Our Sustainable Business Model

The 2022 GDP has been impacted by the energy crisis (linked to the conflict between Russia and Ukraine) as well as by a supply chain disruption and a tight monetary policy.
Inflation in the Eurozone in 2022 reflects the higher energy prices and related spillover effects.

Inflation in the Eurozone in 2022 reflects the higher energy prices and related spillover effects.

How market context is driving banks in capturing ESG business opportunities

With the conflict between Russia and Ukraine in the background, the European Union (EU) is looking at quickly developing alternatives to fossil energies without jeopardising supply on the one hand and undermining climate goals on the other

REPowerEU plan: Thanks to investments amounting to €300bn, by 2030 a total of 45% of energy in the EU will come from renewable sources and the installed solar capacity is to quadruple to 600 gigawatts.

The energy crisis costs thousands of EU jobs according to Eurofound: job cuts in energy-intensive manufacturing and hotel closures are just two examples of widespread damages caused by the energy market disruption.

^A UniCredit Monthly Outlook, November 2022.
^B UniCredit Scenario (Dec.22); 2022 preliminary data.

Changing stakeholder behaviour must not only be immediately recognised, but also anticipated. Remote channels have undergone further acceleration due to the digitalisation boost of Covid-19.

Global digital snapshot ^C
% of world population

How market context is driving banks in capturing ESG business opportunities

Consumers

71% of global consumers are making changes to the way they live and the products they buy in an effort to live more sustainably ^D.

Companies

For 94% of respondent corporate leaders, ESG-related responsibilities have increased in recent years: approximately 85% spend at least one day per month on ESG topics ^E.

Corporate sustainability teams are now at the heart of key business decisions: 90% of companies are developing an ESG Strategy ^F.

^C Source: Digital around the world 2022 report, by We Are Social.
^D Source: Simon Kucher & Partners, 2022 Global Sustainability Study: The Growth Potential of Environmental Change.
^E Source: McKinsey & Company, Defining CXO roles in achieving ESG impact.
^F Source: Morningstar, Sustainalytics survey 2022.

ESG investing is becoming mainstream. Asset managers are questioning about how they can differentiate themselves through increasingly sophisticated ESG investment approaches. The global ESG bond market predicts growth to resume in 2023 although below record pace.

Global ESG-bond issuance (USD bn) ^H

How market context is driving banks in capturing ESG business opportunities

Data security and privacy, effective corporate governance and reduction of greenhouse gas emissions emerged as investors’ priorities for businesses

For 87% of investors surveyed, corporate reporting contains unsupported sustainability claims.

78% of investors say that managing regulatory risks is an important factor in their sustainable investing decisions

^G Source: PwC’s Global Investor Survey 2022.
^H Source: UniCredit.

The banking regulatory framework is rapidly evolving. Regulators' attention to sustainability trends has significantly increased owing to the introduction of regulation on sustainable finance and incorporation of ESG factors into risk management. Disclosure requirements for companies are also growing, with a view to incorporating financial and non-financial information in the same documents.

How market context is driving banks in capturing ESG business opportunities

2019
EU Green Deal
EU to be climate neutral by 2050

2021
European Commission announced the Renewed Sustainable Finance Strategy in the framework of the European Green Deal

2022
Disclosure on environmentally sustainable activities (eligibility) based on the Taxonomy Regulation (Art. 8 - Reg. 2020/852).
European Commission adopted a proposal for a Directive on Corporate Sustainability Due Diligence.

2023
Disclosure on first set of KPIs for EBA Pillar 3 regarding climate risks, mitigation actions and institutions' strategy, governance and risk management framework.
Additional reporting requirements for adverse sustainability impacts at the financial product level apply and for Art 8 or 9 SFDR products (light and dark green).

2024
Disclosure on environmentally sustainable activities (Green Asset Ratio) based on the Taxonomy Regulation (Art. 8).
Corporate Sustainability Reporting Directive entry into force, with the adoption of first set of European sustainability reporting standards by EFRAG.

Currently, the energy transition is certainly the most significant driver of change for all business sectors. In recent years, other factors have been: the impact of Covid-19 on the working world, digitalisation and the growing need to integrate ESG commitments with central business functions. Today the industrial sector must be aware of all these developments in order to remain competitive in opening up new paths.

How market context is driving banks in capturing ESG business opportunities

Biodiversity
Almost half of CDP respondent companies are considering biodiversity in their strategies and making commitments and putting governance mechanisms in place ^I.

Circular economy
Rental, resale, repair and remaking have the potential to grow from 3.5% of the global fashion market today to 23% by 2030: represents a $700bn opportunity helping to put the fashion industry on a 1.5-degree pathway ^J.

^I Source: CDP, Climate change questionnaire 2022.
^J Ellen MacArthur Foundation, Circular business models: redefining growth for a thriving fashion industry (2021).