CUSTOMERS Our Retail Division promotes personal and launched several new initiatives and WITH SUSTAINABLE INVESTMENT renewable energy solutions by offering products. In late 2007, we convened OPTIONS financing for consumer solar panels. representatives from all UniCredit Group Pioneer Investments, the core of our Asset Through agreements with agricultural Divisions to share best practices and Management Division, has a longstanding syndicates (e.g., Confagricoltura), we also lessons learned and to identify potential tradition of providing its customers with the fund investments and support activities that synergies. option to invest in sustainable funds. The address climate change.
UniCredit Group · 2007 Sustainability Report 133 Environment
Sustainability initiatives (CONTINUED)
PROVIDING FREE ENERGY to stimulate enhanced networking A climate change PERFORMANCE CERTIFICATES between innovators and financial service We offer our German retail customers providers. strategy for the future free Energy Performance Certificates for residential buildings in cooperation with DISSEMINATING PRACTICAL Some of the initiatives highlighted above our subsidiary, VVB (Vereinsbank Viktoria INFORMATION FOR FAMILIES serve as a starting point for UniCredit Bausparkasse). These certificates are Bank Austria, in collaboration with bauMax Group’s comprehensive Climate Change based on the German Energy Saving and the Austrian Lebensministerium Strategy, which will be defined in 2008. Ordinance (EnEV) and contain information (Ministry of Life), launched the Energy about modernization requirements and Cost Savings Initiative in 2005. Since the beginning of last year, climate and renovation recommendations. The initiative disseminates practical specialists from our Divisions have worked Together with the certificates, HVB/ information on environmentally friendly to craft a clear statement on climate change VVB offers special financing solutions to building methods and low-energy devices to be endorsed by the UniCredit Group CEO. enable clients to carry out eco-friendly and equipment for the household. This The statement will include greenhouse gas improvements. undertaking remains significant, because abatement targets in line with the UNEP-FI Austria’s households are responsible for statement that UniCredit Group signed in INCENTIVIZING SMEs TO REDUCE approximately one-third of the country’s June of 2007.
EMISSIONS AND INCREASE CO2 emissions. EFFICIENCY The core of the draft statement is provided In 2007, following an agreement with the below: Italian Ministry of Economic Development, UniCredit Banca d’Impresa of the Corporate Division offered its SME customers a We commit: “plafond” of €500 million to encourage
SME’s to reduce CO2 emissions and • To advance our knowledge and understanding of both climate change risks and increase their energy efficiency. opportunities.
• To quantify and integrate those risks and opportunities into our core financial Legal Entity initiatives operations. This includes working with our clients and investments - through engagement and product development - to reduce their carbon emissions. UniCredit Group leverages our Legal Entities’ local knowledge and prestige to • Similarly, to assist our clients in managing the risks and opportunities of climate promote environmental initiatives to our impact, by assessing their exposure and by providing products and services that core markets. improve their adaptive capability.
STIMULATING ENHANCED • To reduce our own direct impact and carbon footprint and to report and assess our NETWORKING annual emissions transparently. HVB is among the leading financial service providers that founded the Finance Forum. • To incorporate the issue of climate change into our investment decision-making The second climate research summit was process in order to promote and protect asset growth in the companies and held on 16 October 2007 on the subject sectors in which we invest. This includes cooperation to encourage and harmonize of climate change. A new and central disclosure of climate-related items in regular financial reporting with the goal research and dialogue platform for the of more accurately assessing the impacts of climate change on company effective implementation of climate policy, performance. the Finance Forum is a part of the German Federal Government’s “High-tech Strategy UNEP-FI declaration on climate change by the financial services sector, signed by for Climate Protection,” which is designed UniCredit Group on 5 June 2007
134 2007 Sustainability Report · UniCredit Group Direct impacts
Controlling and reducing our direct impact is have a substantial impact on UniCredit European Union GreenBuilding Partner status a constant consideration for UniCredit Group. Group’s environmental performance and due to our successful optimization of the environmental footprint. structure for efficient climate control. Our direct impact on the environment stems from activities expressly related to banking Sustainable real estate management means We have developed common-sense solutions operations in the form of the energy and conserving resources and identifying in Italy in order to increase climate-control water we consume, the building materials that opportunities for energy savings. It includes efficiency, allowing for a business-casual go into our facilities and the transportation both environmentally aware construction dress code during the summer teamed requirements of our employees. UniCredit and the creation of health-conscious with a deliberate reduction in our use of air Group treats these resource impacts as equal interior environments. Economic and conditioning and targeted internal awareness in importance to those we affect indirectly environmental features, space efficiency, campaigns. through our business policies. high-quality workplaces and low operating and energy costs are all important criteria In Germany, HVB’s new high-rise building Wherever practicable, we undertake in construction and remodeling projects. in Munich incorporates a number of to minimize the impact we have on Building maintenance furnishes some of significant energy efficiency measures. A the environment through our everyday the most straightforward opportunities for new and more efficient air conditioning business activities. Our work to develop an sustainability in terms of its direct impact system provides roughly a 30% decrease environmental conservation plan will result on the environment, the health of our in electrical power requirements, allowing in reduced operating costs by decreasing employees, and costs. for energy savings of some 550,000 kWh, our consumption of basic resources and equal to a CO2 reduction of 250 tons input commodities. It will enable us to UniCredit Group will continue to conduct per year, while the renovation of the roof serve as a role model for our stakeholders, energy-optimized planning with input from provided heating savings equivalent to multiplying the positive impact of our efforts our facilities management experts. Our about 700,000 kWh. by encouraging others to undertake similar experience has shown that well-designed efforts. roof replacement and façade restoration In Austria, Bank Austria’s initiatives to projects can conserve as much as two-thirds reduce the airflow rate in selected offices Implementation of our objectives requires a of our energy expenditures for heating and and lobbies have led to savings of more multi-pronged approach. We will continue to cooling. than 420,000 kWh in electricity and the improve our resource consumption efficiency equivalent of 22,000 kWh for heating. and streamline our business processes and Our actions in this area include initiatives Similarly, the optimization of extra-cooling resource use within the framework of our to achieve efficiency in climate control, to by the modification of circuit time and certified EMS. We will take further steps to strengthen facilities management and to room temperature in the “Millennium City” reduce carbon emissions. We will continue renovate water-management systems. branch in Vienna resulted in a 100,000 kWh to raise our employee’s awareness of reduction in electrical consumption. conservation issues. EFFICIENCY IN CLIMATE CONTROL All heating and air conditioning systems in Data on the consumption of energy for At present, our efforts to reduce our direct Italy were modernized and upgraded (i.e., heating purposes in the CEE is difficult to impact are principally focused on real estate, installation of high-efficiency air conditioning collect, as most of the facilities are not energy efficiency, water consumption, paper systems, smart/low-energy lighting systems, equipped with proper metering devices. In consumption and waste management. insulated windows, reflective window film many cases, non-itemized office energy and remote temperature control systems) invoices include the cost of heating, and in from 2006 to 2007 in roughly 650 buildings. other cases it is paid to property owners Real estate As a result, our projected reduction in as an undifferentiated part of the rent. energy consumption in 2008 will be 5.7 In the near future, we will improve cost- Our real estate choices (with respect GWh per year, saving the UniCredit Group reporting methods and implement necessary to architecture, construction, space €450,000 annually. Furthermore, the measures to ensure tighter control over management and technical infrastructure) Sant’Elia building in Milan has been granted energy consumption.
