Sustainable governance
We believe that sustainability is the only path to growth: this is why we are committed to implementing the 17 Sustainable Development Goals of the United Nations 2030 Agenda.
Our sustainable approach
The Bank and its people are focused on protecting households’ wealth with integrity, passion and dedication, with an emphasis on long-term objectives. A commitment to pursuing sustainable growth requires the vision needed to understand and anticipate the challenges of innovation and the other transformation of our society, an inclusive culture, openness to dialogue and an informed approach to creating value for the Bank’s stakeholders.
Our goal: a sustainable growth
A responsibility for taking a long-term approach is an intrinsic part of our way of doing business, focused on protecting wealth according to a long-term vision. Therefore, we promote sustainable development that listens to all our different stakeholders, seeking to understand their real needs and matching them to the Company’s business goals. Excellence in the wealth advisory market cannot ignore the focus on value creation for all stakeholders who participate in and interact with that market: shareholders, financial advisors, employees and their family, customers, suppliers, communities — with whom the Bank has daily contact.
Our sustainability strategy is characterised by:
- sustainable growth over time, with entrepreneurial actions aimed at achieving long-term economic and commercial results, minimising risks related both to the volatility of the economic-financial scenario, and the inadequate planning of objectives, due to short-term needs;
- people enhancement, encouraging the constant development of skills and professionalism and acknowledging the contribution of individuals to the success of the organisation;
- sensitivity to the social context, participating in charitable, cultural and sports initiatives;
- reduction of direct and indirect environmental impacts by taking measures to minimise the consumption of energy, paper and water, and to reduce greenhouse gas emissions to promote the energy transition towards an economy that protects the climate and biodiversity.
A new way to invest
Letter to stakeholders
Dear Stakeholders,
Banca Generali achieved important results in 2021 despite the continuing pandemic. Social and economic life in Italy and the world resumed thanks to the fundamental contribution of science through the discovery of vaccines.
The Italian economy ended 2021 with a 6.5% increase in GDP, buoyed by improvement in the job market and consumer spending. This growth is the most robust of European countries, where it averages 5.2%.
The economic recovery in Western countries was supported by expansionary fiscal and monetary policies. The ample liquidity available and extraordinarily low interest rates were a favourable context for international financial markets, which achieved significant gains during the year. The Next Generation EU plan is expected to offer considerable support for Italy.
However, the current economic and financial outlook is severely conditioned by the tensions surrounding the conflict between Russia and Ukraine, which resulted in threats of war on the border of the European Union itself, as had not occurred since the fall of the Berlin Wall. In a few days from its outbreak, the conflict had already revolutionised expectations and resulted in a completely new geopolitical and economic framework. On the economic front a possible stagflation scenario is taking shape, in which upwards pressure on energy prices and the related inflationary tensions could go hand-in-hand with more tolerant monetary policies in view of declining growth and worsening asset quality. Financial markets have understandably reflected the gravity of the situation and the uncertainty of the path towards a resolution with significant declines in stock exchanges at the international level.
In this scenario, we are even more aware of the importance of Banca Generali’s role in meeting the investment protection needs of its customers and in in steering and guiding them in their financial planning choices at such a complex time. As it always has been, Banca Generali is poised to rise to this new challenge, secure in the knowledge that it can count on the experience and professionalism of its Financial Advisors and all the Bank’s personnel. It is no coincidence that over the past two years, shaped by the Covid-19 pandemic, Banca Generali has presented significant growth rates. The pandemic heightened demand for financial advice from households and rewarded service models based on flexibility and digitalisation. Harnessing these strengths, Banca Generali expedited its growth, fully achieving the ambitious goals of its 2019-2021 Industrial Plan. Business expansion, development of sustainable profitability and confirmation of generous shareholder remuneration were the strategic guidelines of reference. I am proud to be able to state that all our goals have not only been achieved, but far exceeded.
In fact, in 2021 the Bank reported its best net inflow performance of all time, 7.7 billion euros, bringing total assets to 85.7 billion euros, exceeding the target of 76-80 billion euros set in the plan. During the three years, total inflows amounted to 18.7 billion euros, 76% of which was achieved organically, bearing out the quality and solidity of development. Growth was also evenly distributed between existing customers and acquisition of new customers, confirming the quality of the service model and the professionalism of distribution.
