Prelios Credit Servicing is aware of its responsibility to contribute to sustainable development and consistently manages the environmental and social aspects of its activities, in addition to its own direct impact.
The ESG policy of Prelios Credit Servicing S.p.A. ("PRECS") is an essential document in the framework of the commitment to sustainability, considering the constant development of the regulatory and market environment. ESG analysis assesses how companies manage their environmental, social and governance impacts, and how they perform in terms of sustainability and social responsibility. ESG Policy is an integral part of PRECS' overall approach to ESG criteria.
In recent years, the importance of ESG in the financial and banking sector has grown significantly, in response to regulatory pressures, especially at the European level. Investors, banks and financial intermediaries are increasingly integrating ESG factors into their investment and lending decisions, recognising the crucial role they play in economic, environmental and social sustainability. Particularly in the credit management industry, a focus on ESG is vital as financial receivables can have a significant impact on the economy and communities, especially during challenging economic times.
The current Policy outlines the principles and guidelines for integrating ESG issues into PRECS' business processes, promoting sustainable development and managing risks in accordance with sustainability practices. Recipients include members of corporate bodies, employees and collaborators of PRECS, suppliers.
DOWNOLAD
The Esg Governance Model
In order to strengthen management's focus on ESG issues and to give an active and informed role to the board of directors with regard to climate and environmental risks, the Company has established the ESG Committee and appointed an ESG contact person, in line with the expectations expressed by the Bank of Italy regarding, first and foremost, the integration of climate and environmental risks into business systems.
The ESG Committee advises and makes proposals to the Board of Directors and the Chief Executive Officer in integrating environmental, social and governance issues into corporate decision-making processes.
The ESG Referent is responsible for integrating sustainability principles into PRECS management practices and monitors the ESG Action Plan approved by the Board of Directors.
Risk Management is involved in the identification and assessment of sustainability risks, presenting analyses to the ESG Committee, the Risk Committee and the Board of Directors on an annual basis.
The NPL Management and UTP Management Business Departments, as well as the Compliance & AML and Internal Audit functions, are involved in specific topics, while each function manager is responsible for implementing the sustainability guidelines.
The Pillars of Sustainability
The Company has embarked on a structured process of integrating ESG factors into its operations to implement sustainable management strategies and respond to the growing demands of stakeholders regarding ESG strategy. The Company, aware of the impact that credit management can have on a social and environmental level, is committed to a growing path of sustainability, based on six fundamental pillars that create sustainable value for all stakeholders: human capital, relations with suppliers, society, innovation, environment, corporate governance.
For the Company, being sustainable means pursuing responsible economic growth based on the values of integrity, respect for people and natural resources, together with a constant commitment to innovation understood as the creation and improvement of products and processes.
For PRECS, socially responsible credit management is a key element in the sustainability journey undertaken.
Responsible credit recovery
The Company is committed to the continuous assessment of the social and environmental impact of credit management, especially in the NPL sector and even more so in the parallel UTP (Unlikely To Pay) sector, which by definition includes companies still in business that must also reprogram themselves financially. During debt recovery, the company adopts a collaborative and transparent approach, favoring out-of-court settlements and avoiding aggressive recovery activities. The aim is to propose solutions that promote a return to long-term performance and sustainability, while also benefiting the local economy.
In order to deal with the problems of NPL-UTP (jointly "NPE") for its customers in an efficient and sustainable way, PRECS deals with:
- Define a strategy and an operational plan for the management of NPE receivables
- Monitor the implementation of the strategy
- Define the management objectives for the activities aimed at the recovery of NPEs
- Define appropriate procedures for the approval of decisions relating to the recovery of NPEs
- Ensure sufficient internal controls over NPE management processes and approve related policies
- Have sufficient expertise in the management of NPEs
ESG Factors
The acronym ESG represents a framework to support stakeholders in assessing how an organization manages risks and opportunities related to environmental, social and governance criteria. The Company is committed to consistently managing environmental and social aspects in its credit management policies and in its direct impact. The principles included in the policy aim to provide clear sustainability guidelines that guide the Company's operations.
An important step forward is the reconciliation of corporate objectives with 10 of the 17 Sustainable Development Goals promoted by the UN, which address economic, social, environmental and governance challenges.
PRECS, together with the Prelios Group, carried out a materiality analysis through a thorough process that included the identification of material issues relevant to the Company, the identification of the main internal and external stakeholders, the engagement with stakeholders through the administration and collection of questionnaires, theanalysis of the results obtained, the creation of a matrix, as well as the identification of the relevant KPIs for each material topic. Through this analysis, it was possible to associate each material theme with the KPIs established and monitored by PRECS, in order to contribute to the Sustainable Development Goals (SDGs). From the materiality analysis, therefore, the themes and SDGs supported by the company emerged.
Environmental
The Company recognizes the importance of environmental management as a responsible business practice towards its customers and suppliers.
