Letter from the Chief Executive Officer

Letter from the Chief Executive Officer

Dear Stakeholders,

Since becoming CEO of UniCredit, I have made no secret of my ambitions for our bank: I believe that we can be the bank for Europe's future. Europe’s future may look markedly different today than it did when I became CEO, facing conflict the scale of which has not been seen on our continent for a generation, but what it needs from its institutions in the long-term is unchanged. That bank must be many things: financially successful and resilient; driven by empowered people working to a common goal; and united behind a shared purpose.

Underpinning all these qualities lies a commitment to creating a better future, a future that is more sustainable and benefits all our stakeholders in the long-term, as we emerge from the pandemic and, eventually, from the crisis in Ukraine. The bank for Europe's future has Environmental, Social, and Governance considerations at the heart of all its activity. The crisis only makes this more important.

At UniCredit, ESG is not an afterthought or an add-on. It is a mindset, which guides and informs every decision we make and all the actions we take. And ours is an ambitious mindset: already this year we have extended our Coal policy to support the financing of green activities and our Oil & Gas policy to include onshore, oil expansion and new oil projects.

These policies are written and codified, but they are about more than words. They are about action and leading by example. We must hold ourselves and our clients to certain standards of accountability and responsibility. We must demonstrate real, measurable, tangible ESG actions.

That's why ESG is woven through UniCredit Unlocked, the new strategy for our bank, to help our clients in a just and sustainable transition towards a better society. We will take a holistic approach to all aspects of ESG because they must be considered equally in this journey.

Environmental, Social, and Governance considerations are often seen as touching only E. This is not the case. They are equally important, but they do not always equate to the other. We are determined to be both ambitious and pragmatic in our approach to ESG. We will continually evaluate how we deliver on ESG considerations, always working to achieve success across all, but also understanding that we as a company may have greater impact in different areas at different times. This is particularly important when we consider those industries and countries which are less further along in their development and may face greater challenges to reach sustainability. We cannot simply discount
them: countries are home to millions of people and these sectors are still vital contributors to our economy, employing vast numbers. To exit them entirely would have significant social consequences, undermining the possibility of a decent living for the people in those regions. They, and their communities, deserve our support to progress towards a greener future.

Sustainability cannot be achieved by making these industries and countries disappear. Instead, we must support them through this transition in order to mitigate social risk. This will involve compromise, and a complex interaction with clients, but we will work with them to define common standards of action and a specific framework for transition. This will take time, but it is necessary to truly make this a just transition for all. At every step of the way, we will ask ourselves if we are doing the right thing and ensure we are confident the answer is yes.

What we expect from our clients we must embody ourselves. Just this year, we have taken important steps to do so. In 2021, we signed up to the Net-Zero Banking Alliance, an important milestone in our journey to a more sustainable future. Delivering a positive and sustainable transition to green energy which does as little harm to the planet and its people as possible will not be an overnight process, and it is only right to set goals and hold ourselves accountable.

We also signed a CEO manifesto as part of the G20, committing us to driving meaningful and accountable change towards gender pay parity. As part of this, we will invest EUR100 million to ensuring equal gender pay, which means equal pay for equal jobs.

Within the framework of our participation to the UN Principles for Responsible Banking, we joined the Commitment to Financial Health and Inclusion; a first-ofits-kind commitment to promoting universal financial inclusion and to fostering a banking sector that supports the financial health of clients.

This is completely aligned with our purpose of empowering communities to progress: banks exist to do more than lend. We exist to support individuals - entrepreneurs, families, and the vulnerable - to build better lives and, in turn, to help communities grow. We are endeavouring to shape a society that is not only more sustainable, but more inclusive and equitable. We are proud to be the first Italian bank to sign this collective commitment.

The changes we make within the bank will resonate outwards. We will bring our clients and communities on our journey towards sustainability with us. Our ESG commitments will inform our choices of who we partner with to deliver aligned environmental and social goals, and how we mobilise capital and set targets to foster sustainable development. In the next three years we plan to target new ESG volumes with a cumulative value of over EUR150 billion.

This is a journey, and we all know it will not be a simple one. Doing the right thing is not always straightforward. However, I believe it is the only possible road to travel if we are to secure a better future, and I also believe that our bank has everything we need to make the journey.

We will commit to being held accountable and we will provide updates on our progress as we build a more equitable and sustainable future - a better future.

That is what I know you expect from the bank for Europe's future, and it is what I know we will deliver.


Andrea Orcel
Chief Executive Officer UniCredit SpA