At the level of results, the Bank succeeded in improving its profitability, thanks to innovation and diversification of its range of products and services, while maintaining careful cost discipline. All this strongly reinforced the sustainability of its business model. Profits reached an all-time high of 323 million euros, despite the prudential initiative of 80 million euros, taken to protect customers against a potential loss relating to investments in securitised healthcare receivables reserved for professional clients.
The progressive normalisation of the economic and social context in 2021 led the banking authorities to lift the restrictions on the distribution of dividends from Italian and European banks. Banca Generali was thus able to distribute prior dividends relating to the years 2019-20, standing out as one of the most generous banks in Italy. The Bank distributed 2.7 euros per share in the fourth quarter of 2021, with an implicit yield of 6.5%. An additional 0.6 euros per share was distributed in the first quarter of 2022. This was in addition to the proposal to distribute a dividend of 1.95 euros per share from 2021 profits, with an implicit payout ratio of 70.5%. Overall, the Bank thus distributed total dividends of over 600 million euros during the three years, while maintaining a solid capital position reflected in the level of balance sheet ratios far in excess of the requirements set by the monetary Authorities.
The strength of the financial results, combined with the favourable situation on financial markets — and equity markets in particular — drove the price of the shares up 42.3% during the year. If we also consider the dividends distributed during the calendar year, the Total Shareholder Return (TSR) for the year amounts to a significant 52.0%. In both cases, Banca Generali’s performance far exceeds that of the FTSE MIB Italy and the Italian and European banking sector.
The stronger results and share performance were accompanied by a considerable number of awards that recognised the quality of the people who work at the Bank and the service it offers its customers. Among others, for the seventh consecutive year the company was named the “Best Financial Advisors Network by Customer Satisfaction” in the independent judgement of the Deutsche Institut für Qualität und Finanzen: important recognition in terms of its customer experience in Italy. For the fourth time in the last five years, Banca Generali received the important “Best Private Bank in Italy” award from the Financial Times Group, attesting to the quality and uniqueness of its development process in financial and household advisory services. Also important were first place overall in traditional management schemes and second place among green management schemes, also according to the Deutsche Institut für Qualität und Finanzen. I would also like to mention the award for “Best Private Bank in Europe for Use of Technology” at the 2021 Wealth Tech Awards for leveraging technology to facilitate and strengthen the relationship between Financial Advisor and customer.
Among the numerous awards and prizes received, special mention goes out to those obtained for sustainability, where Banca Generali reaped the fruits of the considerable work done during the year. The Bank came in at the top of the rankings by ESG rating assigned by two major ESG ratings agencies: according to Sustainalytics it is among the top 100 at the global level and number six in the Diversified Financials sub-industry, whereas Standard Ethics raised its rating to EE (strong). I would also like to note that Banca Generali joined the MIB ESG index, which includes the top Italian listed companies on the basis of the ESG positioning. On the basis of these awards, the internal policies on ESG governance were thoroughly revised (policies concerning the integration of ESG factors into key business processes, such as investment policies, were significantly enhanced), and the constant striving towards innovation of the commercial range on ESG issues was appreciated. At year-end, sustainable solutions already made up 14% of all managed solutions offered to customers. Our ESG solutions are compliant with the SFDR, which entered into force in March 2021.
Banca Generali’s commitment to raising awareness for a sustainable transition also extended to the investment arena, focusing on conveying this message to the general public through specific initiatives. The Bank thus launched projects closely tied to the UN 2030 Agenda with a public education focus. The first of these to see the light was #BG4SDGs, a series of meetings dedicated to shedding light on the progress of the individual SDGs identified by the United Nations through addresses by highly authoritative speakers who laid out the challenges and ingredients of competitiveness required to meet environmental and social commitments. The project continued in September 2021 with “BG4SDGs – Time to Change” with the precious collaboration of Stefano Guindani. The project takes an innovative approach to presenting some virtuous examples of man’s actions in response to situations of extreme difficulty from a social and environmental perspective. The initiative — which is still ongoing — is based on seeking dialogue with the youngest through interactive photographic and video content on social media, with positive feedback from the various media and users.
The Bank’s commitment to sustainability does not concern only operational processes and communications initiatives to raise awareness on the evolution of its issues, but also takes the form of concrete projects benefiting the community. Among these, we are proud of the numerous initiatives launched in the community by our Financial Advisors to promote the awareness and importance of sustainable investment instruments and the impact they may have. These were in addition to the support for the Italian Banking Association Foundation for Financial Education (FEDUF), which we assisted with the project “Un Salvadanaio Per Amico” (“A Piggy-Bank for a Friend”), involving participation in full-fledged lessons on the rudiments of savings and financial instruments for children and young adults.
