At UniCredit, we view the participation of all people in the modern financial system as a vital aspect of economic development. We also take seriously our own responsibilities with respect to the potential social and environmental impacts of our business.
In 2010 we focused on the following:
- providing accessible and suitable products and services to the less financially secure members of our communities, supporting those who are struggling with the financial crisis, and promoting financial education
- taking a socially and environmentally responsible approach to financing sensitive industries by utilizing special risk policies and responsible products
Financial Inclusion
Reducing poverty by enabling new groups to access financial products and services is an important aspect of a financial institution's corporate responsibility
UniCredit's financial inclusion initiatives are designed to accomplish the following:
- provide needed financial services at affordable rates to vulnerable groups facing financial difficulties
- bridge linguistic and cultural barriers to help immigrants participate in the financial system
- supply young people with products and services that suit their needs
- enhance financial literacy, thereby helping people manage their money and make more informed financial decisions
Families struggling with the financial crisis
In 2010, many families continued to face difficulties in repaying their mortgages due to the economic crisis.
In Italy, the Insieme 2009 initiative, which allowed customers to stop making their mortgage payments for up to 12 months under certain circumstances, came to an end in February 2010. At February 2011 approximately 9,300 customers participated.
We also continued to develop the ABI initiatives that are detailed in the appendix of this chapter.
In Croatia, we help clients restructure their debt using loans with longer or more convenient repayment periods or a grace period. In 2010, we approved 11,545 refinancing and debt restructuring requests.
In Hungary, we provide tailored solutions for clients in temporary difficulty through a renegotiation program. This program processed 812 applications in 2010.
In Italy we also continued to implement a number of ethical credit card initiatives managed by charity organizations that provide support to families. All the roughly 178,600 cards issued that resulted in about €1.6 million in contributions.
Immigrants
Supporting immigrants means developing a service model that offers them a complete range of financial products and services.
In Italy, we continue to strengthen our Agenzia Tu network. The branches included in this network are dedicated to foreign nationals and temporary workers, and are designed to promote innovative products and services.
In 2010, Agenzia Tu continued to offer a wide range of products and services based on simplicity, trust and transparency. For example, in addition to conventional banking services, Agenzia Tu provides fixedrate discretionary loans.
The network attracted roughly 11,900 customers, of whom 4,500 were new in 2010. In comparison with 2009, the number of customers increased by roughly 40 percent.
In Prague, we established our first International Client Center, complete with information and documentation provided in four languages (English, Italian, German and Russian).
Future generations
We provide young people with products that suit their needs on favorable terms, thus enabling them to take charge of their own futures.
Ad Honorem loans are designed to help university students with their academic expenses.
We provide unsecured loans to students who plan to enroll in specialized educational institutions, training courses or master's degree programs. In Italy, several of these loan programs have been designed in close cooperation with major universities.
Also in Italy, we held a web contest, In Viaggio con Genius Card. Tailored to those between the ages of 18 and 30, it required participants to submit their plans for personal and professional growth, using photos, videos or text. Three winners received awards of €10,000, €7,000 and €4,500, respectively, for master's programs, language classes or professional courses in Italy or abroad. In 2010, more than 400 people participated in this contest.
In Austria, the MegaCard account for those between the ages of 14 and 20 comes with no maintenance or transaction fees and includes a bank card and a box office service for discounted tickets. At the end of 2010, roughly 41,200 youths were MegaCard customers.
In Russia, we held a contest for talented, young economists to encourage their participation in academic financial research.
Initiatives for customers with disabilities
We are working to increase the accessibility of our financial products and services to people with disabilities.
In Germany, we were the first service provider in Europe to introduce Braille-imprinted service and savings cards for our visually impaired customers.
In Austria in 2011, we will launch a new bank card featuring a large type for the visually impaired.
We are also working to make our branches and ATMs wheelchairaccessible wherever possible. At the end of 2010, for example, 19 out of 216 branches in Bulgaria were wheelchair accessible.
Financial education
We believe in the value of financial education to our customers. It represents an important way to foster informed decisions and the financial inclusion of people in vulnerable categories (e.g., families struggling with financial difficulties, youths, retirees, immigrants).
In this vital endeavor, our main objectives are:
- building greater financial literacy among consumers, especially in at-risk groups (e.g., young people and seniors)
- reducing the risk of over-indebtedness, thus decreasing the number of insolvent clients
- creating a better-informed customer base, thereby reducing complaints
In 2010, we continued to focus on initiatives intended for people and businesses not yet capable of participating confidently in the financial world due to their experience level, age or background.
