Asset management for people
We are global institutional investors and asset management is a key aspect of insurance business. It has a significant impact on the real economy, allowing us to actively influence areas such as environmental protection and respect for human and social rights.
For several years now, we have based our investment strategies on environmental, social and corporate governance (ESG) criteria, without sacrificing profitability and remaining consistent with the principle of protecting our most sensitive asset – our reputation.
Responsible Investment Guideline
In March 2015, the Group CEO approved the Responsible Investment Guideline, which regulates the various responsible investment activities for all Group companies, building on the previous Ethical Guidelines for Investment adopted in 2010. The document defines the business management processes, the roles and responsibilities of the various corporate departments involved and the methods of communication with stakeholders. Inspired by international initiatives such as the UN Global Compact and Principles for Responsible Investment (PRI), of which the Group is already a signatory, the document outlines the scope of operations for carrying out responsible investments.
- Integration of ESG aspects in the investment decision-making process
Criteria, tools and activities have been defined to identify, assess and monitor the investments that are more exposed to social, environmental and corporate governance risks.
As in the past, the criteria defined refer to the production of weapons which, when used normally, may violate fundamental humanitarian principles (cluster bombs, antipersonnel mines and nuclear weapons), and the involvement of companies in serious or systematic violations of human rights, serious environmental damage or serious instances of corruption.
The management process aims to identify the ESG risks associated with investing in companies involved in these activities – including through an external provider – and provides for initial dialogue activities to discourage the behaviours observed or to exclude them from the portfolio in the event of inadequate responses.
- Offering socially responsible investment products
The Group is committed to developing and offering investment products that meet Socially Responsible Investment (SRI) criteria built using a proprietary methodology that enables us to select the best companies according to the corporate social responsibility and sustainable development policies. The analysis uses an approach based on risks and opportunities, combining traditional financial and non-financial aspects, and on a best effort evaluation criterion, which considers companies with more pronounced ESG performance improvement trends. If necessary, we also rely on dialogue to encourage the companies involved to act responsibly and help them improve their performance.
- Dialogue with issuing companies and voting policy
The integration of ESG aspects is also regulated by the Group Voting Policy, which incorporates a practice established by Generali Investments Europe to align the voting choices with the investment strategy. The Generali Group is in favour of submitting proposals at shareholders’ meetings in order to disseminate best practices with regard to governance, business ethics, social cohesion and environmental protection, and undertakes to express its views on similar proposals from other shareholders. The Policy also defines the Group’s position with regard to the fair treatment of shareholders’ rights, anti-takeover mechanisms, sustainability in the composition of the board (in terms of diversity, independence, etc.), transparency and the quality of financial disclosure, in addition to the inclusion of ESG variables in the remuneration policies of managers. There are also clear indications with regard to voting against activities that are not in line with the Group’s ethical principles.
- Impact investing
The Group considers the possibility of making financial investments in companies, projects or investment funds with a view to improving the living conditions of the communities in which it operates or reducing risks and mitigating the effects of climate change, with the intention of generating a positive social and environmental impact while maintaining an adequate financial return.
- Public commitment and accountability
Constant dialogue, collaboration with national Institutions and participation in international networks to promote responsible investment are an integral part of the Group activities. Among these, we note in particular our participation in initiatives and working groups of the European Forum for Sustainable Finance (EUROSIF) and the Forum per la Finanza Sostenibile (FFS). Even transparent communication on issues related to responsible investments in the financial markets and the disclosure of the results obtained are viewed as tools to promote the Group sustainability.
A working group on responsible investment
During 2014, with the intention of creating an opportunity to develop sustainable and responsible investment in the insurance sector, the Forum per la Finanza Sostenibile and ANIA (association of Italian insurance companies) promoted the establishment of a dedicated working group, of which the Generali Group is an active member.
The group’s work is summarised in an information booklet entitled Le imprese assicuratrici e l’investimento responsabile (Insurance companies and responsible investment), which describes the main points that emerged during meetings, including operational recommendations and a series of technical analyses and case studies.
The document includes an introductory analysis of the state of the SRI market in Italy, insights on SRI investment policies, ESG analysis methodologies of government and corporate issuers which consider the risks and opportunities of the emerging themes, and finally the SRI investment products available on the market (pension-related products, index and unit-linked products, impact investing).
A task force for social impact investment
Generali participates in the G8 Social Impact Investment (SII) Taskforce launched by the UK Prime Minister during the G8 Forum held in London on 6 June 2013, dedicated to stimulating capital investments in companies and funds which, in addition to a financial return, also aim to achieve a measurable social or environmental impact.
Each country has its own representatives on the international Task Force (for Italy the members are Giovanna Melandri, Mario Calderini and Mario La Torre) and has established a national Advisory Board, which is in turn subdivided into thematic groups.
The Italian Advisory Board, with participation from Generali, is represented by financial experts and social entrepreneurs and has been supported by the contribution of institutional partners, such as the Ministry of Labour and the Ministry of Foreign Affairs.
During the year, each Advisory Board produced a final report incorporating the study and observations produced by the individual working groups.
The Italian report, published in September 2014, concludes with 40 recommendations and proposals to help expand the potential of social entrepreneurship and impact finance at national and international levels. Each recommendation is accompanied by a suggested timetable for implementation (short, medium or long term).
The proposals to be implemented in the short term include:
- “exclude social impact financial products from the increase in the taxation of financial instruments required by L.66/2014”;
- “approve the decrees implementing the law on microcredit and fully implement the provision that provides for the extension of the Central Guarantee Fund for SMEs to microcredit loans”;
- “reduce administrative barriers and costs to make social impact investments available to institutional and private investors”.
A fund for development in Africa
A particularly significant example of impact investing involves Generali International Ltd. (Guernsey).
The initiative relates to one of the unit-linked products sold by the company – the Alquity Africa Investment Fund – which invests in listed companies with a presence in a number of African countries by applying a careful selection process aimed at identifying those that are managed with robust social responsibility principles.
In addition, Alquity Fund allocates up to 25% of its management fees to non-profit organizations operating in selected African countries.
The Chairperson of the Donations Committee is Georgie Fienberg, a senior representative of the world of sustainable philanthropy and founder of Afrikids, an NGO that does not give grants, but tries instead to create small communities that are able to support themselves.
The CEO is Paul Robinson, who established One Water and One Foundation, through which he has funded water projects in Africa by selling bottled water in some discount stores in the United Kingdom.
Through Afrikids, the Alquity Fund mainly carries out microcredit activities in Ghana in favour of small businesses and individuals, and is funding the creation of medical centres, orphanages and homes for street children.
Generali’s direct cooperation with Afrikids has further intensified over time: in addition to providing continuous financial support by investing capital in the Alquity Fund, the initiative is supported through the Experience Challenge programme, which allows groups of General International employees to spend a week in the African communities supported by the programme, getting involved in the life and work of the local people.