The continuation of the pandemic in 2021 also led us to accelerate the “Next-Normal” project, one of the first agreements in the banking world to introduce a hybrid working model with an increasing focus on the principles of work-life balance. This new approach continued hand-in-hand with a new, more integrated method of developing, training and managing people, both through centrally managed activities and specific initiatives by individual departments.
Finally, in 2021 a new edition of the Generali Global Engagement Survey was held, yielding excellent results of which we are proud and that show a response rate for the Banca Generali Group of 96% and an increase in the engagement score to 84%, bearing out how strongly the Bank’s employees share its goals and values.
In conclusion, I would like to offer my heartfelt thanks to our Financial Advisors and Employees, whose professionalism in assisting customers and dedication to the Bank made it possible to reach the important milestones in terms of growth and value creation that we have seen. I would also like to thank CEO Gian Maria Mossa and his management team for their attentive leadership and strategic vision, as well as my colleagues on the Board of Directors for the extraordinary commitment shown by their openness, competence and focus on the Bank’s projects. I would like to end with a thought for all those involved in the unexpected conflict between Russia and Ukraine, and in particular to divided families and those who have lost their dear ones, with the hope that mediation can be found as soon as possible to put an end to the fighting and to the further sacrifice of human lives.
Articles of Association
Sustainability Policy and our Code of Conduct
Our Sustainability Policy outlines the system defined by the Banking Group for identifying, assessing and managing the risks connected with Environmental, Social and Governance factors in keeping with our goal of promoting sustainable development of business activities and generating durable value over time.
In particular, this Policy sets the rules to:
- identify, evaluate and manage ESG factors that may pose risks and opportunities for the achievement of business objectives;
- identify, evaluate and manage the positive and negative impacts that business decisions and activities may have on the external environment and on legitimate interests of stakeholders.
The Policy aims to integrate into business processes the Banking Group’s Sustainability model outlined in the Charter of Sustainability Commitments in force from time to time and approved by Banca Generali’s Board of Directors that defines the long-term strategic goals for doing business responsibly and living in the community, helping to create a healthy, resilient and sustainable society.
Internal Code of Conduct
In pursuing its growth objectives, we remain faithful to the fundamental principles that characterize its ethics, such as transparency, fairness and impartiality. These principles are reiterated in the our Internal Code of Conduct, which is in line with the rules of conduct reported in the Generali Group’s Code of Conduct.
The Internal Code of Conduct defines the minimum rules of conduct to be observed in dealings between colleagues, as well as with customers, competitors, suppliers and the Group’s other stakeholders and contains specific provisions governing the promotion of diversity and inclusion, protection of company assets, conflicts of interest, bribery, financial information and the processing of insider information, the prevention of money laundering, financing for terrorism and international sanctions.
Whistleblowing and AML/CTF Policy
To monitor compliance with the Internal Code of Conduct and in accordance with the applicable legal framework, we have adopted a whistleblowing procedure that makes it possible to collect, assess and manage reports of potential fraudulent phenomena, violations of internal rules and suspect behaviour. The procedure guarantees those involved protection from all forms of retaliation, discrimination or penalisation and ensures them the utmost confidentiality, without prejudice to legal obligations.
Zero reports were received in 2021.
In addition, with the aim of combating money-laundering and the financing of terrorism, which constitute a serious threat for the legal economy and can result in destabilising effects, above all for the banking and financial system, we have adopted an Anti Money Laundering and Counter Terrorist Financing (AML/CTF) Policy. The AML Policy, approved by the Board of Directors, is part of the broader internal control system of our Bank, aimed at ensuring compliance with applicable laws and regulations.
Materiality analysis and matrix
The materiality analysis is a tool for strategic reading of the Bank’s internal and external environment to identify the most relevant topics on which to focus our model for creating shared value and the related reporting, taking into consideration the expectations of our stakeholders.
In order to update the materiality analysis and to bring to light the most relevant topics, in 2021 we have put in place a structured approach based on benchmark analyses and a wide selection of documentary sources - both internal and public - with a particular focus on emerging regulations and international guidelines on sustainable finance.
The use of computational linguistics technologies was complemented by the assessments of internal management and stakeholders to draw up a list of topics in order of relevance and identify the top eleven as material topics.
