THE IMPORTANCE OF ESG

After a challenging 2020 our Head of ESG and Impact Banking, Roberta Marracino, discusses UniCredit’s continued and ramped up focus on ESG and shares insights on what ESG trends we should look out for in 2021.

How is UniCredit addressing ESG in 2021?
 

Sustainability is part of our DNA and we continue to take concrete actions to further integrate ESG in the core activities of our bank. Our risk management and lending approach, as far as our retail and corporate offering, are progressively incorporating sustainability factors that will also play an increasingly important role in our short and long-term incentive plans. Defining clear ESG metrics and targets, both internally and externally, as we are doing, helps a lot in setting the overall direction. 

On the environmental front, we are measuring the exposure of our portfolio to the most polluting sectors and will proactively align it to the Paris scenario also by partnering with our clients in the shift to a low carbon economy. For example, we are asking them to take on the same challenge we have and fully exit the coal sector by 2028.

We also have a strong social commitment. Our aim is to drive positive social change and inclusion in our countries. As part of this, we are reviewing and increasing the footprint of our Social Impact Bank, which has also been recognised as best practice in Europe by CFI magazine.

Furthermore, our corporate governance is among the best in class European companies and we remain fully committed to sustainable value creation for all stakeholders.

What will be the key ESG trends this year and beyond?
 

The challenges of 2020 showed that ESG is prominent and it is here to stay. Sustainability will only grow in importance and be part of the future model of society and of corporate business. We must act fast if we want to be among the frontrunners and to have an impact. It’s also a great business opportunity we cannot miss.

What we are further seeing is the growing relevance of the S component in ESG. In fact, the interaction and intersection between E and S are increasing and their impact is often combined. This is clear in the evolution of an EU-wide framework on S as well as E and in the investments coming into the sector.

In addition, we are starting to see a mounting sensitivity of both retail and corporate clients to ESG topics, particularly on the environmental side, and we expect this trend to grow in 2021 and beyond.

How does client appetite for ESG differ by market?
 

The appetite and market opportunity for ESG are growing across the board, which is further driven by regulation, the changing behaviour of investors and the significant amount of upcoming national and supranational investments.

ESG needs of course differ by market and this is something that we always stay mindful of and adjust our approach accordingly.

Nevertheless, there has been a continued increase in ESG appetite across all our markets and client segments, including CEE, as ESG progresses from something previously seen as a “soft” topic to “hard” with increasingly concrete metrics as well as common rules and definitions.

Finally, congratulations on your recent recognition as one of the Business Persons of the year by Fortune Italia in 2020 in the Finance category!

Thank you! I was humbled and pleased to be included in this list of very impressive people and happy to see the high significance given to the topic of sustainability in the 2020 selection.

The shortlist celebrated managers whose success last year was driven by a focus on innovation, sustainability and supporting the real economy particularly in the context of the Covid-19 pandemic. The selection also took account of the personal characteristics of each manager as well as specific criteria related to gender equality.