Responsible Investments
Among the different financial services, we also promote sustainable investments and support our customers in building portfolios that take account of their personal sensibilities to ESG (environmental, social and governance) issues.
The three pillars of ESG
Environment, society and governance: these three pillars are the source of the acronym “ESG” (environmental, social and governance), which encompasses three different approaches to sustainable investments.
The first pillar — the environment — refers to themes relating to reducing pollution and rationalising waste. The second — society — relates to gender policies, human rights, labour standards and relationships between productive enterprise and the community in which it operates. The third — governance — has to do with sound governance practices for companies and virtuous behaviour by businesses in the area of legal compliance and business ethics.
In pursuit of these goals, we promote sustainable investments and stand shoulder to shoulder with our customers in building portfolios that take account of their differing sensibilities to ESG issues, according to an approach based on the Sustainable Development Goals promoted by the United Nations.
Functioning of the responsible investment process
We have adopted procedures and methods that integrate the investment analysis conducted according to traditional financial criteria with an analysis focused on sustainability risks and the negative effects of investments in terms of sustainability factors.
Thanks to the use of ESG indicators and screening tools, developed with the support of external advisors, we can determine whether the companies to which we direct investments are involved in controversial sectors or have violated the United Nations Global Compact.
On the basis of this screening, the securities of the companies analysed are admitted to our investment universe or, in cases of controversial practices and sectors, are admitted with reservations or completely excluded. More specifically:
- it is not permitted to invest in the securities of companies that have committed serious or systematic violations of human and workers' rights, that have severely damaged the environment or that are involved in serious episodes of corruption. Companies that produce unconventional weapons or that derive significant market share from coal, tobacco, gambling and adult entertainment are also excluded.
- the securities of companies involved in controversies that indicate insufficient attention to ESG aspects with potential negative effects on sustainability factors are also constantly monitored and at risk of exclusion from our investment universe. This category includes, for example, companies directly involved in the production of nuclear weapons or indirectly involved in the cluster munition, anti-personnel mine and/or biological and chemical weapons market, as well as companies involved in violations of the Global Compact not of a serious, systematic nature.
In addition, for asset management lines that promote environmental or social characteristics (pursuant to Article 8 of Regulation No. 2088/2019) or that pursue a sustainable investment objective (pursuant to Article 9 of Regulation No. 2088/2019), we assign an ESG rating to the investment product, verifying the manager's institutional commitment and the investment strategy adopted, analysing the underlying portfolio, where applicable. Each instrument is thus assigned a sustainability rating, weighted by the sector to which it belongs and periodically updated: only instruments with a "high" rating (at least 3 on a scale of 1 to 5, where 1 represents the lowest degree of integration with ESG factors and 5 the highest, or a score that similarly falls into the higher end of the range with a possible different scoring scale) may be selected within such portfolios.
Regulation (EU) No. 2019/2088 has introduced disclosure obligations on the integration of sustainability risks and the consideration of adverse sustainability impacts in investment processes: for further information, visit the page with Banca Generali's information on sustainability in the financial services sector.
Investments in support of SDGs: measurement of impacts
We believe that private investors may also play an active part in implementing the international sustainable development agenda by financing, through their investment choices, companies committed, for example, to reducing greenhouse gas emissions and more efficient use of resources, offering high-quality care services or products for healthy nutrition, as well as companies capable of creating an inclusive workplace oriented towards the wellbeing of their employees.
We have thus developed a proprietary platform capable of providing an in-depth analysis of the level of sustainability of individual investment products, and of calculating their impact on the individual Sustainable Development Goals (SDGs) promoted by the United Nations, determining its positive contribution in tangible terms through the use of appropriate metrics.
On this basis, we have included in our range a broad, diversified sustainable component at the level of both asset classes and specific investment themes, as well as of SDG compliance. Sustainable products are in addition to model portfolios and asset management lines characterised by investment processes that integrate the pursuit of traditional financial return with specific environmental, social and governance (ESG) criteria aligned with the SDGs.
Partnerships to promote responsible investment
We have been ordinary members of the Forum for Sustainable Finance (SBB) since May 2019. Born in 2001, the Forum for Sustainable Finance is a multi-stakeholder non-profit association: it includes financial operators and other organizations interested in environmental impact and social investment.
Eurosif
The Association promotes the knowledge and practice of sustainable investment, with the aim of spreading the integration of environmental, social and governance criteria into financial products and processes.
The Forum is a member of Eurosif, an association committed to promoting sustainable finance in European markets.