2022
Sustainability
ReportConsolidated Non-Financial Statement
pursuant to Legislative Decree 254/2016

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione

2022
Sustainability
Reportas of 31 December 2022

Consolidated Non-Financial Statement
pursuant to Legislative Decree 254/2016

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,
ma in nessun caso si deve fare riferimento per la verifica
dei colori di stampa. I caratteri tipografici non vengono

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.
Sul CD-Rom allegato troverete anche una versionedel documento in outline.

Approval signature - Firma per approvazione

Contents
Main ESG achievements			
Letter to stakeholders			4
6

Principles of Governanceillimity. Bank beyond form
01	

10

02 Corporate Governance

24

The Group
The main stages in illimity’s story
Purpose and values
Associations and endorsements of international schemes
illimity’s sustainability strategy
fondazione illimity

Governance of Sustainability and management of its impacts
Risk management and ESG risks03	Materiality analysis

29
30

and stakeholder engagement40

Methodological Note
Stakeholder identification and engagement
Materiality Analysis
illimity materiality matrix

40
41
43
44

04	
A culture of rules
The organisation, management and control model
The illimity Way
Safeguarding human rights
The fight against fraud, money laundering, corruption and violations of Financial Sanctions
A culture of compliance
Whistleblowing

Innovation
Innovation05	

Digital Mindset Revolution
Innovative and high-value projects
Cyber Security
Data management and data protection

2

10
16
18
19
21
23

illimity • 2022 Sustainability Report

46
48
49
49
50
54
56

60
61
62
64
68

PeopleEmpowerment, involvement and well-being of illimiters
06	

72

07	
Diversity, Equity and Inclusion

86

Prosperity08	
Robustness and creation of shared value

94

09	
The central role of SME and retail customers

98

10	
Value chain and business relationships

106

Planet and Society
11 Sustainable finance112

illimity Journey – The Value of Careillimity Onboarding – The Value of Embracing
illimity Performance – The Value of Managing Goals
illimity w.o.w. – The Value of Intelligent Working
illimity Growth – The Value of Learning
illimity Total Reward – The Value of Recognition
illimity Engagement – The Value of Commitment
Health and safety

72
73
75
76
76
81
83
84

Gender Equality Certification
Commitment to new generations
illmitHER

89
90
91

Economic value generated and distributed
Approach to taxation
Engagement with the financial community

95
96
96

Support for SMEs
Retail customer relations

98
102

The ecosystem of partnerships
Responsible supply chain management

106
107

Integration of environmental and social factors into investment opportunities
Sustainable finance to support businesses
Commitment in the energy and real estate sector

112
115
118

12	
The European taxonomyof eco-sustainable activities

120

EU Taxonomy Eligibility Reporting
Methodological Note

120
122

13	
Environmental impacts and climate-related challenges
Direct and indirect environmental impacts
Task Force on Climate-Related Financial Disclosure (TCFD)
Governance, management and control of climate-related risks

126
127
134
135

14	
Recognition and Awards

138

Appendix

140

GRI Content Index
SASB Index
Report of the Independent Auditors

142
148
150

illimity • 2022 Sustainability Report3

Main ESG
achievements

4

illimity • 2022 Sustainability Report

4.6%

76%

among the lowestof our sectorof the economic value
generated distributed
to stakeholders

Gender Pay Gap

2023-2025
Sustainability
Planapproved by the Boardof Directors
of illimity

Gender Equality
Certification
UNI PdR
125:2022
Certification obtained

51

average hours of training
above the sector
average

Great Place
to Work and Best
Workplace Europe
GPTW for the 4th year
running and Best Workplace
Europe for the 2nd year
running

Scope 3

CarbonNeutrality

Expansion of emissions
reporting including
financed emissions

Maintenance of Group
Carbon Neutrality(Scope 1 and Scope 2)

Principles
for Responsible
Investment
Membership throughillimity SGR

Rating
ESG
Upgrade of main
ESG ratings
assigned to illimity

illimity • 2022 Sustainability Report5Message from the Chair
and Chief Executive Officer
GRI 2-22

Dear illimity friends,
We present to you the Group's 2022 Non-Financial
Statement, at the end of the Group's fourth year ofoperation.

a new, innovative end-to-end model for managing
distressed corporate credit, covering the entire
value chain.

We are highly satisfied with what we have done inthese years, as we have been capable of expressing
significant growth, while continuing to invest in the
future and, since the beginning, fully integrating
ESG issues into our values, our business model,
and organisation and into company culture.

We have completed our IT infrastructure, which will
enable us to exploit new data and augmented andartificial intelligence technologies. On the positive
results achieved to this point, we will continue togrow, remaining focused on supporting SMEs, towhich we have disbursed loans for more than EUR
2.6 billion, and asset management of non-performing
loans, specifically UTP, making our maximum effort
to favour their return to performing status.

The year just finished was marked by unforeseeable
events: form the war in Ukraine to the energy crisis,to the sharp increase in inflation.
We implemented a strong, effective approach andreaction to the changes around us. We remained
faithful to our commitment: being a Bank thatfunds the growth of SMEs and works with them in
restructuring situations, with the goal of ensuring thatthey prosper once again, also in specific momentsof difficulty, intervening in complex situations that
other financial operators might see as a restriction.
A Bank that dialogues with entrepreneurs to finalise
recovery plans and out-of-court agreements thatspeed up resolution times and contribute to theentrepreneur's recovery. This is the model we haveconceived, which we are pursuing now more thanever: produce profits, but also be useful to thecommunity that we feel a part of.

All of this has been made possible by a team oftalents, now composed of almost 900 people
from 300 organisations in different sectors and22 nationalities. Varying professional skills which,joined together, manage to go above and beyond,with an approach strongly focusing on innovation.
And thanks this united front and sense of belonging,the illimity Group was recognised as a Great Place toWork for the fourth year running, also at European
level.

Significant results were also achieved this year. We
achieved highly satisfying profitability, with a low
risk profile, and launched new tech initiatives that
we believe will create significant development andvalue for the Group in the medium term: b-ilty, thefirst lendtech offering for small and medium-sizedenterprises, and Quimmo, the digital proptech forproperty brokerage. These initiatives join our joint
venture with Banca Sella HYPE, a leader in the
Italian fintech market for retail customers.

Our process of and commitment to sustainability
issues are strong and deeply felt by the entire
organisation, starting from the Board of Directors,
to the management through to each illimiter. We
are proud that this is reflected in the significant
upgrades to our ESG ratings. But we are notabout to stop: with the publication of this NonFinancial Statement, we present the new 20232025 Sustainability Plan, which comprises the
ESG objectives we set in the 2021-2025 StrategicPlan, to ensure even better alignment with the bestpractices in the international banking sector, also
in response to the guidance from the Regulator
and the increasing expectations of the financial
market and the ESG ratings agencies, with which
we constantly interface.

During the year, we successfully acquired andintegrated AREC into neprix, giving rise to an
operator – ARECneprix – which positions itself as

We have also committed to carrying out datacollection which, this year, resulted in an initialquantification of indirect emissions (Scope 3)

6illimity • 2022 Sustainability Reportan illimiter“ Beingalso means
behaving responsiblyin the concrete
choices wemake every day“

attributable to financing activities (financed
emissions). A fundamental step in our journey,
which will enable us to monitor the carbon footprintof our portfolio and define, along with the businessstructures, possible decarbonisation strategies.
With this same spirit, from this year we haveadded to our disclosure the climate-environmental
reporting aligned with the recommendations of the
Task Force on Climate Related Financial Disclosure(TCFD).
We have also renewed our full endorsement of
the United Nations Global Compact, which, forillimity, is a commitment to help promote the Ten
Fundamental Principles, through cooperation andpartnerships with various stakeholders.

We are proud to have reached this point after four
years of operations, creating a sound banking groupthat is useful to Italy, and we are ready to capture
new challenges and opportunities, guided by our
principles and continuing to create and share value.

Rosalba Casiraghi
Chair of illimity

Corrado Passera
CEO of illimity

illimity • 2022 Sustainability Report7Morato Pane
A company that industrialised the processof production of soft bread

Frame the cover photo to watch the video"The Morato Pane Story” using the ARIA App

Find out more:

illimity, Morato PanePrinciplesofGovernanceLandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

01. illimity.
Bank beyond form
The Group
GRI 2-1

GRI 2-2

GRI 2-6

illimity Bank S.p.A. is the parent company of the Banking Group of the same name. Its story starts inJanuary 2018, with the launch of SPAXS, Italy’s largest and one of Europe’s biggest SPAC (Special Purpose
Acquisition Company), set up to acquire and invest in a company operating in the banking sector, with fundsof EUR 600 million. With the acquisition of Banca Interprovinciale in 2018 and the finalisation of the merger
with SPAXS, illimity Bank came into being and on 5 March 2019 was listed on the electronic stock exchange(“MTA”) organised and managed by Borsa Italiana.
Since September 2020, the ordinary shares of illimity have been admitted to trading on the STAR –Segmento Titoli con Alti Requisiti (High Requirements Securities Segment) of the Electronic Stock Market(Mercato Telematico Azionario - “MTA”), dedicated to businesses that excel in terms of transparency andcommunication, liquidity and corporate governance.
illimity is a bank of the new order, specialised in financing for small and medium-sized enterprises (SMEs)
through the Growth Credit, Distressed Credit, b-ilty and Investment Banking Divisions, with a businessmodel that is extremely innovative and highly technological. illimity provides funding for high-potential
companies with a low or no rating, including the UTP (Unlikely-To-Pay) segment. illimity supports companies
in structuring market and private operations to meet their needs for capital, debt and strategic growth, also
through consultancy on operations such as mergers, demergers, incorporations, acquisitions and corporate
restructuring.
It purchases distressed corporate credit, with or without guarantees, and manages this credit throughneprix (since 1 January 2023, ARECneprix S.p.A.), its proprietary servicing platform. Starting on 30 June
2022, AREC (Aurora Recovery Capital S.p.A.) entered the Group, a company through which illimity aims
to strengthen its positioning and innovative approach to servicing distressed corporate loans. Moreover,through Abilio it manages and sells property and capital goods originating from insolvency proceedings
and foreclosures.
Thanks to b-ilty, illimity provides financial and loan services to SMEs through a digital banking platform
featuring an intuitive interface to streamline the business management of small companies.
It also offers innovative services for retail customers through its own digital bank illimitybank.com.
Lastly, the illimity Group also includes illimity SGR, which manages the assets of reserved closed-end
alternative investment funds (AIF), established with own funds and the funds of third-party institutional
investors.
Through the fondazione illimity, established in 2021, the Group promotes innovative projects for the social
regeneration of real estate assets, and impact financing, working with the third sector and experts in social
design, to create value for the territory and local communities.
GRI 2-1

The Bank performs management and coordination functions for the Group and has its registered office at
Via Soperga 9, Milan. It also operates an operational branch located at Via F. Lamborghini 88/90, Modena.

10

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

GRI 2-6

The Group’s main activities are listed below.
Growth Credit Division

financing of the supply chain of operators of Italian manufacturing and industrial districts,• Factoring:
through recourse and non-recourse purchasing of customers’ trade receivables.
and Acquisition Finance: for high-potential businesses with a suboptimal financial structure• Crossover
and/or with a low or no rating.
the purchase of loans classified as UTP, with the aim of recovering and restoring them
• Turnaround:to performing status by identifying optimal financial solutions, which may include new loans or thepurchase of existing loans.

Distressed Credit Divisionpurchase of secured and unsecured distressed corporate credit, allocated to three specific• Investment:
desks: Special Situation Real Estate, Portfolio, Special Situation Energy, UTP Portfolios and PPC.
• Senior Financing: the provision of senior financing services to investors in distressed loans.
the provision of services for the management of distressed corporate credit and underlying assets,• Servicing:through a specialised servicing platform or under commercial agreements with specialised operators.
The Group performs those services through ARECneprix S.p.A., created through the merger byincorporation of AREC S.p.A. (acquired on 30 June 2022) by neprix S.r.l. with legal effect from 1 January2023.

management and sale of property and capital goods originating from insolvency proceedings• Prop-tech:
and foreclosure, through its own network of platforms/online auctions and a network of professionals
operating nationwide. On 1 April 2022, Abilio S.p.A. became operational. This company was incorporated
and is wholly-owned by the Bank and, through a partial proportionate spin-off, the neprix Sales Area anda portion of Neprix Tech, previously held by neprix S.r.l., were contributed to it.

b-ilty Division
Through its b-ilty Division, illimity offers digital banking and digital lending products and services to Businesscustomers, i.e. small and medium-sized enterprises with turnover of EUR 2 million to EUR 10 million. The
Division’s purpose is to define, develop and manage the offering of products and their commercial andpricing characteristics through an innovative offering of dedicated products (e.g. Digital credit, which also
includes factoring and green loans), in line with illimity’s mission, which aims to develop the potential of
businesses.

Investment Banking DivisionMarkets: which provides solutions that are complementary to the offering of the Growth Credit• Capital
Division for SMEs to access the capital market, geared towards the development, organic and nonorganic growth and optimisation of the financial structure.

Solutions: which invests in corporate bonds and alternative debt and offers solutions to• Corporate
SMEs and Mid Caps to hedge market risks.
which takes care of implementing complex financial transactions for both companies and• Structuring:financial companies and for the Bank.

illimity • 2022 Sustainability Report11PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimity SGR& Turnaround Funds: AIFs with strategies of investing in the turnaround market and, specifically,• UTP
on businesses in financial difficulty with prospects for relaunch.
Capital Funds: AIFs with strategies of investing in financial instruments issued by performing• Private
companies.
Small Medium Tickets Funds Area: AIFs with strategies of investing in the granular (typically• NPL
unsecured) Non-Performing Loans (NPL) market, with potential counterparties both small corporates
and retail businesses, and different areas of origination (utilities, consumer, commercial credit, etc.).

Corporate Center
The organisation also monitors related activities through functions directly reporting to the Chief Executive
Officer.
Financial Officer (CFO): responsible for coordinating the overall process of planning, control and• Chiefadministration, strategic allocation of capital, managing liquidity and funding, managing relations withthe financial community, as well as developing and coordinating sustainability strategies and activities
for the entire Group.

HR & Organisation Officer: responsible for procurement and facility management, managing• Chief
human resources, as well as managing the organisational activities of supervision and transversal
coordination for the Bank.

Counsel: responsible for legal and corporate support and managing the corporate secretariat,• General
as well as general affairs and relations with authorities.
Risk Officer (CRO): responsible for guaranteeing the strategic oversight and definition of risk
• Chiefmanagement policies. Risk Management, Risk Strategy & Group Controls and Risk Analytics deal withthe management of risk, and the development of new strategies using quantitative models.

Lending Officer (CLO): monitors credit analysis and approval activities. The Credit Machine unit
• Chief(assessment of creditworthiness in loan transactions) and Operations, Credit Monitoring & NPE unit
(monitoring credit and managing “organic” non-performing loans) report directly to the CLO.

Information Officer (CIO): responsible for managing IT infrastructure, Back Office activities and• Chief
the Contact Centre. The Chief Information Officer is also responsible for managing illimitybank.com,
the digital direct banking platform for retail customers which offers current accounts, deposit accounts,
payment services and innovative open banking services.

Compliance & AFC Officer: responsible for compliance risk management and oversight of money• Chieflaundering and terrorist financing risk.
Communication & Marketing Officer: responsible for promoting and supporting the development of• Chiefa single, shared identity of the Bank among the stakeholders and formulating the Bank’s communications
plan and brand development strategy to ensure positioning, customer acquisition results and optimal
customer management.

Audit: carries out assurance activities for the entire system of internal controls, advising• InternalManagement.

12

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

illimity’s Governance and Organisational Model(Updated as of 1 January 2023)

Board ofDirectors

Internal Audit

Chief Executive Officer

General Counsel

Chief Compliance & AFC Officer

Chief Financial Officer

Chief Communication & Marketing Officer

Chief HR & Organization Officer

Chief Risk Officer

Chief Lending Officer

b-iltyChief Information Officer

Distressed Credit

Growth Credit

Investment Banking

illimity • 2022 Sustainability Report13

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

GRI 2-1

As of 31 December 2022, the following companies were part of the Group, in addition to the Parent Company
illimity Bank S.p.A. (“illimity”):
neprix S.r.l. (“neprix”), a wholly-owned subsidiary of the Bank mainly operating in the NPL sector, relying
on the services of professionals with specific experience and know-how in assessing and managing nonperforming loans.
AREC S.p.A. (“AREC”), a company in which illimity holds 100% of the share capital, established to include
the assets and liabilities sold by Aurora Recovery Capital S.p.A. as part of the acquisition of the business ofthat company, finalised on 30 June 2022. ARECneprix S.p.A. was created through the merger by incorporationof AREC into neprix, with legal effect from 1 January 2023.
illimity SGR S.p.A. (“illimity SGR”), wholly-owned by the Bank, which manages the assets of closed-end
alternative investment funds (AIFs), established with own funds and the funds of third-party institutional
investors.
Abilio S.p.A. (“Abilio”), wholly owned by the Bank, and whose purpose is to execute real estate operations
and develop and organise sales to the public through online and offline auctions.
Abilio agency S.r.l. (“Abilio Agency”), wholly-owned by Abilio, a real-estate broker that handles sales andleases and certifies the value of properties and companies for third parties.
The Group also includes a number of securitisation vehicles, which are used for the acquisition of portfolios
of distressed loans.

14

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Corporate Structure of illimity Group as of 31.12.2022

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Soperga
RE S.r.l.

AportiS.r.l.

100%

67%

FriuliLeaseCo
S.r.l.

FriuliSPV
S.r.l.

100%

100%

Doria
LeaseCo
S.r.l.

Doria
SPV
S.r.l.

100%

100%

River
LeaseCo
S.r.l.

River
SPV
S.r.l.

100%

100%

Pitti
LeaseCo
S.r.l.

Pitti
SPV
S.r.l.

100%

100%

KenobiSPV
S.r.l.

River
Immobiliare
S.r.l.

illimity
SGR
S.p.A.

100%

100%

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati

Arec
S.p.A.

R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,
ma in nessun caso si deve fare riferimento per la verifica
dei colori di stampa. I caratteri tipografici non vengono

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.
Sul CD-Rom allegato troverete anche una versionedel documento in outline.

100%

neprixS.r.l.

AbilioS.p.A.

Hype
S.p.A.

100%

100%

50%

AbilioAgencyS.r.l.

SpicyCo
S.r.l.

100%

49%

Approval signature - Firma per approvazione

Maui
SPE
S.r.l.

Piedmont
SPV
S.r.l.
SpicyCo 2
S.r.l.
49%

Spicy
Green SPV
S.r.l.

having the majority of voting rights at ordinary
shareholders’ meetings

DagobahLeaseCo
S.r.l.

Dagobah
SPV
S.r.l.

100%

100%

other forms of control
Company consolidated with the equity method

illimity • 2022 Sustainability Report15

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

2018
January

Establishment of SPAXS, Italy’s first Special Purpose
Acquisition Company with the aim of creating a newbanking operator

April
The Business Combination of SPAXS with Banca
Interprovinciale is announced

AugustThe SPAXS Shareholders' Meeting approves theBusiness Combination and announces the name of
the new bank: illimity

Decemberillimity’s innovative headquarters with smart spaces
is inaugurated in Palazzo Aporti, Milan

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

2020
February
illimity SGR is authorised to establish andmanage Alternative Investment Funds

May
illimity acquired 100% of IT Auction

June
Publication of the first Sustainability Profile to reporton the Bank’s commitment to ESG issues

September• Admission to the STAR segment of Borsa Italiana• An agreement with Fabrick (Sella Group) is signed forthe joint venture in the Fintech HYPE.

2019

Novemberillimity and neprix receive a Fitch rating

DecemberMarchillimity Bank S.p.A. is created on 5 Marchwith its concurrent listing on the MTA of Borsa Italiana(Italian stock exchange)

illimity’s first bond issue successfully concluded

April
neprix, the servicer specialising in the management of
distressed corporate credits, is presented

June
Signed the contract for the acquisition of IT Auction
which, together with neprix, creates the first end-to-end
servicer specialising in distressed corporate credit

September
illimitybank.com is established, offering direct digitalbanking services to retail customers

The main stages
in illimity’s
story

16

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

2021
March
Qualification as a Euronext Growth advisor on
the Euronext Growth Milan market, expanding
illimity’s offering to SMEs

April
• Publication of the first Non-Financial Statement
on a voluntary basis• illimity SGR completes the first closing of “Credit& Corporate Turnaround”

May
Carbon Neutrality (Scope 1 and Scope 2) achievedJune• fondazione illimity was created, to promote
innovative projects for the social regeneration ofreal estate, and impact financing•Approval of the 2021-25 Strategic Plan• Placement of illimity’s first Tier 2 subordinatedbond concluded

November“Basket Bond - Sustainable Energy” was createdin collaboration, in partnership with ENI, Elite andillimity, as Arranger

DecemberEndorsement of the United Nations Global
Compact

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

2022
February

Launch of b-ilty, the first Digital Business Store forfinancial and credit services for SMEs

April
Launch of Quimmo, the Italian prop-tech platform
created to meet the needs of both property buyers andsellers

May
An agreement is reached for the acquisition of AREC,
which, integrated into neprix, creates a leading operator
in the servicing of Unlikely-to-Pay (“UTP”) loans

July
Upgrading of ESG ratings from MSCI and Standard
Ethics, placing the bank at the top of the banking sector

September
iREC, the second fund of illimity SGR, is launched,
dedicated to investments in distressed real estateloans

October• fondazione illimity presents its first projects: Albergo
Etico Cesenatico and (RE)GENERATION CAMP
• Sustainalytics upgrades illimity, bringing its ESG
Rating to Low Risk level• The Bank is ranked in 58th place globally, and number
five in Italy, in the ranking of the World’s Most Socially
Responsible Banks of Newsweek and Statista, which
identifies the 175 most socially responsible banks inthe world.

November• Gender equality certification obtained• Launch of a liability management operation

December• Second senior bond issue successfully concluded• CDP upgrades illimity's ESG rating to B

illimity • 2022 Sustainability Report17

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Purpose and values
GRI 2-23

Our identityand values comefrom the work of all
our illimiters,
because we have shaped
our identity specificallystarting from our people.

We have a clear
mission:to recogniseand empower
the potentialof people,
families andbusinesses.

We are a bank, and we say it proudly
We offer next-generation lending services to companies through an innovative, highly-digital businessmodel, to discover and optimise the extensive hidden potential in our economy and society:• companies that, if supported, could make the big leap forward• companies that, if accompanied, could get back on track• companies that have not made it, but where value can still emerge.

There are individuals and families within and behind these enterprises, and a community around them:
our actions can help enhance their well-being.

We live for innovation
We are a business of the new order, born from listening to the real needs of businesses and people: thatwas our starting point from which to redesign our guiding philosophy and build banking from the ground up,
integrating the most advanced technologies with the best skills and experiences.

We believe in freedom
We have an entrepreneurial spirit and feel free to go beyond the preconceptions and conformity of the
traditional system. We are autonomous from external conditioning.

We act responsibly

our shareholders, committing ourselves to optimising the return on the capital entrusted to us• towards

towards our customers by speaking clearly, responding quickly, accompanying them in their challenges• towards

our employees, staff and associates by activating their potential, enhancing their diversity,• promoting
the right balance between work and personal life
towards our partners, positioning ourselves as a platform for increasingly expanding partnerships and• opportunities
society and the environment by generating positive impacts.
• towards

We want to demonstrate our ability to produce profits through our actions, but also be useful to thecommunity, contributing to its well-being and building trust.

We’re illimity. Bank beyond form.

18

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Associations and endorsements of international
schemes
GRI 2-28

Main associations and partnerships include:
ABI (Italian Banking Association)
This non-profit organisation represents and safeguards the interests of the banking industry. Its main
activities include organising studies and debates on banking issues, and providing information and technicalassistance for member banks.
ASSIOM FOREXThis financial association promotes the professional growth of financial operators, the dissemination oftechnical aspects and market practices, contributing to the development and integrity of domestic financial
markets in a European and international context.
ASSONIME
The Italian Association for Public Limited Companies. This Association studies and deals with issues
concerning the development of the Italian economy, working to improve industrial, commercial, administrative
and tax legislation, with a particular focus on corporate law, to promote a better knowledge of Italian law
and Italy’s economic situation.
ASSIFACT (Italian Factoring Association)
This Association brings together Italian factoring operators, and provides information, training and assistancefor its members, working with institutions. It also oversees studies and statistics, promoting an awarenessand knowledge of factoring.
ASSILEA (Italian Lease Association)
This trade association represents operators of finance and operating leases in Italy, comprising specialist or
multi-product banks, financial intermediaries and commercial long-term hire companies.
VALORE D
This business association is committed to gender balance and an inclusive culture in organisations and in
Italy. It promotes female diversity, talent and leadership for the growth of companies and the country.

UN Global Compact
The United Nations Global Compact encourages businesses the world over to create an economic, socialand environmental framework that can promote a healthy, sustainable world economy which guarantees
everyone has the opportunity to share the benefits.
Launched in 2000, the Global Compact requires endorsing companies and businesses to comply with 10
universally accepted principles in the areas of human rights, employment, the environment and the fightagainst corruption, and also act to support the UN’s Sustainable Development Goals (SDGs).
Endorsing the Global Compact (since 2021) is an important step for illimity in its journey of sustainable
development and a commitment to help promote the Ten Fundamental Principles, through cooperation andpartnerships with various stakeholders.

illimity • 2022 Sustainability Report19PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
Governance

Scope

Human Rights

LabourEnvironment

AntiCorruption

Materiality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Principles

Diversity, Equity
and Inclusion

Page reference

Principle I. Promote and respect universally recognized humanrights within their respective spheres of influence.

49-50

Principle II. Make sure that you are not, albeit indirectly, complicit
in human rights abuses.

107-109

Principle III. Supporting freedom of association for workers andrecognising the right to collective bargaining.

72-91

Principle IV. Elimination of all forms of forced and compulsory
labour.

72-91

Principle V. Effective abolition of child labour.

72-91

Principle VI. Elimination of all forms of discrimination in respectof employment and occupation.

72-91

Principle VII. Support a preventive approach to environmental
challenges.

112-119

Principle VIII. Undertake initiatives that promote greater
environmental responsibility.

112-119

Principle IX. Encourage the development and diffusion ofenvironmentally friendly technologies.

112-119

Principle X. Counter corruption in all its forms, including extortionand bribery.

50-51

Principles for Responsible Investment
The PRI - Principles for Responsible Investment were developed through the partnership between UNEPFI and the Global Compact, with the intention of disseminating sustainable and responsible investments
among institutional investors. The principles aim to provide a framework for integrating ESG issues into
investment decision-making. The illimity Group endorsed the PRI as a signatory in February 2023, throughillimity SGR.