Some of our initiatives involving credit and debit cards, new banking channels, mortgages and mutual funds have been running since 2008 in partnership with Italian Consumer Associations.
In 2010, the ChiaraMente project, an initiative for people over age 65, was launched in partnership with the Non Profit Community of Sant'Egidio. Roughly 150 people participated in this effort to help senior citizens transition to electronic banking. To date, feedback has been overwhelmingly positive, and new programs designed along similar lines are currently being developed.
Because financial understanding is vital to young people as they learn to deal confidently with everyday financial issues, we developed two programs for students:
- Guadagniamo il Futuro (Earning for the Future), is a training program for 17- and 18-year-old students. Stemming from a partnership with several Italian Consumer Associations (Adiconsum, Federconsumatori and Movimento Difesa del Cittadino), together with support from the Ministry of Youth and the Ministry of Economic Development, this program is focused on managing savings. In 2010, roughly 1,500 students in six Italian regions participated
- around 1,000 students participated in a project organized by the Italian Credit Observatory in collaboration with Rome's Tor Vergata University. The program is designed to raise awareness of financial tools and decision-making processes
In Germany, we organized Future Finance 2010 in cooperation with the leading daily newspaper, Suddeutsche Zeitung. Designed for recent graduates, students and young professionals, this initiative involved roughly 150 participants.
In Austria, the Schulinfoheft (booklet on school information) online platform remains active. Teachers use this platform to support activities with their economic classes (e.g., tracking students' grades, planning their academic calendar and ordering classroom materials). In 2010, roughly 500 orders were processed. We intend to redesign this online platform in the spring of 2011.
We also have designed special financial education initiatives for foreign citizens who would like to improve their understanding of the banking system.
In Italy, Agenzia Tu offers basic banking courses to foreigners who live in Italy. Roughly 240 people participated in these courses in 2010.
For enterprises, we have organized seminars that will improve their understanding of our products and processes while strengthening our relationship with the business community.
For example, in a partnership with the Province of Rome, we provided 60 entrepreneurs with an eight-part course on subjects including balance sheet analysis, business plans, Basel II guidelines, banking products and obtaining loans. We also organized seminars for entrepreneurs on finance products. Roughly 700 businesses participated.
The following additional financial education sessions in Italy have been held in conjunction with Consumer Associations (CAs):
- clients and non-clients alike were invited to attend sessions at UniCredit branches and CA offices. In 2010, 10 meetings at branches were attended by roughly 400 people, while six meetings at CA sites involved roughly 370 people
- CA managers have been invited by UniCredit to discuss ways to enhance financial education and share knowledge with our communities. In 2010, two such meetings involved 75 managers
UniCredit Main Financial Education Initiatives
| Country | Initiative | Description | Number of Participants in 2010 |
|---|---|---|---|
| Italy | ChiaraMente project | For people over age 65 and launched in partnership with the non-profit Community of Sant'Egidio, this initiative aims to help senior citizens transition to electronic banking | 150 |
| Guadagniamo il Futuro | A training program for 17- and 18-year-old students. Stemming from a partnership with several Italian Consumer Associations (Adiconsum, Federconsumatori and Movimento Difesa del Cittadino), together with support from the Ministry of Youth and the Ministry of Economic Development, this program is focused on managing savings | 1,500 | |
| Osservatorio sul Credito | A project organized by the Italian Credit Observatory in collaboration with Rome's Tor Vergata University it aims to raise awareness of financial tools and decision-making processes | 1,000 | |
| Agenzia Tu – Basic Banking Competence | It provides basic banking courses for foreigners living in Italy | 240 | |
| Financial education sessions in Italy in conjunction with Consumer Associations (CAs) | Clients and non-clients alike were invited to attend sessions at UniCredit branches and CA offices | 770 | |
| Financial education for SMEs | An eight-part course on subjects that includ balance sheet analysis, business plans, Basel II guidelines, banking products and obtaining loans | 60 | |
| I seminari dell'Imprenditore | Eight seminars designed for entrepreneurs and aimed at improving the understanding and application of credit products and processes | 700 | |
| Germany | Future Finance 2010 | A program designed in cooperation with the leading daily newspaper, Suddeutsche Zeitung, and dedicated to recent graduates, students and young professionals | 150 |
| Austria | Schulinfoheft | Online platform remains active. Teachers use this platform in order to support activities with their economic classes (e.g., tracking students' grades, planning their academic calendar and ordering classroom materials) | n/a |
| Cooperation with Austrian Chambers of Commerce and Trade | The close cooperation with all Austrian Chambers of Commerce and Trade (federal and regional) enables Bank Austria to give exclusive support to SMEs and prospect company founders | 6,000 |
Responsible finance
All of UniCredit's lending activities, including corporate, project and export finance, are carried out with reference to environmental and social standards of the International Finance Corporation and the World Bank Group. These consist of the IFC Performance Standards and the World Bank Group's Environmental, Health, and Safety Guidelines.
