As a signee of the UNGC e PSI, the Group has formalised the adoption of an ESG risk identification and tracking system in its Non-Life/Life underwriting ESG policies in the various economic sectors and in relation to various segments, products and insurance cover to allow for the proper and timely assessment of exposure to risks, defining responsibilities and consequent actions.
This policy contains criteria and a methodology to define when a business relationship may imply “sustainability risks” from a technical and reputation perspective. To identify high-risk business relationships at the underwriting stage, a process consisting of two due diligence mechanisms has been set up:
- an online reporting tool capable of integrating a summary assessment of each customer’s ESG performance (ESG Score) into the underwriting process. Based on it, the compatibility or otherwise of the potentially negative impacts arising from the business relationship with respect to the Group’s sustainability approach and risk management objectives is determined. In the event of non-compatibility, following targeted engagement activities with the customers involved, the creation or continuation of the contractual relationship may be excluded;
- an assessment or investigation tool: transactions identified as more critical are relayed to the sustainability team, which will carry out or request the necessary investigations. Ultimately, with the assistance of the sustainability team, choices consistent with the company’s vision are defined with respect to the cases presented (i.e., proceed, refrain, engage with the customer or conduct in-depth analysis through targeted research).
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Customers Engagement
An insurance company’s role is to understand its customers’ activities and collaborate with them to promote the adoption of responsible and sustainable business practices. To this end, Unipol verifies the existence of adequate organizational controls and improvement plans implemented by the customer in the event critical issues have been found in the management of ESG factors or significant violations. In addition to taking place individually with potential customers, engagement is also achieved through discussions with trade associations and institutions, encouraging the sharing of experiences and expertise.
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Monitoring
Unipol monitors sustainability risks associated with business relationships on a continuous basis; the results of risk assessments and related mitigation measures are systematically tracked and analysed, ensuring the correct adoption of the criteria for excluded sectors and sensitive sectors, as defined in the Policy. The criteria for identifying and assessing ESG risks in the various economic sectors are also included in the supporting information materials (handbook and FAQs) available to the network. Finally, a course dedicated to managing and reporting sustainability risks is available for employees and intermediaries.
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Human Rights
The approach to ESG risks in the business relations of an insurance nature also includes the issue of Human Rights. Please refer to the section HUMAN RIGHTS to learn more about the Group’s position on this issue.