CNFS

To learn more about the CNFS write us at:
ESG@iccrea.bcc.it

The 2023 CNFS

In 2023 the BCC Iccrea Group confirmed sustainability as a central priority facet of the Group's overall strategy, with the goal of continuing to support the development of the social and economic fabric of the regions where the BCCs are based, increasingly directing financial resources towards sustainable loans and investments. In December 2023, as in previous years, loans to households and small and medium-sized enterprises amounted to more than 81% of total loans to customers, this total amounting to more than €94 billion.

Social impact funding, was substantial, totalling about €7.6 billion, as was funding with an environmental value, thus confirming once again in 2023 the Group's commitment to promoting and supporting initiatives aimed at the environmental transition and the development of social welfare.

For the BCCs, 2023 was a year of strong focus and closeness to local communities: disbursements to charities and sponsorships amounted to more than €47 million (up 44% from the previous year). As far as donations are concerned, the share – amounting to 3% of net profit – allocated by the Affiliated Banks to the Fondosviluppo mutual fund for the promotion and development of cooperation was also significant, amounting to approximately €49 million in 2023. On the asset management front, ESG assets under management exceeded €10.9 billion, accounting for 44% of the total assets under management and placed by the Group.

In early 2024 the issuance of a third Social Bond of €500 million, was completed with the aim of supporting the real economy through the provision of financing to SMEs operating in economically disadvantaged areas, young entrepreneurs and women business owners.

The commitment to environmental protection also continued, with positive results recorded with respect to the reduction of GHG emissions from the Group's operations, both direct (Scope 1: 10,385 tCO2eq, -25.31%) and indirect deriving from the consumption of electricity purchased from third parties (Scope 2 market-based: 6,909 tCO2eq, -53.28%).

LThe 2023 Consolidated Non-Financial Statement also includes the reporting of emissions financed by the Group (Scope 3 portfolio) whose values improved compared to last year, standing at, around 14.7 million tonnes of CO2 equivalent, corresponding to an intensity of 330.3 tonnes of CO2 for each million financed.

This also includes the calculation of the Green Asset Ratio (GAR), an indicator of the alignment of the company's operations with the objectives of the EU Taxonomy Regulation. For 2023, the GAR of the BCC Iccrea Group stood at 1.06% of total covered assets (turnover-based), establishing the foundations for the orientation of future strategies.

Finally, as evidence of its constant commitment and the tangible results achieved in its pursuit of sustainable growth, the BCC Iccrea Group earned an ESG Risk Rating that corresponds to a “Low” ESG risk level from the Morningstar Sustainalytics, rating agency, which employs a five-level scale: Negligible, Low, Medium, High e Severe. The Group also consolidated its position by improving its rating ESG “unsolicited” from the MSCI agency by one notch to A, on a scale from CCC to AAA.

To learn more see the full 2023 CNFS.

Stakeholder engagement and “double materiality” analysis

The BCC Iccrea Group considers the solid relationship with stakeholders – both internal and external, based on the principles of transparency and mutual trust – to be a fundamental strategic lever.

Constant listening and dialogue with stakeholders is particularly useful and constructive, first and foremost to update and interpret the economic and social context of reference, with a view to continuous improvement.

In this regard, the Group has identified several communication channels that it uses to establish and maintain an organic, continuous dialogue with its stakeholders.

Indeed, there is a traditional as well as fundamental and constant interaction with the BCCs, which allows the Group to oversee relations with customers, regions and local communities.

In the context of sustainability reporting, the concept of “materiality” is a pivotal principle, as it allows the company to be guided in identifying the most relevant sustainability issues on which to base the definition of its strategic guidelines and focus the presentation of its ESG performance.

Reasoning based on material sustainability issues means considering, on the one hand, internal factors such as strategic objectives, priorities for action and company operations, and on the other external factors such as the interests and demands of the various stakeholders, as well as regulatory developments and market trends.

The BCC Iccrea Group carries out a materiality analysis each year in accordance with the GRI standard and Italian Legislative Decree no. 254/2016.

For the 2023 Consolidated Non-Financial Statement, the 23 temi 23 material topics that emerged in 2022 were confirmed once again in 2023, as they reflect:

The major impacts generated directly or indirectly by the Group on the environment and society as a whole (so-called inside-out perspective or "impact materiality").
The major impacts these topics have or could have on the Group's economic and financial performance (so-called outside-in perspective or "financial materiality").

Specifically, there were two material topics in the Environmental sphere, 12 in the Social sphere, five regarding Governance and four cutting across the various ESG dimensions.

These topics were developed and analysed in the CNFS through 81 indicators in total, of which:

76 indicators consistent with adopted international reporting standards (GRI).
Four internal indicators, introduced as "non-GRI standard" in order to report facets of the world of cooperative credit for which the international standard does not provide specific indicators.
One indicator of capital strength, the Tier 1 Ratio.

The table below provides details of the material topics subject to reporting, divided into “core” issues, the reporting of which is mandatory and therefore envisaged independent of stakeholder requests as a result of regulatory changes in the ESG domain, and topics emerging from the double materiality analysis, with results of the respective analysis.

Material topics by type of Double Materiality analysis

For more on this, see the "Double Materiality Analysis" section in Chapter 2 of the 2023 CNFS.