Fostering positive change through investments: Generali leverages its role as a key global institutional investor and asset manager to apply strict ESG (Environmental, Social and Governance) criteria to the Group’s investments.
Year since the Ethical filter was applied to the Generali Group investments
Direct investment under the Generali Group’s proprietary Responsible Investment Guidelines.
Shareholders’ Meetings in which the Group has participated (in 2020)
Voted resolutions, 12% against
Source: Generali Group, data as at end of December 2020
Generali leverages its role as a key global institutional investor and asset manager to apply strict ESG (Environmental, Social and Governance) criteria to the Group’s investments. This commitment started in 2006 and is designed to have a significant impact on economies in which the Group operates, allowing Generali to try to actively influence areas such as environmental protection, respect for human rights and clear and transparent governance.
"Simply put, we strive to foster positive change through investments."
At an operational level, we have drawn up principles, processes and criteria to identify, evaluate and ensure continuous monitoring of the issuers in our investment portfolio that are most exposed to ESG risks. These criteria are reviewed and updated annually, and used to assign specific scores to the investments we make. We also analyze non-financial risks that may have an impact on company share prices, engaging with companies to address them.
Today this commitment is more important than ever, as the world struggles with multiple crises – financial, social, ecological and more – even more emphasized by the Covid-19 pandemic. Acting as a lifetime partner to investors around the world, we believe our focus on socially responsible investing and the application of ESG guidelines will translate to better, more sustainable societies wherever we operate.
The Generali Group
Group Ethical Filter 1)
Signed the UN Global Compact
Signed the UN principles for Responsible investing
Signed the UN PSI 3) & the Climate Risk Statement of the Geneva Association
Signed the Paris Pledge for Action & the EFR (European Financial Services Round Table). Generali Group is part of the Climate Action 100+ a coalition of global investors*
Signed the TCFD Supporters 4) “Investing in a Just Transition” Generali’s “Climate Change” Strategy 5). Generali Group is an active member of the Investor Leadership Network**
Generali Group issues its 1st Green bond
Generali Group joins the UN Net-Zero Asset Owner Alliance
Generali Investments is backed by and shares this strong Group Commitment to Sustainability, a combination of ESG criteria, ethical parameters and guidelines that establish a benchmark companies in the Group aspire to meet and, wherever possible, exceed.
"Our ambition? To promote and lead sustainable investing in asset management."
Generali Investments further refines application of this commitment through a vast range of conscientious SRI (Socially Responsible Investing) approaches, adopted by the boutiques united through our multi-boutique platform. Indeed, the broad range of specialized investment skills and capabilities present in each boutique are in line with the vision and commitment of the Generali Group. As per their investment approaches, each boutique maintains its autonomy to apply ESG parameters and operates within its dedicated SRI mission and framework.
We believe that capital invested should maximize both financial and extra-financial performance. Our goal is to help our investors identify and channel capital into strategies that are compatible with and contribute to sustainable development, based on their own needs and without sacrificing profitability.
At Sycomore, we are truly convinced that companies addressing genuine social, governance or environmental needs are the companies of the future and that only shared value can guarantee sustainable performance. Through our investments, our aim is to develop a more sustainable and inclusive economy, encourage companies in their transformation and demonstrate that it is possible to combine purpose and performance.
All the companies included within our investment universe are analysed through our proprietary SPICE* framework, developed to assess a company’s sustainable performance. This analysis is fully integrated in our investment process for a 360° view of the company, analysing its relations with all its stakeholders (society & suppliers, employees, investors, clients and the environment). The investment team mainly relies on regular company meetings, their publications as well as experts’ insights.
We regularly share what we think are the best ESG practices, define areas for improvement as part of a constructive dialogue and systematically vote at shareholders’ meetings of all portfolio companies. We take part in collaborative engagement initiatives run by groups of investors or experts on key issues.
*SPICE: Sycomore AM’s ESG methodology based on the belief that a company can provide value to long term only if this is shared with all of its stakeholders: society and suppliers (Social), People, Investors, Clients and the Environment. The result is an SRI investment universe which includes about 40/45% of the initial one.
* The full legal name is Generali Insurance Asset Management S.p.A. Società di gestione del risparmio
Since several years Generali Insurance Asset Management* (GIAM) built up internal ESG capabilities and, as a key global asset manager, has ESG as a central feature of its strategy aimed at offering what GIAM considers the best and flexible investment solutions to its clients. ESG for GIAM means innovation in the way we manage assets and answer clients’ needs: combination of traditional performance with the generation of positive impact for our society by mitigating risks and improving returns relying also on our ESG competences and network.
The Investment Stewardship Team has developed an internal ESG Methodology. A key element is the identification of material ESG topics at sector or issuer level to support the Investment Teams to select issuers and construct portfolios with enhanced risk-return profiles. Portfolio managers and research analysts integrate ESG views into their activity and internal exchanges on ESG topics are regularly carried out.
We focus on companies on which we have a significant exposure and a real probability to influence. We onboard all internal stakeholders with high level of coordination: ESG analysts, Credit analysts, Portfolio managers, Stewardship specialists.
We prepare detailed engagement case and realistic expectations, creating a true partnership based on trust with the issuer where we can help each other in what we consider a win-win deal.
