This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails. Boards, Management, Auditors BOARD OF DIRECTORS Chairman Gian Maria GROS-PIETRO Deputy Chairperson Paolo Andrea COLOMBO Managing Director and Chief Executive Officer Carlo MESSINA (a) Board members Gianfranco CARBONATO Franco CERUTI Francesca CORNELLI Giovanni COSTA Edoardo GAFFEO * Giorgina GALLO Giovanni GORNO TEMPINI Rossella LOCATELLI Marco MANGIAGALLI ** Maria MAZZARELLA Milena Teresa MOTTA * Bruno PICCA Alberto Maria PISANI * Livia POMODORO Daniele ZAMBONI Maria Cristina ZOPPO * MANAGER RESPONSIBLE FOR PREPARING THE COMPANY’S FINANCIAL REPORTS Fabrizio DABBENE INDEPENDENT AUDITORS KPMG S.p.A. (a) General Manager * Member of the Management Control Committee ** Chairman of the Management Control Committee 3 Contents Letter to the stakeholders 6 Compliance with labor laws 47 Methodology 9 Audits 48 Fines and disputes 49 IDENTITY AND PROFILE 11 Main social and environmental Group Presentation 12 risks managed by the Group 50 Business Model 14 Reputational risk assessment and management 50 Company value and solidity 15 Management of social and environmental The 2014-2017 Business Plan 15 risks in loans 51 Economic and financial performance Adoption of the Equator Principles 52 and distribution of value added 16 Controversial sectors 53 Vision and Values 19 Climate change: management of potential Commitment to domestic and international environmental risks 53 initiatives and United Nations Sustainable SOCIETY 56 Development Goals 20 Sustainability indices, rankings and awards 27 Quality and innovation in customer relations 59 Materiality analysis 28 Service quality 59 Multichannel approach and accessibility 64 GOVERNANCE AND MANAGEMENT OF RISKS 32 Customer protection and Governance structure 33 responsible sales 66 The Board of Directors 33 Customer health and safety 68 The internal control and Access to credit and financial inclusion 69 risk management system 35 Financial inclusion of vulnerable people 69 Shareholder Base 36 Financial education 73 Governance of Corporate Social Responsibility 38 Support to production 74 Implementation and governance of the Responsible asset management 78 Code of Ethics 39 Socially responsible investments 78 Integrity in corporate conduct 41 Insurance sector with social impact 80 Fight against corruption 42 Relations with the community 81 Combating money-laundering 44 Contribution to the community 81 Compliance with tax regulations 45 Promoting culture for social cohesion 84 Protection of free competition 46 Responsibility towards the supply chain 88 Privacy protection 47 4 EMPLOYEES 89 HUMAN RIGHTS 116 Employment protection 91 STAKEHOLDER ENGAGEMENT ACTIVITIES Job protection 91 AND RESULTS 120 Labor Relations 92 Relations with stakeholders: Employee growth and development 92 engagement and listening 121 Assessment and incentive systems 93 Stakeholder map 121 Training 95 Engagement initiatives and issues covered 122 Talent development 96 Summary of issues emerging from the stakeholder engagement process 123 Value of diversity 96 Employee well-being 98 IMPROVEMENT OBJECTIVES 125 Welfare and quality of life in the company 98 INDICATORS 128 Employee engagement 100 Health and safety 100 GRI INDEX 165 ENVIRONMENT AND CLIMATE CHANGE 103 AUDITORS’ REPORT 183 Direct environmental impacts 106 Greenhouse gas emissions CONTACTS 187 and energy consumption 107 Responsible management of resources 110 Green economy 112 Loans and services for the green economy 112 Green culture and initiatives 114 5 102-14 Letter to stakeholders The 2017 results confirm that Intesa Sanpaolo is a solid Bank, with growing profitability, and reflect the strengths of our business model, which combines the generation of income and high efficiency with financial solidity and a low risk profile. The implementation of the 2014-2017 Business Plan has made it possible to create value for all stakeholders, starting with our shareholders, with a dividend proposal of 3.4 billion euro (10 billion euro over the duration of the Plan), by focusing on innovation, the development of new products and services and on a commitment to excellence on behalf of our staff, while raising awareness that sustainable growth can facilitate long-term development through a reduction of risks, both social (rising inequality and more people in vulnerable situations) and environmental (with a particular focus on climate change). In the broader context of medium and long-term scenarios and trends, Intesa Sanpaolo has therefore renewed its commitment to the three dimensions of sustainability (social, environmental and governance), in line with its leading role in Corporate Social Responsibility. Concerning social