We are one of the most important institutional investors. Aware of the responsibility of our role, we conduct a transparent dialogue with our stakeholders who, increasingly frequently, are interested in learning about the criteria and principles that underpin our investment choices. For this reason, as part of our investment strategy we have also introduced and formalised environmental, social and corporate governance (ESG) criteria with the aim of creating long-term sustainable value and contributing to the growth of the economy.
In accordance with the Responsible Investment Guideline document which regulates our responsible investment activities at Group level, in 2016 we strengthened the process of identifying, assessing and monitoring the issuing companies in our portfolio involved in controversial sectors or activities. The Responsible Investment Guideline is applied to € 322 billion of direct investments by the Group’s insurance companies.
The methodology has been finetuned in order to broadly and comprehensively assess the involvement of the issuing companies in the production, development, storage and trade of illegal weapons (antipersonnel mines, cluster bombs, and nuclear, biological and chemical weapons) and in activities that lead to serious or systematic violations of human rights, serious environmental damage or corruption.
Thanks to the creation of a proprietary internal rating system based on the quantification of 9 risks, this year we have put together 2 lists of issuing companies, which are periodically updated and sent to all Group portfolio managers.
According to their level of involvement and responsibilities, the issuing companies are placed on either the Restricted list or the High Risk list.
The inclusion of a company on the Restricted list brings with it specific actions ranging from a ban on making new investments to the settlement of current holdings or the retention of same until their expiration with no possibility of renewal.
As regards the High Risk list, actions range from the close monitoring of controversial aspects to direct dialogue with the company in question in order to encourage it to act responsibly.
A cross-functional committee called the Responsible Investment Committee is tasked with assessing the lists and supporting the decisions of the Group Chief Investment Officer as regards possible exclusions from the Group’s investment universe.