20

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

illimity’s Sustainability Strategy
Since the start of its operations in 2019, illimity has placed significant focus on environment, social andgovernance issues (ESG) and has innately undertaken a process to integrate them into its strategies,
processes and governance.
The 2021-2025 Strategic Plan, presented in June 2021, confirmed the Group’s commitment also to ESG
issues. In publishing its 2022 Non-Financial Statement, the Bank deemed it necessary to evolve thosecommitments by integrating new, more extensively detailed qualitative and quantitative targets in order tobetter align with the best practices of the Italian banking sector, meet the growing needs of the market and
ESG rating agencies and implement the feedback received from investors during engagement activities.
The new 2023-2025 Sustainability Plan, approved by the Board of Directors in February 2023, is the resultof a detailed analysis within and outside the Bank and the Group’s increased expertise in non-financial
reporting. It enabled us to start from a solid baseline aimed at defining significant, ambitious targets
that integrate with the various aspects of the Bank’s business and meet the requests from the various
stakeholders, on the one hand, and comply with regulatory expectations regarding sustainable finance andgovernance of climate and environmental risk, on the other.
The environmental targets focus on the urgent issue of transitioning to a net-zero economy, in which illimity,
plays and will play, a key role in supporting and assisting the financed businesses in that process. The
social targets were reinforced through commitments regarding diversity and inclusion, including genderequality certification and initiatives to raise awareness among employees. Lastly, since its inception, illimity
has aligned with the best practices regarding the integration of sustainability into the business strategies,
processes, policies and governance of the Group, with the goal of consolidating that positioning.
The new Sustainability Plan with time horizon to 2025 is organised as follows:

Environment•Maintain of the Group’s carbon neutrality (Scope 1 andScope 2 emissions); measure and address the so-called“financed emissions” (Scope 3)2021-2025
Strategic Plan

• Reactivation of renewable energy plans through the Energy
Desk• Integration of ESG factors in the credit assessment and Risk
Appetite Framework (RAF)

Target’s integrationof the 2023-2025
Sustainability Plan

Energy used

• Reach 100% of electricity used from renewable sources at
the Group’s main locations

FSC Paper• Maintain 100% use of FSC paper throughout the Group

Environmental Policy• Develop an environmental policy at Group level

Environmental KPIs in
Real Estate• Consider the environmental and climate impacts in theappraisal and management of Real Estate assets• Develop the offering and framework for sustainablefinance products
Green Loansand sustainablefinance• Develop ESG support/advisory services for SMEs
• Reaching 15% on cumulative origination volumes(disbursed/invested) for 2023-2025 for sustainable finance(Sustainability-Linked Loans, Green Loans/Investments
and Taxonomy-Eligible Loans)

ESG Asset
Management• Launch of SGR fund with ESG characteristics

Climate Disclosure• Reporting aligned with TCFD disclosure

illimity • 2022 Sustainability Report21

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Social• Double the number of women in managerial roles (Gender

Equity)• Maintain the balance between men and women in theformalised "talent pool" and a gender pay gap with amaximum deviation of 5%2021-2025
Strategic Plan

• Maintaining the engagement index of Group employees
above 70%
• Develop impact projects for the real estate sector, throughfondazione illimity

Target’s integrationof the 2023-2025
Sustainability Plan

D&I Certifications• Maintain the UNI_PdR 125-2022 gender equality certification

Anti-Harassment
Policy• Develop a company policy to combat
inappropriate sexual conduct and bullying

Training• Maintain the average number of hours of training at 42 hours
per employee, while guaranteeing 3 hours of ESG training
per employee

Raising awareness on
sustainable mobility• Develop initiatives to raise awareness on sustainablemobility (commuting) for employees

Supply chain• Reach more than 50% of total expenditure on goods andservices as of 2025 assessed with ESG criteria

harassment,

Governance• Enhance illimity’s ESG Ratings

2021-2025
Strategic Plan

Target’s integrationof the 2023-2025
Sustainability Plan

• Integrate ESG Goals in incentive plans
ESG Ambassadors• Identifying the specific ESG Ambassadors in the key
structures (10% of illimiters)

Endorsement to PRB• Endorsement of the Bank to the Principles for Responsible
Banking

Anti-Bribery
and Compliance
Certifications
ESG Investment
policy & limits• Obtain Anti-Bribery certification (ISO 37001)• Obtain Compliance certification (ISO 37301)• Developing an ESG Investment Policy (property financing)and reach 100% of Treasury and Investment Banking
investments that consider ESG factors in the selection
phase (ESG due diligence)

To achieve these strategic ESG objectives, all the Group’s business, central and control functions wereinvolved, to identify, organise and launch operational projects and actions necessary to achieve the targets.
The Sustainability Plan integrates the ESG goals included in the 2021-2025 Strategic Plan and identifies
the improvement and upgrading initiatives for the operational alignment with the Group’s sustainability
strategy.

22

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

fondazione illimity
For the Bank, generating value means not only earning profits, but also being useful. With this spirit,
fondazione illimity was created in March 2021, with the goal of regenerating real estate assets for the
purpose of creating new value for the community.
fondazione illimity is a separate entity independent from the illimity Group, financed by the Bank to promote
innovative projects of social regeneration of real estate assets. The foundation acts as a driving hub andenabler of a synergistic ecosystem of social enterprises, no-profit organisations and public and private
entities keen to support projects connected with the creation of new spaces for inclusion, cohesion anda shared well-being.
Due to partnerships with professionals in social planning, as well as with research centres, institutes anduniversities, the foundation promotes an ecosystem of partnerships to create projects and initiatives ofsocial impact, with a strong focus on ESG sustainability topics.
Moreover, the Bank promoted the “Make It Double” programme, which allows each employee of the Groupto allocate a monthly amount from their salary through withholding in their payslips. Each month, illimity
will double the amount donated by the employees and the amounts collected will be allocated to initiativesof the foundation.
Two processes are carried out to identify and select the projects: a top-down process, which involves
selecting assets starting from specific requests of non-profit entities and a bottom-up process, which
consists of scouting for cooperatives near the assets to establish the possible projects together.
In October 2022, the first project was presented: “Albergo Etico Cesenatico” (Cesenatico Ethical Hotel),with the partner Albergo Etico, a social enterprise based on a tourism-hotel business model with asocial impact, which inserts people with disabilities into the working world and offers them training andindependence. The objective is to revolutionise the concept of the hotel business, focusing it on experiences
and on the connection with people.
Albergo Etico Cesenatico will thus promote the employment also of people with disabilities, to increase theirpersonal autonomy, offering them social, training and work opportunities. Moreover, the redevelopment
works on the building made it possible to develop large renovated spaces and high quality services, andcreate a multi-purpose room open to the entire town, for inclusion, cohesion and shared well-being activities.
Another project is (RE)GENERATION CAMP, a laboratory for creativity held in a space regenerated by the
fondazione illimity, at the Dima Shopping Bufalotta Shopping Centre in Rome. Its objective is to promote theintegration and socialisation of the younger generations. Specifically, laboratories of art were organisedfor children and comics for teenagers, both with the partner “Programma Integra”, a social enterprise that
promotes the development of an inclusive community by implementing actions and services in the social,educational and psychological fields.
Moreover, following the launch of the foundation, several cooperatives and social enterprises in Italy
demonstrated their interest in cooperating to define and manage projects with social impacts. These also
include Il Nodo Consorzio, with which a project was launched to build housing to temporarily host people(Care Leavers) who have completed voluntary and involuntary temporary institutional medical and social
assistance (who no longer receive loans) and require support to develop a project of independent living.
The total contribution made by illimity to the foundation in 2021 and 2022 came to EUR 610 thousand, used
for the activities described above. The above costs, with the exception of the Make It Double programme,
were incurred by illimity’s Distressed Credit Division. These exclude the costs incurred for the renovationof Albergo Etico Cesenatico because it is reflected in the final value of the property, in addition to the cost
incurred for the promotion and communication of the project.
For further information:www.fondazioneillimity.it

illimity • 2022 Sustainability Report23

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

02. Corporate Governance
GRI 2-10

GRI 2-17

The corporate governance structure of illimity sets out the relations between the Bank, its corporate bodies
and stakeholders. Through this structure:objectives are defined;• business
the
means
to achieve these objectives are decided;• the overall purpose
objectives and their legal compliance is monitored;• specific prior and ofpostthecontrols
are carried out to ensure actual compliance with strategies and• regulations.

Effective organisational and corporate governance structures are fundamental for all companies to achieve
their business goals. For banks, they are particularly important, given the characteristics of banking andpublic interests, specifically considered by legislation. Besides meeting business interests, the organisationaland corporate governance structures of banks must ensure conditions for a sound and prudent management- which is key to regulation and supervisory controls.
On 21 February 2022, the Extraordinary Shareholders’ Meeting approved the new text of the By-laws for the
adoption by the Bank of the “one-tier” system of administration and control. The changes to the By-lawsalso explicitly included “sustainable success” for the purpose of creating long-term value for the benefitof Shareholders, taking into account the interests of the key stakeholders.
In that regard, with the appointment of the new Board of Directors by the Shareholders’ Meeting of 22 April
2021, the opportunity was taken to assess the adequacy of the traditional governance model, also in linewith that requested by the Corporate Governance Code, examining its strengths and areas for improvement
in light of: (a) the latest changes involving the Company, (b) the approval on 21 June 2021 of the 2021-2025
Strategic Plan and (c) the company’s inclusion in the STAR segment of Borsa Italiana, which sets out the
obligation to observe requirements of excellent corporate governance.
Therefore, in submitting the proposal to the Shareholders’ Meeting, the Board decided that the one-tiergovernance model (i) favours ongoing dialogue between corporate bodies, facilitating the circulation of
information among the strategic supervision, management and control bodies, (ii) optimises processes,
maintaining the preliminary analyses and support to decision-making carried out by all Board Committees
according to well-specified duties and functions, and (iii) can be more easily recognised by institutional
investors that operate on international markets, facilitating the comparison with peers and investor
engagement.
Lastly, the Board deemed the one-tier system to be in line with the medium and long-term strategic objectives
and long-term company strategies, as identified on approving the 2021-2025 Strategic Plan.
The “one-tier” system of administration and control assigns strategic management to the Board of Directors,
while the control functions are assigned to the Audit and Internal Control Committee, established within
the Board. Both of these bodies are appointed by the Shareholders’ Meeting. The independent auditing
is assigned independent auditors appointed by the Shareholders’ Meeting based on a justified proposal
from the control body. The Board also operates with the support of the board committees, which makeassessment, give advice and submit proposals.
The one-tier system took effect on 28 April 2022, with the appointment of the corporate bodies (Board of
Directors and Audit and Internal Control Committee).

Endorsement of the Corporate Governance CodeSince being listed, the Bank has endorsed the Corporate Governance Code for listed companies, approvedin March 2006 by the Corporate Governance Committee of Borsa Italiana and last amended in July 2018.
In its meeting of 22 December 2020, the Board of Directors decided to endorse the new Corporate Governance
Code approved by the Corporate Governance Committee of Borsa Italiana and published on 31 January 2020.
During 2021, illimity aligned with the recommendations of the new Code, publishing the Annual Report on
Corporate Governance and Ownership Structure of 2021 and the Guidance Document on the Optimal Quali-

24

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Quantitative Composition of the Corporate Bodies (the “Guidance”), approved by the Board at the meeting of
25 February 2022, prior to the notice of call of the Annual Ordinary Shareholders’ Meeting.
In the Guidance, the Board confirmed the policy on diversity in the Board composition considered optimal for
it to carry out its functions as effectively as possible and ensure a sufficient diversity with the perspectives
and expertise necessary for a proper understanding of current affairs, risks and long-term opportunities
of company operations. For this purpose, the composition of the Board must reflect an adequate level ofdiversification in terms of the expertise, experience, age, gender, education and professional background ofits members.
At the meeting of 28 April 2022, the Board also approved the regulations of the board committees,
assigning them duties, responsibilities and a specific operational budget, as provided for both by applicableregulations and the new Corporate Governance Code. Those Regulations were then further updated andfinalised at the end of 2022 and beginning of 2023, considering the experience acquired in applying the
one-tier administration and control system.
With the approval of the 2021-2025 Strategic Plan, illimity has planned a number of areas for action,
initiatives, indicators and objectives, with the aim of consolidating the Group’s role as an innovator, not onlyin terms of supporting economic development and meeting the needs of businesses and households, butalso by playing and active role and supporting the process of transition towards a low carbon economy.
At the Shareholders’ Meeting of 21 February 2022, which approved a change to By-laws 16, paragraph 1of the By-laws, the concept was included which requires the Board of Directors to steer the Company toachieving sustainable success in order to create long-term value benefiting shareholders, while considering
the interests of stakeholdersthat are significant for illimity.

Appointment and election of the Board of Directors
The laws and regulations in force shall apply to the appointment of the Board of Directors. Specifically,
illimity is a listed bank, and therefore, its corporate bodies are elected pursuant to the regulations on list
voting set out in the Consolidated Law on Finance.
The concrete methods of appointment are governed by Article 14 of the Bank’s By-laws, to which reference
is made (Governance > Governance System section on the website www.illimity.com).
In compliance with the supervisory provisions and the Corporate Governance Code, on expiry of its termof office, in view of the appointment of the Board of Directors, the outgoing Board, with the support of theNominating Committee and the Remuneration Committee, to the extent of their respective responsibilities,
approves and makes available to shareholders (suitably in advance) Guidance on the Optimal QualiQuantitative Composition of the Corporate Bodies (the “Guidance”).
In this sense, the Nominating Committee provided and provides advice in the phases of analysis anddetermination of the optimal quali-quantitative composition (the Remuneration Committee provides advice
as regards the overall remuneration of the Board of Directors and the Directors with Key Functions).
Specifically, in terms of quantity, the number of members must be suited to the size and complexity ofthe bank’s organisational structure, in order to effectively oversee all company operations in terms ofmanagement and control, but not an excessive number. Considering the provisions of the Supervisory
Provisions for Banks and Article 16 of the Bank’s By-laws – which sets out an odd number of members of
the Board of Directors that is not less than nine and not greater than fifteen Directors – the outgoing Board
hypothesised a total of 13 members (including the members of the Audit and Internal Control Committee, a
total of three Directors). That proposal was approved by the Shareholders’ Meeting.
In terms of quality, the Guidance states that – in addition to considering compliance with the requirements
by individual members pursuant to Article 26 of the Consolidated Law on Banking, of Italian Ministerial
Decree DM 169/2020 and of Article 16 of the By-laws – the composition of the management body must asa whole express the know-how, skills, abilities and experience needed to understand the Bank’s activities,
including the main risks to which it is exposed. The collective composition must also be suitably diversified– from the standpoint of age, training, professional path, personal qualities and skills of the Directors,
gender, diversity and the period for which Directors have held the position.
The Guidance makes references to the main aspects of the above rules and the recommendations of theoutgoing Board on the professionalism and expertise requirements, aptitude and diversity profiles, andthe integrity requirements and criteria of propriety, independence and incompatibility, the interlocking
prohibition, time availability and maximum number of positions that can be held by directors.
illimity • 2022 Sustainability Report25

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

It is verified that the quali-quantitative composition of the Corporate Bodies match the profile identified
in the Guidance following the appointment of those Bodies by the Shareholders’ Meeting, as required by
the regulations set out by the Supervisory Authorities. That verification was conducted by the Board at its
meeting of 27 May 2022.
Where the outgoing Board of Directors resolves to submit its own List, as provided by the By-laws, theprocedure specifically set up and published on the Company’s website shall apply1.
In the above case, dialogue may be established with the stakeholders in accordance with best market practiceand in compliance with applicable laws and regulations, including the principle of equality of treatment ofshareholders in the dissemination of information, and with the stakeholder dialogue and engagement policy
approved by the Bank. In line with that set out in the Policy for managing Dialogue with the generality of
Shareholders, as part of the process of preparing the list of candidates, dialogue may be initiated between
the Chair of the Board, the Chair of the Nominating Committee and/or the Chief Executive Officer and themain shareholders, on renewal of the corporate bodies (both in the case of co-opting and the Shareholders’Meeting proposing appointments), in accordance with the best market practices and in compliance withapplicable regulations. For the purpose of defining the list of candidates, the Nominating Committee and/or
Board may request the support of independent third party advisors, where needed suitable.
On publishing the list of the outgoing Board (within the 30 days prior to the date of the Shareholders’Meeting, as stated), a specifically report, made available to the public, shall illustrate the process concretely
followed to identify the candidates.
We also note that there is a policy entitled “Succession Planning Policy for Company Officers”, desired by
the Board, which defines the emergency plan for renewing the top management in the event of a hypotheticalsudden need for replacement. With reference to the termination of office due to the natural expiry of theterm of the members of the Board, the policy outlines the process for defining and submitting a list of
candidates, involving the Chair, the Chief Executive Officer and the Nominating Committee, pursuant to
the pro tempore By-laws in force (only for the Group entities to which the mechanisms of appointment ofofficers through list voting applies, as governed by the Consolidated Law on Finance). The policy statesthat the process of defining the candidates must also consider that set out in the pro tempore document
reporting the “Guidance of the Board of Directors of illimity Bank S.p.A. on the Optimal Quali-Quantitative
Composition of the Board of Directors”, which outlines the guidance on diversity with regard to the optimal
quali-quantitative composition of the Board.
The establishment of the Board Committees (other than the Audit and Internal Control Committee) and theappointment of their members are approved by the Board, considering the role assigned to each Committee
and the skills and experience held by each member of the Board.
The composition of each Committee various from three to five members, all non-executive, with a majority
of independent directors. The Committees must differ by at least one member, and each member must bepart of at least one Committee. The Chair of each Committee is selected from the independent members.
The Related-party transactions Committee Transactions is composed exclusively of Independent Directors.
The Chair of the Board of Directors or the Chair of other Board Committees cannot be appointed as Chairof the Risks Committee.
For further details:

illimity Bank S.p.A. By-laws

1. A specific “Procedure for the presentation by the Board of Directors of a list of candidates for the renewal of the corporate bodies” is available, in linewith that required by CONSOB in its notice no. 1/22 of 21 January 2022.

26

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Composition of the Board of Directors and the Board Committees
GRI 2-9

GRI 2-11

The Board of Directors plays a key role in our corporate organisation and it is responsible for setting out
strategic and organisational guidelines, as well as ensuring the existence of the necessary controls tomonitor the progress of the Company and the Group companies. The composition of the Board of Directors
and the Board Committees following their appointment by the Shareholders’ Meeting of 28 April 2022 andthe Board Meeting held on the same date is shown below.

BOARD OF DIRECTORS
Chair
Rosalba Casiraghi

Chief Executive Officer
Corrado Passera
Directors
Filippo Annunziata
Marco Bozzola
Massimo Brambilla
Patrizia Canziani
Stefano Caringi
Elena Cialliè
Nadia Fontana
Paola Elisabetta Galbiati
Francesca Lanza
Giovanni Majnoni D’Intignano
Marcello Valenti

BOARD COMMITTEES
Audit and Internal Control
Committee
Marco Bozzola, Chair
Stefano Caringi
Nadia Fontana

Risks Committee
Elena Cialliè, Chair
Filippo Annunziata
Patrizia Canziani
Stefano Caringi

Sustainability Committee
Rosalba Casiraghi, Chair
Massimo Brambilla
Patrizia Canziani
Elena Cialliè

Remuneration Committee
Paola Elisabetta Galbiati,
Chair
Francesca Lanza
Marcello Valenti

Nominating Committee
Marcello Valenti, Chair
Rosalba Casiraghi
Giovanni Majnoni D’Intignano

Related-party transactions
Committee
Giovanni Majnoni
D’Intignano, Chair
Nadia Fontana
Paola Elisabetta Galbiati

illimity • 2022 Sustainability Report27

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
Governance

INNOVATION

Materiality
Analysis

A cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimity’s Board of Directors provides for significant representation of independent members and memberswith high standing, with significant, complementary skills and experience, also at international level. The
average tenure of the members of the Board Directors is 2 years.
Term ofoffice(years)Name and surname

OfficeGenderClassification

Executive/
Non-executive

In office since

Rosalba Casiraghi

Chair

Woman

IndependentNon-executive

20 September 2018

Corrado Passera

CEO

Man

Executive

20 September 2018

4

Filippo Annunziata

DirectorMan

IndependentNon-executive

28 April 20220

Marco Bozzola

DirectorMan

IndependentNon-executive

28 April 2022

0

Massimo Brambilla

DirectorMan

Non-executive

20 September 20184

Patrizia Canziani

Director

Woman

IndependentNon-executive

22 April 2021

1

Stefano Caringi

DirectorMan

IndependentNon-executive

28 April 2022

0

Elena Cialliè

Director

Woman

IndependentNon-executive

20 September 2018

4

Nadia Fontana

Director

Woman

IndependentNon-executive

28 April 2022

0

Paola Elisabetta Galbiati

Director

Woman

IndependentNon-executive

10 February 2021

1

Francesca Lanza

Director

Woman

IndependentNon-executive

15 December 2021

1

Giovanni Majnoni D’Intignano

DirectorMan

IndependentNon-executive

22 April 2021

1

Marcello Valenti

DirectorMan

IndependentNon-executive

10 February 2021

1

4

During the year ended 31 December 2022, the Board of Directors held 29 meetings. The average duration of
the Board Meetings was approximately 3 hours, 20 minutes, and the average participation was 94%. In detail:Meetings

2022

2021

2020

Board of Directors

29

26

29

19

-

-

7

20

27

Control body

Board of Statutory Auditors

3

Risks Committee

17

20

18

Sustainability Committee

12

12

4

Remuneration Committee

8

14

7

Related-party transactions
Committee

796Nominating Committee

9

13

3

Induction meetings

6

5

2

Average duration

2022

2021

2020

Board of Directors

3 hours, 20 min

3 hours, 30 min

3 hours, 20 min

2 hours, 30 min--

Control body

2
3

AICC

2

AICC

2 hours, 8 min

2 hours, 29 min

2 hours, 24 min

Risks Committee

Board of Statutory Auditors

4 hours, 50 min

4 hours, 30 min

4 hours, 30 min

Sustainability Committee

1 hour, 50 min

1 hour, 50 min

1 hour, 20 min

Remuneration Committee

1 hour, 15 min

1 hour, 30 min

1 hour, 5 min

Related-party transactions
Committee

1 hour, 15 min

1 hour, 35 min

49 minNominating Committee

1 hour, 10 min

1 hour, 30 min

50 minThe Audit and Internal Control Committee was established on 28/04/2022 following the change to a one-tier administrative system.
The Board of Statutory Auditors, appointed by the Shareholders' Meeting of 18 January 2019, remained in office until the Shareholders' Meeting of 28
April 2022.

28

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Governance of Sustainability and management of its
impacts
GRI 2-12

GRI 2-13

GRI 2-14

The issues of sustainability and the management of ESG impacts are overseen, in accordance withinternational best practice and each according to its responsibility, (i) by a Board Committee specificallyestablished in January 2020 and composed of four Directors (the Sustainability Committee) and (ii) the
Risks Committee. The Chief Executive Officer, CFO, Head of IR & Sustainability, Secretary of the Board of
Directors and the Chair of the Audit and Internal Control Committee (or other member designated by him/her) are asked to permanently participate in the Committee meetings.
illimity’s Sustainability Committee is mainly tasked with assisting the Board of Directors, in giving advice,
making assessments and taking decisions on sustainability issues. The Committee is assisted by the IR &Sustainability Department, and promotes a responsible, sustainable culture within the Group, establishingmedium/long-term sustainability goals.
The Committee receives periodic (quarterly) reporting on the progress of sustainability projects involving
the Bank and the Group.
The Risks Committee, through a process involving the identification of ESG risks by the CRO is also
responsible for assessing and analysing the risks and opportunities climate-related and a correct system ofinternal control so that the Board may correctly and effectively determine the RAF (Risk Appetite Framework)and the ESG risk governance policies.
The Sustainability Committee and the Risks Committee, coordinating with each other, express an opinion
on the integration of climate and environmental risks and their assessment and management, into thecompany culture, strategy and processes, as well as the risk appetite and limits, and in the supervisory
reporting and reporting to the market on exposure to climate and environmental risk, which inform all
stakeholders of the Group's positioning in the process of transitioning to a more sustainable economy.
They also assess the trend in exposure to climate-related risks, and their management. Lastly, the Risks
Committee examines and assesses the technological innovation initiatives and applications of artificial
intelligence to company processes.
The Audit and Internal Control Committee performs the control functions and duties provided for by theapplicable supervisory and regulatory framework, and reports to the Supervisory Authorities pursuant to
the regulations in force.
The Board of Directors steers the Company, pursuing sustainable success in order to create long-termvalue benefiting shareholders, while considering the interests of stakeholders that are significant for theCompany (Article 16 of the By-laws).
As regards the development, approval and update of the sustainable development targets, it performs thefollowing activities:
revision and steering of the sustainability strategy, also through the support of the Sustainability
Committee and the Risks Committee, each to the extent of its responsibility;•• revision and steering of main action plans;• revision and guidance of the climate risk management policies;• definition and monitoring of the sustainability performance targets;and supervision of the progress achieved in relation to the objectives and milestones in• monitoring
handling with issues linked to the climate.

The Board of Directors also plays a key role in the management and control of climate-related risks, indefining the strategic guidelines, objectives and limits of risk, in assessing the degree of efficiency andadequacy of the Internal Control System and in approving the policies related to those activities. Lastly, theBoard of Directors is responsible for approving the materiality matrix resulting from Stakeholder Engagement
activities, as well as the annual Consolidated Non-Financial Statement, which represents and conveys the
Bank’s commitment, results and goals for improvement in terms of sustainability issues.4

4

For more details, see Chapter 3 “Materiality analysis and stakeholder engagement”.

illimity • 2022 Sustainability Report29

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

The CFO, through the IR & Sustainability Department and the ESG Governance operating area, monitors theGroup’s sustainability activities, coordinates the implementation of the Sustainability Plan and the process
of monitoring and reporting on these issues, working at all times with the Group’s various Departments andDivisions. The CFO reports to the Sustainability Committee at least every two months, and to the Board of
Directors at least annually.
illimity has ESG Ambassadors in various Divisions and Departments, responsible for the development ofspecific ESG initiatives and the promotion of a culture of sustainability within their own teams.