UniCredit Group · 2007 Sustainability Report 135 Environment
Direct impacts (CONTINUED)
STRENGTHENING FACILITY trickle through simple filtration ditches, atmospheric emissions, conducting test MANAGEMENT CAPACITY providing natural benefits and further cost programs, using common sense, modernizing In Germany, HVB has adopted a new savings. IT systems and improving the reporting on environmental information platform to energy consumption at our Units in the CEE. strengthen facilities management processes. The platform provides information tools Energy efficiency INSTALLING INTELLIGENT SYSTEMS covering sustainability, architectural and In Italy, the Sant’Elia building in Milan technical solutions and sustainable materials. Energy efficiency is a key objective of our is equipped with advanced lighting overall environmental strategy. Building management systems that feature automatic RENOVATING WATER MANAGEMENT architecture and the mechanical systems in switch-off and other automatic regulators SYSTEMS office buildings are crucial factors in efficient that decrease voltage in certain areas during In 2007, we renovated the sewer systems in energy management. Consequently, we evening hours. the Technical Center building in Tucherpark, make every effort to ensure low operating Munich. Now rain and wastewater will be and energy costs, while at the same In Germany, HVB is renovating the elevator diverted separately, leading to cost savings time incorporating other environmental facilities in the Technical Center & VTO through the rainwater that does not flow into considerations into construction and buildings in Tucherpark, Munich. The the sewer system. Since it is unnecessary to remodeling projects. Technical Center is already finished, and purify rainwater through a sewage-treatment the VTO project will be completed at the plant, this puts less strain on the system. Our actions in this area include installing end of 2008. By utilizing state-of-the-art Additionally, rather than being diverted into intelligent systems, tapping renewable technology, HVB seeks to realize substantial the sewer system, the rainwater can now energy, providing Energy Passes, monitoring energy savings. Altogether, energy
136 2007 Sustainability Report · UniCredit Group efficiency measures in four HVB buildings electronic ballasts in the garage and main which are now being operated through 36 in Tucherpark, Munich, are saving up to building of our Lassallestrasse office in machines without suffering any functional 105,120 kWh per year. Vienna. When combined with our efforts to losses. This corresponds to a savings of improve the efficiency of our climate control approximately 2,670 MWh per year, which TAPPING RENEWABLE ENERGY systems, these measures have saved Bank results in an annual cost savings of roughly The percentage of electrical power supplied Austria approximately €97,620 annually. €310,000. The success of this project is by renewable sources to all legal entities of leading to further virtualization solutions in UniCredit Group in Italy was 93.9% as of our MODERNIZING IT SYSTEMS IT Austria. last accounting in 2007. UniCredit Group has also adopted energy- saving policies that require personal Since only 36 servers are in operation PROVIDING ENERGY PASSES computers, monitors and related electronic instead of 638, Bank Austria is leaving Under German law, an Energy Pass must be devices to be turned off at the end of each a lighter footprint all the way up the provided for every building sold or leased working day. distribution chain (i.e., fewer machines from 2008. At HVB, our preparations to meet need to be produced, less energy is this requirement are well underway. As an At Bank Austria we have introduced the consumed by the manufacturer, less example, we have prepared a consumption WOL (Wake-on-LAN) feature on our toxic material is used, less waste and demand-oriented Energy Pass for computer networks, which is scheduled produced), leading to lower overall energy two properties in the cities of Munich and to be part of the next Microsoft Hyper consumption. The project will save Bank Rosenheim that are in the process of being virtualization software release. The feature Austria a significant amount of money and finalized. Proposals for other improvements makes it simpler to leave a networked make a substantial contribution towards are in progress. computer fully shut down when not in use. environmental protection. By shutting down one PC, electric usage is MONITORING ATMOSPHERIC reduced by approximately 70 to 80 watts. BENCHMARKING ENERGY EMISSIONS Assuming that a computer is operated for CONSUMPTION Atmospheric emissions produced by many 50 hours a week and can be shut off for In the CEE, electrical consumption per of our boilers and central heating systems nearly all of the remaining time, the annual employee varies from 3,224 kWh in are regularly monitored and controlled by savings in electricity consumption will be Slovenia to 6,746 kWh in Romania. The specialist and management companies, roughly 500 kWh per computer. At the average electricity consumption is 22% which ensure that their content is kept current cost of electricity, this results in a below the average per employee in Italy, within legal limits and which maintain the total savings throughout the bank of about Austria and Germany. Such energy- equipment to ensure efficiency. €220,000. intensive facilities as the data center and other air-conditioned buildings are boosting CONDUCTING TEST PROGRAMS After the successful virtualization electrical consumption. In the future, we We are conducting a test program at three projects in Italy and Germany, Project VIA intend to benchmark our CEE energy medium-sized buildings in Verona, Vicenza (Virtualization in Austria) began in May consumption, analyze the design quality and Treviso. The cost savings generated 2007 and was successfully completed of our buildings and improve the energy from reduced energy use is projected at the end of November. Bank Austria efficiency of our technical infrastructure to be €280,000 per year starting from succeeded in virtualizing 638 servers, and IT systems. 2008. Another test at three large buildings, Milan Sant’Elia, Verona Monte Bianco and Energy consumption per employee (kWh/capita)3 Trieste Corso Italia, is altogether saving approximately 10.5 GWh in energy savings COUNTRY 2007 2006 and €1,180,000 in costs per year. Italy 10,733 11,507 Germany 13,203 15,575 USING COMMON SENSE Austria 13,962 13,757 In Austria, 282,000 kWh in electrical CEE 10,967 9,931 savings came from changing the lamps and 3. Figures relate to 85% of 2007 of employees headcount for countries reported in the table.