Moreover, in the interest of a shared vision that adheres to Banca Generali’s situation, in late 2020 and early 2021 the Bank conducted internal engagement activity with the involvement of “ESG champions”, a group of employees selected for their focus on sustainability issues and on the basis of the function performed within the Organisation.
The priorities thus identified are a clear reference to the 17 U.N. Sustainable Development Goals.
The correlation between the material issues and the GRI (Global Reporting Initiative) guidelines are reported below, with a focus on their internal and/or external impact.
The priorities that guide our sustainable business model are:
- Business management and culture dissemination
This topic extends both to our commitment to combating active and passive corruption through an adequate assessment of the associated risks and the adoption of safeguards designed to mitigate them and to the adoption of tools intended to govern the behaviour and spread the values that are the foundation of our company and commercial conduct.
- Governance and sustainable strategy
We have adopted a set of tools, rules, relationships, processes and company systems designed to ensure proper, efficient management of the organisation, with a particular focus on the challenges posed by the current environment and the management of new organisational models.
Moreover, the company strategy integrates environmental, social and economic considerations so as to create value for internal and external stakeholders from a medium-to-long-term perspective.
- Data protection and cyber security
In harmony with the process of accelerating digitalisation, we are committed to developing and enhancing adequate means and technologies to protect data and information technology systems in terms of availability, confidentiality and integrity.
- Investment protection and customer relations management
Our distinctive characteristics are our commercial model, based on a one-to-one relationship with our customers, and portfolio management focused on return and protection against all risks that, directly or indirectly, may compromise its value over time.
- Innovation and sustainable products
For us innovation implies, on the one hand, investments aimed at increasing the technological infrastructures to support the new offering of digital products and services, on the other, a focus on social, environmental and corporate governance issues, which are taken into account when designing products and services, integrating ESG criteria in the investment strategy of customers to raise awareness among them, and to deepen their knowledge of sustainability issues. Accordingly, we have identified and selected specialised partners with which to develop sustainable finance strategies, products and services.
- Business solidity
By ‘business solidity’ we mean the ability to maintain a strong performance over time and predict market trends, including through the renewal of the services offered, and development of robust organisational resilience in order to protect financial stability and business profitability.
- Growth and development of human capital
We promote the development of a company model capable of attracting talent and excellent professionals and harnessing the skills offered by our personnel through growth processes designed to hone their abilities and consolidate their professional expertise.
We view people as the centrepieces of our strategy: as a result, we develop initiatives and measures of various kinds designed to ensure equal opportunity and respectful, fair and flexible working conditions, while also avoiding all forms of discrimination. These range from work-life balance programs, a focus on individuals and attention to households, to engagement, development of growth and training initiatives and action plans for diversity and inclusion.
- Human capital protection
By ‘human capital protection’ we mean placing the protection of human capital at the heart of the organisation.
- Stakeholder and community relations
We believe it to be fundamental to listen to, consult and constantly engage stakeholders to understand their needs, while also contributing to the development of the community and local area. We also regard banks as contributing significantly to institutional debate for the development of mechanisms for economic facilities/support for individuals and businesses.
- Risk management system
We have set ourselves the goal of adopting a system for identifying, assessing and managing risks that includes ESG factors in order to integrate them into our strategy and operating model so as to govern the transition towards more sustainable economic and business models.
- Environmental impacts
To manage our direct environmental impacts, we have adopted policies aimed at enhancing efficiency and reducing consumption and greenhouse gas emissions; we also consider the indirect environmental impacts of investment activities on climate change and assess the climate risks of investment portfolios.
Discover our model of shared value creation to explore how the Bank translates these priorities into concrete initiatives that generate value that lasts over time and is shared with our stakeholders.
Dialogue with Stakeholders
We acknowledge as our stakeholders all those who contribute to achieving our goals, influencing our activities and allowing us to compete on the markets.
Stakeholders may be classified as follows:
- Direct stakeholders: employees, financial advisors and shareholders who, for different reasons, are part of the Group structure;
- Competitive stakeholders: Clients and contractual partners who, in their capacity, have an impact on business results;
- Social-environmental stakeholders: the community, the environment and the financial community — the external context in which the Bank operates
An awareness of the central role played by our stakeholders in the process of sustainable growth has led us to engage in various forms of dialogue and discussion with them.