Evaluation of the performance of the Board of Directors
GRI 2-18

The Board of Directors and Board Committees (including the Audit and Internal Control Committee) annuallyconduct a self-assessment of its composition and functioning, according to that set out in Circular 285 of
the Bank of Italy, the Board of Directors Regulation and the Corporate Governance Code. Moreover, at least
every three years, and, in any event at the end of the term of office of the directors, that activity is conductedwith the assistance of an external independent professional.
As stated, the self-assessment process regards the Body as a whole (including the Board Committees) andthe contribution that single Directors make to its work. On election of new directors, the self-assessment
also focuses on defining an optimal composition of the corporate bodies regarding their functioning andrepresentative objectives. That process is conducted by the personnel identified by the Chair of the Boardof Directors.
The areas that are subject to assessment are: (i) the quali-quantitative composition; (ii) functioning of the
body as a whole; (iii) induction activities; (iv) the Chair; (v) the Chief Executive Officer; (vi) approaches toshareholders; (vii) composition and functioning of the Board Committees.
The self-assessment considers the checks required pursuant to Article 26 of the Consolidated Law on
Banking and the additional requirements of the law and the By-laws for taking on offices (such as, forexample, compliance with the prohibition on interlocking directorships set out in Article 36, Italian Decree
Law no. 201 of 6 December 2011, converted into Law no. 214 of 22 December 2011). Where possible, the selfassessment is conducted at the same time as those checks.
The analyses conducted are formalised in a specific document approved by the Board and submitted, where
requested, also to the Bank of Italy. The results of the self-assessment for 2022 are mentioned in the Annual
report on corporate governance and ownership structure, to which reference is made.
For further information:

Corporate Governance Report 2022

Risk management and ESG risks
The illimity Group has a structured Risk Management Process (hereinafter, also “RMP”), with the aim ofcontributing to the sustainable process of value creation, ensuring at the same time legal compliance.
The Board of Directors of the Parent Company plays a fundamental role in risk management, including
ESG risks and opportunities, specifically regarding the assessment and management of climate-relatedrisks and opportunities. It sets the strategic guidelines, objectives and limits for risk, assesses the level of
efficiency and adequacy of the Internal Control System and approves relevant risk management policies.

30

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

The Board of Directors uses the assistance of:
Risks Committee, for the activities relating to internal control and monitoring, as well as performing• thethe analysis/support function so that the Board of Directors may correctly and effectively determine theRAF (Risk Appetite Framework) and the risk governance policies;

Sustainability Committee which, jointly with the Risks Committee, expresses an opinion on the• theintegration of climate-related and environmental risks, and their assessment and management, into thecompany culture, strategy and processes, as well as the risk appetite and limits, and in the supervisory
reporting and reporting to the market on exposure to climate-related and environmental risks (which
inform all stakeholders of the Group's positioning in the process of transitioning to a more sustainableeconomy) for the Bank and Group Companies concerned. The two Committees also assess the trend in
exposure to climate-related and environmental risks, and their management;

and Internal Control Committee, which monitors the adequacy and concrete functioning• ofthetheAudit
Company’s organisational structure an internal control system. It also supports the Board of
Directors in defining the guidelines for the internal control and risk management system, in line with theBank's strategies and in assessing, at least annually, the adequacy of that system with respect to thecharacteristics of the Bank and the risk profile assumed, as well as the efficacy of the system.
For the Internal Control System, illimity has established three levels and types of controls, reported below,
based on business practices and in compliance with prudential regulation.

1st
level
controls

2nd
level
controls

3rd
levelcontrols

The operating structures carry out “line controls”, to ensure that operations under their
responsibility are carried out correctly.

The CRO (Chief Risk Officer) ensures constant oversight of the risks assumed by
the Group, governing the process of identification, analysis, modelling, assessmentand measurement, control and reporting, while the Chief Compliance & AFC Officer
prevents, manages and mitigates compliance risk as well as the risk of money launderingand terrorist financing. The Department meets legal obligations on personal dataprotection at a Group level, and appoints the Chief Compliance & AFC Officer as theData Protection Officer.
The Internal Audit Department monitors the regular performance of operations and theevolution of risks, and assesses the completeness, adequacy, functionality and reliabilityof the organisational structure and the internal control system, notifying the company
bodies of possible improvements, with specific regard to the RAF, the risk management
process and the risk measurement and monitoring tools.

In the Process to Manage Risks that are significant, current and forward-looking, traditional and ESGrelated, and, in compliance with supervisory regulations, the Group has implemented:

system of risk limits and objectives of the RAF, that represents an organic and structured approach• awhich
has implications on integrated risk management and governance processes, producing impacts
on nearly all company functions. The RAF is structured and set out at an operational level by Company,
Business Division and business segment, and covers escalation processes, metrics and quantitative
limits, as well as qualitative guidelines, indicated annually in the Risk Appetite Statement (RAS). The
formalisation of the risk management process is fundamental to ensure a sound and prudent company
management;Internal Capital Adequacy Assessment Process (ICAAP) and the internal liquidity adequacy• theassessment process (ILAAP), which have the objective of providing an internal assessment of the assets
with respect to exposure to the risks that characterise their operations and the operational and structuralliquidity profile, under ordinary and stressed conditions, also on a forward-looking basis on achievementof the objectives of the Strategic Plan and the Budget;

process to assess ex ante Material Transactions, with a prior opinion on their sustainability at a
• thecredit and income level and consistency with the RAF.
illimity • 2022 Sustainability Report31

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

In conjunction with these processes to manage and control risk under normal operating conditions, theGroup has implemented a process connected with drawing up the Recovery Plan, which governs the
management of crisis situations, and strategies and options for intervention designed to restore ordinary
operations, as well as the Contingency Funding Plan procedure (emergency plan to manage liquidity incrisis situations).
The Group has also started an operational risk mapping and risk analysis process based on quali-quantitative
metrics and rules shared within the organisation, which identifies the individual types of risk that the Bankis the most exposed to, in terms of materiality. The result of the identification process is contained in the
Risk Radar, and represents, in relative terms, the risks inherent in the Group’s operations, and to structure
them according to the Companies and Business Divisions that generate these risks in order to determine
overall risk exposure.

ESG risks and opportunities
GRI 2-25

ESG topics as a whole and risk management applications fall within a medium/long-term ESG risk process
being developed and implemented, a significant portion of the 2021-2025 Strategic Plan, and are also
represented in the expectations of the Bank of Italy.
This section illustrates the results of the structured process of identifying and assessing the illimity Group’s
exposure to ESG risks.
In compliance with the requirements of Legislative Decree 254/2016, the Group has identified - througha process led by the CRO Department, assisted by the IR & Sustainability Department - the main
environmental, social and governance (ESG) risk factors also for 2022, related to each material topic reported
on, attributing these factors to existing risks. Specifically, the process consists of a preliminary analysis of
ESG risk factors, in order to identify the economic, financial and reputational risks defined by prudential
supervisory regulations and best practices, and identified as material by the Group during the 2022 ICAAP.
The table below shows the main ESG risk factors (classified as generated or incurred)5 to which the illimity
Group might be exposed.

5

As indicated by Article 3, paragraph 1 of Legislative Decree 254/2016.

32

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Areas of Legislative Decree 254/2016:

ENVIRONMENTTopicsOpportunities

Specific risk6

Risk classification

Environmental
impacts
and climate
challenges

Strengthening of theGroup's reputation
through compliancewith environmental
regulatory
requirements inforce

Non-compliancewith environmental
regulations (e.g. Italian
Legislative Decree
152/2006)

Generated

Safeguards in place in terms of the Compliancefunction and ex post controls

Environmental
impacts
and climate
challenges

Operational and credit
losses related to an
Strengthening of theincrease in climate/
long-term resilienceenvironmental risks,of the businessboth physical andtransitional

Incurred

Safeguards in place during origination (policies,
ESG rating and business sector/model analysis) andthe management of guarantees (prudential pricing
strategies and credit recovery and insurance process
management)

Value chain
and business
relationships

Selection of a
supply chain
focused on ESG
issues, withspecific regard
to environmental
aspects

Generated

In selecting and evaluating suppliers, the Bank
adopts conduct where it shares and supports
the core principles of safety and environmental
regulations and corporate social responsibility, in linewith the Group’s sustainability strategy, as well as
requiring its suppliers to accept illimity Way and theCode of Conduct.

Signing of agreementswith counterparties
that do not meetenvironmental
sustainability
requirements

Management procedure

Areas of Legislative Decree 254/2016:

SOCIAL
TopicsOpportunities

Specific risk

Risk classification

Management procedure

Customersatisfaction

Improve customer
satisfaction
to incentivise
attracting newcustomers

Little ability to attract
new customers

Generated

Safeguards in place regarding marketing,development and customer care, that have ensured
and are ensuring a continual increase in thecustomer base and customer satisfaction.

Customersatisfaction

Strengthening of thesystem of listening,insight activities
and surveys toidentify and manage
customer needs

Customerdissatisfaction, with aconsequent negative
turnover

Incurred

Safeguards in place regarding marketing,development and customer care, that have ensured
and are ensuring a continual increase in thecustomer base and customer satisfaction. Expert
personnel work at contact centres, on hand to help
customers at any time, from onboarding to theoperational management of services offered.

Cyber Security
and Data
Protection

Creation ofrelationships oftrust and respect of
the sensitive dataof customers andparties that interact
with the Bank

Generated

Safeguards in place for controls, such as theactivities of the Compliance Function, with regard
to the requirements defined by the GDPR andprudential regulations, and IT systems with accessprofiling.
A system is in place to monitor the conduct ofusers connected with the bank system. Training of
personnel involved in personal data processing.

Incurred

Safeguards in place for control, such as accessprotocols and protection systems.
Activation of the illimity Security Awareness
Program.
Monitoring of quantitative indicators (see thesection “Cyber Security”) useful in understanding
the security measures implemented by the Group.
Vulnerability Assessments and Penetration
Tests (VAPT) carried out to identify any security
vulnerabilities in the Bank’s applications andsystems, with the aim of preventing and tacklingcyber attacks. Publication of guidelines to take
into account correct security measures to adopt
in various cases of processing classified data,according to increasing criticality levels.
Monitoring of a dual operational risk indicator in the
Risk Appetite Framework: business operating losses
and ICT operating losses identified in the year.

Cyber Security
and Data
Protection

6

Non-compliance withapplicable regulations
and laws on privacy(e.g. the GDPR)

Maintenanceand expansionof the security ofIT systems, with
benefits in terms ofLoss and theft ofcompany reputation
sensitive data due toand as thecyber attacks
creation of stable
relationships of trustwith customers andparties that interact
with the Bank

Specific risk: the main risks, generated or impacting the Group, related to the material topics of the illimity Group, and which arise from the organisation’s
activities, its products, services or business relations, including, where significant, supply or subcontracting chains (ref. Italian Legislative Decree
254/2016, Article 3, paragraph 1 c).

illimity • 2022 Sustainability Report33

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and InclusionCont. >> Areas of Italian Legislative Decree 254/2016: SOCIAL
TopicsOpportunities

Specific risk

Risk classification

Management procedure

Sustainable
Finance

Outlining ofa sustainablefinance strategy,
implementationof regulatory
requirements
in advance andstrengthening of theBank's reputation

Transactions withcompanies operating
in sectors withnegative social/environmental impacts

Generated

Exclusion of loans to those sectors set out in internal
regulations;
Checks on endorsement of ESG standards on
analysing the offering of deals (by Growth Credit, the
CLO and Risk Strategy)

Support toentrepreneurs
and financial
inclusion

Support SMEs,
guiding themthrough a process ofrecovery, relaunchand growth

Insolvency orworsening of thecreditworthiness ofcounterparties towhich the Group is
exposedIncurred

Effective safeguards are in place for the selection,assessment, risk opinions and monitoring/controls(of ratings and other indicators) during originationand on a continual basis

Support toentrepreneurs
and financial
inclusion

Lack of diversification
Limiting of thein the SME portfolio,
sector concentration with resulting potentialof businesses
impacts on the Group'sbusiness

Generated

Effective safeguards in place in terms of limits tosector and single name concentration

Generated

Safeguards in place for control, such as accessprotocols and protection systems.
Activation of the illimity Security Awareness
Program.
Monitoring of quantitative indicators (see thesection “Cyber Security”) useful in understanding
the security measures implemented by the Group.
Vulnerability Assessments and Penetration
Tests (VAPT) carried out to identify any security
vulnerabilities in the Bank’s applications andsystems, with the aim of preventing and tacklingcyber attacks. Publication of guidelines to take
into account correct security measures to adopt
in various cases of processing classified data,according to increasing criticality levels.
Monitoring of a dual operational risk indicator in the
Risk Appetite Framework: business operating losses
and ICT operating losses identified in the year.

IncurredWith regard to the essential outsourcing in the IT
field (Essential or Important Departments - FEI), thefollowing activities are performed:-V erification and control of the outsourcer’s
requirements indicated in the contract- Monitoring of the SLAs in the contract- Preparation of reporting on RTO-A lignment of processes and procedures with thereference regulatory standards

IncurredIn qualifying suppliers for the Group’s suppliers list,
suppliers must read and accept illimity Way and theSustainable Supply Chain policy, which illustrate thesustainability principles through which the illimity
Group operates

Innovation

Development ofsound IT platforms
that guarantee
IT security thatfavours a positive
digital experiencefor customers and acompany culture ofinnovation

Inadequate level of IT
security management
on technologicalplatforms (e.g.
illimitybank.com app)

Innovation

Monitoring of theoutsourcing of IT
infrastructure tofacilitate customers’
digital experienceand the company
culture of innovation

Lack of contractual
power deriving fromthe outsourcing of
the IT infrastructures
essential for certain
Group processes (e.g.
predictive models of
the credit process)Value chain
and business
relationships

Strengthening of
the value change
and reductionof possible
reputational risks
linked to suppliers

Partnerships withthird parties notaligned with the samesocial responsibility
objectives of the
Group

34

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Areas of Legislative Decree 254/2016:

PERSONNEL
TopicsOpportunities

Consolidation of an
inclusive company
Diversity, Equity culture, reducing
and Inclusion in any discriminationand increasing
the company
awareness of
employees

Adoption andconsolidationof an inclusive
Diversity, Equity company culturethat ensures equaland Inclusion in opportunities forthe company
wages to incentivise
female personnel
and reduce any
discrimination

Promotion ofprocesses ofprofessional growth
and a simulating
Empowerment, organisational
involvement and ecosystem where
the potential ofwell-being ofeach individual
illimiters
can be developed
and converged into
superior collective
performance

Inclusion of

Empowerment, sustainability
involvement and criteria in the
incentive systems
well-being offor Bank employees
illimiters
in order to achieve
ESG objectives

Specific risk

Low level of
effectiveness ofprogrammes focusedon Diversity, Equity &Inclusion topics

Increase in thegender pay gap,
with consequentdiscouragement offemale personnel

Inability to attract andretain talent

Failure to achievesustainability
objectives, due to theabsence of appropriate
criteria in management
performancemeasurement andincentive systems

Risk classification

Management procedure

Generated

HR Policy, which adopts the value of diversity(in terms of gender, education, experience andnationality) from recruitment onwards, up to theprofessional development of employees
Group policies targeting the empowerment of all
types of diversity (in terms of gender, education,
experience and nationality)
Plans for programmes and initiatives on the topic (i.e.
illimitHER)
Issue of a specific Policy on Diversity, Equity &Inclusion topics
Monitoring activities specifically requested tomaintain the Gender Equality Certification

Generated“Gender neutral” process guaranteed by the Group
internal HR, DEI and corporate governance policies
and the Remuneration Policy In particular:- Extract from the Diversity, Equity & Inclusion
Policy: “We define remuneration based on theprinciple “equal pay for equal work”, guaranteed bysafeguards to ensure that remuneration decisions
are diversity neutral”;- Extract from the Remuneration Policy: "illimity has
introduced the annual involvement of the Board of
Directors, with the support of the Remuneration
Committee, which is required to analyse the gender
neutrality of the remuneration policies and checkthe Gender Pay Gap and its evolution over time”;- Monitoring activities specifically requested tomaintain the Gender Equality Certification.

Generated

Definition of a framework to attract and develop
human resources based on company values and the“illimity leadership model”, aimed at guaranteeing
a working environment steered by inclusion,
collaboration, accountability and meritocracy
The appeal of this framework is continuallymonitored through continual check points ofmanagers/HR with each illimiter, and also by theannual Great Place to Work certification process andanalysis of independent bodies, such as Universum

Generated

The rules underlying illimity’s sustainability plans aredefined consistent with the purposes of alignment
with the company objectives and values, throughthe commitment to achieving the ESG objectives in
addition to the economic-financial objectives.
For 2022, the inclusion of ESG KPIs in the 2021-2025
Long-Term Incentive Plan for the Chief Executive
Officer, the remaining Top Management and otherkey personnel of the Group (accounting for 20%of the objectives plan) are confirmed, including
measurable elements regarding the issues ofDiversity, Equity & Inclusion and an improvement in
the Bank’s positioning in terms of ESG ratings issued
by independent agencies.
ESG KPIs were also included (accounting for 15%of the plan), in line with those set out for the longterm plan, also regarding the objective plans for all
managers of the group, connected with the MBO
short-term incentive plan. The conduct leadershipmodel (accounting for 25% of the plan) was also
integrated with specific topics connected to ESG and
the Digital Mindset.

illimity • 2022 Sustainability Report35

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Areas of Legislative Decree 254/2016:

HUMAN RIGHTS
TopicsSafeguarding of
human rights

Safeguarding of
human rights

36

Opportunities

Strengthening of
the promotion ofrespect of humanrights by applying
the principle ofnon-discrimination
within the Group

Supporting
companies that
respect humanrights, including
the application of
the principle ofnon-discrimination
in a manner toguarantee equity
and individual
freedom

illimity • 2022 Sustainability Report

Specific risk

Failure to adopt the
principle of “nondiscrimination”
within the Group, in
relations with staff
and associates andin internal policies
and procedures (e.g.
concerning accessto work, training
and professional
promotion)

Failure of companies
which the Groupfinances and/or
invests in, to comply
with principles of nondiscrimination

Risk classification

Management procedure

Generated

Safeguards in place for control at a policy andprocess level. In particular, attention is paid tothe principle of non-discrimination in illimity Way(the Group’s Code of Ethics), and Diversity, Equity& Inclusion Policy, defining the commitment totackling any discrimination, and promoting aculture of diversity and inclusion in compliancewith applicable regulations and international bestpractices at all levels of the organisation, and also
by the Group’s stakeholders. Recruiting and humanresources management are also focused on a fair,consistent conduct, avoiding favouritism, abuse or
discrimination based on gender, ethnic background,religion, political and trade union affiliation, sexual
orientation and identity, language, age or disability.
Respect for human rights and fundamental freedoms
is also guaranteed in third-party relations, which are
based - in terms of contracts and relations - on theprinciples and values in illimity Way, and in internal
relations. The safeguarding of human rights at
illimity is also guaranteed by the national collective
bargaining agreements as well as the specific rules
on Occupational Health and Safety, within theframework of national regulations.

IncurredOversight of operational controls at an applicationlevel (business, risk opinion).
Cosolidated Credit Procedure which governs
the impossibility to grant loans to some types ofparties from “excluded sectors” by the Business
Growth Credit and Distressed Credit Departments(this principle excludes portfolios and individual
positions managed as a gone concern), taking
account of the UN’s principles on the approach tobusiness and human rights, and in keeping with theBank’s strategic guidelines and guidance on credit
strategies.
In the case of counterparties potentially belonging
to these sectors, it is necessary to carry out in-depth
checks during the investigation, paying particularattention to the purposes of the Bank's credit
intervention and taking into account the weightof the excluded activity with respect to the overall
operations of the entity (company or group) to befinanced.

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Areas of Legislative Decree 254/2016:

ANTI-CORRUPTION
TopicsIntegrity incompany
conduct

Integrity incompany
conduct

Opportunities

Guarantee theactual compliancewith the laws andregulations in force
and the principles
and values of theGroup

Guarantee theactual compliancewith the laws andregulations in force
and the principles
and values of theGroupSpecific risk

Internal and external
fraudGroup operations
concerning money
laundering andterrorist financing

Risk classification

Management procedure

IncurredInternal fraud: The Bank’s rules and regulations
define periodic controls to mitigate risks invarious company processes, including the riskof internal fraud. In this regard, both manual andautomatic controls are put in place to guarantee
the “segregation of duties” of people who perform/
request an operation, and people who control/
authorise it, based on defined powers andauthorities. Aside from strictly operational rules,
personnel must observe the general principles ofintegrity and transparency defined in illimity Way, in
performing their duties.
External fraud: assessments during onboarding, onrequest of the Smart Care unit and Branch, using
intelligence tools. Ongoing quantitative assessmentof all customers in relation to the single transaction
and conduct of the customer as regards own current
account transactions.

Generated

Internal Policies and Procedures which describe thesafeguards adopted to manage/mitigate the risks
in question and related rules of conduct to observe(above all the Anti-Money Laundering Policy andAnti-Money Laundering Manual), the Organisationand Management Model (231), and illimity Way(Group Code of Ethics); training courses delivered
through e-learning, dedicated webinars and specifictraining programmes/initiatives for personnel
involved, also with on-the-job training; controls
during processes (e.g. during customer pre-screening
and onboarding) and ex post, carried out bothmanually and using automated tools; periodic risk
assessment).

Transparent
communicationand company
reputation

Improvement of thereputation among
stakeholders

Lack of consistency
between Groupvalues and the
conduct of personnel
directly working withcustomers, throughthe free phone service,chats, video calls or
email

Transparent
communicationand company
reputation

Building of solid
relationships
with customers
by transparently
sharing corporate
and businessinformation

Lack of transparency
in disclosure with theresulting impacts on
the relationship oftrust with customers

IncurredTransparency Policy; the Organisation andManagement Model (231), and related Code of Ethics
and illimity Way; dedicated webinars and specifictraining programmes/initiatives for personnel
involved, also with on-the-job training; training
material as “mini” educational sessions sent by
email; support for business/marketing functionsin assessing compliance with consumer protection
requirements in advertising, to avoid unfair businesspractices.

Generated

Specific safeguards in place such as selection andtraining policies; first and second level controls aswell as surveys conducted on customer satisfaction.

illimity • 2022 Sustainability Report37

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion(not covered by Italian Legislative Decree 254/2016)

BUSINESS TOPICS
TopicsOpportunities

Specific risk

Risk classification

Management procedure

Robust results
and creation ofshared value

Adoption ofeffective strategic
choices that createand distributelong-term economic
value to the Bank’s
stakeholders

Ineffectiveness instrategic choices forlong-term stability

Generated

Safeguards in place regarding processes, resources,
and tools in the area of the various levels of theinternal control system.

Robust results
and creation ofshared value

Monitoring andmaintenance of therisk management
process to maintain
good capitalisationlevels and theability to conduct
sound, profitabletransactions

Ineffectivenessof risk monitoringand management
processes

Generated

Safeguards in place regarding processes, resources,
and tools for second and third level controls.

Incurred

Safeguards in place regarding processes, resources
and tools for Compliance Function activities.
Compliance policy: the purpose is to describe theorganisational model adopted by the Banking Groupto manage compliance risk, and the proper oversightof legal compliance issues.
Promotion of a company risk compliance culture,through initiatives and specific training programmesdelivered based on e-learning, dedicated webinars
and specific training programmes/initiatives for
personnel involved and more exposed to risks.
Preparation of and continual updates to a control
system that is adequate for ensuring, as regards
compliance risks, that the activities of various
areas are in line with applicable internal andexternal regulations, and with company strategies
and policies, based on the principle of sound andprudent management.
The Chief Compliance & AFC Officer Area monitors
compliance risk management for all company
activities and services/products, maintaining
ongoing dialogue with the personnel of the Bank’s
entities and subsidiaries, also ensuring that company
processes and procedures are, starting from thedesign stage, suitable for preventing/mitigating thisrisk, based on a risk-oriented approach.

Incurred

Safeguards in place regarding processes, resources,
and tools for second and third level controls
Definition of company internal regulations/
Organisation and Management Model (231) andillimity Way (Group’s Code of Ethics)
Promotion of a company compliance risk culture,through initiatives and specific training programmes
Periodic reporting to competent bodies (for example:
Tableau de Bord).

Integrity incompany
conduct

Provision of policies
and controls toguarantee the actual
compliance with thelaws and regulations
in force and theprinciples andvalues of the Groupin order to maintaina good reputationin relation to
stakeholders andavoid any financial
lossesIntegrity incompany
conduct

Provision of policies
and controls toguarantee theactual compliancewith the laws andregulations in force
and the principles
and values of theGroup in order toreduce any legal
or administrative
penalties

Considerable financial
loss or harm to
reputation due tofailure to comply withlaws and regulations

Legal or administrative
sanctions as a resultof violating mandatory
regulations

Climate-related risks and opportunities have been identified by the Bank over the short, medium and longterm in order to create a strategy that protects the Group from the various types of events.
Specifically, in the short-term (up to 1 year), the periodic (at least annual) execution of the process of identifying
material risks for the Group is overseen by the CRO, together with the CFO, with the support of other organisational
units of the Parent Company illimity Bank and the Subsidiaries ARECneprix (formerly neprix) and illimity SGR
allows for, inter alia, the identification of ESG risks and opportunities. The results of this process represent
the assessment and input measures used to develop processes related to the ICAAP and ILAAP, the StrategicPlan, Budget and RAF, and are therefore validated by the senior management, discussed and analysed by theRisks Committee, and subject to approval by the Board of Directors of the Parent Company. With regard to themedium-term (from 1 year to 3 years) and the long-term (beyond 3 years), the Sustainability Committee carries
out its role of promoting a responsible and sustainable culture within the Group, submitting proposals to theBoard of Directors to define the targets over that time horizon. Among these, ESG objectives have been integrated
into the long-term incentive plans, in line with the provisions of the 2021-2025 Strategic Plan.

