Sustainable Finance Disclosure

1. Introduction

In March 2018, the European Commission published the Sustainable Finance Action Plan, in implementation of the Paris Agreement on climate change and the United Nations 2030 Agenda for Sustainable Development, outlining the strategy and measures to be adopted for the creation of a financial system capable of promoting sustainable development from an economic, social, and environmental perspective. Specifically, the Action Plan identified the following three objectives:

  1. reorienting capital flows towards a more sustainable economy in order to achieve sustainable and inclusive growth;
  2. managing financial risks stemming from climate change, resource depletion, environmental degradation, and social issues; and
  3. fostering transparency and long-termism in economic and financial activity.

This Plan included the issuing of Regulation (EU) 2019/2088, on sustainability-related disclosures in the financial services sector (the so-called “SFDR - Sustainable Finance Disclosure Regulation”).

The Regulation aims, among other things, to provide disclosures to end investors on the integration of sustainability risks and the adverse impacts on sustainability factors in investment decision-making by financial market participants (entities that manufacture financial products such as portfolio management services) and financial advisers (entities that provide investment advice or insurance advice).

The measures introduced by the SFDR apply to:

  • the affiliated Banks and Cassa Centrale in their capacity as financial advisers, as credit institutions which provide investment or insurance advice on the following financial products and investment services:
    • investment-based insurance products (IBIPs);
    • units/shares of UCITS (mutual funds and SICAVs);
    • pension products;
    • portfolio management services.
  • Cassa Centrale, regarding the rules applicable to financial market participants, as a credit institution which provides a portfolio management service.

In accordance with the provisions of the SFDR, Cassa Centrale and the affiliated Banks publish information in this section of their respective websites regarding:

  • the integration of sustainability risks in their investment decisions or in their investment advice or insurance advice (Article 3, SFDR);
  • a statement on due diligence policies with respect to the adverse impacts of investment decisions or advice on sustainability factors (Article 4, SFDR);
  • how their remuneration policies are consistent with the integration of sustainability risks (Article 5, SFDR).

For the sake of understanding the information in the subsequent paragraphs, the following definitions pursuant to the SFDR are provided below:

  • sustainability risks: an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment;
  • sustainability factors: environmental, social and personnel-related issues, respect for human rights, as well as anti-corruption and anti-bribery matters;
  • principal adverse impacts: the impacts of investment decisions and advice that result in negative effects on sustainability factors.

The following paragraphs have been updated following the adoption of a sustainability preference assessment in the model for the provision of investment advisory services, starting from August 2023.

2. Integration of sustainability risks in investment decision-making processes (Article 3, SFDR) (art. 3 SFDR)

Cassa Centrale, as part of its investment decision-making process, has defined a specific strategy aimed at integrating and monitoring sustainability risks, where relevant, and any probable impacts on the performance of the financial products.

In particular, the integration of environmental, social and governance (ESG) risks in investment decisions with reference to the asset management lines offered to customers by Cassa Centrale and the affiliated Banks allows for the development of a comprehensive approach to the different risk categories (i.e., market risk, credit risk, liquidity risk, etc.), also analysing any material negative impacts on the performance of the investments.

The strategy developed by Cassa Centrale envisages the application of the following measures with regard to sustainability risks:

  • negative screening: qualitative analysis based on the exclusion of financial instruments and issuers that do not meet minimum sustainability criteria (for example, cluster bomb manufacturers);
  • positive screening: quantitative analysis based on the selection of financial instruments and issuers that have environmental and/or social characteristics or objectives, applying a “best-in-class” logic.

These analyses also take into account assessments provided by leading specialised info-providers, which have developed proprietary methodologies for the analysis of the main market issuers.

When providing advice on investments and insurance investment products, the Parent Company and the affiliated Banks analyse the information provided by manufacturers with regard to any relevant aspects for sustainability preferences (i.e., taxonomy-aligned and/or sustainable investments or PAI consideration), as well as sustainability risks and their impact on the performance of the financial products. If available, this information is considered as part of the distribution process to customers, to inform them of the aforementioned aspects and of any sustainability risks identified by the manufacturer.

This approach allows the Parent Company and the affiliated Banks to recommend financial instruments or products also considering their most significant sustainability risks.

3. Statement on adverse impacts on sustainability as a financial market participant (Article 4 (2) and (3), SFDR)

Cassa Centrale, given its size, the nature and scale of the business it undertakes as well as the type of financial products it makes available, considers the main negative effects on sustainability factors in investment decisions as part of its portfolio management service.

The “Statement on principal adverse impacts of investment decisions on sustainability factors” pursuant to Delegated Regulation (EU) 2022/1288 is provided below.




4. Statement on principal adverse impacts of investment advice and insurance advice on sustainability factors (Article 4 (5), SFDR)

Cassa Centrale and the affiliated Banks understand the importance that customers’ investment decisions can have on sustainability factors and therefore consider the principal adverse impacts (PAI) of investment decisions on these factors when providing investment advice. The negative effects of investment decisions on sustainability factors are assessed, when providing investment advice, through the analysis of the information disclosed by issuers - which qualify as financial market participants pursuant to Article 2 (1), SFDR - on relevant financial products pursuant to the SFDR1.
For each product, Cassa Centrale and the affiliated Banks analyse the documentation made available by the manufacturer (e.g. European ESG Template - EET, contractual documentation, etc.), closely examining which PAI-related issues are taken into consideration by the product itself.
The information analysed is used by Cassa Centrale and the affiliated Banks when providing investment advice to assess the suitability of the investment recommendations with respect to the customer profile and, in particular, correspondence to their sustainability preferences, if expressed.

1Pursuant to Article 2 (11) of Regulation (EU) 2019/2088 (SFDR), the following financial products are relevant for financial advisers: an alternative investment fund (AIF); an IBIP; a UCITS.


5. Remuneration policy (Art. 5, SFDR)

Cassa Centrale and the affiliated Banks have started to redesign the Group’s sustainability strategy, resulting in the definition of a multi-year Sustainability Plan, which has been updated by outlining specific performance and monitoring benchmarks. The Remuneration and Incentive Policies adopted by Cassa Centrale and the affiliated Banks reflect their commitment to achieving sustainable performance through the inclusion of ESG benchmarks in the MBO incentive program for Identified Staff at a consolidated level. These Policies are consistent with the integration of sustainability risks, taking into account the implementation of the principles and values of the Group and its mutual objectives (e.g., person-centric investment decisions, promotion of the economic/social/cultural development of local communities) in corporate processes. In particular, the principles used to determine the variable remuneration of all staff include the following:

  • commitment to aligning performance with corporate objectives, values, and long-term strategies;
  • appropriate balance between economic and non-economic objectives (both qualitative and quantitative) depending on the role, also considering compliance with the Code of Ethics which has led to the establishment of policies that promote sustainability, some of which are also considered in the selection of investments (e.g., armaments policy, anti-corruption policy, etc.).

For more information on the integration of sustainability measures in the investment processes related to asset management lines (art. 10 SFDR), click here.