We also address potential social and environmental risks related to our lending and investment activities by following additional applicable international standards (e.g., the Equator Principles for project finance), developing special reputational risk policies and creating responsible products.
Special reputational risk policies and responsible products
At UniCredit, we have a responsibility to ensure that our activities do not generate undue negative social or environmental impacts.
In 2010, we continued to develop special reputational risk policies to address risks specific to our industry. To facilitate this process, we stay in regular contact with external industry experts, business representatives and NGOs.
Special Reputational Risk Policies
| Policy | Objective | Recent Developments and Risk Mitigation | |
|---|---|---|---|
| ALREADY IN PLACE | Defense/Weapons* | To regulate financial involvement with companies from the defense/ weapons industry, in order to minimize environmental, social, reputational and credit risk | UniCredit has published a position statement on the defense/weapons Industry that includes the key criteria our Group applies in this sector. In 2010, we expanded the implementation of this policy across UniCredit's legal entities as well as in related activities, processes and policy tools In order to raise internal awareness of this sensitive topic, we have developed internal communication activities and training for our colleagues. For example, in 2010 in Italy we launched a training module that, as of January 2011 included 10 sessions and involved 94 percent of all SME relationship managers and area managers and 100 percent of corporate relationship managers |
| Nuclear Energy* | To regulate involvement and aims to address the challenges posed by the nuclear sector in order to minimize environmental, social and credit risk | The content of our Group Nuclear Energy Reputational Risk Special Policy was published on our website in 2010 | |
| Non-Cooperative Jurisdictions | To define principles and rules for managing new business in tax havens and non-cooperative jurisdictions in order to help our Group maintain a high level of risk awareness and risk culture, while safeguarding UniCredit from tax and reputational risk-taking | In December 2010, our Reputational Risk Policy - Non-Cooperative Jurisdictions was formally approved by the parent company and will be implemented in 2011 by UniCredit's legal entities. The policy applies to new business, in connection with both proprietary activities and customers. As per this policy, new subsidiary businesses may be established in the abovementioned jurisdictions, but must be subject to specified standards of transparency With reference to customers, in respect of any new business established in the abovementioned jurisdictions, they must state in writing that, to the best of their knowledge, no tax regulations are being violated |
Special Reputational Risk Policies
| Policy | Objective | Recent Developments and Risk Mitigation | |
|---|---|---|---|
| UNDER DEVELOPMENT | Human Rights | Objective | Recent Developments and Risk Mitigation |
| Mining | To provide guidelines and standards that address risks associated with mining operations | In 2010, we continued to develop our reputational risk policies concerning mining and water infrastructure, and we remained in contact with external industry experts, business representatives and NGOs. In reference to the water infrastructure policy, we met with the NGO Counter Current in Berlin in January. Both policies have also been discussed and developed further with all relevant internal colleagues. Prior to final approval and distribution of these policies, we will hold stakeholder roundtables for each of them in 2011 to generate additional feedback in 2011. After final approval, we will disclose the central content of these policies on our website | |
| Water Infrastructure | To provide guidelines and standards that address and limit risks associated with the financing of fresh water infrastructure |
We are committed to the ongoing development of lending practices and products designed to deliver clear environmental benefits.
Across UniCredit, we have launched a series of loans for Retail customers that aim to encourage energy efficiency and renewable energy production:
- in Italy, CreditExpress Energia is a credit line for energy-saving building renovations, such as upgrading heating and air conditioning systems or improving insulation. In 2010, we provided more than 250 such loans, worth over €4 million.