Institutions, businesses, media, NGOs and other organisations, opinion leaders, professional associations, non-profit organisations and the welfare industry
- Local conventions on financial education
- Press conferences
- Company points of contact dedicated to media and institutional relations
- Meetings with institutions and NGOs
- Multi-stakeholder meetings
- Website and mobile apps
- Social activities, including in favour of community
Shareholders, investors, analysts and proxy advisors
- General Shareholders’ Meeting
- Media news
- Meetings and interviews with analysts, investors and proxy advisors
- Company points of contact and digital tools dedicated to relations with financial investors
- Digital channels and social media
Suppliers and strategic partners
- Meetings with the Bank and Networks
- Working groups on common projects
- Participation in local meetings
- Media
- Events
Employees and their families
- Engagement survey (every two years)
- Individual performance evaluation interviews and joint determination of development goals
- Roundtables with unions and workers' representatives
- Portal, newsletters, and house organ
- Annual meeting with all employees
- Events and initiatives
- Internal meetings and cascading initiatives
- Outdoor training sessions
Customers, customer households and consumers
- Surveys on the level of satisfaction
- Market researches
- Dialogue with consumer associations
- Communications channels devoted to customers (website, e-mail, toll-free phone number)
- Media
- Dedicated events
- Advertising campaigns
- Periodic documentation and in-depth reporting
- Social support activities
- Social media
Financial Advisors and their families
- Dedicated portal
- Monthly newsletter
- Dedicated conventions
- Eurisko survey on the level of satisfaction
- Website and mobile apps
- Media
- Training
- Local events
- Social Media
The committees and management role for a Sustainable Governance
At Banca Generali, sustainability is an unquestionable strategic orientation supported by a strong internal commitment. In this regard, by amending the Rules Regulating the Proceedings of Meetings of Board of Directors and of Internal Committees, as approved on 11 May 2021, Banca Generali decided to integrate sustainability in its Managing Committee and all Board Committees.
The integration of sustainability in the aforementioned committees is briefly described below.
Internal Committees
- Managing Committee
The Managing Committee is an advisory body set up to assist the company’s top management by subjecting the Bank’s most significant strategic and managerial aspects to in-depth assessment, as a panel. It consists of the CEO, the two Deputy General Managers and top managers. It is in charge of examining, on a half-yearly basis, all matters related to the Banking Group’s social, environmental and sustainability responsibility, in accordance with the guidelines and principles defined by the Nomination, Governance and Sustainability Committee. In this context, the Committee defines sustainability-related opportunities, risks, common objectives, targets, areas for improvement, content and reporting methods, and analyses the results set out in the Annual Integrated Report, discussing the achievement of the targets set, the difficulties faced and the problems still to be solved.
Board Committees
- Nomination, Governance and Sustainability Committee
The Committee is responsible for advising and making recommendations to the Board of Directors on nominations, governance and sustainability. It supports the Board of Directors with integrating sustainability into the definition of business strategies, as well as the formulation of the materiality matrix; it oversees sustainability matters; it proposes to the Board of Directors any updates to the Sustainability Policy and all other internal policy documents that are ancillary and/or connected to the latter and designed to pursue the Sustainable Success of the Company and Banking Group; it examines the general outline of the sustainability reporting process; it formulates opinions and proposals regarding other corporate governance decisions to be made.
- Internal Audit and Risk Committee
The Internal Audit and Risk Committee performs supporting functions for the body with strategic supervision functions with regard to risks and the internal control system. It also ensures that the risks and profiles connected to ESG (Environmental, Social and Governance) factors are thoroughly assessed in order to foster the Sustainable Success of the Company and Banking Group.
- Remuneration Committee
The Remuneration Committee is responsible for advising and making recommendations on remuneration to the Board of Directors. It formulates proposals regarding plans, targets, rules and company procedures relating to social and environmental issues and, more generally, sustainability, in line with applicable laws and regulations.
- Credit Committee
The Credit Committee performs preliminary, consultative and propositional functions in support of the Board of Directors regarding loans, particularly the evaluation of loan applications. In supporting the Board of Directors to the extent of its remittance, the Committee ensures that the Board may adopt all appropriate lending resolutions in accordance with an assessment of the risks underlying the loans that also take account of the risks connected to environmental, social and governance (ESG) factors.
Management
All the competences regarding sustainability are attributed to the General Counsel Area, within which the Group Sustainability Service was established, with the task of coordinating the structures of the banking group on strategic sustainability projects.