38

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

APPENDIXGRI Content Index

Evidence from the monitoring and control of individual risks, the analysis of developments in internal andexternal factors, public information, sector studies and best practices. etc. are all used, continually, topinpoint potential emerging trends and, as a result, also potential emerging risks connected with ESG
profiles, to which the Group might be exposed. The identification of those types of risk is significant with aview to continuously updating the processes of identifying risks, modelling, assessment/measurement andmanagement that includes them.
For example, the emerging trend of increasing digitization of technological infrastructure, as well as greater
automation of processes by leveraging machine learning and artificial intelligence techniques, have led to achange in the assessment of several risks, such as IT risk, cyber security and third party risks (regarding theincreased dependence on systems and services offered by third parties, to which not only processes, butalso cloud or IT services are outsourced). For more details, refer to the section “Cyber Security”.
Lastly, the Bank continued its efforts in 2022 to integrate ESG factors in its overall risk management, mainly
focussing on climate-environmental issues. The initiatives started by illimity’s CRO involve a number ofanalyses, development and implementation based on evidence taken from regulatory guidelines, indications
from interbank work groups and the 2021-2025 Strategic Plan, thus intervening on the risk assessment
system (composed of processes, databases, assessment frameworks, models and reporting) which is still
being defined, developed and implemented, as follows:

MT

2022
12.21

ICAAP 22

(Material
Transactions):
Due Diligence on reputationand ESG aspects,
due to the evaluation of
external ESG scores
used by the business;
Prior checks on borrowers
using a Natural Language
Process tool to continuously
monitor connected
reputational (sentiment
analysis) and ESG
aspects

01.22

03.22

Tableau debord 03 22

Analysis of the
ESG risk profile
accompanying the
ICAAP

04.22

Additionof further
ESG indicatorsin the Tableau de
bord

07.22

09.22

Climate scenarios
NFS 2021

Enrichment of thesection on ESG Risks,
addition a paragraphon the managementof climate-related andenvironmental risks

Tableau de bord
01 22:First integration of
a set of ESG indicatorsin the monitoringof the Tableau de bord

Use of the satellite model
to estimate the impacts thatmacroeconomic scenarios
affected by climate-related
and environmental factors(source Oxford Economics) may
have on the Probability of
Default risk factor

Lastly, as per the objectives of the Strategic plan, the update of the 2023 RAF will also introduce Risk
Appetite/Tolerance thresholds on several of the ESG indicators that were developed and monitored during2022 within the Risk Tableau de bord.

illimity • 2022 Sustainability Report39

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

03. Materiality analysis
and stakeholder engagement
Methodological Note
GRI 2-3

GRI 2-4

GRI 2-5

The illimity Group has drawn up its third Consolidated Non-Financial Statement (NFS) and its second
pursuant to Article 4 (Consolidated Non-Financial Statement) of Italian Legislative Decree 254/2016.
From as early on as 2020, illimity opted to prepare its first NFS on a voluntary basis pursuant to Article 7(Conforming Voluntary Non-Financial Statements) of the Decree.
The Decree, enacting Directive 2014/95/EU of the European Parliament and of the Council of 22 October
2014, regards the disclosure of non-financial and diversity information by certain large undertakings andgroups on environmental matters, social and employee-related matters, respect for human rights, anticorruption and bribery matters.
Also this year, as the scope of Directive 2014/95/EU and consequently Italian Legislative Decree 254/2016
apply, illimity has disclosure obligations concerning its own economic activities considered to be ecosustainable. This reporting is contained in the Non-Financial Statement pursuant to Article 8 of Regulation(EU) 2020/852 on European Union Taxonomy, as described in Chapter 12 “European taxonomy and ecosustainable activities”.
This statement has been drawn up in compliance with the “GRI Sustainability Reporting Standards”
published by the Global Reporting Initiative (GRI), as indicated in the attached table “GRI Content Index”
under the “in accordance” option in the 2021 version. Moreover, in order to provide complete disclosure on
the Group’s performance to the financial community and all other stakeholders, additional qualitative andquantitative indicators on some material topics produced according to an independent methodology, wereadded, alongside the GRI Standards. For more information on the correlation between the chapters of thisNFS and reference indicators (GRI and additional indicators), reference is made to the tables in the GRI
Content Index.
The NFS is prepared through the annual coordination of the IR & Sustainability Department, that is
responsible for defining the work plan, and meeting the deadlines indicated in the Decree, i.e. aligned withthe financial reporting process. In particular, the Department is tasked with starting and supervising theentire process to collect data and qualitative information, using software developed to manage the entire
reporting chain through a collaborative approach, and with preparing the draft version of the NFS, assistedby all structures involved, to submit to the Sustainability Committee which, possibly through additions orrequests for changes, presents it to the Board of Directors for approval by the same deadline set out for
presenting the draft financial statements.
The reporting boundary of the document corresponds to the 2022 Consolidated Financial Statements andconsiders all entities consolidated on a line-by-line basis that are part of the illimity Group, as describedin Chapter 1. Compared to the previous year, the reporting also includes AREC S.p.A., which was acquired
during the year7.
In order to ensure the comparability of the information included in this document with that reported in
the NFS 2021, a comparison of the information for the three-year period is provided. The qualitative andquantitative data and information in this document refer to activities carried out by the Group regarding theyear ended 31 December 2022, and were compared with those referring to the two previous years. In order tocorrectly represent the performance and ensure the reliability of the data, the use of estimates was limited
as much as possible. If present, they are founded on the best methodologies available and suitably noted.

7

The reporting of AREC S.p.A refers only to the second half of the year, as it joined the Group on 1 July 2022. Any changes to the data published in theprevious reports have been suitably emphasised in the document.

40

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

The 2022 NFS was approved by the Board of Directors in the meeting of 9 March 2023.
The reporting boundary of the Group for 2022 changed compared to 2021, as AREC S.p.A. was acquired.
Nonetheless, the information included in this document is considered comparable to that reported in the
NFS 2021 and, thus, a comparison of the information for the three-year period is provided.
Since 2021, illimity has endorsed the United Nations (UN) Global Compact, which is why the information forthe purpose of preparing the Communication on Progress (COP) required by the Global Compact has also
been included in this Non-Financial Statement.
The Statement was audited on a limited basis by KPMG S.p.A. The results of audits, conducted pursuant
to Article 3, paragraph 10, of the Decree and according to criteria indicated in ISAE 3000 Revised, arepresented in the independent auditors’ report, attached to this document.
For further information on the contents of illimity’s Non-Financial Statement, please write to:sustainability@illimity.com.

Stakeholder identification and engagement
GRI 2-29

The GRI standards define materiality as a fundamental principle underlying the reporting process andreferring to topics that:• reflect the significant economic, environmental and social impacts of the organisation, or• substantially affect stakeholders’ evaluations and decisions.

In developing its business, the illimity Group interacts with a multitude of categories of stakeholders thatare directly and/or indirectly influenced by its activities, services and products, or which actively influence
the Group's operations. In 2022, the categories of illimity stakeholders identified based on their significanceare presented below:

Employees

Customers

Partners

Suppliers

Shareholders
and investors

Media

Socialecosystem

Community

illimity • 2022 Sustainability Report41

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

It is fundamental to engage these categories in order to understand their interests, expectations anddisclosure needs. The parties identified are engaged mainly as part of the normal course of business.
Communications are constant and transparent, allowing the Group to maintain a stable, proactive dialogue.
In general, the channels used for dialogue, at least monthly, in stakeholder relations are:

Customers

Employees(consumer and corporate
customers)(illimiters)

Engagement survey
Company Newsletter
Company Intranet
Meetings at regular intervals
Events and internal initiatives
Company welfare initiatives
Performance appraisal sessions
Materiality questionnaire

Partners

Shareholders
and Investors

Institutional website
Events and conferences
Periodic calls
Materiality
questionnaire

Periodic calls
Roadshows
Shareholders’ Meetings
Institutional website
Press conferences
Materiality questionnaireSocialecosystem
EventsPeriodic calls
Partnerships

SmartCare (free phone number, emails,chat and video chat)WebsiteHome banking
APP illimity
Social network
Direct E-mail Marketing
Physical and online events
Survey brand reputation andsatisfaction level
Materiality questionnaireMedia
Calls and meetings at regularintervals
Events and conferences
Press conferences
Materiality questionnaire

Suppliers
Selection and managing
relations
Suppliers database portal
Meetings at regular intervals
Materiality questionnaire“Vai Oltre la Forma”

Community
Events and conferences
Dedicated community web
SurveysMateriality questionnaire

In line with the 2021 NFS, for the 2022 NFS, stakeholder engagement involved almost 1,300 illimity
stakeholders, as described further in the next section.

42

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Materiality analysis
GRI 2-29

GRI 3-1

For illimity’s first year of non-financial reporting - with the 2019 Sustainability Profile - the Group conducted
an analysis leading to the definition of the 2019 materiality matrix. The materiality analysis the matrix isbased on was then updated annually, in order to identify any changes in the Group’s internal and external
context.
In 2022, coordinating with the IR & Sustainability Department and involving the Sustainability Committee,
illimity further updated its materiality analysis to confirm the significance of the topics identified so far.
The new materiality analysis, with the purpose of defining the matrix of material topics for 2022, wasstructured in three stages according to the methodology suggested by the GRI Standards:

1

Internal analysis to support theprocess of updating the material
topics of the Group.
The approach firstly involves
examining the various usefulsources of information to update
the range of potentially material
sustainability topics.

2
Stakeholder engagement.
With a view to ongoingtransparency and greater
involvement of the key players
involved in the business, theprocess of assessing the topics
involved internal and external
stakeholders by setting up an
online questionnaire.

3

Update of the Matrix.
By processing the results
obtained through stakeholder
engagement it was then possible
to establish the positioning of thematerial topics within the Matrix.

1. Internal analysis to support the process of updating the material topics of the GroupThe process to identify and select potential material topics was driven by the Bank’s purpose and values.
This process involved a careful internal analysis, with the consultation of internal documents, media
publications, benchmarks, best practices in sustainability reports, aspects of sustainability that are material
for the sector, external trends and legal developments.
2. Stakeholder engagement
After the first-stage results, the topics which are potentially significant for stakeholders and the Group
were identified. The list of these topics was considered as the starting point for stakeholder engagement
activities.
The Bank also proposed the revision of the nomenclature of some topics, to improve their disclosure andhow they are presented.
The topics identified were submitted to voting by stakeholders and the management, based on theimpact generated, on which the illimity Group will guide its sustainability initiatives. Through an online
questionnaire, the internal and external stakeholders were able to assess the positioning of the topics inthe matrix for 2022.

illimity • 2022 Sustainability Report43PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesMaterial topics 2021

Innovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Material topics 2022

Environmental impacts and climate challenges

Environmental impacts and climate challenges

Support for SMEs

Support to entrepreneurs and financial inclusion

Innovation and digital transformation

Innovation

Customer focus

Customer Satisfaction

Robustness and creation of shared value

Robustness and creation of shared value

Diversity, equity and inclusion

Diversity, Equity and Inclusion in the company

People empowerment, engagement and well-being

Empowerment, engagement and well-being of illimiters

Sustainable finance

Sustainable financePartnership development & consolidation

Value chain and business relationships

Integrity, legal compliance and the fight against fraud,money laundering and corruption

Integrity in company conduct

Clear, transparent communication, brand and reputation

Transparent communication and company reputation

Safeguarding of human rights

Safeguarding of human rights

Cyber Risk, Data Management & Security, Privacy

Cyber Security and Data Protection

3. Positioning of material topics through the Involvement of the Board of Directors, Top Management andstakeholders
The positioning of topics in the materiality matrix entailed:assessment of internal materiality in light of the impacts generated on the environment and• The
the company, which involved the CEO, the Board of Directors, the Sustainability Committee, theManagement Team and the Second Line, through an on-line questionnaire to assess the positioning of
the material topics for this year;

assessment of external materiality in light of the impacts generated on the environment and• The
the company, which instead involved Group Personnel, SME customers, retail customers, the “Vai

Oltre la Forma” Community, partners and suppliers, shareholders, investors, the social ecosystemand the media, through an on-line questionnaire to collect new information on external stakeholders’expectations for each topic identified.
Stakeholder assessments were weighted, considering the impact of each stakeholder class on illimity.
The final materiality scores for internal and external stakeholders, for all topics assessed, were presented ina matrix, with the axes representing the two aspects investigated.

illimity’s materiality matrix
GRI 3-2

The process to update materiality was completed with the confirmation of the materiality threshold,corresponding to a score equal to 2.5 out of 5, in line with the previous year.
The chart therefore shows the topics considered material, i.e. the topics which exceeded the materiality
threshold, and which are presented in the NFS.
Those material topics are the result of the strategic importance attributed by illimity to those topics(represented on the x axis) and the expectations of stakeholders regarding material topics (represented on
the y axis).

44

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Support to entrepreneurs
and financial inclusion

Extremelymaterial

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

Innovation

Diversity, equity andinclusion in the company

Transparent communicationand company reputation

APPENDIXGRI Content Index

Cyber Security
and Data Protection

Materiality forstakeholders

Integrity in company conduct
Customer satisfaction
Safeguarding of human rights
Robustness and creation of shared value

Material

Value chain andbusiness relationships

Environmental impacts Sustainable
and climate challenges financeEmpowerment, involvement and wellbeing of illimiters

Materiality for illimity

Material

Extremelymaterial

The materiality matrix was presented to the Sustainability Committee at the meeting of 25 November 2022
and approved by the Board of Directors at the meeting of 28 November 2022.
The material topics have a dual function of guiding the company in choosing individual disclosures toreport and of guaranteeing compliance according to the areas contemplated by Italian Legislative Decree
254/2016.

Correlation table for reporting areas pursuant to Italian Legislative Decree 254/2016 and material topics:
Environment

Environmental impacts and climate challenges
Sustainable financeSocialSupport to entrepreneurs and financial inclusion
Customer satisfaction
Value chain and business relationships
Transparent communication and company reputation
Innovation
Robustness and creation of shared value

Personnel

Empowerment, involvement and well-being of illimiters
Diversity, Equity and Inclusion in the company

Anti-corruption

Integrity in company conduct
Cyber Security and Data Protection

Human Rights

Safeguarding of human rights

illimity • 2022 Sustainability Report45

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

04. A culture of rules
The value of integrity in corporate conduct is a fundamental principle and foundation of the illimity Group’s
operations, characterising the approach and conduct of personnel in achieving objectives, and is reflectedin the Group’s commercial offering and relations with the external community.
illimity ensures the lawfulness and sustainability of the Group’s activities in compliance with all applicablelaws, regulations and internal standards.
illimity is committed to promoting a conduct among its employees and associates, that is based on integrityin all activities, with the aim of proactively managing the risks connected with a failure to comply with legal
obligations, best principles or ethical principles.
The dissemination of a solid compliance culture is facilitated by an effective, extensive control model, at allorganisational levels, and by adequate personnel training, and sanctions in the case of violations.
The Chief Compliance & AFC Officer monitors compliance risk management for all company activities andservices/products, maintaining ongoing dialogue with the personnel of the Bank’s Divisions and subsidiaries,
also ensuring that company processes and procedures are, starting from their design stage, adequate forpreventing/mitigating this risk, based on a risk-oriented approach.
The Group’s compliance model is described in a specific internal policy (“Compliance risk management andthe Compliance model”), which establishes a structure to oversee this mission:

the continual improvement of company processes and procedures aimed at correct• supporting
compliance risk management, controls on adequacy, the proper use and need for training, and providing
practical and operating information for business structures (guidance);

opinions and interpretations on regulations, taking an active part in specific projects,• providing
monitoring in advance the compliance of new products, processes, organisational solutions, procedures
and systems (compliance by design);

a compliance risk controls system that is adequate for ensuring that the activities of various• preparing
areas are in line with applicable internal and external regulations, and with company strategies andpolicies (second level controls);

a company compliance risk culture, through initiatives and specific training programmes,• promoting
together with the Chief HR & Organization Officer (Compliance Culture);
managing, together with the legal functions of the Bank and subsidiaries, as well as any other• actively
subjects involved, feedback on claims received from customers, also to identify attention points andareas for improvement to include in the plan of activities and controls.
In a dimension of compliance and integrity of own actions, internal regulations require the Group and its
employees to:and promote strict compliance with applicable laws and regulations, and establish that pursuing the• ensure
Bank’s interests can never justify a conduct that goes against the principles of loyalty, honesty and fairness;transparent relations with stakeholders, through the dissemination of information that is• guarantee
complete, accurate and comprehensible, enabling readers to always make informed decisions regarding
the relations they have with the Bank;

strict compliance with all organisational and procedural rules adopted, with a particular focus• promoteon rules aimed at preventing the commission of crimes;
compliance and also require staff, associates and commercial partners to comply with all laws,• promoteregulations, principles and organisational rules;
from adopting a conduct that is unlawful, or does not conform to the Bank’s principles, in• refrain
relations with the authorities, partners, employees, staff and associates, customers, suppliers and, moregenerally, the community at large;

compliance with principles of transparency, honesty and reliability in dealing with partners,• guarantee
customers, counterparties and the community, and also avoid real or potential conflict of interest
situations;46

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

environmental protection and safety, with particular reference to occupational health and• promotesafety;prevent and repress all forms of discrimination based on gender, age, sexual preference, race,• avoid,nationality, physical and/or socio-economic conditions, religious beliefs, political opinions;the confidentiality, integrity and security of data and information processed, strictly conforming• ensure
to applicable laws on confidentiality and privacy, and also prevent the use of confidential information for
purposes not directly related to the performance of professional activities.
Likewise, persons that hold representative, administration, and/or management positions within thecompany, as well as supervision and control positions, are required:• to base their own conduct on the utmost honesty, transparency, fairness and independence;
ensure their own staff and associates meet requirements of professionalism, integrity and good• tostanding,and empower resources properly, also through training and continual professional development;
carry out their own role with an awareness and sense of responsibility, providing full cooperation and• toreciprocal
information, in order to promote the attainment of company goals and guarantee the accuracy
and authenticity of documents and information provided in their functions, in compliance with principles
of confidentiality and integrity, and ensuring their use only for purposes concerning work activities;

to carry out activities that may harm the interests of the Group or pursue own or third-party interests,• noteven if only in potential conflict and/or potentially harmful for the Bank and, if acting otherwise, toinform competent internal functions in compliance with the Bank’s regulations;guarantee that all their team members understand and adopt the Group’s principles, set out in the• todocument
illimity Way and in relevant internal regulations.
GRI 2-15

In managing conflicts of interest, the Conflict of Interest Management Policy identifies the main casesof conflict and describes the process to identify and assess them, as well as the measures necessary to
prevent and manage them, also clarifying the roles and responsibilities of the various departments involved.
Specifically, the document identifies relevant parties for the purpose of identifying conflicts of interest,
as well as the various types of conflict that may arise between these parties, and sets out the criteria for
identifying concrete situations that can generate a conflict of interest. It also defines the safeguards andorganisational and control measures to prevent, manage and monitor conflicts of interest, and establishes
the activities to be carried out in the event that the safeguards and measures adopted are insufficient toneutralise the effects of the conflicted detected.
The Board of Directors is responsible for approving and revising the internal policies on conflicts of interest
on a regular basis, identifying - in relation to the operating characteristics and the strategies of the Bankand the Group - the business sectors and types of financial relationships in which conflicts of interest may
arise. The Board is also tasked with identifying, assessing and managing the most significant conflicts ofinterest, with the support of the Chief Compliance & AFC Officer.
The Chief Compliance & AFC Officer maintains and ensures the periodic update of a specific registerof situations that have caused an actual or potential conflict of interest. The data in the register remain
available for any requests received or put forth by the Supervisory Authorities, and are also used for theperiodic review of the Conflict of Interest Management Policy by the Board of Directors. Regarding MiFID
Conflicts of Interest, the Chief Compliance & AFC Officer submits to the Board of Directors annual written
reports on the conflicts of interest that arose during the reference period.

illimity • 2022 Sustainability Report47

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

The Organisation, Management and Control Model
illimity has put in place a specific Organisation, Management and Control Model, (the “Model”), that sets
out the principles of control and conduct that must be adopted in order to reduce the risk of committing
the crimes and offences contemplated in Italian Legislative Decree 231/2001 including, in particular, crimesof corruption and crimes against the Public Administration, financial and corporate crimes, IT crime andunlawful data processing, tax crimes and organised crime, as well as money laundering.
The Model was developed, considering first and foremost the regulations, procedures and internal control
systems intended to prevent crimes and unlawful conduct in general, including the crimes and offences
contemplated in Italian Legislative Decree 231/01.
More specifically, the Model comprises:

Corporate Governance System, adopted pursuant to the Corporate Governance Code, corporate• therules and significant regulations;• internal regulations, procedures and policies of the company;• illimity Way and the Anti-Corruption/Bribery Policy;• the internal controls system;• the system of powers and authority;• the internal whistleblowing system and sanctions system.
The effective, concrete implementation of the Model is also guaranteed by the Supervisory Board, appointed
by the Board of Directors, vested with autonomous powers of initiative and control on the correct applicationof the Organisation Model. The Bank’s Supervisory Board is also tasked with:• verifying the adequacy and effectiveness of the Model;
company operations, carrying out audits and controls at regular intervals and identifying• monitoring
follow-up;
updates to, the dissemination and knowledge of the Model by its addressees, making proposals• overseeing
to the Board of Directors, if necessary, on its alignment, to improve its adequacy and effectiveness, in thecase of legal developments and/or changes in the organisational structure or company activities, and/or violations of the Model;

following up requests from the Bank’s organisational units or from Corporate Bodies, for• promptly
clarifications and/or advice concerning the model, also providing opinions;• ensuring that all parties involved promptly carry out all reporting activities on compliance with the Model;
and evaluating all information and/or reports received and related to compliance with or• reviewing
violations of the Model;
the competent bodies of activities carried out, relative results and planned activities, as well
• informing
as proposing suitable measures in the event of violations of the Model;• providing necessary information to audit bodies, in the case of controls by the Authorities.
In July 2022, the Board of Directors approved the update to illimity Bank’s Model, in order to integrate, among
others, new legal developments - including changes to internal regulations - occurring on a provisional
basis, and align with the changed organisational structure of governance and the Parent Company.
For further information:

Organisation, Management and Control Model

48

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

The illimity Way
GRI 2-24

illimity Way, illimity’s Code of Ethics and Conduct, is an integrity manual created as the Group’s “charterof relations”, describing its commitment to customers, shareholders, suppliers and business partners, theSupervisory Authorities and the public administration, the media and country, expressing the values andconduct of the Group and its corporate culture of responsibility, lawfulness, transparency and value creation
it has committed to promoting and disseminating, at all levels of the organisation, through sustainable
development.
illimity Way also sets out illimity’s commitment to respecting the environment, caring for its own humancapital and company assets, as well as protecting the Bank and the reputation of the entire Group, as it
forms the basis for principles and rules that put into practice the values the Group recognises.
Working with company bodies, managers, employees, associates partnering the Group that contribute inany way whatsoever to illimity’s activities, is a way to provide guidance each day, to make a distinction
between conduct that is permitted and conduct that is not accepted.
The document was also updated in June 2022 to include the references and international principles
expressed by the United Nations, the OECD and the EU, which guide the Group in pursuing its objectives
and the values expressed by the relevant internal regulations, with specific consideration of those regarding
environmental and social sustainability and governance (ESG) and ethics in the use of artificial intelligence,in line with market best practices.
illimity Way is an integral part of the Organisation, Management and Control Model pursuant to Italian
Legislative Decree 231/2001, as it prevents the commission of relevant crimes, and is thus disseminated to
all recipients, who comply with its principles and make an active contribution to its circulation, as well as
being published on illimity’s website.
For further information:

illimity Way

Safeguarding human rights
illimity is aware of the importance of values of fairness and safeguarding human rights, and is committed
to eliminating all discrimination, and to respecting differences in gender, age, ethnic background, religion,
political and trade union association, sexual orientation and identity, language or disability. The Group
works for the full observance of the fundamental freedoms proclaimed in the Universal Declaration of
Human Rights, approved in 1948 by the General Assembly of the United Nations, as explained in the Group's
illimity Way. During 2021, the Bank also endorsed the United Nations (UN) Global Compact, undertaking torespect and promote the ten universally accepted principles, including those regarding the safeguarding of
human rights by companies (principles 1 and 2).
Given the Group’s operating and business model, and contextualisation at national level, respect for thoserights is a fundamental of illimity’s human resources management policies, supported by national collective
bargaining agreements, international principles and specific rules on occupational health and safety, in thecontext of the applicable nationwide and supranational regulatory framework.
The Bank guarantees and maintains a work climate that is inclusive, that values uniqueness and plurality
as ways of developing humanity. The Bank’s conduct is geared towards an approach that does not favour or
tolerate any violation whatsoever of human rights, and that promotes the widest possible dissemination ofa culture and awareness of employees to welcome diversity in all its forms.
Special attention is also paid to third-party relations, which are based - in terms of contracts and relations- on the principles and values in illimity Way.

illimity • 2022 Sustainability Report49

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

In line with the international principles of the United Nations, the OECD and EU, illimity also has theobjective of:• safeguarding human rights in all areas where it operates;• respecting freedom of association and the personal political involvement of its employees;that each person who operates or works for the Group does so of his or her own free will
• guaranteeing
in a healthy, safe environment;
to a greater solidarity, based on the recognition of cultural diversity, an awareness of the unique• aspiring
nature of mankind and the development of intercultural exchange;
any discrimination, form of slavery or child labour, paying a great deal attention to these issues• avoiding
also when identifying the parties it has dealings with;• ensuring gender equality;• respecting labour laws and promoting sustainable working hours.
Moreover, due to the importance given by the Group to issues related to Diversity & Inclusion, the gender
pay gap and absence of discrimination, further information is given in Chapter 3 of “illimity Way” - “People”
and in Chapter 7 “Diversity, Equity and Inclusion” of this document. In general, respect for human rights because it covers all the diverse areas of the Group’s operations - is part of a narrative that runs throughout
the Consolidated Non-Financial Statement.
GRI 406-1

No cases of discrimination at work were reported during 2022.

The fight against fraud, money laundering, corruption
and violations of Financial Sanctions
The Group promotes the principles of the United Nations, the OECD and EU, in the development of policies
on the fight against corruption, safeguarding human rights, workers’ rights and environmental protection.
Compliance with rules and integrity in company conduct are also ensured by compliance activities dedicatedto monitoring corruption, money laundering, terrorist financing risk and managing embargoes.

Anti-corruption

illimity is actively involved in fighting against all types of corruption, including private-to-private corruption,
ensuring full cooperation with the authorities and the preparation of adequate measures and controls
carried out by independent functions.
The risk of corruption is offset by stringent rules of conduct, that prohibit all employees, staff andassociates from requesting, offering or accepting cash payments that are not part of the Bank’s contractual
obligations. Dedicated measures have also been adopted to regulate the exchange of benefits and/or giftswith counterparties, suppliers and, more in general, with third parties, that could be classified, dependingon the context and methods used, as an act of potential corruption. More specifically, an internal regulation
has been approved on giving and/or receiving gifts and on business entertainment, and on organising andparticipating in charity events and sponsorships.
illimity has put in place anti-corruption measures for personnel recruitment, for processes for the purchase,management and sale of investments and other assets, and also for the purchase, management and sale ofproperty for Bank credit purposes and/or purchases to guarantee investments in impaired loans.
Applicable regulations are the document illimity Way, the “Anti-corruption Policy”, the “Expenditure
Procedure”, the “Audit Management Procedure” and the “HR Procedure”.
For further information:

Anti-corruption

50

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

GRI 205-2

Anti-corruption policies and procedures are notified to the entire company population, in a document packthat each employee receives when hired, and through the illimity Group’s Internal Regulations portal on its
website. All updates to internal regulations are appropriately notified, in periodic email alerts, sent by the
HR & Organization Department. illimity’s policies and procedures are instead sent to business partners on
their request, and are also published on illimity’s website.
The obligatory training provided by the Chief Compliance & AFC Officer is a dynamic offering, essentially
focused on webinars dedicated to current business topics, including the participation of highly specialised
third party trainers, provided to specific target populations, accurately identified based on their degree of
involvement and responsibility in the topics covered in each case. The Chief Compliance & AFC Officer
focuses the initiatives on the internal needs and specific characteristics based on a gradual approach, withthe objective of significantly impacting the conduct engaged in by illimiters. Alongside the standard training,provided through online courses, the Chief Compliance & AFC Officer provides educational meetings/
initiatives that guarantee greater interactivity and meet the specific training needs of the operational andbusiness departments.
For the Christmas holidays, the Chief Compliance & AFC Officer sent a training notice to all employeesof the Group to remind them of the principles set out in the Anti-Corruption Policy regarding gifts. At thesame time, employees were asked to track and report any gifts received and/or given by filling in a form
specifically prepared, including the information regarding the nature and purposes, beneficiary, type andvalue of such gifts.