UniCredit Group · 2007 Sustainability Report 137 Environment
Direct impacts (CONTINUED)
Energy consumption by source (%)4 COUNTRY 2007 2006
Italy 61.3% 56.7% 5 renewable sources Germany 19.0% 19.0% Austria 54.5% 54.0% CEE5 17,4% 15,7% Italy 38.7% 43.3% Germany5 32.0% 32.0% fossil fuels Austria 45.5% 46.0% CEE5 61.0% 59.5% Italy 0.0% 0.0% Germany5 49.0% 49.0% nuclear power Austria 0.0% 0.0% CEE5 21,6% 24.7%
4. Figures relate to 73% of 2007 of employees headcount for countries reported in the table. 5. Figures from Germany and Czech Republic address only electrical consumption.
GHG emissions from energy consumption per employee (tons CO eq/capita)6 2 Paper consumption COUNTRY 2007 2006
Italy7 1.01 1.16 At UniCredit Group, we believe that the Germany7 4.28 5.82 production and distribution of paper Austria7 2.08 2.03 should be resource-efficient. That is why CEE8 4.41 4.02 all of our paper must be derived from
6. Figures relate to 85% of 2007 of employees headcount for countries reported in the table. environmentally sound sources, such 7. Calculation based on emissions factors related to specific energy suppliers. as certified sustainable forests, and be
8. Calculation based on the CO2 calculation tool of the GHG Protocol Initiative (World Resource Institute-WRI/World Business Council for Sustainable Development-WBCSD). produced in an environmentally sound way. Our overall group-wide target is to reduce paper consumption and increase the ratio of recycled paper we use on a Water consumption upgrading the technological infrastructure daily basis. of our buildings. While most of the water UniCredit Group is aware that water we use is linked to building infrastructure In Italy and Germany, we use recycled conservation will soon be a global issue. facilities, employees can make a positive paper for much of our internal That is why we are seeking to reduce contribution and become conscious about communications, at levels of 50 percent and optimize our water consumption by water consumption in general. and 25 percent, respectively. HVB is proud to use only the highest standard “Blue Angel” recycled paper. For external Water usage per employee (m3/capita)9 purposes, HVB uses white paper (non- COUNTRY 2007 2006 recycled) of the highest environmental Italy 38 37 standards, with the FSC seal (signifying Germany 17 20 its originating from certified sustainable Austria 33 34 forests), made under TCF (total chlorine
9. Figures relate to 87% of 2007 of employees headcount for countries reported in the table. free), environmentally-friendly production methods that are the strictest across the entire UniCredit Group.
138 2007 Sustainability Report · UniCredit Group Paper consumption per employee (kg/capita)10 Mobility management COUNTRY 2007 2006 One of the most important direct impacts Italy11 82 79 attributed to financial institutions are Germany 54 55 emissions generated by business trips. Austria12 108 100 Since mobility is indispensable for CEE 53 46 UniCredit Group’s business activities, we 10. Figures relate to 87% of 2007 of employees headcount for countries reported in the table. 11. 2006 figure differs from the one published in the previous report, due to different criteria. focus on traveling efficiently to reduce our 12. Consumption figures for Austria include paper used for direct marketing activities. environmental footprint. We aim to cut back on unnecessary business travel and to rely In the CEE countries, paper consumption storage materials and residual waste from on more environmentally friendly forms is lower than that in Italy, Germany and the communal kitchen areas. Cost-aware, of transport. This also applies to the daily Austria. The average annual consumption ecologically efficient management of commutes of our employees. across the region is 53 kg per capita. As material flows is the goal of our disposal- of today, none of our Legal Entities in the management efforts. REDUCING COMMUTING CEE is regularly using recycled paper. Non- The UniCredit Group Mobility Manager recycled white paper produced according to About 75% of our waste at HVB is paper, introduced several programs for the elemental chlorine-free (ECF) standard and we ensure that all our waste is employees in Italy to reduce travel and is being used in the Czech Republic, collected and properly disposed of by lower the overall environmental impact Hungary, Slovakia and Turkey. certified specialist companies. We have of daily commuting requirements (e.g., a drawn up plans to reduce HVB’s waste contribution of 25% towards the conversion and to teach our employees how to avoid of our employees’ cars to methane/LPG Waste management unnecessary waste. At HVB, we reuse (liquefied petroleum gas). some of the waste paper we generate Most of the waste UniCredit Group generates after it is recycled into paper towels and We offer discounts on public transport involves paper, packaging materials, data toilet paper. commuter passes in Munich and Hamburg, and, in Milan, we provide additional incentives for our employees to use their Waste production per employee (kg/capita)13 cars less, such as a 50% discount from a COUNTRY 2007 2006 number of supermarket chains for home Italy 142 157 deliveries to reduce shopping-related travel. Germany14 287 286 Austria 198 193 REDUCING BUSINESS TRIPS
13. Figures relate to 63% of 2007 of employees headcount for countries reported in the table. According to HVB’s current travel guidelines, 14. German figures include both urban and special waste. our German employees must use public transport for normal business trips in town. Similarly, rail travel must replace all short- 15 GHG emissions from business travel per employee (tons CO2 eq/capita) haul flights up to 500 km. Further measures COUNTRY 2007 2006 aimed at reducing transport-related Italy16 0.45 0.32 emissions of carbon dioxide include the Germany17 0.79 0.68 purchase of 21 hybrid vehicles, the provision Austria17 0.35 0.29 of free company bicycles in Munich and CEE16 0.44 0.50 equipping our diesel fleet vehicles with soot
