Our system of corporate governance promotes clarity and accountability while continuing to evolve to ensure long-term sustainable value.
UniCredit is an Italian listed company, with a traditional management and control system, which assigns specific responsibilities to the Shareholders' Meeting and allows for a clear exchange of views between shareholders and management on key decisions relating to governance.
These include appointing and removing Directors, appointing members to the Board of Statutory Auditors, granting a mandate for external auditing to an audit firm and approving all associated fees.
Such decisions also include the approval of financial statements, the allocation of profits, resolutions on remuneration and incentive policies and practices in accordance with current provisions, as well as setting criteria to determine compensation to be granted in the event of early termination of employment or early retirement from office.1
ORGANISATIONAL AND GOVERNANCE STRUCTURE, FOCUS ON ESG COMPONENTS
(AS AT THE APPROVAL DATE OF THIS REPORT)
Our sustainability governance has been significantly strengthened in recent years at both steering and execution levels, underpinning the drive to further integrate ESG criteria into the Group's overall business strategy.2
CORPORATE BODIES OVERSIGHT
AUniCredit's Board of Directors defines the overall strategy of the Bank, which incorporates the Group's ESG strategy, overseeing its implementation over time.
BThe ESG Committee (ESGC) supports the Board of Directors in fulfilling its responsibilities with respect to the ESG components integral to the Group's business strategy and sustainability over time.
CThe Internal Controls & Risks Committee (IC&RC) supports the Board of Directors in risk management and control-related issues. Its work encompasses matters of risk in the ESG sphere such as climate change risk.
DThe Corporate Governance & Nomination Committee (CG&NC) provides support to the Board on topics regarding the UniCredit corporate governance system, the Board of Directors composition and top management.
The Board of Statutory Auditors exercises oversight of ESG governance and related topics. On the occasion of the renewal of the Board of Statutory Auditors in 2022, the areas of Sustainability (ESG) and Digital technology were specifically added as desirable competencies of the qualitative profile of its members.
STEERING AND COORDINATION
EThe Group Executive Committee (GEC) is the Group's most senior executive committee and is chaired by the CEO It defines the overall ESG strategy. It also ensures the effective steering, coordination and control of the Group business as well as the alignment of the parent company with the different businesses and geographies regarding strategic topics such as ESG issues. Moreover, in dedicated Risk sessions, the GEC supports the CEO in coordinating and monitoring all categories of risks and approves strategic risk topics including ESG-related matters.
FThe Group Non-Financial Risks and Controls Committee (GNFRC) supports the CEO in steering and monitoring non-financial risks. For example, it approves governance policies and guidelines for the management of reputational risk regarding sensitive sectors.
GThe Group Strategy & ESG and Group Stakeholder Engagement functions together serve as a CEO Office. The office deals with all initiatives which are critical for the CEO such as strategy, M&A, the further integration of ESG criteria in our business, stakeholder management and regulatory affairs. The Group ESG function, part of Group Strategy & ESG, steers the definition and implementation of the Group's ESG strategy. It ensures the ESG framework is consistent with the Group’s principles and Purpose and with relevant international standards and practices. Moreover, the function is tasked with, inter alia, monitoring and disclosing the Group's ESG impacts and results and with overseeing the adoption of relevant policies and standards.3 The function’s activities are divided into three offices - ESG Strategy and Implementation; ESG Service Excellence; ESG Metrics, Policies and Disclosure.
HThe Group Risk Management function supports the
CEO in defining the Group Risk Appetite proposal which is
to be shared with the GEC, the IC&RC and the Board. It also
interacts with the IC&RC and the ESGC on ESG risk matters.
Within Group Risk Management, the Group Climate Risk and Risk Governance function oversees climaterelated and environmental risks. It has a central steering and coordination role aimed at ensuring alignment with ECB guidelines on climate-related risk and related plans, promoting the definition of a strategic view on climate risk and supporting climate risk-related methodologies. Furthermore, the newly established Climate & Environmental Credit Analysis function manages the integration of climate and environmental factors in the various phases of the credit risk cycle.
IMPLEMENTATION AND EXECUTION
Dedicated ESG teams and experts. ESG matters are increasingly embedded across our Group through dedicated teams and experts in several Group functions which manage specific ESG aspects according to the area of competency. Examples include the Sustainable Finance Advisory Team, ESG offices supporting business divisions in the main Group geographies, and the recently established ESG Digital and Group Real Estate ESG, Innovation Projects & Monitoring functions. The Compliance and Regulatory Affairs functions also have resources dedicated to ESG-related issues.
Additionally, an important role is played by UniCredit Foundation, the corporate foundation of UniCredit Group. Its new Purpose is to unlock the potential of Europe’s next generation. The Foundation's mission is to empower young people across Europe by providing equal opportunities in education and supporting their personal and professional development4.
1 For more information refer to the annual Report on corporate governance and ownership structure and the 2023 Group Remuneration Policy and Report available in the Governance section of our website (www.unicreditgroup.eu).
2 For more information on functions involved in the governance and management of climate-related issues, see our 2021 TCFD Report, pages 10 - 14, available at https://www.unicreditgroup.eu/content/dam/unicreditgroup-eu/documents/en/sustainability/sustainability-reports/2021/UC_TCFD_2021_ENG.pdf.
3 This includes the coordination and publication of the Group Integrated Report, UniCredit's TCFD Report, and the implementation of the Principles for Responsible Banking-UNEP FI and related reporting.
4 For more information refer to the Human Capital chapter and to the website of the Foundation https://www.unicreditgroup.eu/en/unicreditfoundation.html.