Employees who have received training
on anti-corruption

2022

2021

2020

Number%Number%Number%Senior managers

77

N/A

65

97.0

45

81.8

Middle managers

350

N/A

288

95.1

201

83.4

Professional areas

426

N/A

323

90.7

98

33.7

8

GRI 205-3

During 2022, no episodes of corruption were confirmed, nor were any public legal proceedings brought
against the organisation or its employees regarding corruption.

Anti-money laundering

illimity pays particular attention to complying with national and international laws on combating money
laundering and terrorist financing and ensures prevention consistent with the corporate structure, complexity
and scale, the type of services and products offered, and characteristics of customers served, through:definition of strategic guidelines and policy for the overall management of money laundering risk at• theGroup level;organisational systems and procedures suitable for guaranteeing compliance with customer due• thediligence obligations, suspicious activity reporting and the retention of data;• the clear definition of roles, duties and responsibilities of each organisational oversight entity;establishment of the anti-money laundering department as a control function supervising money• thelaundering risk prevention and management;
control of compliance by personnel, internal procedures adopted and legal and regulatory• continual
obligations on money laundering.

8

As this is a training notice sent to the Group’s personnel, the percentage value of “uptake” of the initiative is not applicable (different from the participationin training events such as webinars), considering, in any event, that that notice was sent to all employees of the illimity Group.

illimity • 2022 Sustainability Report51

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimity is committed to preventing and mitigating the risk, even when unaware, of being exploited for money
laundering and terrorist financing purposes, and adopts measures in proportion to the risk depending on
the type of customer, type of product or service requested, the geographic reference area and distribution
channels used.
To avoid involvement in money laundering and terrorist financing, illimity adopts general principles ofconduct, above all concerning bans and obligations of applicable external and internal regulations, and in
keeping with the values of company codes of ethics.
illimity’s governance system to combat money laundering and terrorist financing is set out in the AntiMoney Laundering Policy and related Operating Manual - documents that define a systematic andfunctional reference framework, based on the principle of the Group’s active cooperation, and that
describe at a granular level the safeguards adopted by each Group company - also in terms of processes
and information systems - for preventing these types of unlawful activity. In fact, specific processes andprocedures are in place regarding customer due diligence, suspicious activity reporting, the registration ofrelations and transactions, the retention of documents, risk assessment and management, internal control
and guarantees of compliance with all relevant provisions to prevent transactions connected with money
laundering, terrorist financing and the violation of embargoes.
The guidelines defined in the Parent Company’s Policy are set out and adopted by individual operating
structures, and subsidiaries, in proportion to the characteristics and complexity of activities carried out, thesize and scale of the organisation, in compliance with regulations, ensuring the sharing of information at aconsolidated level.
Procedures are also in place to carry out automatic controls on records and transactions, to mitigate therisk of having customers on lists of persons subject to restrictions or the freezing of assets (black lists).
illimity guarantees efficient anti-money laundering oversight, that can also mitigate additional risks, suchas reputational risk, which may have consequences due to a negative perception of the image of the Group,
Bank or individual companies of the Group, held by customers, counterparties, shareholders, stakeholdersof the supervisory authorities.
During 2022 the Group carried out monitoring to identify phenomena of money laundering and terrorist
financing, using specific tools, namely: (i) the Transaction Monitoring system to identify potential suspicioustransactions, making it possible to intercept “anomalous transactions” in relation to the standard of conductof the cluster that the customers belong to and anomalous transactions in relation to the information
provided by the customer during due diligence “consistency”), with a specific focus on Italian retailindividual customers acquired through multi-channel digital platforms (web, apps); (ii) the Information
Monitoring System, which monitors the subjective profile of corporate customers of the Group, to identify
and steer potential non-compliance situations, identify trigger events in risk management (e.g. Change
in corporate structure, change in business conducted, participation in public tenders) or to intercept
significant relationships (e.g. New directors, beneficial owners or partners/shareholders in common withother companies) by enriching the database using reliable, independent public sources (e.g. Infocamere or
specialised info providers).

For further information:

Anti-money laundering policy

52

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Financial Sanctions

illimity ensures suitable oversight of the regulations in force on financial sanctions, in line with the type ofcustomer, type of product or service offered and the specific geographical area, through:definition of strategic approaches and policies to guarantee compliance with the provisions on• thefinancial sanctions;organisational systems and procedures to guarantee the correct management of transactions• suitabledirectly or indirectly involving counterparties and countries subject to restrictive measures;• the clear definition of roles, duties and responsibilities of each organisational oversight entity;
appointment of a Sanction Compliance Officer, specifically charged with overseeing the preventing• theand management of risks of breach of financial sanctions;
exercise of continual control of compliance by personnel, internal procedures adopted and legal and• theregulatory obligations on money laundering.

Where necessary, the financial restrictions established by the reference national or internationalorganisations, set out by the regulations in force at the time.
illimity is strongly committed to guaranteeing compliance with the laws and regulations applicable on
financial sanctions, adopting control and oversight measures based on the risk associated with eachcountry that is the target of financial sanctions.
During 2022, illimity established a Sanction Compliance Program at Group level, to integrate safeguards on
financial sanctions, formally assigning responsibilities for those sanctions to the department dedicated toanti-money laundering, which already effectively oversaw the management thereof, given the proximity of thetwo matters in terms of processes and procedures. As a result, the name of the head of that organisational
structure was changed from the Chief Compliance Officer to Chief Compliance & AFC Officer, appointing
this officer as the Sanction Compliance Officer, with the related assignment of responsibilities for theactivities that the structure carries out in the area of financial sanctions. Among these, the following arenoted, by way of example:
verification of the adequacy of the process of managing the risk of breach of financial sanctions• ongoing
and the suitability of the internal control system and procedures;assessment of risks relating to non-compliance with financial sanctions through the Self Risk
• theAssessment outlined based on Framework defined by OFAC;
issue of opinions on the execution of operations involving countries exposed to greater restrictive• themeasures in order to assess the actual exposure to the risk of breach of the financial sanctions in force
against those countries.
Safeguards to prevent, mitigate and manage the risk of breach of financial sanctions are outlined in the
Financial Sanctions Policy, implemented at Group level, which defines the general principles to be applied
to conducting company business and sets out provisions regarding:• the roles and responsibilities of the company bodies and departments of the illimity Group;• safeguards for compliance with and management of restrictive measures and embargoes;• safeguards for control over transactions;of the risks associated with financial sanctions imposed for breaches of embargoes and• assessment
restrictions defined at international level.

Lastly, the Group has set up a catalogue of second level controls dedicated to financial sanctions, to assess,on a continuous basis, compliance with the reference regulations, as well as the correct application of theprocesses defined within the ongoing controls, to oversee the risk of breach of financial sanctions.
For further information:

Financial Sanctions Policy

illimity • 2022 Sustainability Report53PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

A culture of complianceillimity’s commitment to creating and disseminating a culture of compliance is strongly embedded in thecompliance by design principle, which inspires and guarantees the proper configuration of commercial
processes, relative procedures (including IT procedures), as well as commercial channels and, moregenerally, the model of relations with customers that monitors the offering of products and services of the
Bank and other subsidiaries.
The compliance by design principle behind the company’s main processes sets out in black and whitea model of mutual collaboration between business and control functions, to correctly balance different
analysis perspectives, with the aim of achieving business goals, while complying in full with applicable rules.
This model has been created based on the belief that compliance is an enabler not only in containing risks
and ensuring the sound and prudent management of the Bank, but also at ensuring customer satisfactionin the context of efficient relations.
To promote an adequate compliance culture, the Group pays particular attention to personnel training andeducation, with courses dedicated to main applicable regulations (anti-money laundering, market abuse
and administrative liability of the organisation, pursuant to Italian Legislative Decree 231/01), as well as
specific training initiatives to promote the effective dissemination of principles and best practices whichmust underpin conduct in the company, including that of senior management. Specific classroom induction
sessions are organised for members of the Board of Directors and Board of Statutory Auditors.
Besides standard online training, illimity organises numerous educational meetings/initiatives, and on-thejob training, with classes welcoming a small number of participants, as well as live webinars, to promote
continual interaction and engagement with participants, as well as opportunities to analyse case histories
presented by operating or business functions.

Compliance Risk Assessment

Starting in the first quarter of 2022, illimity updated its compliance risk assessment methodology, fully
replacing that regarding the Compliance Risk Assessment used up to the previous year, which consisted of
the aggregate view of the controls conducted on each Business Division.
To ensure greater intelligibility of the risk associated with anomalies/shortcomings detected – also in termsof impacts (and the related probability of occurrence) on the Group's income statement results – the newcompliance risk assessment methodology requires that, along with the results of the most significant
controls in terms of situations of non-compliance detected, a summary indicator of the underlying risk beprovided, calculated based on four specific factors, i.e.:

presumable impact of the administrative sanctions that can be imposed by the competent supervisory• theauthorities;
presumable adoption of other, non-sanction measures, by those authorities (and/or the judicial• theauthorities) impacting the current or future business of the Group companies;
possibility of disputes with customers, also in terms of class actions, each time damage incurred by• thecustomers can be identified (business conduct risk);• the effects on reputation caused by measures of the authorities or clear situations of non-compliance.
With the goal of supporting the company bodies in the decisions and actions to be taken regarding situationsof non-compliance arising in each case, each of the above factors is assigned a preset weight that expresses
the (relative) significance of each of these in the overall measurement of compliance risk and enables
weighted calculation of the total value of the risk indicator. As this is a hypothetical assessment, featuring
a necessary discretionary component, a key element is the assessment by the analysis of the existence andsignificance of each single factor, which considers numerous elements, such as, for example, the natureof the breach, the existing supervisory practices, the amount of the sanctions imposed for equivalent orsimilar non-compliance, the number of parties involved and the duration of the non-compliant situation.
With specific reference to the factor assessing the administrative sanctions that can be imposed by thecompetent supervisory authorities, in addition to the expert assessment, other elements are consideredwhich, if detected, will result in an increase in the compliance risk indicator.

54

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

APPENDIXGRI Content IndexThose elements are:of the breach, where non-compliance conduct is detected that has already been challenged• repetitionand sanctioned by the authorities;
behavioural nature of the breach, determined by concrete conduct of the interested parties in breach• theof the processes and related procedures adopted; as well as
significance for the purposes of Italian Legislative Decree 231/2001, every time that a breach is verified• itsof the processes/procedures codified in the Organisation, Management and Control Model implemented
pursuant to the mentioned regulations in order to avoid the administrative liability of the company for(predicate) crimes committed by its employees.
Lastly, as in force under the previous methodology, faced with the second rescheduling (deemed notadequately justified) of the corrective measures agreed with the risk owners, the final value of the compliancerisk indicator will be increased by an additional notch as a result of the continuation of the non-compliant
situation.

es

Othe

s

2.83

33%

0%
Dis

Elements ofcompliance risk
SANCTIONSOTHER MEASURESDISPUTESREPUTATIONAL

Replanningputes

Impactassessment

WeightExpert Assessment +risk components

3

Expert Assessment

3

Expert Assessment

2(High/Medium/Low/Nil)(High/Medium/Low/Nil)Expert Assessment(High/Medium/Low/Nil)

-X*

1

at
io
na
l

11%
t
pu
Re

SANCTIONS
ExpertAssessment
RISK
COMPONENTS

New compliance risk indicatorwhich displays the severityof the anomaly detected andthe breakdown of the single
contribution of the individual
factors to the calculationof the final amount of theindicator

tion
nc
Sa

33%

rm
ea
s

ur

A flowchart of the method described is shown below.

ImpactWeight(High/Medium/
Low/Nil)

8.2

YES/NO

0.6

Repeated
Conduct-related

YES/NO

Scope of Law
231/2001

YES/NO

0.6
0.6

COMPLIANCE RISK
(range of 1-4)
Nil or irrelevant(4.00 - 3.50)

Low(3.49 - 2.50)

Medium(2.49 - 1.50)

High(1.49 - 1.00)*	Increase in compliance risk applied from thesecond rescheduling, as described below:• second rescheduling -0.20;• third rescheduling -0.40;• fourth (and last) rescheduling -0.80;
	any additional rescheduling will be escalated to theChief Executive Officer.

illimity • 2022 Sustainability Report55

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Whistleblowing
GRI 2-16

GRI 2-26

illimity’s Board of Directors has appointed the Head of Internal Audit as the “Head of the whistleblowing
system”, who is tasked with receiving, reviewing and evaluating disclosures made, and with directly reporting
to corporate bodies through suitable escalation mechanisms. The people involved in checking disclosures
are required to keep the information received confidential, also as regards the whistleblower’s identity andin any case, the whistleblower must be protected from any retaliation, discrimination or unfair conduct as aresult of the disclosure made.
The Bank’s internal regulations include the Regulation on the internal whistleblowing system. An annual
report is also produced, prepared by the Head of the Whistleblowing System, containing all information on
the results of activities carried out following disclosures made.
With reference to specific regulations on whistleblowing, illimity has set up a dedicated platform, consistingof a Digital Room for each Group company, called “@Whistleblowing”, where disclosures can be sent
and are managed. The use of this digital platform enables people involved in managing whistleblowing
to easily exchange documents and information, ensuring a greater traceability of the entire process and agreater level of confidentiality for the identity of the whistleblower, who may opt to proceed also in a totallyanonymous manner.
The platform allows personnel and members of the Corporate Bodies and any external party to report - ina guided online procedure - alleged unlawful conduct or irregularities, violations of internal regulations andcompany provisions in general, as well as violations of external regulations applicable to the Bank. The
reports also include grievances and all conduct that violates the Code of Ethics. The whistleblowing systemguarantees the confidentiality and protection of personal data of the whistleblower and, as applicable, theperson the disclosure refers to. The system is set up in such a way that disclosures are received, reviewed
and evaluated through specific, autonomous, independent channels that differ from ordinary reportinglines.
In fact, the Whistleblowing Officer displays reported information from a dashboard in the tool that can also beaccessed (in read-only mode) by members of the Audit and Internal Control Committee and the Supervisory
Board. If reported information concerns the Whistleblowing Officer, an “alternative” management process isused, where reporting is visible (in read/write mode) to the Chair of the Audit and Internal Control Committeeand (in read only mode) to other members of that Committee and to members of the Supervisory Board. In
this case, the activities usually overseen by the Head of the Whistleblowing System shall be carried out by
the Chair of the Audit and Internal Control Committee of the Bank.
Besides the IT platform, information can be reported in writing, and sent in hard copy from the company
post box. The keys for this post box are kept by the Chair of the Audit and Internal Control Committee.
In that case, the Chair immediately informs the Head of the Whistleblowing System and the Supervisory
Board, tracking the report in the IT tool.
Disclosures may be sent anonymously or otherwise, with the confidentiality of personal data guaranteedin any case. The Bank has adopted special protection measures for parties involved, in compliance with
Italian Legislative Decree no. 196 of 30 June 2003, Regulation (EU) 2016/679 on personal data processing
and subsequent rulings issued, adequately protecting the reporting party “from retaliation, discrimination
or in any case unfair conduct as a result of reporting information” in a climate that respects their dignity.
For each report acquired by Head of the Whistleblowing System, a procedure of analysis is launched,whose result is communicated to the whistleblower within a period of no more than three months from theconfirmation of receipt of the report.
During 2022, no violations were reported, and so no investigations of this kind were conducted.

For further information:

Whistleblowing Policy

56

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

illimity • 2022 Sustainability Report57

L’Orto di Jack
The innovative start-up to
digitalise the fruit and vegetable sector

Frame the cover photo to watch the video"The Orto di Jack Story” using the ARIA App

Find out more:

illimity, L’Orto di Jack

Innovation

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

05. Innovation
illimity innovates first and foremost in the way it does banking.
Being a Bank of the new order, without a legacy, means being innovative in combining a business model
offering structural and sustainable competitive benefits with a strategy focussed on major market segmentsthat are not adequately served by traditional operators.
At illimity, innovation is a strategic driver permeating the entire organisation: from company culture, tooperating processes, up to technological infrastructure.
The Bank strongly believes that innovation, if embraced throughout the organisation, is the driver capable ofgenerating value for the entire company. So it is essential for innovation to be well integrated in every single
division, area and work group and for processes to be shared that enable illimiters to work in cross-cutting
teams, honing their expertise, generating ideas and identifying new opportunities.
The ability to innovate contributes to achieving business goals and to meeting customer requirements,
through a new inclusive model centred on the synergy of services, designed for the needs of people andbusinesses, always guaranteeing a digital approach combined with the human touch, which is customer
centric, always available, anywhere, plus a range of banking and non-banking services centred aroundartificial intelligence.
illimity is also the first cloud native bank in Italy, with a modular, scalable architecture, enabling an allround vision of all data of the bank and its customers. This is fundamental from various aspects: tobrowse the Internet and use services from mobile phones, for corporate and retail customers, to managing
and purchasing credit, and accounting and risk management. The efficient, scalable IT infrastructure,accompanies the Bank in its growth, through customised, innovative solutions with high security standards
in processes.

An overview of innovation at illimity

99.00%

100.00%65.90%

Digital communication out of totalcustomer communication

End-to-end digital onboarding of
consumer customers

Active consumer customers (atleast one login a month)

100.00%8.08%

100.00%

Proprietary cloud banking
systems

Customers using PSD2/Open Banking
functionalities

Employees who have theresources to do smart working

85.07%
Logins from apps vs desktops

Investments in Research andDevelopment in 2022:

15,5
million euros

60

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Digital Mindset Revolution
The Digital Mindset Revolution, launched in 2022 and promoted by the senior management of illimity, is
one of the strategic projects of the Group, with the goal of favouring a significant internal digital revolution,
both in terms of mindset and of skills.
A project that promoted innovation, using innovation.
The initiative integrates a creative, fresh approach with a hybrid work group where IT, HR and Design
come together to disseminate innovative Edutainment (Education + Entertainment) learning methods toprovide training activities and collaborative tools of Design Thinking and Workshops to implement internal
processes using a digital approach.
The significant investment in mindset and skills made it possible to launch, in the last few months of2022, the first work groups for the digital redesign of several processes, in the Digital Design Process area,
overseen by internal Digital Advisors.
An initial pilot phase was important to test tools, formats and initiatives of the DMR process.
Synergic daily work resulted in the completion of specific activities over time:Inventory: tests designed to map the levels of the digital mindset and practical skills of the entire• Digital
company population, with individual reports available to illimiters and their supervisors. In support ofthis, in-depth sessions with certified trainers were provided;

Clips: dynamic training articles specifically drafted, which can be viewed at any time on a
• Digital
dedicated internal platform on issues of significant interest such as meeting culture in the digital age
and effective communications in a hybrid context;

Mindset & Collaboration Design Workshop: training and inspiration sessions for the target• Digital
populations identified, to engage everyone and increase their awareness to disseminate effective digitalcollaboration, through mindsets, tools and processes;

Coach and Card Game: a system of personalised notifications on one's computer for constant• Digital
memos and a personalised card game on the topics covered.
In 2022, colleagues demonstrated a significant commitment to these initiatives, with around 2,500 hours
dedicated, broken down as follows:

650

1,000
HOURS

850
HOURS

HOURS
to complete theDigital Inventoryof training toconsult the
Digital Clipsof training to participate in
Design Workshops

Over

Over

Over

97%

of illimiters involved

75%

of illimiters involved

23%
of illimiters involved

illimity • 2022 Sustainability Report61

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

The activities are monitored using numerous KPIs which reflect the two main drivers of the process: Design
Workshop Satisfaction (average level of satisfaction with the Digital Mindset & Collaboration Workshop)and Digitized Processes (number of Group processes revised using a digital approach, with increased
digital maturity).
Moreover, to effectively monitor the results of the Digital Inventory, an interactive dashboard was designed,
made available to the work group in order to identify new training initiatives.
To support those indicators, illimity uses Microsoft Viva Insights technology as an observatory of informationthat the work group monitors, month after month, to capture employee work habits and analyse any changes.
2023 will feature numerous, increasingly personalised initiatives, training plans designed based on teams’
needs and greater dissemination of good practices and approaches supported by the Digital Mindset
Revolution process.

Innovative and high-value projects
Through partners, collaborations and people with which the Bank shares values and visions, high-quality
projects are developed with impacts on society.
illimity Talks
A format of meetings created by illimity to look beyond patterns and shape possible futures. Alongside
Corrado Passera, Founder and CEO of illimity, exceptional guests speak on the hottest issues of the
moment: thought leadership, innovation, technology, the environment and corporate social responsibility. In
November, the illimity Talk “Entrepreneurial Mindset” was held, with the goal of providing useful ideas forentrepreneurs and startuppers on how to do business.
Emozioni d’Impresa (Business Emotions)Webinar sessions promoted by b-ilty, where illimity’s Division managers offer points for reflection useful forthe growth of SMEs, so that they can achieve their potential. The emotions and needs of SMEs are the key
players in the dialogue, at a historical time characterised by extreme socio-economic changes. Each session
covers different issues, including the relationship between the digital sphere and human relationships, or
how to build a successful work experience.
b-ilty talks
Meetings in local areas between experts in various sectors, focused on the various areas of interest(including, for example, company strategy and ethics and digital innovation) with the goal of continuing theongoing dialogue established with entrepreneurs by investigating issues of common interest.
Real Estate Observatory
The study promoted by Abilio and ARECneprix (formerly neprix), with the goal of studying the dynamics
regarding judicial real estate sales in Italy, by analysing sales both as part of foreclosure proceedings andthose triggered as part of bankruptcy proceedings, providing evidence of the single characteristics, criticalissues and current opportunities for growth.
Abilio Talks
A series of meetings on real estate and securities liquidation, dedicated to professionals and stakeholders
in the sector. The objective of each meeting was to provide in-depth information and useful tools for
professionals working in this area, by analysing the reference regulations and their updates, focusing on thestatus and evolution of judicial sales, identifying the best tools and most effective methods for managing
liquidation. Through these initiatives, Abilio is continuing its process of development as an enabler ofservices for all professionals that orbit the world of the courts, judicial auctions and bankruptcy receivership.

62

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Projects through partnerships
TECH.EMOTION
A podcast form Corriere della Sera and Emotion Network, supported by illimity, where important guests
tell their stories: decisions and processes that best expressed the link between innovation, emotion andproducts and services Made in Italy. These also include Corrado Passera, Founder and CEO of illimity, andAndrea Clamer, illimity Head of Distressed Credit.
Find out more:

illimity, Tech.Emotion

HabiSmart
illimity supports the project from CDP Venture Capital “HabiSmart”: the unique accelerator for the growth ofstart-ups that develop innovative solutions or services for the real estate sector. A programme that supports
the growth of young companies specialising in high potential markets.
Find out more:

illimity, HabiSmart

FT x Made in Italy Challenge
FT x Made in Italy is an initiative of FT Talent and of Sole 24 Ore, dedicated to the development of new
business ideas for the relaunch of Italian manufacturing by young Italian innovators. Participants, supported
by mentors and tutors, competed in teams to solve business and strategic challenges. In addition, there weremoments of networking and training through Masterclasses on the world of business and entrepreneurship.
The hackathon, which lasted 5 days, involved the participation of over 1,500 candidates and 100 people
were chosen to participate in the programme.
Find out more:

illimity, Challenge FT Project

Ambrosetti Research
The research project, designed by The European House - Ambrosetti in partnership with illimity and Fabrick,analysed new logics to create value within the financial industry, and in particular, the contribution that an
ecosystem approach can make to developing a competitive, sustainable and resilient society, in line with an
Open Finance logics.
Find out more:

illimity, Ambrosetti

illimity • 2022 Sustainability Report63PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Cyber Security
The illimity Group’s IT system was designed to maximise the new opportunities offered by the digital universe
and innovate the traditional paradigms of IT management of banks.
As envisaged in legislation and regulations, illimity focuses its IT security policies on safeguarding theconfidentiality, integrity and availability of its data, with regard to both its customers and to carrying out
business and internal strategic activities, availing of experts in the fields of ICT Security, Compliance andData Analysis, as well as of advanced artificial intelligence technology.
In that regard, it is noted that the ICT Security Area, in charge of defining and implementing the security
policies of the Bank, in the last few years:
its capacity to predict threats to the confidentiality, integrity and secrecy of data, investing• strengthened
in Open Source Intelligence, or consolidating analysis tools that use the most modern algorithms ofartificial intelligence and machine learning. This made it possible to fine tune customer due diligenceprocedures during onboarding, starting a process to assess the security posture of networked entities;

control over transactions on Internet Banking channels which, using algorithms based on• improved
artificial intelligence techniques, conduct risk assessments on individual transactions. In the eventof an anomalous transaction, the procedures implemented ensure, in more than 90% of cases, thatthe customer will not lose the capital subject to the transaction, due to the capacity of the prediction
mechanisms to intercept the transaction type. These prevention and protection mechanisms wereparticularly impactful in Open Banking, where illimity implemented onboarding protocols, based on theuse of advanced digital technology to identify customers, capable of predicting potentially fraudulent
conduct with significant accuracy, blocking or monitoring the suspicious prospect, and on the due
diligence performed by the Bank's internal departments;

the monitoring capacity of the Bank’s infrastructures, to prevent different and new types of• increased
attack;its own operational governance procedures, optimising the Business Continuity Management• developed
system, which increased the resilience of the bank's system to the occurrence of crisis events;
the internal procedures of selection and prior evaluation of suppliers and outsourcers,• strengthened
setting up a third party management system that aims to analyse and assess the ICT security measuresof IT service providers. That process strengthens the preventive screening of suppliers, by verifying andmeasuring the exposure to cyber risk;

ongoing investments in preparing and providing IT security training courses, targeted to• madeemployees as well as managers, to increase the company’s awareness of cyber attacks. The courses

were followed by campaigns simulating attacks (e.g. phishing), or other methods of attack, which verified
the effectiveness of the training provided.
The illimity Group continues to invest in IT security and develops solutions that offer an efficient service
for stakeholders.