15. Figures relate to 70% of 2007 of employees headcount for countries reported in the table. particulate filters.
16. Calculation based on the CO2 calculation tool of the GHG Protocol Initiative (World Resource Institute-WRI/World Business Council for Sustainable Development-WBCSD) 17. Calculation based on emissions factors related to specific sources Bank Austria is increasing its use of videoconferences with a view to reducing the
UniCredit Group · 2007 Sustainability Report 139 Environment
Direct impacts (CONTINUED) Indirect impacts amount of physical business travel, saving ideas about sustainability and about the Our indirect impact on the environment money and protecting the environment. environment through a wide variety of stems from such activities as our lending In 2007, the number of videoconferences channels. practices. Shaping and mitigating the increased by more than 110 percent (from level and nature of our indirect impact is a 286 in 2006 to 606 in 2007). Beginning in 2006 in Italy, UniCredit constant activity at UniCredit Group. Group’s intranet has included a portal that In the CEE, the automobile is the dominant describes general-interest environmental Indirect environmental impacts are mode of transportation for financial firms. issues, activities and solutions carried out developing into a core strategic focus Due to the increasingly global scope of the by UniCredit Group, along with guidelines for all of us at UniCredit Group. In our UniCredit Group, international air travel has for everyday behavior. lending business, for example, we strive become more and more common among our for consistency in our values - especially CEE employees. We will continue to make In Germany, CSR intranet homepage when it comes to funding projects advances in assessing and controlling our provides detailed information on the with clear environmental impacts (e.g., travel requirements and will emphasize the company’s performance, initiatives, projects financing of energy plants, financing of use of more energy-efficient vehicles in the and responsibilities. Pertinent, up-to- photovoltaic projects, etc.). This is one way CEE when practicable. date information is shown on the main for us to meet our ecological and social homepage. Employees can also obtain responsibilities. information through leaflets, automatic Sustainable event intranet pop-ups and tips, inter-sectoral management and working groups and a yearly CSR event. Credit catering We consistently enforce our guidelines - especially our lending policy and our Whenever practicable we use regional environmental guidelines - in our lending organic foods, locations with public business. This is one way we can meet transportation options and a sensible our ecological and social responsibilities selection of decorations and giveaways as a company in the financial services that minimizes waste because we know industry. We apply appropriate tools to that proper event management can have a ensure the sustainability of our loans. The very positive effect on the sustainability of most important goal of our environmental banking operations. Whenever possible, as risk management is to minimize our at the Venice Forum last year, we acquire loan-default risk and any risks to our
CO2 compensation credits to reduce our reputation. In the case of corporate carbon footprint. loans in particular, it has turned out that environmental risks can have a substantial We will continue to focus on designing impact on a client’s credit rating or on the more environmentally friendly events, both value of bank collateral. internal and external, in the future. CREDIT AND INVESTMENT BANKING In the case of project finance loans, where Awareness-raising the sponsoring firm’s credit rating is not at issue and the cash flow expected from activities the project is expected to provide for the necessary servicing of capital, there may To be truly sustainable, UniCredit Group be cases where environmental and social knows that a bank needs every employee’s risks can greatly increase the probability of support. Therefore, we communicate a loan default. This risk is less relevant for
140 2007 Sustainability Report · UniCredit Group foreign-trade loans, as these transactions guidelines. Thus, reviewing social and models have been developed to address are generally covered by export credit environmental risks is an integral part specific operational contexts. Two principal agencies. of every loan decision. For example, in sectors can be treated in this way: group- Germany and Austria, HVB and Bank wide (governments, banks, insurance CREDIT AND CORPORATE BANKING Austria have environmental desks that have companies, multinationals) and local All types of lending carry some risk of provided support to credit officers and risk (large corporations, corporations, small damaging a reputation. In an effort to managers in the areas of ecological, social businesses). We have also implemented protect UniCredit Group from these risks, and reputational risk for many years. an impact analysis following the European our General Credit Policy clearly states Bank of Reconstruction and Development’s that every loan must be reviewed for its Furthermore, sector-based credit policies model. ecological and social impacts. The minimum have been developed to take into standard to be met is established by the account environmental issues. Credit UniCredit Group intends to develop applicable local, national and international rating procedures have incorporated in additional sector-based credit policies, laws, as well as by the World Bank’s their financial methodology the use of to focus on group-wide environmental environmental and social standards, questionnaires for qualitative analysis protection implementation, to improve our such as performance standards and the of the counterparty, in order to identify internal tools and processes and to expand Environmental, Health and Safety (EHS) potential environmental risks. Rating our stakeholder dialogue.
UniCredit Group · 2007 Sustainability Report 141 Environment
Indirect impacts (CONTINUED) Goals
Developing renewable provide liquidity to the market to ensure the In line with UniCredit Group’s CSR strategy, correct and consistent pricing of CO2. The our environmental goals are to continue energy sources team stepped up its activity in 2007 with implementing energy-efficiency measures, more than €800 million traded in European maintain our ongoing climate-protection During 2007, project-financing activities Union Allowances (EUAs) and Certified measures, implement an EMS in Austria, performed by UniCredit Infrastructure primarily Emission Reductions (CERs - representing prepare for future EMS implementations emphasized the development of renewable more than 50 million tons of CO2 equivalent in the CEE and expand our focus on energy sources. Major projects included (tons CO2 eq.) At present, it is important to environmentally oriented communications, the financing of four wind energy plants in note that the team’s focus is on customer- information and training. southern Italy for €210 million, the financing driven transactions and that their work of a photovoltaic project for €15 million and represents only a fraction of UniCredit MIB’s To meet these targets, we have planned an advisory project for many Italian water yearly turnover. numerous concrete projects for 2008 and resource authorities for €15 million. beyond at both the pan-European and country levels. In Turkey, YKB provides project financing Leading innovative to environmentally friendly initiatives and climate protection bond requires Environmental Impact Assessment (EIA) reports before financing can be finalized issues for any project. YKB strongly supports those customers who invest in renewable energy UniCredit MIB, together with Dresdner alternatives such as wind and hydroelectric Kleinwort and Merrill Lynch International, power plants, and we aim to increase the served as lead manager of the European share of renewable energy investments in our Investment Bank’s issue of a new bond portfolio over the next five years. that combines innovative features focused on climate protection and offers a unique investment opportunity. This issue was the Reducing greenhouse first bond to be sold via public offering in all 27 EU Member States with proceeds gases earmarked for future renewable energy and energy efficiency projects. The bond also UniCredit Group has invested €10 million offered a return linked to the performance in the European Carbon Fund, the first non- of the new FTSE4Good Environmental governmental fund promoted by the Caisse Leaders Europe 40 Index and gave des Dépôts et Consignations. The fund investors the option to purchase and cancel invests in rights and derivatives relating to the CO2 Allowances (EUAs) in a simple and reduction of greenhouse effect gas emissions. transparent way at maturity.