Chirografario Fotovoltaico is for the financing of photovoltaic systems and is designed to take advantage of energy efficiency incentives. These incentives enable customers to obtain reductions of their energy costs during the term of the loan. In 2010, we made more than 470 of these personal loans, worth more than €12 million - in 2010, we created a new loan for photovoltaic investments in Bulgaria while in Croatia, a green housing loan encourages customers to make use of renewable energy sources
- the WWF UniCreditCard supports the WWF's largest natural conservation program, the Oasis WWF project. Out of every purchase made by WWF UniCreditCard holders, 0.3 percent goes to a fund supporting activities including plant and animal conservation, the maintenance of hiking trails, and the prevention of illegal hunting and pollution in protected areas. By the end of 2010, more than 6,700 WWF UniCreditCard were issued
As of year-end, our Corporate & Investment Banking Strategic Business Area had a portfolio of €4.4 billion in loans for renewable energy projects, principally in wind farms, photovoltaic, solar thermal and biomass installations.
In 2010, we extended our relationship with the European Investment Bank (EIB) and other agencies that provide environmental subsidies
The EIB has provided UniCredit Leasing with two credit lines totaling €550 million. This enabled Leasing to make more than €1 billion in EIB funds available to Italian firms over the past year alone. These latest contracts provide for €350 million to finance investments by SMEs and €200 million to support renewable energy and energy efficiency projects. Both of UniCredit Leasing's credit lines are guaranteed by the parent company. In Austria, we have begun discussions with Kreditanstalt für Wiederaufbau (KfW) on refinancing investment loans in the energy and environmental sector via KfW's global loan programs. In 2011, we will work to create further refinancing opportunities for investment loans in the energy and environmental sector, both with the EIB and KfW. At the end of 2010, we also launched an energy-efficiency initiative in Southern, Central and Eastern Europe to finance the development of energy-efficient office buildings that capitalize on the decline in construction costs and can be made available at relatively low and sustainable rental rates. The initiative will continue in 2011.
With the object of incorporating environmental, social and corporate governance (ESG) considerations into its investment activities and to make investment-related ESG information available to its portfolio managers and analysts, Pioneer Investments subscribed in 2010 to an ESG service provided by ISS, a leading company in the field. The information from ISS includes research, analysis, ratings and screening tools.
Project Finance and the Equator Principles
First adopted in 2003 by HVB3, the Equator Principles are today an integral part of the project finance activities of UniCredit's investment banking arm. Since 2008, Corporate & Investment Banking (CIB) has worked continuously with the Group Risk Policies Department on the Groupwide adoption of the Equator Principles for project finance. At the same time, CIB has improved the implementation of the model's standards across all points of the project financing process, rather than solely at the final approval stage, which is when formal reviews are traditionally conducted.
In October 2010, UniCredit formally introduced its new Groupwide Special Credit Policy on Project Finance Transactions, which requires that all UniCredit entities comply with the Equator Principles. It features an extended screening and management process based on the Equator Principles. It also formalized the new Equator Principles Risk Management Screening Tool, which must now – according to the policy – be applied to all project finance credit requests. A priority in 2011 will be the incorporation of the Holding Special Credit Policy on Project Finance Transactions into the project finance processes and procedures across all legal entities.
From the early stages of a relationship, we look for confirmation that potential clients are motivated to meet the requirements stipulated under the Equator Principles. This might include social and environmental assessments for a proposed project, or the necessity of undertaking consultations with affected communities and relevant authorities.
To this end, we have begun providing additional support to help make our clients more aware of environmental and social risks, and to extend the resources required to manage those risks. In most cases, this directly contributes to the long-term viability of their projects.
This approach also enables us to decline potential projects when a client's management capacity cannot be increased sufficiently to address the financial, environmental and social risks identified. In addition, we now selectively conduct site visits for clients with high-impact projects. The CIB based Equator Principles Team, created in 2010 at the parent company level, is responsible for screening project finance transactions and evaluating the environmental and social risks and impacts. According to the principles, an independent Lenders Environmental and Social Risk Advisor is involved and signsoff on the appropriateness of the Environmental Impact Assessment and on the Environmental and Social Action Plan that the client must provide, as required for Category A projects.
Environmental and social risk management capacity-building program
In the first half of 2010, the CIB Equator Principles Team continued the environmental and social risk management capacity-building program begun in 2009. They conducted four training courses on the Equator Principles in a program developed with external partners. The course includes modules tailored to multiple user groups within UniCredit.
Development priorities for 2011 include continuing the capacitybuilding program with a focus on UniCredit entities in the CEE and rolling out our Holding Special Credit Policy on Project Finance Transactions and our Equator Principles Risk Screening Tool to all UniCredit legal entities.