Environmental impact management is key to sustainable credit management. In addition to complying with applicable environmental laws and regulations, the Company aims to promote environmental awareness and knowledge.
Environmental goals among the 10 eligible SDGs
Direct environmental impact
As a financial intermediary, the direct environmental impact of PRECS is relatively limited. However, the Company is committed to continuously improving its environmental performance by adopting targeted strategies.
Actions promoted
- Work to reduce the direct negative impact of the Company's activities on the environment (e.g. smart working)
- Be resource-efficient and use renewable or recyclable materials
- Minimizing and recycling waste
Indirect environmental impact
The Company is committed to promoting actions aimed at reducing indirect impacts on the environment, even if these are limited in scope, especially with respect to its value chain.
Actions promoted
- Continuously improve risk assessment procedures, further developing environmental and social considerations
- Involve suppliers in the assessment of sustainability performance
Direct environmental impact
Travel policy
At Group level, a Travel Policy has been implemented for some time now, which aims to reduce the travel of individual employees between the various Group companies to strictly necessary cases and to replace meetings, both internal and external, with teleconferences and videoconferences where necessary and/or possible.
Company car policy
The Group has introduced the Company Car Policy, demonstrating a strong sensitivity towards colleagues and the environment, which includes rules that aim to:
- Offer colleagues a wider and improved range of cars
- Ensure the use of a car fleet that is more in line with environmental sustainability (hybrid, full electric cars)
- Keep the car list attached to the policy updated from time to time
- Encourage employees to make a sustainable choice by opting for models with a lower ecological impact
Responsible use of resources
The Prelios Group has embarked on a path to reduce the consumption of materials, in particular paper and toner, by promoting sustainable practices among employees and in business relationships, including:
- The detection and monitoring of print data coming directly from the e-maintenance system provided by the service provider
- Raising awareness among employees on saving paper and reducing energy consumption for lighting unused rooms
Waste production
To promote responsible waste management behavior, the Company disseminates good practices among employees, encouraging them to follow specific guidelines during their daily activities Each site has differentiated containers for the collection of materials such as paper, plastic and organic waste and their disposal is done through authorized suppliers.
Road to Net Zero
As confirmation of its commitment to environmental issues, PRECS, in line with the Group, is committed to the "Road to Net Zero" initiative. The fight against climate change is a global challenge that requires concerted action by government institutions, businesses, financial investors and, more generally, society as a whole. Effectively tackling climate change necessarily involves reducing greenhouse gas emissions into the atmosphere.
Calculation of GHG emissions
In 2022, in collaboration with the Prelios Group, PRECS launched a monitoring of its direct and indirect GHG emissions (Scope 1, 2, 3) along the entire value chain, expressed in tons of CO2 equivalent and calculated on the basis of models in line with the reference standards. GHG emissions, according to the Greenhouse Gas Protocol (GHGP) classification, include:
- Scope 1: these are direct emissions from sources owned or controlled by the organization. Including combustion processes, refrigerant gas leaks, transport with vehicles owned by the organization
- Scope 2: these are the indirect emissions resulting from the production of electricity, heat or steam imported and consumed by the organization
- Scope 3: these are the other indirect emissions deriving from business activities. This category includes emission sources that are not under the direct control of the company, but whose emissions are indirectly due to the company's activities
For the next few years, Prelios will be committed to the annual quantification of emissions, the preparation of its reduction targets and the planning of emission reduction actions through a multi-year plan in line with the main international standards and market best practices.
The reduction targets will be defined according to the SBTi (Science Based Targets Initiative) which guides companies in adopting ambitious targets for reducing GHG emissions in line with the objectives set by the Paris Agreement (COP 21).
Social
The Company considers both internal aspects and external relations with stakeholders with regard to social aspects.
Social goals among the 10 eligible SDGs
The Company attaches great importance to the social dimension, placing people at the centre of its attention. The well-being, health and integrity of people are considered fundamental, ensuring business growth that respects the primary needs of employees, customers, suppliers and stakeholders. PRECS has increased its workforce in compliance with gender equality and has always protected its employees, offering a wide range of company benefits and investing in their continuous training to adapt them to the new skills required by the market. The relationship with staff is based on principles of inclusion and merit, ensuring fair treatment regardless of gender or any other form of diversity.
In the distressed credit sector, the Company and the Group face the challenges in an efficient and sustainable manner, preferring recovery strategies aimed at bringing debtors back to performing status.
This strategy is also pursued through specific credit education initiatives, such as the Educadebito platform, used in recent years to reduce, and if possible, overcome, situations of credit difficulty and promote the financial rebalancing of debtors, with impacts on the entire country system.
This commitment by the Company has resulted in the fact that over 350 debtors, representing over 2 billion euros of credit exposure, have returned to a situation of financial stability in the last 2 years.