Providing liquidity Transparently reporting to carbon markets on issues
2008 is the first year that signatory nations In 2007, UniCredit Group is proud to have must meet Kyoto Protocol targets. UniCredit won an award at the “Intellectual Capital MIB’s Carbon Solution Team has been Value Awards” for our commitment to embedded within the commodities trading reporting activities linked to social and department since 2006 and is working to environmental issues.
142 2007 Sustainability Report · UniCredit Group Pan-European level
Subscribing to the Equator Principles On a pan-European level, UniCredit Group will be subscribing on a group-wide basis to the Equator Principles, a set of voluntary guidelines designed to ensure respect for the environment and for social equity in project financing.
Country level Rebranding and energy efficiency Taking advantage of the HVB rebranding process, we will convert our new signage system to LED technology by the end ITALY of 2008. Compared with conventional fluorescent tube display technology, we will be able to reduce energy consumption Upgrading climate control systems from signage by 90%. While there will be initial costs to this We will upgrade the central heating and air-conditioning conversion, we have decided that the long-term environmental systems in our Milano Cordusio, Torino via Nizza and Bologna benefits outweigh the up-front costs. via del Lavoro buildings. These upgrades will generate an estimated total energy reduction per year of one GWh and an Data center redundancy estimated cost reduction per year of €600,000. Projects will We plan to install an innovative cooling and electrical power be completed by the first half of 2009. supply solution for the data center in Munich at Tucherpark by the end of 2009. Water from the nearby Eisbach River We will replace old thermostats with the latest-generation will supply a cooling system with the capacity for year-round remote control systems for 50 buildings in Italy by the first use. This will permit us to use existing cooling towers and half of 2009. This will lead to better system balancing and a refrigeration machines for back-up purposes only, reducing significant reduction in energy consumption. energy consumption by 13 GWh per year. The project will reduce overall electricity, maintenance and water-conditioning Producing energy savings needs and costs. We will remove all redundant Uninterruptible Power Supply (UPS) Units from our buildings. The project will end in 2009 and will produce an energy savings worth roughly 1.8 GWh AUSTRIA and €275,000. Environmentally-friendly automotive fleet Bank Austria is setting ambitious goals regarding climate GERMANY protection, reducing emissions and serving as a role model for other corporations. The Bank Austria automotive fleet will Lowering resource consumption become environmentally friendly within the next four years. In Germany over the last few years, HVB has undergone About 100 cars used by account managers for visiting our several reorganizations. Because of this, many Divisions and clients will be exchanged for low-CO2-emissions models. Units, especially at the Munich headquarters, are dispersed Special training sessions on fuel-efficient driving will further over different locations. By implementing a new space policy, enhance their effectiveness. Units belonging or working together will be located in one building or campus. Our goal is to enhance our employees’ Climate control efficiency enhancements efficiency. As a result, we have freed up about 20,000 square Bank Austria is working to reduce the district heating meters of office space in Munich. We will dispose of this connection power in three buildings, saving a minimum of space by the end of 2008. €33,000 and 213,000 kWh of heating energy per year.
UniCredit Group · 2007 Sustainability Report 143
GRI-G3 index
UniCredit Group · 2007 Sustainability Report 145 GRI-G3 index
GRI-G3 index Some indicators are represented with a partial coverage, although the most significant information related to Corporate Responsibility has been stated in the report. All the core indicators have been inserted in the table, while the additional ones have been reported only if they are stated in the Sustainability Report.
Legend: Total Indicator completely covered Partial Indicator partially covered N/A Not applicable NI Not included EC-EN-LA... Core indicator EC-EN-LA... Additional indicator
COVERAGE PAGE
PROFILE 1. Strategy and analysis 1.1 Statement of the most senior decision-maker of the organization Total 6-7; 20-24 1.2 Main impacts, risks, and opportunities Total 20-24; 36-37 2. Organization profile 2.1 Organization name Total Cover 2.2 Main brands, products and/or services Total 10-15 2.3 Operational structure of the organization Total 12-15 2.4 Headquarters Total Cover 2.5 Countries of operations Total 10-11 2.6 Ownership structure and type of legal entity Total 122. Annual Review 127 2.7 Markets served Total 13 2.8 Scale of the organization Total 11 2.9 Significant changes Total 14-15 Annual Review 100-107 2.10 Awards received Total 69-70, 79, 142 3. Report parameters Profile 3.1 Reporting period Total 8-9 3.2 Previous report’s date of publication Total 8-9 3.3 Reporting frequency Total 8-9 3.4 Contact point for information on report Total 160 Report purpose and scope 3.5 Process for defining contents Total 8-9 3.6 Report scope Total 8-9
146 2007 Sustainability Report · UniCredit Group (follows) COVERAGE PAGE
3.7 Limitations of report purpose or scope Total 8-9 3.8 Information on other associate companies Total 8-9 3.9 Data measurement techniques and basis of calculation Total 8-9 3.10 Modifications compared with previous report Total 8-9 3.11 Significant changes compared with previous report Total 8-9 Index of GRI contents 3.12 Table of reference Total 146-149 Assurance 3.13 External assurance Total 152-153 4. Governance, Commitment, Involvement Governance 4.1 Governance structure Total 29-34 4.2 Indicate whether Chairman also holds an executive role Total 31 4.3 Independent and/or non-executive directors Total 30-31 4.4 Mechanisms for making recommendations to Board of Directors Total 55 Corporate Governance Report 8; 60-63 4.5 Link between directors’ remuneration and performance Total Corporate Governance Report 35-40. Bilancio 2007 UniCredit S.p.A. 190-196. 