At Generali Global Infrastructure (GGI) we aim to make a difference by supporting investors in driving capital towards assets that are compatible with and contribute to sustainable development. Since inception, our investment philosophy has been designed to go beyond “ESG risk integration” and strive towards an impact investing approach, supported by a proprietary methodology which uses a holistic approach with key ESG factors captured to ensure that we select assets that contribute to sustainable development as a whole and not just to a single aspect of sustainability. We are convinced that the development of sustainable investment principles for the asset class, and associated assessment methodology/framework, is key to drive significant capital towards infrastructure investments with positive impact, encourage virtuous behaviours from infrastructure asset owners, accelerate the reaching of the UN Sustainable Development Goals (SDGs), and mitigate the ESG risks that the asset class may carry.
Solely investing in sectors and assets that are compatible with sustainable development is for us synonym of resilience and long-term value generation for our investors. Integral to this impact-led philosophy are the methodologies and analytical tools we have developed. Our proprietary ESG rating methodology dedicated to infrastructure, developed in collaboration with ISS ESG, goes beyond ESG risk mitigation and allows evaluating the impact of our investments on the basis of the UN Sustainable Development Goals (SDGs).
Furthermore, we monitor ESG performance during the asset life – with importance given to gathering and reporting on impact indicators, such as annual greenhouse gas emissions or avoided emissions. With respect to carbon emissions specifically, we go beyond measuring the footprint, we evaluate carbon impact of our portfolios against the larger goals of reduction of carbon emissions established by the Paris Agreement. This allows us to project a decarbonization trajectory to measure the alignment of our portfolios with targeted climate scenarios (i.e. 1.5°C) and pave the way to a “net-zero” commitment.
At Generali Real Estate (GRE), we want to be proactive in the reduction of the environmental impact of our portfolio as well as integrate ESG metrics and monitoring into our business operations.
Our vision is to have a market-leading portfolio of sustainability credentials as well as best practise asset management and development processes.
Our ESG guidelines integrate sustainability into the decision-making process and in our day-to-day business so that ESG is always taken into consideration on how we invest and how we operate.
In order to tackle environmental aspects on our portfolio GRE leadership, staff and vendors is following Responsible Property Investments Guidelines. On top, we adopted a series of proprietary models, filters, policies and screening effective during the overall real estate value chain. As a matter of fact, the following set activities are regulated by our ESG policies: direct and indirect investment, asset refurbishment/ capex injections, relationship with tenants, health and safety aspects, transparency and fairness.
Given the characteristics of our industry, we ensures that our decisions contribute to improvements in environmental sustainability at the local and urban levels, working cooperatively with tenants, city governments, planners and other stakeholders in achieving our targets.
For example, as far as relationship with tenant is concerned, Generali Real Estate is adopting green leases to ensure optimal building efficiency in operation and puts in place sustainable data analytics on consumption trends and behaviours to find ways to reduce consumption.
We embrace our responsibility to take an active approach in adopting ESG policies and practices, both by our investment and non-investment teams. In doing so, we hope to contribute to a fairer and more sustainable world while ultimately creating better value for our clients and stakeholders.
We trust that, over time, mindfulness of ESG factors will improve outcomes for our portfolios and clients. Aperture portfolio managers have each adopted a proactive approach to responsible investing. By integrating ESG factors that go beyond simple negative screening into their fundamental research processes, they can implement more nuanced and innovative ESG tilts within their portfolios. Specific assets or types of assets are not automatically excluded from portfolios because of any single ESG factor or set of factors, but our extensive fundamental analysis typically includes a disciplined analysis of those factors. This comprehensive research process considers ESG risks alongside others in an attempt to better understand the total risk and reward profile of any given investment opportunity.
In Generali Investments Partners* (GIP) our approach to ESG is a natural evolution of the Generali Group’s commitment to sustainability. We embrace our responsibility in adopting SRI policies and practices to improve our environmental and society as a whole, preventing negative impact on financial performance.
In GIP we adopt a multi-step approach, combining the Generali Group Ethical Filter and ESG Expertise. The Generali Group Ethical Filter, applied to investments since 2006 and monitored on an ongoing basis, identifying and screening potential ESG controversies affecting corporate issuers (eg. involved in the production of weapons violating fundamental humanitarian principles; involved in severe environmental damages; involved in serious or systematic violation of human rights; implicated in cases of gross corruption; significantly involved in coal-sector activities). Starting from this investments universe, each single issuer within each industry is analyzed and ranked based on its ESG Score according to Sustainalytics analyses.
GIP engages Investee Issuers, in the interest of the clients’ portfolios, implementing an active ownership, especially considering industry, country, issuer allocation, stock picking, proxy voting and ESG screening factors, with the aim to reinforce its engagement capabilities and have a greater impact on the Investee Issuers.
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1) The application of the Group’s ethical filter is part of the Investment Manager’s discretionary assessment and the results of such assessment are confidential. 2) UN Principles for Responsible Investment. 3) UN Principles for Sustainable Insurance. 4) Task Force on Climate-related Financial Disclosure, sponsored by the Financial Stability Board. 5) Generali’s “Climate Change” strategy on: a. Green and sustainable investments; b. Positioning on coal-related businesses and companies; and c. Engagement (coal-related businesses in countries heavily dependent on coal). *Climate Action 100+ was launched during COP21 to coordinate shareholder engagement and action in the 100 listed companies with the highest greenhouse gas emissions in the world to take action to rapidly decarbonize their operations. **Investor Leadership Network is a collaborative platform launched in 2018 under Canada’s G7 Presidency that brings together leading global investors to accelerate financial industry action on key sustainability and long-term growth issues, starting with the challenge of climate change. Generali Group is part of the ILN Working Group, which focuses on disseminating best practices for analyzing and communicating financial risks related to climate change under the FSB TCFD.
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