Governance
The Company pays attention to the Governance component through the various policies adopted, as well as to the applicable regulations and is committed to maintaining an internal regulatory body that exceeds market standards
Governance goals among the 10 eligible SDGs
The Company is committed to complying with strict principles of professional ethics and transparency, through adherence to and compliance with Model 231 and the Code of Ethics, ensuring proper management of conflicts of interest and risks related to corruption, money laundering, terrorism and international sanctions. The Company adopts specific initiatives for its suppliers, especially in contracts with outsourcers, requiring their explicit adherence to the Code of Ethics.
Sustainability risk frameworks in managed portfolios
The Company has integrated climate and environmental risks into its risk management framework, in line with the Bank of Italy's Expectations, implementing a methodology to analyse the impacts of these risks on PRECS' operations with regard to the portfolios under management.
The risk factors considered in the impact analysis on Pillar 1 and Pillar 2 risks are those arising from physical and transition risks.
The mapping of physical and transition risks carried out by the Risk Management Function has shown that these can have a significant impact in the medium to long term, especially on reputational and operational risks.
Physical risk
Potential negative impacts on recovery prospects related to hydrogeological, seismic and other chronic climatic events (e.g. floods), with reference to:
- operations and operational/financial continuity of PRECS and counterparties/portfolio positions
- the value of the properties pledged or repossessed, taking into account any damage, increased operating costs and insurance costs
Transition risk
Potential negative impacts on recovery prospects related to hydrogeological, seismic and other chronic climatic events (e.g. floods), with reference to:
- operations and operational/financial continuity of PRECS and counterparties/portfolio positions
- the value of the properties pledged or repossessed, taking into account any damage, increased operating costs and insurance costs
Legal and regulatory framework
The Code of Ethics adopted by the Company and the 231 Organizational Model represent an ethical tool at the service of sustainability.
Principles of action and the results to strive for
- Upholding, respecting and protecting internationally affirmed human rights
- Apply the Group's Code of Ethics approved by the Board of Directors
- Protect the health and safety of its workers, contractors and the community in the management, conduct and development of its activities
- Protect the environment in which it operates, making all workers and contractors responsible
- Promote the responsible use of resources
- Putting sustainability at the heart of its culture as a key factor for the company
PRECS, together with the Prelios Group, adheres to the concept of "Sustainable Development" promoted by the UN Agenda and, through the implementation of this policy, believes it can contribute to ensuring an improvement in living conditions for current and future generations.
Areas of intervention
- Implement and maintain the policy by reviewing it periodically
- Comply with applicable health, safety and environmental regulatory obligations
- Striving for continuous improvement and prevention
- Respect workers' rights, protecting and enhancing human resources, pursuing respect for the principle of equal opportunities, promoting everyone's professional growth
- Raise awareness and train workers to carry out their work safely and assume their responsibilities
- Communicate and disseminate information on health, safety at work, the environment and social responsibility to internal and external stakeholders
Responsibility for the management of health, safety at work, respect for the environment and social responsibility concerns the entire company organization, from the top to each worker, each with their own duties and skills.
Engagement Policies
The company promotes engagement policies both internally and externally to raise awareness among stakeholders on sustainability issues, with the aim of encouraging positive behaviour and improving the transparency of its operating environment.
Internal involvement
Preparation and implementation of an annual training plan on ESG issues, intended for both PRECS employees and members of the Board of Directors and the Board of Statutory Auditors, with the dual objective of increasing awareness of ESG issues as well as the dissemination of specific skills in the organization.
Mode of course delivery
- Courses for all employees in e-learning mode
- Dedicated courses for company front lines and Top Management
- Workshops dedicated to in-depth study of new regulations of relevance in the ESG field
Main topics
- ESG factors
- Climate change and decarbonization
- Diversity and inclusion
- ESG governance
- Green financial products
- Integration of ESG risks into the risk management framework
- Sustainable reporting
- Issues found not to be relevant by materiality analysis (climate change, waste, responsible use of energy resources, biodiversity)
- Relationship with suppliers
External involvement
Launch of outsourcer profiling activities, also carried out through the use of questionnaires, in order to capture the preferences and positioning in the field of sustainability of its suppliers in order to recognize and reward good performance in terms of ESG factors.
Platform for collecting ESG assessments
PRECS is committed to assessing its suppliers on ESG issues through the use of a dedicated tool. It is able to provide an objective and systematic assessment of ESG performance while providing a summary report to suppliers through which they can become more aware of ESG issues and identify key areas for improvement. The tool through the automatic delivery of a survey, allows PRECS to collect ESG data from its suppliers and simultaneously associate each of them with a synthetic ESG Score based on their sustainability performance. In this way, PRECS can monitor the risks in its supply chain and provide corrective measures, where necessary, to mitigate related risks.
Over the next few years, the goal is to extend the scope of the assessment to all suppliers, ensuring that the company has a comprehensive overview of the entire corporate value chain.