2008 long term incentive plans of UniCredit Group 4.6 Mechanism of conflicts of interest’s avoidance Total Corporate Governance Report 19-20 4.7 Directors’ qualifications Total Corporate Governance Report 14-15; 32-34 4.8 Mission, values, codes of conduct, and principles Total 14-15; 20-23; 52-53; 55 4.9 Procedures to identify and manage economic, environmental, and social performance Total 8-9; 36-37. Corporate Governance Report 42-45 4.10 Process to assess BoD’s performance Total Corporate Governance Report 21-22 Commitment in external initiatives 4.11 Way in which prudential principle or approach is applied Total 34-37 4.12 Adoption of external codes and standards in the economic, social, and environmental fields Total 37; 68-70; 131-132 4.13 Memberships in associations Total 131-132 Stakeholder Engagement 4.14 List of stakeholders engaged Total 24 4.15 Principles for stakeholders’ identification and selection Total 8-9; 24 4.16 Stakeholder engagement activities Total 24; 52-55; 83-87; 100-105; 122 4.17 Key aspects and criticalities emerging from stakeholder engagement and related actions Total 36-37; 83-87 ECONOMIC PERFORMANCE DMA EC Information on management approach Total 10-11; 14-15. Annual Review 10-15 EC 1 Direct economic value generated and distributed Total 16-17 EC 2 Financial implications and other risks and opportunities due to climate change Total 131-134; 142 EC 3 Coverage of the organization’s defined benefit plan obligations Total 57. Annual Report 141-143 EC 4 Significant financing received from Public Administration NI EC 6 Policy, practices, and percentage of expenditure concentrated on local suppliers Partial 96-97 EC 7 Procedures for local hiring Partial 40; 47 EC 8 Development and impact of investments in infrastructures and public utilities Total 111-118 ENVIRONMENTAL PERFORMANCE DMA EN Information on management approach Total 128-130 EN 1 Raw materials used Total 139 EN 2 Percentage of materials coming from waste recycling operations Partial 138-139 EN 3 Direct energy consumption by source Total 137-138
UniCredit Group · 2007 Sustainability Report 147 GRI-G3 index
GRI-G3 index (CONTINUED)
(follows) COVERAGE PAGE
EN 4 Indirect energy consumption by source Total 137-138 EN 5 Energy saving Partial 136-137 EN 6 Initiatives to provide energy-efficient or renewable energy based products and services Total 133-134; 140-142 EN 7 Initiatives to reduce indirect energy consumption and reductions achieved Total 139-140 EN 8 Water consumption by source Total 138 EN 11 Land owned, rented or managed in protected areas NI EN 12 Description of greatest impacts on biodiversity N/A EN 16 Greenhouse gas emissions Total 138 EN 17 Other indirect greenhouse gas emissions Total 139 EN 18 Initiatives to reduce greenhouse gas emissions Total 132; 136-137; 139-140 EN 19 Emissions of substances harmful for the ozone layer NI EN 20 Other atmospheric emissions NI EN 21 Water discharges N/A EN 22 Waste production and disposal methods Partial 139 EN 23 Total number and volume of pollutant discharges N/A EN 26 Initiatives to mitigate impacts of products and services Total 132-142 EN 27 Reclaim rate of products sold N/A EN 28 Fines and penalties for non compliance with environmental law and regulations NI EN 29 Impact of transportation for the business and staff travel Partial 139-140 SOCIAL PERFORMANCE DMA LA Information on management approach Total 40. Integrity Charter LA 1 Breakdown of staff by type, contract, and region Total 42-43 LA 2 Turnover by age, gender, and region NI LA 4 Degree of coverage of collective labor contracts Total 60 LA 5 Minimum period of notice for operational changes Total 60 LA 6 Percentage of total workforce represented in formal health and safety committees Partial 57-58 LA 7 On-the-job accidents and illness Partial 58 LA 8 Programs for management of serious diseases Partial 58-59 LA 10 Staff training Total 49 LA 11 Programs for skills management and lifelong learning Partial 47-48; 50-51 LA 12 Employees receiving regular performance reviews Total 44 LA 13 Breakdown of employees by gender and other diversity indicators Total 31; 43; 46 LA 14 Ratio between salaries of men and women NI HUMAN RIGHTS DMA HR Information on management approach 15; 55. Integrity Charter HR 1 Operations with human-rights considerations Partial 68-70 HR 2 Suppliers assessed as regards respect of human rights NI HR 4 Cases of discrimination Total 52 HR 5 Risks for right to freedom of association and collective bargaining Total 55-56 HR 6 Risks for use of juvenile labor Total 55 HR 7 Risks for use of forced labor Total 55 IMPACTS ON SOCIETY DMA SO Information on management approach Total 34-36; 100. Integrity Charter SO 1 Management of impacts on community Partial 66-70 SO 2 Analysis for risks related to corruption Total 35 SO 3 Staff trained in the prevention of corruption NI SO 4 Actions taken following cases of corruption NI
148 2007 Sustainability Report · UniCredit Group (follows) COVERAGE PAGE
SO 5 Positions concerning public policy and lobbying Partial 110-111; 131-132 SO 7 Legal actions for anti-competitive behavior Total 35-36 SO 8 Sanctions for non-compliance with laws or regulations Partial 35-36; 81-82; 124 PRODUCT LIABILITY DMA PR Information on management approach Total 64-66; 71; 73; 76; 80; 82-83; 88 PR 1 Healthiness and safety of products and services Total 88-92 PR 3 Information on products and services Total 73-75 PR 4 Non-compliance with regulations concerning product and service information and labeling Total 80-82 PR 5 Customer satisfaction Total 83-87 PR 6 Laws, standards, and voluntary codes concerning marketing communications Partial 73 PR 9 Sanctions for non-compliance with laws or regulations Partial 80-82 Annual report 329-334
UniCredit Group · 2007 Sustainability Report 149
Report of the External Auditors
UniCredit Group · 2007 Sustainability Report 151
Glossary of acronyms and credits
Glossary of acronyms 156 Credits 158
UniCredit Group · 2007 Sustainability Report 155 Glossary of acronyms and credits Glossary of acronyms
ASI - Advisory Satisfaction Index HVB - HypoVereinsbank ATM - Automatic Teller Machine IEFE - Istituto di Economia e Politica dell’Energia e dell’Ambiente ATO - Ambito Territoriale Ottimale IFC - International Finance Corporation is a division AUM - Assets Under Management of the World Bank BCM - Business Continuity Management ISO 14001 - An international standard that specifies a process BCP - Business Continuity Planning for controlling and improving a company’s BenE Munich - Bildung für eine Nachhaltige Entwicklung environmental performance. BoD - Board of Directors ISO - International Organization for Standardization BSC - Telephone Business Service Centers IT - Information Technology CABERNET Project - Concerted Action on Brownfield KORI - Key Operational Risk Indicators and Economic Regeneration Network KPI - Key Performance Indicators CAPI - Computer Assisted Personal Interviews kWh p.a. - Kilowatt-Hours per annum CATI - Computer Assisted Telephone Interviewing LED - Light Emitting Diode CDLI - Climate Disclosure Leadership Index LPG - Liquid Petroleum Gas CDP - Carbon Disclosure Project M&A - Mergers and Acquisitions CEE - Central and Eastern Europe MAMbo - Museo d’Arte Moderna di Bologna Censis - Centro Studi Investimenti Sociali MAXXI - Museo Nazionale delle Arti Del XXI Secolo, National Museum CEO - Chief Executive Officer for 21st Century Art in Rome CER - Certified Emission Reductions MIB - Markets and Investment Banking CFO - Chief Financial Officer MiFID - Markets in Financial Instruments Directive
