The business challenges that Banca Monte dei Paschi di Siena addresses with this solution are: 1) risk profile improvement of the investments, especially those made for long term saving purposes (pension funds), 2) possibility to raise awareness on ESG features of the investments among consumers and 3) to find a way to contribute to make the financial market more sensible to ESG performances of corporate equities as a possible strong accelerator for CSR spreading.
Starting from 2010 the Bank will be using data provided by Vigeo (the French leading ESG rating agency) to assess the sustainability level of the investments, either made as an asset owner or packaged in financial products for the retail market or managed to run the employee pension funds.
The investment portfolio held by the Bank will be screened monthly to monitor its ESG profile. An alert tool will also be available to identify possible equities to discharge for being under scrutiny due to unfair conducts.
Marketing of investments products
The Bank does not both make and manage investments products. It selects in the market the products that are then provided to its customers through the sale network.
Every quarter the average ESG rating of these products will be calculated. This piece of information will then be highlighted in favor of customers both during the subscription of the product and within its regular performance updates. The activities will be set and tested by engaging with all the Italian consumers advocacy groups. An internal training effort will also be encompassed to support the realization of the initiative.
Corporate pension funds
The ESG criteria will be applied to:
- choose the equities that are financially well suited and that are also considered as best-in-class against their peers also in terms of sustainability;
- monitor the overall sustainability profiles of the funds introducing if necessary possible corrections to the management policy.
We will explore possible ways to make the ESG integration even more profound and effective. For instance: using the ESG criteria either as part of the selection tool of the investments products and to establish the proprietary asset allocation policy.
The initiative is in its very early stage of implementation.
- It will address the two corporate pension funds involving some 15,000 people and 1 billion of assets under management.
- It will also be applied to about 1,000 mutual funds.