Risk assessment of the Group’s ICT assets
The protection of company data, business continuity, information integrity and the availability of IT systems
are further overseen within the Group by the second and third level control functions:Management, responsible for defining IT risk governance and the resulting methods of analysis,• Riskprocessing, monitoring and reporting;which provides support in designing the processes of analysis, processing, monitoring and• Compliance,
communication of IT risk;
Audit, which provides assessments of the main technology risks that can be identified and the• Internal
overall management of Group IT risk.
The main actions taken in 2022 to manage and monitor IT risks concerned in particular:

assessment of the Group’s IT assets. Through six-monthly assessments of potential risk, residual• Riskrisk and specific risk, with the support of the competent departments, the exposure to IT risk of thesingle assets of the Group was estimated. Updates and customised assessments were also carried out

64

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Indexof the risk associated with assets, at the time of structural changes to the Group’s organisation, inclusionof new applications in the catalogue, or to ensure the correct, ongoing update of the assessments, also
outside of the set six-month schedule;risk indicators – RAF. Approved by the Board of Directors, the Risk Appetite Framework• Operational
and the Risk Appetite Statement included, starting in 2021, a dual operational risk indicator that
distinguishes between business operating losses and ICT operating losses identified in the year;

Collection of IT incidents. Information on IT incidents reported by users of the Parent Company illimity• and
its Subsidiaries ARECneprix (formerly neprix) and illimity SGR was gathered and analysed for prompt
9

identification, to monitor possible IT and operational risk situations.
Starting in 2021, the Bank decided to specifically monitor exposure to cyber risk of companies offering
IT services to the Group. The platform chosen by illimity constructs a model to calculate exposure to IT
risk, processing open information on the web, and establishing engagement with the supplier through adetailed questionnaire on cyber, data governance, compliance, IT Service Management, etc. that contributeto identifying a final “Cyber Risk Rating”.
The security assessments activated by the platform consider international regulations and standards
which the supplier must observe, as well as the organisation’s own security policies, and the business andtechnological relationship that is established. Cyber Risk Ratings enable illimity’s IT professionals to makequick decisions about a potential or existing supplier.

Management of systems, evolutions and IT incidents
Considering the structured and complex nature of an information system, the Group has adopted a model
to manage and control, based on market best practices and the most common standards, considering theoutsourcing of its information system as well as legal constraints.
Also based on the regulations in Bank of Italy Circular no. 285, in 2020, the Group set up enhanced internal
ICT management and its own policy for IT development.
In fact the Group has put its guidelines for secure planning, developed and updated in relation to OWASP10
best practices and related to changing threats which are monitored by the dedicated Cyber Security teamon the company intranet.
The applications developed by the Group are subject to white box static application security testing andblack box testing, through dynamic application security testing.
The tools and procedures create a classification of potential vulnerabilities within the management illustrated
in the company vulnerability management process, which links the classification of the vulnerabilities
detected by the continuous monitoring with specific remediation periods, agreed on and accepted by theRisks Committee.

910

For further details see the next section “Management of systems, evolutions and IT incidents”.
Open Web Application Security Project.

illimity • 2022 Sustainability Report65

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Vulnerabilities are classified and assigned to the application or infrastructure owners, who are charged withcorrecting them according to a well-defined schedule, linked to the criticality of the vulnerability.
The resolution times (RT) reported below for the vulnerabilities are expressed as number of calendar days,
while indicating:• the maximum time for which the Bank deems it can remain exposed to the risk;• the maximum time in which the Bank intends to have the competent teams resolve the vulnerabilities.
Resolution Times TableASSET RATING \ VULN RATINGCRITICALHIGH

MEDIUMLOW

CRITICAL

7

15

45

90

SENSITIVE

15

45

70

acceptance ordelayed planningor best-effort

RELEVANT

45

70

acceptance ordelayed planningor best-effort

acceptance ordelayed planningor best-effort

As regards the process to report and manage IT security incidents, the Group, based on indications fromthe Bank of Italy, adopts a system to process and analyse reported anomalies, comprising several levelsof oversight, which manage the incident and its resolution, based on the severity and type. A specificallyselected Incident Manager assesses the severity of the incident, and in more severe cases, reports it to theauthorities and control functions, based on criteria of economic and reputational impact, and customer
involvement, as contemplated by regulations.
The next table shows the quantitative indicators to help understand how the security measures adopted by
the illimity Group guarantee an excellent level of protection and actions to tackle cyber attacks.
Additional indicators

2022

2021

2020

0

0

0

% of software covered by security application checks in the process
to manage application vulnerability

100%

100%

100%

% of vulnerabilities resolved, identified by the new Vulnerability Management process

90%

98%

100%12

Number of serious IT security incidents out of the totalof IT security incidents reported11

During 2022, no serious IT incidents occurred that had negative, significant impacts on the integrity,
availability, confidentiality, authenticity and/or continuity of services with consequence financial loss, harmto the company’s image or prolonged, significant poor service for customers and other parties.

For further details:

IT Security Policy

11
12Classified according to the guidelines in the Bank of Italy Circular no. 285.
The figure refers to Vulnerability Assessments and Penetration Testing (VAPT). During 2021, this process, which manages the vulnerabilities of subjects
continually monitoring defects of applications used by the Bank and their developments, was further consolidated.

66

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

IT security awareness and training
As cyber threats to steal personal and financial data have intensified in recent years, customer communication
has been stepped up, with periodic emails on phishing, smishing and vishing, to increase awareness of IT
security issues and enable customers to recognise any attempts by fraudsters to obtain personal, financial
or security information via emails, text messages and phone calls.
This same commitment is also made to the Group’s employees and associates, through the illimity Security
Awareness Programme, providing training on phishing, business e-mail compromise, malware and dataprotection, for all employees and interns, tailor-made to the risk profile of each user. The programme, which
is held annually, consists of three types of activity:• assessment: a test to define the level of initial knowledge of IT security;• training clips: provided at regular intervals to explore cybersecurity issues;• simulations: simulated phishing campaigns to test user learning progress.
Programme uptake (constant) has reached over 80% of those entitled, with an awareness of the mostimportant risk scenarios and confidence rating of over 75% in terms of positive results.

Ethical aspects related to the use of Artificial Intelligence and Machine
Learning techniques
The illimity Group is aware that the use of artificial intelligence and machine learning algorithms may entail
potential ethical implications, depending on the methods of use and objectives pursued. For this reason,in 2021, the Policy on the Governance of Internal Risk Models formally set out the reference framework forethical aspects related to the use of artificial intelligence and machine learning techniques. The framework
indicates the zero or negligible risk of models in illimity’s perimeter, in ethical terms, as these are not sold,they are not used for commercial products but instead only for internal risk assessments, and they are notincluded in AI systems prohibited or defined as high risk under Articles 2 and 6 of the Proposed Regulationof the European Parliament on artificial intelligence.
In June 2022, given the increasing significance of issues regarding the use of artificial intelligence andmachine learning techniques, illimity was one of the first banks to set up a customised Artificial Intelligence(AI) Policy. The Policy aims to implement, in coherence with the characteristics of illimity Group’s businessmodel, the voluntary indications regarding ethical profiles as defined from time to time by the European
Union and the Organisation for Economic Co-operation and Development (OECD), specifically regarding thegovernance of the AI (Artificial Intelligence) models used by the Group, which also undertakes to implement
them in compliance with the Information Security rules. In particular, referring to the European Commission
Communication of 25 April 2018 on Artificial Intelligence for Europe, and taking into account the fact that
the General Data Protection Regulation (GDPR) became effective on 25 June 2018, as well as the Proposal
for a Regulation of the European Parliament and of the Council establishing harmonised rules on artificial
intelligence (Law on Artificial Intelligence) of 21 April 2021, the illimity Group recognises the importance ofaddressing the challenges associated with the use of AI and the ethical implications that derive from it.
In this regard, the illimity Group continuously monitors regulatory developments, also in terms of regulations
and guidelines, for accurate and timely implementation and adaptation of its internal regulations, where
deemed appropriate. Furthermore, with regard to the OECD Council Recommendation on Artificial
Intelligence, the Group undertakes to comply with the application of the best standards in the field ofArtificial Intelligence, extending to all the AI models used by the Group the principles set out for “high risk”
models by the Proposal for Regulation of the European Parliament.

illimity • 2022 Sustainability Report67

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

It is important to note that the models of interest to the Group include additional characteristics: theunderlying data are traditional, meaning public (e.g. Financial statements) or derive from private regulated
credit bureau, whose codes of ethics are contractually applicable to the Group. For models applied toindividuals: (i) the underlying data do not include sensitive data; and (ii) the prediction features of the model
do not include sensitive data or data that make direct or indirect identification possible. If a new model, achange to an already approved model, or a new type of model does not meet the above characteristics, theirproduction is subject to specific, ethical-based assessments, and to the approval of relevant Bodies.
Also for the purpose of monitoring the adoption of high-risk artificial intelligence systems applied toindividuals, the Group has implemented an internal catalogue relating to all the AI models used (developed
internally or by external suppliers) which lists characteristics and purposes, illustrates the protection of theprinciples adopted by the Group, and contains a risk assessment by the first and second level functions,
including compliance assessments for high-risk models.
Lastly, the specific indicator - number of applications of “high-risk” AI models – was included in theGroup’s Risk Appetite Framework. It is calculated by measuring the number of applications of “high-risk” AImodels used by the illimity Group (both models developed internally and those acquired from third parties).
The indicator aims to limit the use of high-risk AI models, in line with the illimity Group’s voluntary
endorsement of the principles adopted in relation to high-risk models for individuals in the Proposal for
Regulation of the European Parliament. It is also noted that the level of risk limits defined reflects the
choice to restrict those models to internal use and to the first and second level risk controls, with a “zero or
minimum” appetite for that risk.

For further details:

Artificial Intelligence (AI) Policy

Data management and data protection
illimity promotes and is continually committed to protecting the privacy of its customers and all other natural
persons it does business with, through the Group’s companies, in compliance with legal requirements inforce from time to time at national and EU level, and with the decisions and rulings issued from time to timeby the Italian Data Protection Authority.
For this purpose, illimity has adopted a Privacy Policy that sets out the principles of personal data processing
performed at both a business line and technical/operating entity level, and also by supporting entities and describes the organisational model as well as the processes and procedures that govern all related
activities, in compliance with the fundamental principles of lawfulness, fairness and minimisation, as wellas the legal bases contemplated in regulations.
The Group has adopted a model to manage privacy based on data protection by design & by default principles,
directly linked with the operating and business processes of Group companies, thus benefiting the correct
and transparent configuration of all activities that involve the processing of personal data, starting from thecreation and design stages, and has also effectively defined and continually manages the (technical andorganisational) safeguards for this purpose.
To guarantee an integrated Group approach and consistent management of relations with all stakeholders,illimity has appointed a Data Protection Officer (DPO) at Group level, who is the Chief Compliance & AFC
Officer and steers the organisational model adopted for the proper oversight of personal data processing
issues and legal obligations, acting as the single, official contact point for all Group companies and third
parties, as well as for the Regulators, and for individual data subjects.
The Group guarantees necessary, periodic updates to the internal policy, which all personnel mustobserve, to guarantee the correct management of personal data processing issues. Periodic revision covers
the safeguards adopted for compliance with obligations to provide disclosure to data subjects, as well68

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

as the processes to obtain and manage data subjects’ consent and requests to exercise their rights, themethodology to assess the impact of data protection, the correct adoption of data protection by design& by default principles, the procedures to manage and notify data breaches, as well as the functioning of
information flows to the Data Protection Officer.
In compliance with internal regulations, illimity continually adopts all necessary organisational andtechnological measures to ensure that customers and all natural persons are adequately informed about
the processing activities of the Group, and above all, about their rights and how to exercise them.
GRI 418-1

During 2022, the illimity Group guaranteed the correct management of all requests to exercise rights,
received from data subjects, confirming that there were no cases of significant data breaches. In that year,
three episodes of unauthorised access to personal data regarding several customers of the Bank occurred,
which caused the accidental, unauthorised access to a very limited number of data and - after necessaryinternal assessments - did not pose a risk for the rights and freedoms of subjects involved. All violations
were promptly solved and appropriately registered in the Group’s internal records, in compliance withapplicable regulations.

Cookie Policy

The Bank has a Consent Management Platform (CMP) on the use of cookies, that has been appropriatelyaligned with the needs and specific aspects of Group companies, opting as far as possible for a standard
approach to guarantee a uniform and adequate level of data processing and protection.
The platform guarantees that the Group’s websites display an appropriate, updated cookie banner on thecookies and trackers present, in compliance with the most recent, applicable regulations. Users are given
the utmost visibility and transparency about cookies that use various websites and about the nature andpurpose of technologies activated on them. The cookies banner also enables users, through simplified
interaction, to control their own data and privacy settings, by selecting single cookie types or specific, single
cookies.
Specific consent and detailed information on each cookie, with the related purposes, suppliers, durationand types, guarantee the confidentiality and protection of users’ browsing data, in compliance with theirpreferences.
Following the entry into force of the Guidelines on Cookies published by the Italian Data Protection Authority,
additional privacy safeguards were set out in managing cookies on the Group’s websites (e.g. implementinga specific button on the cookie banner to continue navigating without installing optional cookies and an
additional button on the footer of the website to allow users to manage and change the cookies used intheir browsing at any time).

For further details:

Privacy Policy

illimity • 2022 Sustainability Report69

Alessi
100 year old Italian design company inauguratinga new century of research and development

Ph.: Francesco Van Straten

Frame the cover photo to watch the video"The Story of Alessi” using the ARIA App

Find out more:

illimity, The Story of Alessi

PeopleLandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

06. Empowerment, engagement
and well-being of illimiters
illimity Journey – The Value of Careillimity’s People Value Proposition is the set of actions that create the HR ecosystem, with the purpose offavouring the engagement, development and well-being of illimiters and their families.
Specifically, the illimity journey is a process that maps all the important moments and starts with theempowerment of people (the illimiters) right from the selection process, which aims to identify people withthe skills, mindset and motivation that will add value to and, at the same time, receive value from the Group.

GRI 2-7

GRI 2-8

GRI 2-30

At the end of 2022, the Group had 853 employees (+18% compared to 2021), 43% women and 57% men, of
which 23 employees (2.7%) with disabilities, in addition to 66 staff and associates (41 internships, 6 seasonal
workers and 19 collaboration agreements). Nearly all employees have a permanent contract and are in fulltime employment.
The total includes 28 employees and 1 associate of AREC S.p.A., acquired by neprix S.r.l. on 30 June 2022
and merged by incorporation into ARECneprix S.p.A., with legal effect from 1 January 2023.
The employees of illimity Bank and illimity SGR are covered by the National Collective Bargaining
Agreement for senior managers and personnel of professional areas, employed by credit, financial andoperating companies, while ARECneprix employees are covered by the “Supplementary agreement for thecredit sector”, referred to in Article 3 of the aforementioned agreement. The National Collective Bargaining
Agreement for the Services Sector was applied to the employees of AREC up to 31 December 2022. Following
the merger by acquisition on 1 January 2023, the same National Collective Bargaining Agreement of neprix
was applied to all AREC employees.
2022
Employees by gender and region

2021

Women

Men

Lombardy

241

Emilia-Romagna

107

Lazio

2020

Total

Women

Men

Total

Women

Men

Total

372

613

202

319

521

156

252

408

86

193

97

80

177

83

69

152

8

13

21

0

0

0

0

0

0

Other Regions13

10

16

26

10

17

27

10

17

27

Total

366

487

853

309

416

725

249

338

587

of which employees with disabilities

11

10

21

9

7

16

5

5

10

of which employees in protected classes

1

1

2

1

0

1

0

0

0

13

For 2022: Marche (2 Women and 4 Men), Sardinia (2 Women and 1 Man), Sicily (2 Women and 4 Men), Tuscany (2 Women and 2 Men) and Veneto (2Women and 5 Men).

72

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Employees by contract type,by gender and region

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

2022

2021

APPENDIXGRI Content Index

2020

Women

Men

Total

Women

Men

Total

Women

Men

Total

Lombardy

241

372

613

202

319

521

156

252

408

Permanent contract

236

372

608

202

318

520

155

252

407

Fixed-term contract

5

0

5

0

1

1

1

0

1

Emilia-Romagna

107

86

193

97

89

177

83

69

152

Permanent contract

106

86

192

89

79

168

76

63

139

Fixed-term contract

1

0

1

8

1

9

7

6

13

Lazio

8

13

21

0

0

0

0

0

0

Permanent contract

8

13

21

0

0

0

0

0

0

Fixed-term contract

0

0

0

0

0

0

0

0

0

Other Regions

10

16

26

10

17

27

10

17

27

Permanent contract

10

16

26

10

16

26

10

15

25

Fixed-term contract

0

0

0

0

1

1

0

2

2

366

487

853

309

416

725

249

338

587

Total

Employees by contract type,by gender and region

2022

2021

2020

Women

Men

Total

Women

Men

Total

Women

Men

Total

Lombardy

241

372

613

202

319

521

156

252

408

Full-time

241

371

612

202

318

520

155

252

407

Part-time

0

1

1

0

1

1

1

0

1

Emilia-Romagna

107

86

193

97

80

177

83

69

152

Full-time

104

85

189

94

79

173

81

67

148

Part-time

3

1

4

3

1

4

2

2

4

Lazio

8

13

21

0

0

0

0

0

0

Full-time

6

13

19

0

0

0

0

0

0

Part-time

2

0

2

0

0

0

0

0

0

Other Regions

10

16

26

10

17

27

10

17

27

Full-time

8

16

24

8

17

25

8

17

25

Part-time

2

0

2

2

0

2

2

0

2

366

487

853

309

416

725

249

338

587

Total

illimity Onboarding – The Value of Embracing
Through an integrated process, illimity supports the entry of new illimiters, favouring their knowledge of theGroup, its culture and its values. All players are asked to personally contribute to the onboarding of new
illimiters, to emphasise the significance of this time, which enables new hires to feel that they are illimitersfrom their first day, breathing in our values and culture, and feeling free to explore.
The main channel used to identify candidates in line with illimity’s needs is the Career Page on the website,which reflects a simple, integrated recruiting process. illimity also uses social media channels to support
recruiting activities. Specifically, LinkedIn is used to directly contact potential illimiters and promote thesearches under way, through posts with a photo of the face of an illimiter on the hiring team and a brief job
description.
illimiters are selected for internships and junior positions working with numerous universities, publishingadvertisements on dedicated portals and carrying out Employer Branding activities (e.g. Career day, round tables
and presentations), in which we meet with young students and graduates interested in working for the Group.

illimity • 2022 Sustainability Report73

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimiters are the main brand ambassadors, representing an important channel for finding applicants: inthis sense, they are incentivised to mention open positions to potential illimiters, also through an internal
programme which, where the applicant is hired, rewards the referring illimiter with a gift card or the choiceof allocating double the amount to fondazione illimity.
Only in specific cases does illimity use headhunters, with which it has close, long-lasting partnerships, toidentify new talent.
An innovating recruiting tool, which was successfully tested during 2021 and integrated into the selection
process in 2022, is a recorded video interview. This is the digital evolution of cover letters, which allow
candidates to tell us something about themselves beyond what they have written in their CVs, personalising
their application and answering questions to expand on aspects of their personality and to verify theirtechnical skills. Using video interviews makes it possible to create a shortlist for the management with lessbias than simply reading CVs.
During 2022, there were 187 new hires (83 women and 104 men), mainly under age 31. There were 85
employees whose employment contract has ended (of which 7 involuntary exits). Turnover of incoming
personnel came to a total of 21.9%, compared to outgoing turnover of 10%.
Since 2021, illimity has consolidated a process of onboarding new hires which is managed through threechannels:the contact persons in illimiters lives before they join the Group, which assists new hires in• Buddies,
their first few weeks to favour their acclimation, helping to familiarise them with the way of working
and to build effective relationships. During 2022 the community of Buddies was further expanded towelcome new hires;

digital training programme which, by combining theory and situation-based tests, introduces• thenew hires to the illimity w.o.w. (way of working) and the pillars of its leadership model. The programme
consists of over 25 hours of remote training to be done in the first two months with the Group. It ismanaged through the Workday Learning platform, also available on mobile, guaranteeing the utmost
flexibility of use and conciliation with other professional and personal commitments;

day, two half days dedicated to new hires to introduce them to the Group’s business, through• onboarding
testimonials from colleagues from each Division/Department and to officially start the illimity journey,
thanks also to the participation of the CEO and Chief HR & Organization Officer.
GRI 401-1
UoM
Total employees hired

2022

2021

No.

187

186

2020
151

%

21.9

25.7

25.7

By gender:
Women
Men

No.

83

81

57

%

22.7

26.2

22.9

No.

104

105

94

%

21.4

25.2

27.8

By age group:≤ 31 years of age
32 - 39 years of age
40 - 54 years of age≥ 55 years of age

74

illimity • 2022 Sustainability Report

No.

95

96

69

%

36.1

40.9

34.0

No.

53

63

47

%

16.3

23.0

22.6

No.

36

27

32

%

15.1

13.8

20.4

No.

3

0

3

%

11.5

0

15.8

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

UoM
Total employees whose employment contract has ended

APPENDIXGRI Content Index

2022

2021

2020

No.

85

36

30

%

10.0

5.0

5.1

By gender:
Women
Men

No.

34

13

9

%

9.3

4.2

3.6

No.

51

23

21

%

10.5

5.5

6.2

By age group:≤ 31 years of age
32 - 39 years of age

No.

29

17

12

%

11.0

7.2

5.9

No.

32

10

11

%

9.8

3.6

5.3

40 - 54 years of age

No.

22

9

5

%

9.2

4.6

3.2

≥ 55 years of age

No.

2

0

2

%

7.7

0

10.5

illimity Performance – The Value of Managing Goals
The performance management process enables illimity to monitor, verify and develop the performance of
illimiters, defining individual development areas. The process also makes it possible to measure performance
qualities in terms of results and conduct, acknowledge and reward merit and ensure opportunities for
feedback between mangers and staff, identifying actions to take to obtain required results. More generally,
the process involves four stages during the year: Goal Setting (defining objectives to achieve in the year),
Mid-Year Review (assessing the extent to which objectives have been achieved), Year End Evaluation(appraisal, i.e. the year-end evaluation of performance compared to objectives, and Feedforward (feedback
session and the definition of individual development plans).
To promote fairness, the evaluation system includes not only a traditional appraisal by the manager but
also the change for each illimiter to analyse his/her own conduct (self-evaluation) and the conduct of otherillimiters (cross evaluation) for an all-round contribution to measure and develop an effective conduct.
The Self and Cross Evaluations, as information made available to the appraisal manager, contribute todetermining the final score of the evaluation. Moreover, in line with the previous year, also in 2022, theassessment of conduct of illimiters (accounting for 25% of the objective plan) maintained the specificimportance of responsibilities linked to ESG and Digital Mindset issues.
In this way, the Performance Management process guarantees a direct connection with the individual
development of each illimiter, as it involves an evaluation that supplements qualitative/quantitative
objectives and behavioural objectives, transforming areas for improvement into points for professional
development that are discussed during the employee/manager feedforward session.
GRI 404-3
2022
Employees involved in the
Women Men %Performance Management process%2021
Total %

Women Men %%2020
Total %

Women Men %%Total %

Senior managers

100.0

98.4

98.7

92.3

96.3

95.5

100.0

97.9

98.2

Middle managers

95.9

98.2

97.4

96.3

92.9

94.1

93.0

88.4

90.1

Professional areas

96.1

97.5

96.7

87.4

94.0

90.4

81.2

76.1

78.8

The figures refer to the number of eligible employees included in the Performance Management process for
2022, i.e. hired by 30 September 2022.

illimity • 2022 Sustainability Report75

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimiters that do not participate in the 2022 performance evaluation still have the chance to attend
the feedforward session, receiving feedback on performance and conduct and defining their individual
development plans (as part of a catalogue of training and development initiatives, to take part in during theyear or over a longer period).

illimity w.o.w. – The Value of Intelligent Working
illimity co-designed the way of working with its employees, continuously evolving it towards “how” insteadof “where”, to move beyond the borders of space and time and enter a dimension focused on fluidity,
efficiency and well-being.
The social context we live in, due to COVID-19 has profoundly changed the way we work. At illimity as well,
the pandemic led to the definition of new shared work rules, and thus to the creation of the illimity w.o.w.
(way of working) in mid-2020.
illimity w.o.w. is a hybrid work model to enable employees to work from home or elsewhere for 10 days amonth, with the possibility to have greater flexibility based on specific needs (compared to the previous 1
day a week), as they prepare (in line with illimity’s value of freedom), and agreed with their manager (in linewith illimity’s value of responsibility). Work spaces were extensively reviewed, and an App was developed
for staff to book a desk at the office.
Along with this new way of working, online training was held, with digital sessions to further explore main
issues (e.g. working by objectives, being a team player, developing trust).
illimity has always tried to balance its digital and innovative philosophy with an employee experience thattakes into account human and personal aspects, and hybrid work has further tested this balance, bringing
to light new needs and creating opportunities for improvement. For these reasons, illimity started to use
new analysis tools, to evaluate how illimiters work, and collaborate, to set out a road map towards a more
efficient, effective work model.
One of these tools is Microsoft Viva, which provides qualitative/quantitative and objective analyses on
how employees work (collaboration, conduct, interaction). Thanks to these analyses, it is possible to obtainfundamental data (protected by privacy regulations), to improve the quality of interactions and understandwhich types of conduct must be corrected because they can result in stress and burnout, thus increasing
staff’s well-being. The platform can also provide practical advice, in emails and pop-ups, based on individual
work habits.

illimity Growth – The Value of Learning
illimity designs, implements and monitors an integrated training programme that favours the definition of
professional development plans built based on the characteristics of each role, functional to the growth of
the individual and the Group, to increase the skill set of illimiters, in order to handle the challenges of thepresent and future, thereby developing transversal talents and people that embody the company culture
and values.
The personal and professional growth of each illimiter is guaranteed through two pillars: training anddevelopment, which contribute to ensuring that illimiters are well-rounded and embody the company values
in their daily conduct.
Specifically, training is divided into four different categories.

1. Mandatory Training & Language Courses
Mandatory training is dynamic and is updated based on Group priorities, following a progressive logic,
covering topics of specific interest in rotation. In addition to topics regarding compliance and occupational
health and safety, in 2021, ESG topics were introduced, as well as an IT Security Awareness Programme tocombat IT risk. Both of these are now included in the catalogue of mandatory training.

76

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

To favour a lasting revolution in our way of working in today’s hybrid-digital context, the senior management
sponsored a new strategic project that entails an intensive digital drive in internal processes and the
conduct of colleagues. To trigger this change in viewpoint, it is necessary to start with people’s mindsets
and the development of their skills. Thus, the Digital Mindset Revolution was created, involving colleagues
in various activities for a commitment of around 2,500 hours in 2022, which will continue in 2023.
Though it mainly targets the Italian market, the Group pays significant attention also to language training.
With a view to reaching a medium-high level of English, each illimiter accesses an individual programmeassigned based on the results of the assessment conducted during onboarding. The Group implements a
training cycle that uses different methods and approaches and increases in difficulty based on the progressmeasured, up to weekly individual sessions with native speaker trainers.
Italian lessons were also activated in order to be increasingly inclusive to foreign colleagues.

ESG training
illimity invests in training on ESG topics, because it believes that the Bank’s sustainable development isonly possible by actively engaging all Divisions and Departments and the people who work there.
Developing a business in tune with ESG topics requires both knowledge, at all levels, of the principles
of sustainability and the impact that sustainability factors may have on operations and a wide-ranging,
integrated vision of the changing level framework for sustainable finance.
For this reason, starting in 2021, illimity has developed a training programme dedicated to ESG topics,
included in the mandatory training programme, which is enriched and expanded annually, based on theemerging trends and the changes to regulations on sustainability issues. Within the 2023-2025 Sustainability
Plan, the Bank has also committed to providing at least 3 hours of ESG training to each employee of theGroup.