CO2 - Carbon Dioxide NGO - Non-Governmental Organization CRM - Customer Relationship Management OECD - Organization for Economic Cooperation and Development CSA - Customer Satisfaction Index ÖGUT - Austrian Society for Environment and Technology CSR - Corporate Social Responsibility OSI - Overall Satisfaction Index CST - Customer Service Teams OTC - Over-The-Counter DJSI - Dow Jones Sustainability Index ÖVA - Society for the Management of Contaminated Sites ECF - Elemental Chlorine-Free Standard PC - Personal Computer ECI - Employee Community Involvement PFA - Personal Financial Advisor EHS - Environmental Health and Safety PIN - Personal Identification Number EIB - European Investment Bank POS - Point of Sale EMAS - Eco-Management and Audit Scheme SME - Small and Medium Enterprise EMS - Environmental Management System SMS - Short Messaging Service EnEV - German Energy Saving Ordinance SRI - Socially Responsible Investment EP - Equator Principles TCF - Total Chlorine Free EPFI - Equator Principal Financial Institutions TC - Technical Center ESI - Ethibel Sustainability Indexes TSR - Total Shareholder Return EU - European Union UCG - UniCredit Group EUA - European Union Allowances UN - United Nations EVA - Economic Value Added UNEP-FI - United Nations Environment Programme Finance Initiative FSC - Forest Stewardship Council UPB - UniCredit Private Banking FT - The Financial Times VIA - Project Virtualization in Austria FTSE - FTSE Group, provider of financial indexes and data services VVB - Vereinsbank Viktoria Bausparkasse GHG - Greenhouse Gas WBCSD - The World Business Council for Sustainable Development GJ - Giga-Joule WEM - Wealth Management GRI-G3 - Third edition of the Global Reporting Initiative Guidelines WOL - Wake on LAN GSA - Global Sourcing Area WRI - The World Resources Institute GWh - Gigawatt-Hours WWF - World Wildlife Fund HR - Human Resources YKB - Yapı ve Kredi Bankası A.S¸.
156 2007 Sustainability Report · UniCredit Group UniCredit Group · 2007 Sustainability Report 157 Glossary of acronyms and credits Credits
Cover The “moving crowd” began as a workshop game, assembling a variety of Public painting project: Rosa, rosae, rosae, rosam, rosa materials to express concepts of identity and difference, encounters with Turin, 10 June 2007 “the other,” the archetypal stranger, the foreigner, the unknown inhabitants of another world. The re-opening of the Gardens of the Reggia di Venaria Reale was celebrated More than 10,000 children were involved in this event in the Piazza del in grand style by the Education Department of the Castello di Rivoli’s Museum Plebiscito, Naples. They joined in a workshop for the creation of thousands of Contemporary Art - a partner museum of Unicredit Group. of Abi-Tabti. These have been added to the 5,000 already on the move, Enormous, vivid flowers and glowing spreads of color are skillfully woven which are displayed here in a kind of pacific invasion of the famous piazza. together to produce a large collaborative work of art, almost as big as a whole meadow of wildflowers. The superb rosebushes of the garden itself Page 38 lend their own magic to the occasion. The feast of color gives all those Social project: Second Steps present the sense of participating in a powerful shared dialogue with the Hypohaus Ost Hall - Munich elements of nature. One step at a time: More than 500 UniCredit Group apprentices met Page 2 for the “Second Steps” project in Munich. The participants responded The Third Paradise (Il Terzo Paradiso) to questions about their work experiences. But the big gathering also In the towns of Pesaro and San Leo (Pesaro-Urbino), the Castello di Rivoli supported a good social cause. Hundreds of toys and other small gifts - and Cittadellarte Fondazione Pistoletto collaborated on an innovative artistic along with the sender’s photo and a short CV - found their way into boxes, happening, appealing to children and adults alike. The goal was to generate which were stacked sky-high by the assemblage and were then left to a dialogue about art as an engine for social transformation, about the adorn the main hall in Hypohaus Ost for a few days. Soon the gifts were difference between nature and artifice, and about respect for our natural forwarded to the international SOS holiday village in Caldonazzo, northern and urban environment. Italy, where children from SOS children’s villages spend their summer The symbolic form of artist Michelangelo Pistoletto’s Third Paradise was holidays each year. created from recycled aluminum cable, contributed by CiAL (the National Consortium for Aluminum Recycling). Pages 46 - 58 C4 - Palladian Villa for contemporary training Page 4 In this image, UniCredit Group managers are participating in a workshop on Public painting project: Skyline leadership themes in the C4 Centre - the Contemporary Cultural Center of Multiple European cities Caldogno, initiated by the Regione del Veneto in cooperation with Unicredit These large events, organized with the Education Department of the Group and the Peggy Guggenheim Collection and School. Castello di Rivoli’s Museum of Contemporary Art, are open to one and all, C4’s goal is to use the language art as a tool to develop the professional and the painting becomes a catalyst for a celebration. A long stretch of skills of creativity, innovation and communication. The center offers training paint and a stunning skyline furnished here by the historical buildings and to a wide variety of professionals groups - university students, professors, monuments of the city of Turin - all spread out on a single grassy plane. public administrators and entrepreneurs. Children and adults together are seduced by the magic of pure colors and by the lively architectural backdrop. A bright world of creativity, encouraging Page 51 a civic sense of belonging, the rights of young and old to their own cultural UniCredit Group colleagues on a group visit heritage. Photographer Thomas Struth Museo del Prado, Madrid, 2005 Page 18 ©2008 Thomas Struth Two Years Together - Davide Bramante and Unicredit Group The artwork of the famous German photographer, published in the Prado’s colleagues 2007 catalogue of exhibitions, captures a group of Unicredit colleagues This piece was created using an unusual technique distinctive to Davide visiting the museum. Bramante’s work. A multitude of visions and perspectives are overlapped and superimposed to create an alternative reality. Pages 62 - 104 For this artwork the individual pictures were taken by UniCredit Group Art installation: Pallemondo colleagues to commemorate the second anniversary of the integration with Paris, 2 June 2007 HVB. The greater effect is an expression of the value of differences. The Place Beaubourg, bustling with youngsters and their parents, was invaded by gigantic spheres saturated with brightly colored, oversize Pages 26, 36, 133 objects. Everyday items take on a different aspect with changes in size Abi-Tanti (Inhabitants) and color and their composition from unexpected materials, like sponges The moving crowd began its long journey in Turin in 2000 and has or cardboard. The great spheres become phantasmagorical worlds continuously shifted and expanded. Thousands of families and artists of through a dynamic and transitory process. These assemblages evoke the every stripe have participated in the creation of the Abi-Tanti in multiple energy of a global festival - FIART - the International Festival of Art for locations both in Italy and abroad, in the context of festivals, exhibitions, the Young, linked to the 30th anniversary celebrations of the Pompidou and educational and cultural events. Centre in Paris.