UniCredit and the Equator Principles Financial Institutions
From 2008 to 2010, UniCredit chaired the NGO Working Group of the Equator Principles Financial Institutions (EPFI) network. In this role, we promoted a dialogue between EPFIs and NGOs and in December 2010, we relinquished our leadership of the NGO Working Group to WestLB and Credit Suisse.
In February 2011, in collaboration with the secretariat of the Organisation for Economic Co-operative Development (OECD), UniCredit organized a one-day meeting between the EPFI and export credit agency environmental practitioners, which took place at the OECD's office in Paris. The meeting addressed topics such as the upcoming IFC Performance Standards revision, the upcoming OECD Common Approaches Revision, as well as possibilities for closer cooperation on topics like outreach, climate change and human rights.
UniCredit is involved in the stakeholder engagement process with IFC and actively contributes to the ongoing review of the IFC Performance Standards. UniCredit will continue in its role as a steering committee member in the Equator Principles Association in 2011, and will continue to co-chair the Export Credit Agencies Stakeholder Engagement Working Group and to lead the CEE Outreach Working Group within the EFPI network.
| Risk Category1 | 20102 | 20093 | 20084 |
| Category A | 2 | 2 | 1 |
| Category B | 12 | 11 | 14 |
| Category C | 4 | 1 | 11 |
| Total | 18 | 14 | 26 |
- Category A - Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or unprecedented; Category B - Projects with potential limited adverse social or environmental impacts that are few in
number, generally site-specific, largely reversible and readily addressed through mitigation measures; Category C - Projects with minimal or no social or environmental impacts. - UniCredit Bank AG only.
- Projects financed within UniCredit Bank AG, including one project financed by UniCredit Mediocredito Centrale SpA for which UniCredit Bank AG provided due diligence services.
- Projects financed within HVB, including one project financed by Bank Austria for which HVB provided due diligence services.
| Sector | Category A | Category B | Category C |
| Resources* | 2 | 3 | |
| Energy | 4 | 4 | |
| Infrastructure | 5 | ||
| Total | 2 | 12 | 4 |
| Region | Category A | Category B | Category C |
| Europe: EU | 2 | 1 | |
| Europe: non EU | 1 | 4 | |
| North America and Mexico | 1 | 5 | 3 |
| South America | 1 | ||
| Total | 2 | 12 | 4 |
Project & Commodity Finance - No. 1 in Global Renewables in 2010
UniCredit ranks first in the renewables Mandated Lead Arrangers (MLA) league table of Infrastructure Journal, having closed 42 transactions in 2010 for a total of roughly $1.8 billion, more than 3.5 times its deal volume in 2009 (11 transactions, $499 million). Infrastructure Journal remarked, the increase consolidates UniCredit's presence in the renewables sector as it takes the bank's overall share of the market to 6.51 percent.
| Total Usd Mn | Rank | Mkt. Share | No. of Issues | |
| UniCredit | 1,774.24 | 1 | 6.51 | 42 |
| Bank of Tokyo-Mitsubishi UFJ | 1,420.81 | 2 | 5.22 | 25 |
| Grupo Santander | 1,231.75 | 3 | 4.52 | 27 |
| Rabobank | 956.17 | 4 | 3.51 | 16 |
| BBVA | 953.15 | 5 | 3.50 | 29 |
| Société Générale | 930.81 | 6 | 3.42 | 19 |
| NordLB | 893.97 | 7 | 3.28 | 20 |
| Deutsche Bank | 831.31 | 8 | 3.05 | 15 |
| Dexia Group | 729.05 | 9 | 2.68 | 18 |
| Crédit Agricole Group | 675.36 | 10 | 2.48 | 15 |
We committed the majority of this debt across a balanced portfolio of photovoltaic projects (24 transactions closed) and wind projects (17 deals closed). Additionally, UniCredit provided debt for the Borkum West II 200MW Offshore Wind Farm - a landmark transaction and the first project financing of a large German offshore wind farm - as well as the first entirely municipal-sponsor-based offshore wind farm in Europe.
The Power & Environment Team also participated in several awardwinning projects in 2010. The Rovigo 70MW PV acquisition was awarded European Solar PV Deal of the Year 2010 by Project Finance magazine, while the Avenal Solar deal received two awards: Renewables Deal of the Year 2010 in the Americas by PFI, and Project Finance's North America Solar Deal of the Year. We are proud of our global number one position in a sustainable business sector. These successes demostrate UniCredit's commitment to green development.
- During 2009, Bayerische Hypo-und Vereinbank AG (HVB AG) changed its company name in UniCredit Bank AG.