Employee training
In 2021, the first course provided to employees, staff and associates of the Group – developed by ASviS,
Italian Alliance for Sustainable Development – regarded the Agenda 2030 and the Sustainable Development
Goals, with the objective of informing colleagues and raising their awareness of the 17 SDGs approved by
the United Nations in September 2015.
During 2022, the Bank provided an additional two training programmes: the first, taken through e-learning(SCORM) by all company personnel, with a focus on measuring sustainability, social aspects and sustainablefinance for banks and asset management companies; the second programme - provided via subject matter
expert trainers and taken in synchronous mode - was divided into 7 workshops on ESG topics14, to which
the Directors of the Group were invited, and which actively involved 47 key people, identified by each Group
Department, based on their various areas of operation. The workshops were planned in small classes, withspecific target populations depending on the topic discussed.
This second programme, included in Compliance training, aimed to illustrate the regulatory principles on
corporate sustainability and provide the building blocks of practical knowledge on sustainable finance todefine the Group’s ESG strategy. It intends to provide specific skills to the key persons in the organisation
who can positively influence the comprehensive management of ESG issues in strategic, design andoperational terms, as well as acting as points of contact for on-the-job training of their colleagues within
their respective structures.

14“Introduction to sustainable development and ESG topics”, “Sustainable finance policies”, “Climate risk and financial risk”, “The management ofenvironmental and climate risk within the bank”, “Strategies and products: Loan Origination & Monitoring”, “Strategies and products: ESG bonds”,“Strategies and products: ESG Funds”.

illimity • 2022 Sustainability Report77PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

GRI 2-17

Training of the Management and Control Body and the Senior Management
The Board of Directors is the annual target of a Board Induction programme, in accordance with theapplicable regulations and best practices of the sector. The topics covered by the induction regard issues ofinterest to the Board and relate, inter alia, to ESG aspects and related risks, with specific focus on climate
and environmental risks.
In November 2021, an ESG Induction session was held for the Boards of Directors of the Parent Company
illimity Bank and the subsidiaries neprix and illimity SGR, and for the Bank’s top Management, on thenational and European framework relating to sustainable development and the main legal developments insustainable finance.
In June 2022, in addition to the above specific workshops also targeted to members of the Board of
Directors, the Bank organised a periodic ESG Induction – which the Directors in the Board of Directors of
the Parent Company and the subsidiaries neprix and illimity SGR, as well as the senior management of theBank, participated in – during which various issues were analysed in depth, including: ESG Compliance(compliance with the EBA Guidelines on Loan Origination and Monitoring, the Expectations on Climate
and Environmental Risk Supervision of the Bank of Italy, and changes to regulations), sustainability atillimity (non-financial reporting, ongoing projects, benchmarking, ESG ratings and petitions by investors,
international sustainability frameworks) and a focus on opportunities and challenges to further integrate
ESG topics into the various business lines of the Group.

2. Specialised Learning
In addition to the standard programme targeted to all employees, illimity created illimity up, a reference modelfor training initiatives that can be activated on demand, which define individual professional development
plans built based on the specific features of each position and on the single needs for growth. In particular,
as part of the Performance Management process, each illimiter can choose from over 50 training initiatives,
together with their manager, to select priorities and content close to their own and their team’s needs. On
average, in 2022, each manager selected 4 initiatives for each illimiter. Among the initiatives most selected,
we note the courses of Bank Financial Statements and Industrial Financial Statements.
With the goal of transmitting these skills and using them in daily activities, illimity has set up the Toolbox
Academy, an integrated training solution that combines internal know-how with the method and scientificcoordination of POLIMI Graduate School of Management of Milan Polytechnic.
The Toolbox Academy is based on microlearning, a skill-based approach to learning that offers informationin small, highly concentrated sections. This methodology is designed to meet technical needs in a shorttime, with just a click, which can be flexibly used in terms of time and space. The digital library createdduring 2022 offers content designed and created by illimiters for illimiters, with a focus on fundamental
topics for banking.
The nature of learning is continuously evolving and, with this, the tools used to transmit content. In April
2022 LinkedIn Learning was activated This is a digital library with over 10,000 courses in English (withthe option to display subtitles in Italian), held by professional trainers. The e-learning platform, open to allillimiters and integrated with Workday, allows users to acquire fundamental skills in the world of work at any
time, at a pace adapted to their specific needs.
In addition to promoting the culture of learning, this tool captures training needs and meets them in a timely
manner, also developing interests and creativity, going beyond the scope of work activities.

3. Business Learning Projects
With the aim of delivering a training programme that is increasingly aligned with internal needs and ofmonitoring key skills, the focus has been on the co-creation of training programmes with customised
content, supported by external companies, or the creation and provision exclusively by internal personnel,
leaning more and more towards the consolidation of an Internal Academy. From this perspective:• the Masters in Credit Management, whose second course concluded in July 2022;
b-ilty Academy, training dedicated to the b-ilty sales network. By levering the digital platform• theillimitybank.com and the Group’s outstanding expertise in loan management, training addressed both
78

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

technical aspects of selling the product portfolio and soft aspects of the relational positioning of thesales network, completed with content with a strong digital imprint. With a view to lifelong learning andever increasing knowledge of the market sectors, b-ilty Academy involves all Relationship Managers on
an ongoing basis regarding new products in the portfolio and market trends, which will be reproposed
cyclically to new hires in the network. Significant space was also dedicated to IVASS training andprofessional development for the management of insurance products.

Master in Credit Management
In October 2020 the first course of the Master in Credit Management of illimity Academy was launched,
set up with the aim of creating cutting-edge programmes to consolidate crossover competencies typicalof future professions, with high-level training courses combining learning and on-the-job training. The
Master’s is a highly professional programme, with the aim of training future Asset managers to include in
the team of the subsidiary ARECneprix (formerly neprix).
The first course, lasting 6 months, was held in Business School mode: 50% classroom teaching and 50%
on-the-job training. In October 2020, classroom lessons were held at the MIP site. With the worsening of
the health emergency, teaching went online, ensuring continuity and at the same time protecting the healthof all participants.
The Master’s course, designed to meet the specific needs of ARECneprix, is for recent graduates (graduatingfrom a degree or Master’s course no more than one year previously), and combines the know-how of theillimity Group’s management with the experience of trainers with an academic and consulting background,
coordinated by the scientific management of the POLIMI Graduate School of Management, Milan
Polytechnic.
The second course, launched in April 2022, kept expectations high: 452 applications were received inslightly more than one month and over 300 teaching hours provided by a faculty composed of 18 university
lecturers and external consultants in 32 courses, with an ongoing buddying programme dedicatedto students: specifically, buddies were selected from illimiters that participated in the first session andfollowed a customised training programme.
The programme is for both young professionals or practising lawyers in the NPE loan management sector,
as well as for new graduates or students near to graduating who have been hired by the illimity Group at thestart of the programme. The Master’s course involved young employees of neprix under 30.
The courses (lasting from 4 to 28 hours) covered the main legal, economic and behavioural aspects of credit
management. The multidisciplinary nature of the programme made it possible for other colleagues of theGroup to actively participate, granting priority to more junior figures.
Compared to the second session, two new aspects were introduced: the programme was entirely free ofcharge and it guaranteed selected candidates employment with neprix, on a trainee contract from thevery first day.

4. Development Programmes
An ever increasing portion of investment in managerial and behavioural training has been dedicated todeveloping the senior management pipeline.
Over the years, the organisation has built up its structure and, due to the increase in responsibility and/or
oversight of activities of certain roles, customised programmes are implemented that provide the tools tocover the new position. This is promptly implemented on appointing a Team Leader or Manager with specifictraining that leverages coaching methodology, with the goal of measuring up to the challenges of the leadcoach in developing own staff.
To improve the expansion of leadership and generate a motivated, resilient environment, by disseminating
conduct, feelings and behaviour useful to the achievement of the corporate objectives, a new development
programme was launched, dedicated to senior management.
In 2022, specific development initiatives were also implemented for a select target of high-potential illimiters,
identified with the support of the managers of the various areas and using assessment tools. The initiatives,
which also involved certified external coaches and the senior management of the Group, aimed at outlining
an individual development plan and guarantee company sustainability with a view to succession planning.
illimity • 2022 Sustainability Report79PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

To support the development of illimiters and promote cross team work, contributing to the general growthof the entire Group, the initiative of cross mentoring continued, with a (formal and informal) relationshipbetween a person with more experience (the mentor) and a person with less experience (the mentee),
aimed at developing the skills of the latter in a working and social environment, regardless of seniority.
In 2022 the initiative involved 51 pairs (for a total of 102 illimiters), counting on the experience of 12 newmentors trained through the Train the Mentor programme.
In addition, illimity recognises the potential of its people, starting from the promotion of heterogeneousbackgrounds that result in unique skills within the Group. With a view to increasingly promoting internal
skills and placing them at the service of young resources, we consolidated the Erasmus experience, which
consists of a period of continuous training and work within a target function, shadowing a more seniorcolleague in his/her daily work, to understand the needs of the position and put them into practice. This
experience lasts from 6 to 12 weeks in a business area different from the employee’s area, and involved 4
illimiters during 2022.
GRI 404-1
2022
Total training hours
Senior managers

2021

2020

Women

Men

Total

Women

Men

Total

Women

Men

Total

1,149

2,817

3,966

696

2,534

3,230

419

1,997

2,416

Middle managers

5,530

10,187

15,717

5,105

10,972

16,077

2,483

3,586

6,069

Professional areas

11,454

12,84024,294

8,004

8,505

16,509

1,887

1,216

3,103

Total

18,13325,844

43,977

13,80522,01135,816

4,789

6,799

11,588of which mandatory
Compliance training

4,816

5,782

10,598

4,011

6,095

10,106

1,818

2,201

4,019

of which technical/specialist
training15

5,350

8,543

13,893

4,381

8,626

13,007

983

1,560

2,543

of which behavioural training

4,747

7,004

11,751

2,890

3,670

6,560

598

552

1,150

of which language skills training

2,890

4,031

6,921

1,951

2,888

4,839

678

1,616

2,294

of which mandatory occupational
health and safety training

330

484

814

572

732

1,304

712

870

1,582

Total

Women

Total

Women

Men

Total

illimity training course categories

2022
Average hours of training

2021

Men

Senior managers

72

46

51

54

47

48

52

43

44

Middle managers

45

45

45

48

56

53

29

24

26

Professional areas

50

65

57

42

51

46

22

17

20

Average hours of training
Minimum hours of training suggestedby the National Collective Bargaining
Agreement for the credit sector

51

Men

2020

Women

49

30

24

The data consider the training provided to AREC personnel from the time they joined the Group (1 July 2022).
The initiatives regarded the following areas: Compliance & AML (participation in webinars organised by the
Chief Compliance & AFC Officer), technical training (e.g. negotiation skills, reform of the Italian Business
Crisis and Insolvency Code), and behavioural training (specifically, a change management programme tosupport the integration, involving managers and other key figures).

15

The total includes the hours provided as part of the following initiatives: b-ilty Academy, Master in Credit Management, Business Skills, ESG andDiversity, Equity & Inclusion, IT & Software.

80

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

As previously illustrated, to favour the entry of new colleagues, a dedicated onboarding programme wasdeveloped (see the section “illimity Onboarding"), with a total duration of around 9 hours, broken down
into various sessions: an onboarding day, lasting a half-day to present the Group’s business Divisions, andfour induction sessions on HR topics, with a duration of 60 or 90 minutes (company tools, complementary
pension funds, welfare system and insurance policies, learning & development programmes). At the start of2023 the onboarding programme was completed with onboarding regarding support functions and induction
on the IT ecosystem and other company tools. Since the start of 2023, in addition to the training that newhires and other illimiters have access to, specific initiatives have been planned that fall within the scope of
mandatory training, including those focusing on ESG principles.
Developing talent has always been one of illimity’s most important commitments. In this view, in October
2022, the internal newsletter illimity Growth: The Value of Learning was created. This monthly newsletter istargeted to all illimiters with the goal of confirming the aspect of professional development among priorities,
with tips & tricks to stay up-to-date and capture learning opportunities also outside of one's role in the Group.
A topic of particular interest that the newsletter focuses on is Diversity, Equity & Inclusion, to which a
digital training programme was dedicated during the year, and which will be reserved significant spacein the mandatory training catalogue for 2023, in order to further emphasise the Group’s sensitivity to thishighly important issue.

illimity Total Reward – The Value of Recognition
The value of illimiters is recognised through a meritocratic, inclusive Total Reward approach, based on the
behaviour demonstrated and the targets achieved, to support the professional growth and personal wellbeing of illimiters, thus promoting the achievement of short and medium/long-term targets, while respecting
illimity's values, and in line with the Strategic Plan.
Specifically, illimity’s total reward approach assesses the competencies expressed and performance interms of results achieved and behaviour adopted, promoting internal benchmarks and market references,with the aim of guaranteeing a fair, diversity neutral remuneration system, which is sustainable over time.
From this perspective and based on the principle “equal pay for equal work”, illimity has committed tooffering salary packages that guarantee fair treatment, regardless of discriminating aspects, such as genderage. In particular, illimity systematically analyses internal and external remuneration benchmarks in case ofequal role or roles that generate the same value, both on recruitment and during the annual salary review
process and is committed to basically achieving a zero Pay Gap, monitored through controls during theperiodic review of remuneration policies.
More generally, in accordance with the provisions of law and regulatory and corporate governancerequirements, the Remuneration and Incentive Policy is established as part of the annual cycle for theplanning, management and control of remuneration in order to ensure that decisions are taken independently,
thereby avoiding the risk of possible conflicts of interest and guaranteeing accurate disclosure. All of this,also taking account of the suggestions from year to year from institutional investors and proxy advisors,
through periodic engagement activities16.
GRI 2-19

GRI 2-20

The annual cycle of revision of the Remuneration Policy involves the company bodies and functions, in linewith the provisions of regulations and the By-laws, the organisational structure and the responsibilities
assigned to the various functions, ensuring that each decision is taken by the bodies and functions
specifically assigned17. For more details on the remuneration policies adopted by illimity, the process ofdefining them and the specific involved required from each body involved, refer to the Report on the 2022
Remuneration Policy and Compensation Paid in 2021, available on the corporate website (Governance >Remuneration).

1617

Note that illimity's 2022 Remuneration Policy was approved by the Shareholders’ Meeting of 28 April 2022, with the vote in favour of 98% of theshareholders in attendance.
For the purposes of drawing up the Remuneration and Incentive Policy, illimity used analyses and support from independent experts with specificexperience in remuneration policies and practices, identified in Willis Towers Watson (WTW).

illimity • 2022 Sustainability Report81PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimity’s incentive strategy promotes the achievement of short- and medium-/long- term objectives,complying with illimity’s values and the 2021-2025 Strategic Plan, contributing to the alignment of investors’
and all stakeholders’ interests. To support this model, all employees are shareholders and take part inthe company’s growth, as they are the beneficiaries of a broad base shareholder plan (ESOP18) designed
to increase employees’ sense of belonging, steering them towards creating value over the long term.
Management and key resources are also the beneficiaries of a Long-Term Incentive System (LTI), which
consolidates the alignment of the interests of beneficiaries with the priority goal of creating sustainablevalue over time, in keeping with the Strategic Plan and through a commitment to achieving ESG objectives(accounting for 20% in the objectives plan) in addition to economic/financial objectives.
To encourage outstanding performance also in the short term, illimity’s Remuneration Policy includes an
Annual Incentive System (Management by Objectives - MBO) dedicated to all employees of the Group connected to a wider-ranging Performance Management System - which awards the achievement of annual
objectives and the adoption of a conduct in line with illimity’s competencies model. Starting in 2022, ESG
objectives were also included (accounting for 15%) in line with those set out for the long-term plan, also
regarding the objective plans for all managers of the Group, connected with the MBO annual incentive plan.

Work-life balance and company welfare
As part of its corporate welfare system, the illimity Group has put in a place a unique benefit policy, witha flexible choice of services and access to best-in-class solutions, offering illimiters an evolved Flexible
Benefits plan, which can be customised to cater for individual and family needs.
illimity’s welfare policy guarantees in particular:

and non-professional accident insurance (paid by the company, plus a possible integration• professionalwith the welfare budget);insurance plus total permanent invalidity insurance (basic insurance paid by the company, plus a• lifepossible integration with the welfare budget);• Long Term Care insurance (paid by the company);varying healthcare policy based on different needs (the individual/family), which may be purchased• athroughthe welfare budget, with a EUR 600 contribution paid by illimity, as provided for in the Second
Level Contract;• supplementary pension;
Flexible Benefits plan with services that are reimbursed and direct access to education, health,• themobility, recreation, assistance and loans areas;
for families (to name just a few: 20 days’ parental leave for new fathers, additional days’ leave• benefits
paid in full to assist children when starting school, assistance with voluntary work, study grants for
illimiters who are students and for their children);modular system of smart working, that provides multiple levels of flexibility, to guarantee illimiters a• acorrect
work-life balance and reduce their commutes;
vouchers for all employees and interns, even for days when working from home, up to a maximum• mealof 10 days per month;fresh fruit, delivered to the Group's various offices every Wednesday, to promote and incentivise• seasonala healthy, sustainable lifestyle;
1 January 2023, a tele-medicine assistance service became available to all illimiters and their family• onmembers in the same household, completely free of charge, available 24-7, 365 days per year, through acall centre.
Also for 2022, in line with 2021, the agreement with trade union representatives was signed on the Company
Bonus, which promotes the contribution, commitment and dedication of each illimiter, correlated with theeconomic soundness of the Group. In line with that defined in the conditions of the agreement, all staff in
professional areas and middle managers of the Group companies may accrue a bonus to be paid in cash or
converted into additional welfare credits, of up to a maximum of EUR 1,200 for office staff and EUR 1,700 for
middle managers. The agreement is part of the overall “Reward & Total Value” strategy, adopted by illimity
since its foundation and based on principles of meritocracy, inclusion and participation.

18

Employee Stock Ownership Plan.

82

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

APPENDIXGRI Content Index

During 2022, 30 male employees and 38 female employees took parental leave. A 100% rate of return aftermaternity/paternity leave was recorded, as well as 97% of female employees and 93% of male employees
keeping their job 12 months after returning.

GRI 401-3
2022
Parental leave

2021

2020

Women

Men

Total

Women

Men

Total

Women

Men

Total

Total number of employees entitledto parental leave

38

30

68

17

21

38

8

10

18

Total number of employees taking
parental leave

38

30

68

17

21

38

8

10

18

Number of employees returning towork after parental leave

38

30

68

17

21

38

8

10

18

Total number of employees who arestill with the company 12 months
after returning from parental leave

37

28

65

16

21

37

8

10

18

100%

100%

100%

100%

100%

100%

100%

100%

100%

97%

93%

96%

94%

100%

97%

100%

100%

100%

Return rate19
Retention rate

20

Additional indicators

2022

2021

2020

Percentage of welfare out of theaverage Gross Annual Salary21

11%22

11%

10%

illimity Engagement – The Value of Commitment
Within the Group, there is a significant focus on the engagement of illimiters, to favour the feeling of
belonging, which plays an important part in their well-being and helps them do their best at their job.
Specifically, illimity Engagement is stimulated and measured through various initiatives:& Inclusion (e.g. illimitHER, dedicated training activities – see the chapter “Diversity, Equity• Diversity
and Inclusion” and the section “illimity Growth”);
Surveys (e.g. Great Place to Work, a survey on the satisfaction with professional development,• Annualmateriality analysis questionnaire, commuting questionnaire – see the section “Great Place to Work”);• Work-life Balance (see the section “illimity w.o.w.” and “Work-life balance and company welfare”);
as Ambassador: Career Day, with the business, newsletters, cross-division projects, events and• illimiterinternal initiatives;
Actions (e.g. Total Reward; Performance Management; dedicated growth programmes – see• Recognition
the sections “illimity Performance”, “illimity Total Reward” and “illimity Growth”);• Meetings at regular intervals: staff meetings, company parties, off-site meetings.
As part of the engagement initiatives, virtual coffee breaks or those in person with the Chief HR & Organization
Officer are organised. Specifically, the coffee breaks can be held at two different times, to collect feedback,ideas and suggestions on the Group: at the time of onboarding for all new hires, and one month from thetransfer of an illimiter to another team.

19
20
21
22

The return rate (%) is calculated as the total number of employees returning to work after parental leave out of the total number of employees taking
parental leave x 100.
The retention rate (%) is calculated as the total number of employees still working 12 months after returning from parental leave out of the total numberof employees returning to work after parental leave in the previous reporting period x 100.
To calculate the ratio, the mean value of welfare and the Gross Annual Salary (fixed only) of personnel entitled to welfare was considered. The Gross
Annual Salary item exclusively includes the fixed gross annual salary, including that of Group staff on project-based contracts, to whom a welfare budget
was assigned (according to that established in the internal Welfare Regulations).
The total is net of AREC personnel, as the effective date of the merger is 1 January 2023 and AREC’s policies do not allocate any welfare budget for 2022.

illimity • 2022 Sustainability Report83PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Health and safety
GRI 403-1

GRI 403-2

GRI 403-3

GRI 403-4

GRI 403-5

GRI 403-6

GRI 403-7

GRI 403-9

Occupational health and safety is a fundamental commitment for the Group, to make to all the Bank’s
employees, staff and associates.
The illimity Group operates in compliance with occupational health and safety regulations and, based on
the requirements of Legislative Decree 81/08, has set out the responsibilities and procedures for preparing
for and responding to potential incidents and emergency situations, as well as the responsibilities andprocedures to prevent harm and accidents that may occur, set out in the Health & Safety Procedure of theindividual Group companies.
The internal occupational health and safety system is supervised by the Employer, its delegate, the Safety
Officer, the Company-appointed Doctor and Officers in Charge, with the support of the Workers’ Safety
Representatives, the Emergency Officers and First Aiders and all heads of structures.
The purpose of adopting this system is to enable the Bank to have safe, healthy workplaces, prevent injury
and illness, and improve its occupational health and safety track record, with a performance planned
according to the following criteria:• analysis of the internal organisational structure;• updates to occupational health and safety risk assessments, formalised in the Risk Assessment Report;• definition of processes concerning safety and the identification of duties and responsibilities;
of work procedures, internal rules, and procedures for communicating safety-related• definition
information;• adoption of planned activities through personnel information and training, and involvement in processes;of periodic controls to monitor the adoption of the safety management system and relative• identification
organisational model, as well as its effectiveness, by identifying the compliance of actions with adopted
procedures;• the preparation of forms;
establishment of an audit and assessment system for critical aspects concerning the Occupational• the
Health and Safety Management System.
As required by Italian Legislative Decree 81/08, Workers’ Safety Representatives, identified by trade union
representatives, are involved in specific activities, such as safety meetings, inspections and preparing
documents.
The Bank organises specific drills annually, depending on the various accident scenarios indicated in theemergency management procedure, in order to monitor the effectiveness and efficiency of these emergency
procedures and plans.
To provide effective health surveillance, a company-appointed doctor is available to carry out mandatory
medical check-ups, as well as additional checks-ups on request.
Employees are requested to report any sources of risk to emergency management officers.

84

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

2022

Occupational accidents
Accident rate

RECOGNITION
AND AWARDS

2021

APPENDIXGRI Content Index

2020

Employees

Staff and
Associates

Employees

Staff and
Associates

Employees

Staff and
Associates

1

0

4

1

0

0

0.80

-

3.8

7.0

-

-

Serious accidents

0

0

0

0

0

0

of which fatal accidents

-

-

-

-

-

-

of which accidents withserious consequences(excluding fatalities)

-

-

-

-

-

-

Rate of fatalities
caused by occupational
accidents

-

-

-

-

-

-

Rate of accidents withserious consequences(excluding fatalities)

-

-

-

-

-

-

Total number of hours
worked1,253,451-

1,043,079

28,400--23

For further details:

Health & Safety Procedure23

The rates are calculated as the number of accidents/total number of hours worked. To improve readability, the portion obtained is then multiplied by
1,000,000 (hours worked) for employees, and by 200,000 (hours worked) for other staff, as they number few people.

illimity • 2022 Sustainability Report85PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

07. Diversity, Equity and Inclusion
illimity is committed to breaking through physical, communication and cultural barriers, adopting anapproach that values inclusion. The Bank considers diversity and respect as fundamental values of its HR
Policy, which it adopts from recruitment onwards, up to the professional development of employees.
Group employees come from over 20 sectors and more than 300 different companies, with more than half
operating in non-finance sectors. The average age of employees is 36, with the highest number of employees
in the junior millennials category, i.e. from aged 26 to 33. 22 different countries are represented at illimity.
During 2021, the Diversity, Equity & Inclusion Policy was issued, which outlines the Diversity, Equity andInclusion guidelines and practices of the illimity Group, as the foundations for the organisation and its
business strategy. Diversity, equity and inclusion are in fact strongly connected with illimity’s identity
and therefore form the basis for looking after human capital, promoting a meritocratic work environment,
consistent with a work-life balance, that empowers the individual characteristics of each person, theircapacities, experience and aspirations.
During 2020, through the CEO, illimity signed the “Manifesto for Women’s Employment” of Valore D, thefirst association of companies in Italy - to date more than 320 - which has been a pioneer, since 2009,
in dealing with the issue of the gender balance and dissemination of a culture of inclusion to support
innovation, progress and growth of organisations and the country of Italy. Through that Manifesto, thesignatory companies commit, gradually and preferably in keeping with their own specific size and sector
dimensions, to establishing clear, measurable goals, to share within the organisation. The Bank’s Chief HR& Organization Officer is also on the Management Council of Valore D.
illimity also has a long-term partnership in place with Manpower, to include in the team persons withdisabilities, which represented 2.5% of Group employees in 2022.

For further details:

Policy Diversity, Equity & Inclusion

GRI 405-124

Composition of the Board of Directors
2022

2021

Women Women Men
(no.)
(%)
(no.)
Members of the Board of
Directors

Men
(%)

2020

Women Women Men
(no.)
(%)
(no.)

Men
(%)

Women Women Men
(no.)
(%)
(no.)

Men
(%)

6

46

7

54

5

56

4

44

4

44

5

56

≤ 31 years of age

0

0

0

0

0

0

0

0

0

0

0

0

32 - 39 years of age

0

0

0

0

0

0

0

0

0

0

1

11

Division by age

40 - 54 years of age

1

8

2

15

3

33

2

22

1

11

2

22

≥ 55 years of age

5

38

5

38

2

22

2

22

3

33

2

22

The Board of Directors breaks down as 46% women, and 54% men, with Rosalba Casiraghi as Chair of theBoard of Directors and Chair of the Sustainability Committee, Elena Cialliè as Chair of the Risks Committee
and Paola Elisabetta Galbiati as Chair of the Remuneration Committee.