158 2007 Sustainability Report · UniCredit Group Page 67 The program was executed in cooperation with the Ministries of Foreign Artworks from the collection: Julian Opie Affairs and Cultural Affairs. HypoVereinsbank Kunst palais - Munich Page 110 Interior of the headquarters, where part of the bank’s collection is on display Family Portrait Pages 68-78 The theme of family has been central to many exuberant public events Artworks of Gerhard Richter, from the HypoVereinsbank collection organized by the Education Department of the Castello di Rivoli, with an Exhibition at the Kunst palais - Prannerstrasse, 2 - Munich emphasis on reshaping the image of new families and new social fabrics in a world that constantly grows more varied and multicultural. Page 72 Art exhibition: “Eros in Modern Art” Page 116 Kunst Forum - Vienna, 1 March to 22 July 2007 Burkina Faso
Page 75 One of the many ventures organized by women’s cooperatives funded by Artworks from the collection: Katharina Grosse Unidea through the microcredit component of the An Ka Here Sso Project in Burkina Faso. Interior of the headquarters, where part of the bank’s collection is on display HypoVereinsbank Kunst palais - Munich Page 120 Public workshop: Contemporary Geography Page 81 Project: Europe in Art In the very cradle of the Italian Renaissance, the Palazzo Vecchio in Image from the opening speech Florence, children and their parents participated in a workshop on National Museum of Contemporary Art - Romania, 2005 contemporary geographies, engaging in a lively and provocative exercise to place aspects of contemporary culture into a historical context and to Pages 86-98 examine the ways in which history is constantly present in our own time. Art installation: Art in the Square - Red, yellow, blue The project was realized by the Education Department of the Castello Bologna, 23 September 2007 di Rivoli in cooperation with the Association of Children’s Museums of Florence, Museo dei Ragazzi di Palazzo Vecchio. During the fair of the Libro d’Arte (art book), three primary colors join to tell a story. Coming together for the first time, the three Italian museums Page 126 with the strongest educational departments, the Castello di Rivoli, MART Public painting project: From flower to flower (Di fiore in fiore) of Rovereto and MAMBo of Bologna - all partners in the UniCredit and Art program - collaborated on this event. Huge pop art flowers and polychromatic works built up from a pallet of Over 3500 people were involved in the creation of a book as big as brilliant colors, all coming together to form a great collective work, wide a labyrinth, where visitors can immerse themselves in a multisensory as a meadow and intense as a rainbow from another world. Adults and experience. Pages assume the dimensions of people, and, when lined children, seduced by the magic of shapes and colors, are the protagonists up, they offer up clues and ideas for an endless array of stories. A variety of this outdoor happening - a communal experience and a vivid dialogue of materials and a diversity of approaches, suggesting a voyage to be between nature and art. experienced with every nerve, to be felt with every sense. A place, real and fantastic at the same time, to travel through, observe and touch. Page 130 Public sculpture project: ReMida’s cloak (Il mantello di ReMida) Page 89 Turning trash into treasure: steel mesh and rags are turned by ReMida’s Europeankonzert magical touch into a glowing blue and gold tapestry. The rows of warps and Performance by the Filarmonica della Scala, director Daniele Gatti wefts tell the story of a famous pictorial tradition. Mendelssohn’s Symphony No. 4 and Mahler’s Symphony No. 1 Prinzregententheater, Prinzregentenplatz 12 - Munich, 29 October Pages 136, 141 In the dark Page 94 Art exhibition: New Landscape For the tenth anniversary of the Festivaletteratura of Mantua, the Detail from Francesco Candeloro’s “Occhi” - nine pieces of varying size museum organized a series of evocative workshops on the theme of light, (2004) resulting in a powerful cross-pollination between literature and the visual UniCredit Group collection arts. Every activity introduced light waves into the plots of noir stories HVB Headquarters - Munich, January 2007 developed by four guest novelists. Design and writing, nature and art, brought together in a workshop created to allow its participants to live the Page 106 experience of light. Art festival: UniCredit represents Italy at the International Making use of silkscreen techniques, Andy Warhol-style, participants Photography Fair created stylized lamp-shaped serigraphs, the striking emblem of electric Paris, 14-18 November 2007 energy.
UniCredit Group · 2007 Sustainability Report 159 This Sustainability Report has been made available at www.unicreditgroup.eu, or you may request a copy from:
UniCredit Group - Corporate Social Responsibility Via Durini, 9 - 20122 Milan, Italy
fax: +39.02.88620051 e-mail address: [email protected] At UniCredit Group we are aware that our business activities have an impact on the environment, and we always factor environmental sustainability into our strategic decisions.
In 2008 the greenhouse gas emissions associated with the paper used for the publication of 2007 Annual Report and Sustainability Report have been offset by a contribution to a biomass-fueled district heating plant in Italy.
The offsets for the 2007 Annual Report and Sustainability Report were executed in association with AzzeroCO2.
Pictures
Cover and sorter pages Courtesy Education Department of the Castello di Rivoli Contemporary Art Museum
Top Managers Courtesy Ferruccio Torboli (UniCredit Group)
UniCredit S.p.A. Registered Office: Roma, via Minghetti 17 General Management: Milan, Piazza Cordusio Graphic development and Composition: Registration number in the Rome Trade and Companies Register, tax Code and VAT No. 00348170101 Mercurio S.r.l. Studi di promozione pubblicitaria - Milan Entered in the Register of Banks Parent Company of the UniCredito Italiano Banking Group Banking Group Register No. 3135.1 Member of the Interbank Deposit Protection Fund Printed: Grafiche Milani SpA (Segrate) Capital Stock: € 6,683,084,257.50 fully paid in April 2008 2007 Sustainability Report
2007 Sustainability Report