aspects, Intesa Sanpaolo has confirmed its position as a real economy Bank, by disbursing approximately 63 billion euro in new long- to medium-term loans during 2017 and approximately 200 billion euro during the 2014-2017 period. Specific attention was paid to financial inclusion, vulnerable groups of customers, households and businesses affected by the financial crisis or earthquakes and environmental disasters in Italy, with the disbursement of around 4.5 billion euro in loans with a high social impact in 2017 (over 13 billion euro over the four-year period). Relations with our customers are based on dialogue, transparency, excellent quality of service and the offer of intelligent technology, through a multi-channel platform and digitalisation and paperless policies. Intesa Sanpaolo is also committed to offering sustainable investment products and, through Eurizon, adheres to the Principles for Responsible Investment and manages SRI (Sustainable and Responsible Investments) funds worth around 4 billion euro, with three SRI funds launched over the last year, compared with 400 million euro at the end of 2013 (the start of the Plan). There has also been considerable focus on supporting local communities with a whole range of social and cultural initiatives and activities and an overall cash contribution of approximately 50 million euro in 2017 (over 200 million euro during the 2014-2017 period), of which over 28 million euro were earmarked for art and culture. In particular, the Intesa Sanpaolo Charity Fund disbursed approximately 9.5 million euro in 2017 to support over 900 projects carried out by non-profit organisations, with particular focus on the vulnerable segments of society. Specific initiatives were devoted to children, such as the Intesa Sanpaolo Educational Programme for children in long-term hospital care, which offers crèche services in the oncology wards of certain first-rate paediatric hospitals. Intesa Sanpaolo has also always been committed to spreading knowledge on economic and financial issues, particularly among young people, as the promoter of various national and international initiatives in the field of financial education. As regards the environment, Intesa Sanpaolo has continued its activities to contain CO2 emissions, which fell by around 30% over the time horizon of the Plan and to support the renewable energy and energy efficiency sector, providing financing of around 1.3 billion euro in 2017 (over 5 billion euro during 2014-2017). It was the first Italian bank to issue a green bond, in June 2017, worth an overall amount of 500 million euro. The focus on environmental sustainability is also demonstrated by the development of the Circular Economy project thanks to the partnership with the Ellen MacArthur Foundation. These results were possible thanks to the people who work for Intesa Sanpaolo; helping them to develop and strengthening their sense of belonging represent the key leverage to achieve the Group’s strategic objectives. Specific attention has been paid to protecting employment through the reassignment of excess production capacity of 4,500 people over the 2014-2017 period. In addition, employee share ownership schemes have made it possible to share the value created over time and an integrated welfare system has been established for employees and their families, with an offer of services aimed at improving their work-life balance, ranging from crèches to flexible working time, with over 8,000 employees involved at the end of 2017. Another stimulus is represented by continuous training focused on strategic company projects, with 800,000 training days provided in 2017 and 4.6 million over the 2014-2017 period. 6 102-14 Intesa Sanpaolo’s social and environmental commitment, marked by participation in a series of international initiatives – including the Global Compact and the Sustainable Development Goals of the United Nations, the United Nations Environment Programme Finance Initiative (UNEP-FI) and the Equator Principles – has been enriched with another step in 2017, with the adoption of the Human Rights Principles. This Corporate Social Responsibility commitment was recognised through the inclusion in a number of sustainability indices, including the Dow Jones Sustainability Index and CDP’s Climate A List 2017. Lastly, Intesa Sanpaolo is the only Italian company to feature on the Corporate Knights ranking of the world’s 100 most sustainable companies. These results give us confidence concerning both the future and the expectations of our stakeholders, with whom we maintain open and attentive dialogue, and encourage us to reinforce our commitment to each and every one of them. In the new 2018-2021 Business