24Disclosure is provided for the GRI 405-1 indicator with a greater level of detail for the division by age group than that suggested in the GRI Standards, as
this represents the classification used for internal activities.

86

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Breakdown of personnel by employment category, gender and age
2022

2021

Women Women Men
(no.)
(%)
(no.)

Men
(%)

2020

Women Women Men
(no.)
(%)
(no.)

Men
(%)

Women Women Men
(no.)
(%)
(no.)

Men
(%)

Senior managers≤ 31 years of age

1

6.3

0

0.0

0

0

0

0

0

0

0

0

32 - 39 years of age

3

18.8

9

14.8

0

0

7

12.9

0

0

6

12.8

40 - 54 years of age

12

75.0

44

72.1

13

100.0

40

74.1

8

100.0

35

74.5

≥ 55 years of age

0

0.0

8

13.1

0

0

7

13.0

0

0

6

12.8

Total Senior managers

16

20.8

61

79.2

13

19.4

54

80.6

8

14.5

47

85.5

15

12.3

33

14.5

23

21.5

33

16.8

27

31.4

38

24.5

Middle managers≤ 31 years of age
32 - 39 years of age

66

54.1

113

49.6

58

54.2

93

47.5

33

38.4

63

40.6

40 - 54 years of age

38

31.1

75

32.9

24

22.4

64

32.6

24

27.9

48

31.0

≥ 55 years of age

3

2.5

7

3.1

2

1.9

6

3.1

2

2.3

6

3.9

122

34.9

228

65.1

107

35.3

196

64.7

86

35.7

155

64.3

104

45.6

110

55.6

92

48.7

87

52.4

77

49.7

61

44.9

Total Middle Managers
Professional Areas≤ 31 years of age
32 - 39 years of age

82

36.0

53

26.8

66

34.9

50

30.1

56

36.1

50

36.8

40 - 54 years of age

38

16.7

31

15.7

30

15.9

25

15.1

21

13.5

21

15.4

≥ 55 years of age

4

1.8

4

2.0

1

0.5

4

2.4

1

0.6

4

2.9

228

53.5

198

46.5

189

53.2

166

46.8

155

53.3

136

46.7

Total Professional Areas

With the presentation of the 2021-2025 Strategic Plan, the illimity Group set the objective increasing thenumber of women in managerial positions two-fold.
As previously stated, the Group’s policies have been based on valuing all diversity, since its foundation. Thistakes place through:activities, with a shortlist drawn up of the best candidates, diversified in terms of gender,• recruiting
education, experience and nationality. In particular, of the 187 new recruits in 2022, 148 were under 40
years of age, with women accounting for 45% and men for 55%;

in new illimiters (see GRI 401-1), and the 72 team leaders (the “third lines”) who represent• investments
the Group’s managerial pipeline.
GRI 405-2

Ratio of the basic salary to other types of remuneration for
women compared to men, by professional category

2022

2021

2020

Women/Men(%)

Women/Men(%)

Women/Men(%)

Senior Management

74.9

-

-

Other managers
3rd/4th level middle managers

78.7

95.1

100.7

94.1

92.9

93.7

1st/2nd level middle managers

99.2

96.6

95.6

Professional areas

97.3

97.1

95.8

Average25

95.4

95.4

96.4

illimity • 2022 Sustainability Report8725

For the years 2020 and 2021, the first ratio (senior management) was excluded, due to a lack of women incumbents.

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Figures are calculated as an average which considers the basic salary and total remuneration of employees
as of 31 December 2022, including the company welfare benefits, as per contracts, the MBO bonus andother variable parts of remuneration. The recruitment of the best resources for all roles at illimity, including
the most strategic, is the result of a gender neutral process, guaranteed by the Group HR and corporate
governance policies.
It is also noted that the Group uses the support of the external advisor WTW to analyse the neutrality of
remuneration policies with regard to gender. Specifically, the methodology used follows an approach thatmeasures differences in remuneration with the same role or roles of the same career level. Based on thatapproach, the Pay Equity Gap, meaning the average weighted gap for each position, examined by the Boardof Directors in 2022, based on the actual remuneration data of 2021, came to -3%.
The approach to fully neutralise the gender pay gap includes careful analysis of internal and external
remuneration benchmarks, when defining financial packages on employment, and a particular focus ongender issues during the annual salary review process.
GRI 202-1
2022

2021

2020

Women

Men

Women

Men

Women

Men

1.1

1.1

1.0

1.0

1.1

1.1

Annual Total Compensation Ratio

2022

2021

2020

Ratio of total annual remuneration of the highest paid individual to the mean total annual
remuneration of all employees (excluding the highest paid individual)27

17.5

13.6

11.4

Ratio of the percentage increase in the total annual remuneration of the highest paid
individual to the percentage increase of the mean total annual remuneration for all
employees

16.2

4.2

0.3

Top Management to Worker Compensation Ratio

2022

2021

2020

Average remuneration of the CEO and Top Management to average employee remuneration
ratio

10.6

9.1

11.1

Ratios of standard entry level wage by gender compared to
local minimum wage26

GRI 2-21

Additional indicators

Last benchmark

28

26
27

28

61.5

The standard salary of a new recruit means the basic lower salary paid to the new recruit in the reference year. The minimum local salary means theminimum salary envisaged by collective bargaining or applicable law.
The pay ratio is calculated using the following metric: CEO Actual Compensation 2022/Mean value of 2022 Group remuneration, where the Total Annual
Remuneration includes the following items: Gross Annual Salary, Welfare, MBO pertaining to 2021 disbursed in 2022, Notice Period, Entry Bonus,
Retention Bonus, Stability Agreement, Bonus Spot and ESOP. AREC employees were included in the scope of reference, with the fixed and variable itemsof remuneration accruing in 2022.
Mean benchmark value of 8 banks of the FTSE Bank in 2022.

88

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Gender Equality Certification
In November 2022, the Group obtained Gender Equality Certification. This is part of the National Recovery
and Resilience Plan (NRRP), whose criteria for achievement are governed by Decree of the Presidency of theCouncil of Ministers of 29 April 2022. Specifically, the topics covered by the Certification are defined in the
UNI PdR 125:2022 standard (hereinafter also “standard”).
That standard defines the guidelines for promoting gender equality, which requires that a set of performanceindicators be structured and adopted, broken down into six specific areas: (i) culture and strategy, (ii)governance, (iii) HR processes, (iv) opportunities for growth and inclusion of women, (v) gender equity inremuneration and (vi) protection of parents and work-life balance.
The Group undertakes to maintain and improve the KPIs and best practices regarding the gender equity
management system, also setting shared, formalised objectives.
Monitoring activities will also be overseen annually by the Sustainability Committee, as the party responsible
for overseeing the diversity, equity and inclusion policies.

Great Place To WorkIn 2022, the illimity Group was recognised as a Great Place to Work® for the fourth year running, and for thesecond time was ranked as one of the Best Workplaces in Europe™, in 13th place among large companies.
This award, certifying companies that have a quality work environment is from Italy’s leading consulting
company specialised in work environment analysis, and follows on from a survey administered annually, towhich 94% of total employees as of June 2022 replied.
The online questionnaire revealed that illimiters appreciate above all the attention the company focuses on
Diversity, Equity and Inclusion, they are proud to work for the company and have a strong team spirit.
Specifically, the figures show a particularly positive perception - above the sector benchmark - of the work
climate, considered to be excellent by 80% of employees and a Trust Index© of 77%. In particular, theTrust Index© summarises the percentages of positive replies from employees in the five areas referred to thecompany climate: credibility, respect, fairness, pride and cohesion.
This result is not a given, as, together with Universum’s award as the Most Attractive Employer for businessstudies students and young professionals again this year, illimity has been confirmed as one of the bestcompanies in Italy for its ability to create a work environment that is inclusive and considerate of personal
well-being.
These annual surveys collected proposals of initiatives that may contribute to making the place we work
more special. Specifically, 14 proposals were collected, with the goal of making interactions between
colleagues more efficient, thus freeing up quality time to be productive and improving the way of working
together. Specifically, the analysis of data and comments showed that we can improve the way in which weinteract, better organising our activities and processes. The proposals were shared with and assessed by the
management, and included in full within the DMR - Digital Mindset Revolution process.
As each year, the Great Place To Work® survey, which will be launched in 2023, and Microsoft Viva Insights
analytics will make it possible to analyse the status and effectiveness of the initiatives implemented andoutline any corrective actions for the current action plan.

79%

94%
Responsive
Rate

80%
“All things considered, I’d say this isan excellent place to work”

77%

76%
75%
77%
78%

Credibility

Respect

Equality
Pride
Cohesion

Trust Index©

illimity • 2022 Sustainability Report89PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Commitment to new generations
To support the development of talent in very young people, in 2022 illimity consolidated various partnerships,
involving its people in person:a non-profit entity that trains people for work, with specific focus on the socially and financially• ELIS,
disadvantaged. Specifically, this partnership gave rise to an orientation programme that involved ahigh school and a middle school in Lombardy and a technical college in Emilia-Romagna. In addition
to increasing knowledge of the company, the issues covered focused on orientation, diversity andsustainability. Orientation was focused on STEM degrees, in particular for young women interested ina career in subjects which at present are predominantly chosen by young men. In addition, with the
involvement of colleagues from neprix, students had the chance to consolidate their technical skills and,thanks to the development of project work, they tried out their skills in a learning-by-doing approach. At
the end of the project, students of final-year classes were able to take part in a dedicated Career Day,
which neprix dedicated to get-to-know-you interviews with the students.

(Young Women Empowering Program): keeping the focus on safeguarding STEM subjects, also
• YEP
in 2022, illimity worked with the Fondazione Ortygia Business School, joining the YEP (Young Women
Empowering Program) mentoring program, designed with the aim of including and empowering female
talent and supporting economic and social growth in the South of Italy. The project, that will conclude inJune 2023, involves 5 colleagues as Mentors to 5 university students studying economics and STEM in
the South of Italy. Interaction is one-to-one and six individual mentoring sessions are held, to optimallysteer students on their own professional and personal growth journey.

a platform with over 500,000 students and young graduates registered with the site (of whom
• Tutored,
340,000 with a STEM background). Tutored provides a digital meeting place to link up with students fromall faculties throughout Italy and thus address a wider group of possible, future illimiters, with a view tocreating an increasingly inclusive environment, where contamination with different university scenarios(also in geographic terms) is a main ingredient when it comes to selecting high-potential, junior profiles.
During 2022, illimity consolidated its partnerships with the academic world and started new alliances, withthe dual aim of guiding and selecting young talent with the spirit of illimiter. Firstly, the partnership with
POLIMI, that curated the Scientific Management of the illimity Academy’s Master in Credit Management,
was extended, covering specific Master’s courses of the Milan Polytechnic Business School.
The Group also took part in recruiting events, round table discussions, and business talks which were
held with hybrid methods. Initiatives contributed not only to employer branding, but also to the direct
employment of job seekers, met during events at universities and subsequently included in recruitment
processes for job offers. illimiters are involved, in the first person, in recruiting/orientation activities, taking
part as ambassadors, and also holding lessons and acting as testimonials at universities. For the second year
running, colleagues from the design team held the Design courses for evolved services at Milan Polytechnic.
illimity also took part in and/or organised initiatives during 2022, related to new generations, to transfer
technical and all-round skills important for their studies and career paths.

a Diversity & Inclusion (D&I) programme of illimity, aimed at creating an “edutorial” schedule• illimitHER,
to transfer and share knowledge and skills to help train a new generation of women in a future that isincreasingly dominated by digital transformation;

Women Network, the first association in Italy dedicated to the networking, mentoring and• Young
empowerment of young women;
the non-profit organisation that aims to fill the gender gap in the technological, digital and• SheTech,business world through networking, empowerment and training, through the “quote sospese” project,that donated annual membership fees to young women who have excelled in their STEM studies;

Future Academy, the innovative project for high school students, that aims to help them discover• Smarttheir direction, by organising debates and inspiring meetings between students and leading players suchas entrepreneurs, scientists and politicians;

di Politiche, which aims to build up the competencies of young people, with high-potential,• Scuolamaking them the enablers of change and innovation.

90

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

illimitHER
What can illimity do to increase the number of women in the workplace?
To answer this question, illimity has created an “edutorial” schedule to transfer and share knowledge
and skills to help train a new generation of women in a future that is increasingly dominated by digitaltransformation.
illimitHER is illimity’s programme, launched in July 2020, created to foster the potential of young womenand go beyond gender stereotypes. Diversity & Inclusion (D&I). The stars of illimitHER are inspiring youngrole models under 35, with STEAM backgrounds (scientists, entrepreneurs, artists and innovators), whichhave succeeded in their personal and professional paths.
A fresh format created by young people for young people, with the narrative voices of Felice Florio andCecilia Greco, two journalists that work with Giulia Rosa, the illustrator that places women at the centreof her art and who, with her dreamlike, delicate style, has made illimitHER unique and identifiable on themarket.
Engagement with the public is preceded by newsletters dedicated to the community. During talks, questions
can be asked through live streaming, and interactive Instagram quizzes are held afterwards.
illimitHER has an open ecosystem of 26 partners, thanks to whom the project can increase its own social
impact. Partners include associations that work on D&I issues, such as Valore D, GirlsRestart, STEM in theCity and the Municipality of Milan, Young Women Network, SheTech, Scuola di Politiche, Digitally, Ortygia
Business School, Smart Future Academy, Ca’ Foscari University of Venice with the LEI project, Bocconi
University, BAM - Alberi Library of Milan, the Prime Minister, Talents Venture, University Box, HarperCollins,
Torcha, Unstoppable Women of StartupItalia, Most Powerful Women of Fortune Italia, Plug & Play, Fintech
District, BIP Poliferie, Hacking Talents, Women at business and Develhope.
Within the network the “quote sospese” project has been developed, which provides employees of illimity
and certain worthy external parties to sign up for one year at YWN or SheTech, free of charge.
In 2022, 5 events were held, with around 100,000 views, regarding digital tools applied to publishing, themission to Mars 2020, gender bias in science and biotechnologies, art transforming spaces into places ofvalue through murals, chemistry and synchronised swimming.
Two highly innovative “marathons”, illimitHER Marathon and illimitHER South Marathon were held.
Phygital meetings to inspire young generations to dream big, following their passions. The first took place atAlberi Library in Milan, with the Deputy Minister for Education and a chemist specialised in glaciology. The
second took place on Ortigia island, with an Oxford-based astrophysicist, an entrepreneur and a culturalproject manager.
Results were extremely positive, and illimitHER obtained sponsorship from the European Commission.

illimity • 2022 Sustainability Report91Bedeschi
A company continuing to innovate
to build a better future

Frame the cover photo to watch the video"The Story of Bedeschi” using the ARIA App

Find out more:

illimity, Bedeschi

Prosperity

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

08. Robustness andcreation of shared value
The illimity Group continues to pursue the goal of being a solid, stable partner for all stakeholders and ofbuilding a base for long-term financial stability.
Profitability and robustness are the pillars of any business and in particular for a Bank such as illimity,
which must be able to provide valid financial support for people, families and high-potential businesses,
also at times marked by a particular uncertainty.
For this reason, the illimity Group is committed at all times to achieving an adequate profitability andshareholder remuneration, maintaining certain capital and financial solidity conditions, in compliance withprudential supervision requirements29.
In November 2021, the international agency Fitch Ratings give the Bank raised its Long-Term Issuer Default
Rating (“IDR”) of the Bank to “BB-” (previously “B+”) and Viability Rating (VR) to “bb” (from “b+”), confirming
the Stable Outlook. At the same time, Fitch Ratings improved its rating of the debts issued by the Bank,
assigning its preferred senior bond a rating of “BB-“ (up two notches from B), and its class 2 subordinateddebt a “B” rating (up from B-).
The improvement in the rating reflects illimity’s ability to generate profit continually, starting from the fourth
quarter of 2019, based on a solid position in its selected business areas and an operational leverage that is
steadily improving. The rating agency appreciated the greater diversification of funding, also following theissue of the senior preferred bond and Tier 2 subordinate bond.

Additional indicators

2022

2021

2020

CET1 (Common Equity Tier 1)

15.77%

18.83%

17.86%ROE (Return on Equity)

9.3%

10%

5.5%

Net Organic NPE Ratio

1.8%

1.2%

1.7%

30 bps4 bps

52 bpsCOR (Cost of Risk)

Main financial data on a consolidated basis6,355.1
million Euros
Total assets

29

324.6

75.3

million Euros

million Euros

Total net
operatingincomeProfit for theyear

Further information on the financial position and performance and cash flows of the Group, and on the identification and management of related risks
is provided in the Report on Operations accompanying the Consolidated Annual Financial Statements of the illimity Group.

94

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Share capital and ownership structure
As of 31 December 2022, the Bank's share capital amounted to EUR 54,513,905.72, fully subscribed andpaid up, divided into 83,645,108 ordinary shares.
The Ordinary Shares were admitted to trading on the Euronext Milan market organised and managed by
Borsa Italiana S.p.A. on 5 March 2019. By order of the Bank of Italy no. 8688 of 2 September 2020, theordinary shares were admitted to trading on the STAR (Securities with High Requirements) segment of theEuronext Milan market.
Consolidated shareholders' equity came to EUR 841.3 million, up on the end of 2021 due to the share capitalincrease destined for the acquisition of the business unit of AREC, the issue of shares as part of the ESOP
program and, lastly, due to the contribution of the profit accrued in the year, net of the negative changes
recorded in the valuation reserves.
Significant shareholders with a stake of at least 5% in the share capital with voting rights in illimity, withthe percentages calculated by the Bank based on the number of shares resulting from the most recent
information available and number of ordinary shares issued, updated at 31 December 2022, are reported
below.
Declaring entity, i.e. subject at the head of the control
chain

Share held

Portion held (%)

Banca Sella Holding S.p.A.

Owned

10.00%LR Trust - FIDIM

Owned

8.12%

FermION Investment Group Limited

Owned

7.26%

Tensile - Metis Holdings S.à r.l

Owned

7.01%

AMC Metis S.à r.l

Owned

6.56%

Economic value generated and distributed
GRI 201-1

The illimity Group operates in the market to generate and distribute long-term economic value for all
its stakeholders. In this regard, the economic value generated by the Group in 2022, which represents
the overall wealth generated by illimity thanks to its production and commercial capacity related to its
business activity, was equal to approximately EUR 313.5 million30.
Approximately 75.9% of the economic value generated in 2022 was distributed to stakeholders, mainly
suppliers (31.6%), employees, staff and associates (27.4%), central and local public administration (12.1%)
and shareholders (4.8%). Around 24.1% of the value generated was retained in 2022, to consolidate theGroup’s capital.

4.8%

Breakdownof economic
value
generated

24.1%

Economic value
retained

12.1%

Central and local public
administration

Shareholders

31.6%

Suppliers

27.4% Employees, staff andassociates

30 The table of economic value distributed and retained represents the added value generated and distributed to stakeholders, and that retained by
the Group. The income statement was reclassified (see the Annex to page 140), to highlight how added value is generated and distributed to various
categories of stakeholders.

illimity • 2022 Sustainability Report95PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Approach to taxation
The aspects concerning the taxation of the illimity Group are managed by internal operating procedures,
chiefly governed by a specialised team from the Administration, Accounting & Control Department.
To effectively deal with the complexity of legislation, the correct management of tax aspects is ensured
by internal control systems in place, that guarantee the prompt monitoring of all tax-related activities andcontinual alignment. This strategy involves the Management and Control Board, that are regularly informed
about illimity’s tax matters.
In its approach to taxation, the Bank is inspired by principles of:illimity adopts an approach geared towards the formal, substantial compliance of national• lawfulness:and international tax legislation, to responsibly prevent any type of tax risk;
illimity acts based on values of honesty and integrity, and in line with its own policies and• responsibility:internal values, aware that correct tax management has a significant impact on the economic and social
development of the country;

illimity adopts a transparent approach and the utmost cooperation in managing its own• transparency:
information and in relations with stakeholders, including the tax authorities.
These principles are adopted with an approach inspired by the following drivers:of operational-related tax risks, related to the correct and prompt payment of taxes and• prevention
fulfilment of related obligations;of interpretation-related tax risks, arising from uncertainty as to the actual spirit and letter of• prevention
the law and qualification of concrete circumstances;to adopt aggressive tax planning: illimity does not carry out operations or activities with the sole
• refusal
or chief purpose of obtaining tax savings and does not recommend customers purchase products orenter into transactions for such a purpose;

to use tax structures that lack commercial substance: illimity does not subscribe evasive or• refusal
fictitious structures aimed at evading tax regulations or to hide the beneficial owner of the transactions;to subscribe transactions, which may involve the Group at international level, at market• commitment
values or aimed at the correct management of transfer pricing regulations, to avoid double taxation.
These principles and drivers are applicable to tax management not only as concerns illimity in a capacity
as “taxpayer”, but also as concerns its obligations as “intermediary” (FATCA, CRS, DAC 6, tax monitoring).
The illimity Group, operating exclusively in Italy, pays all taxes in Italy and the bank knowingly fulfills all
regulatory obligations, contributing to the country’s economic development.

Engagement with the financial community
In its four years of operations, illimity has demonstrated its ability to communicate with and meet theincreasing expectations of the financial community. Taking informed decisions that result in responsible
investments and loans requires profound knowledge of sustainability best practices at international level,
awareness of the needs of shareholders and the market, and the ability to deal with increasingly challenging
requirements from ESG rating agencies.
During 2022, illimity participated in a series of one-to-one and one-to-few meetings, dialoguing with its
institutional investors, in view of corporate events including the Shareholders’ Meeting and the Italian
Sustainability Week organized by Borsa Italiana. These meetings demonstrated the gradual alignment withthe market’s expectations on environmental, social and good governance issues, and both parties benefited
from an ongoing, transparent dialogue aimed at identifying the internal and external priorities of the Group.
In addition to the engagement activities and direct feedback from shareholders, illimity periodically maps its
socially responsible investors, analysing not only their level of commitment to international frameworks ortheir responsible investment policies, but also the strategies31 implemented in making investment decisions.
The attention of illimity’s institutional investors is demonstrated by the fact that almost all of the free float
identified by illimity is held by shareholders that integrate ESG factors into their investment policies (SRI).
31

The reference framework is the Eurosif classification scheme for responsible investments: https://www.eurosif.org/wp-content/uploads/2022/07/FINALWhite-Paper-Eurosif-Classification.pdf.

96

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

APPENDIXGRI Content Index

This awareness is confirmed by the 2023-2025 Sustainability Plan, with which the Group continues its
commitment to reaching the quali-quantitative objectives that fulfil the requests of its stakeholders.
As proof of this, after only four years of operation, illimity has gradually obtained significant results, also
recognised by the opinions of ESG rating agencies, through ratings in line with the best market players, suchas, for example, obtaining an “A” rating from MSCI, which upgraded illimity’s sustainability performanceby three notches, recognising its leadership in the area of corporate governance. Another important result
was that obtained with Standard Ethics, which upgraded illimity’s rating to "EE-", deeming the Bank alignedwith the indications of the UN, OECD and the European Union, while Sustainalytics improved its rating,lowering the Group’s exposure to material ESG risks from “High” to “Low”. Lastly, one of the latest upgradesin the score regarding climate-environment issues was the upgrade to “B” in the CDP questionnaire.
This recognition highlights illimity’s ESG Investment Case, whose main points are set out in the ESG Investor
Presentation published on the company website.
For further details:

For further details:

Policy to Manage Dialogue

ESG Investor Presentation

ESG scores and indices
The Bank is constantly interacting with institutional investors and ESG ratings agencies to ensure thatenvironmental, social and governance issues are dealt with appropriately, in line with its commitment
to providing the market with the utmost transparency.
2022

2021

A

B

E: 3 S:1 G: 1

E: 4 S: 3 G: 5

SUSTAINALYTICS
Scale from 40+ (Worst – High Risk) to 0 (Best – Negl. Risk)

15.6

35.4

S&P Global
Scale from 0 (Worst) to 100 (Best)

49

12

CDP
Scale from F (Worst) to A (Best)B

C

Standard Ethics
Scale from F (Worst) to EEE (Best)

EE-

E

Integrated Governance Index (IGI)
Scale from 0 (Worst) to 100 (Best)

60.55

49.5

Refinitiv
Scale from D- (Worst) to A+ (Best)B

D+

D-Rating
Scale from B+ (Worst) to A (Best)

BBB+

N/A

OPEN-ES
Scale from 0 (Worst) to 100 (Best)

85

N/A

MSCI
Scale from CCC (laggard) to AAA (leader)
ISS ESG
Scale from 5 (Worst) to 1 (Best)

illimity • 2022 Sustainability Report97

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

09. The central role of SME
and retail customers
Support for SMEs
illimity was set up with the aim of focussing on the huge need for credit for SMEs with growth potential,that require specialist support in managing their development plans, and for businesses with problems
that if adequately supported, can achieve their hoped-for recovery.

Credit, restructuring and relaunch
The Growth Credit Division targets those high-potential businesses with a suboptimal financial structure
and/or with a low or no rating. These are companies that, more than others, struggle to fund themselves
and which the Bank chooses to support after careful analysis that combines the financial and industrial
expertise of Tutors and teams with considerable knowledge of the lending sector. Thanks to this mix, illimity
guides SMEs in a development, restructuring and relaunch process, with consequent impacts and social
effects, such as protecting jobs and producing value for the local business context.
The Growth Credit Division’s funding portfolio targets the mid-corporate segment (businesses with aturnover between EUR 30 and 300 million), which represent the foundations of Italy’s production system.
50% of volumes are represented by companies or groups with fewer than 250 employees and/or less than
EUR 50 million in turnover, and the other half by structures companies that fall within the EU definition of“large” companies. The Bank’s activities with the Large Corporate segment are entirely residual, but there
are important effects on side industries, often comprising numerous small and medium-sized enterprises,in addition to a broad base of micro-businesses.
Because of these positive effects on side industries, reverse factoring operations are particularly important.
Thanks to a large customer that has a good credit rating in the banking system, the supply chain, which may
also consist of small and very small businesses, can access financing, that would otherwise have difficultyin finding the financial resources they need or could only do so, under crippling economic conditions.
The Growth Credit Division’s portfolio almost exclusively comprises Italian counterparties and,considering the geographic location of the average Italian business, with a greater concentration in central
and northern parts of Italy, over one-half of the portfolio concerns businesses with their registered officein the regions of Lombardy (39%), Veneto (10%) and Emilia-Romagna (9%). In fact, many companies withfinancing have their production sites in different regions of Italy (in addition to foreign branches in a numberof cases), producing wealth and creating jobs in the various areas where they are located.

Capital financial services for SMEs
Through the Investment Banking Division, illimity acts as a partner for companies, financial companies andpublic institutions, capable of structuring market and private operations to meet their needs for capital, debt
and strategic growth, not only through IPOs, bond issues and securitisations, but also through consultancy
on operations such as mergers, demergers, incorporations, acquisitions and corporate restructures.
The main solutions offered by the Division regard:
Capital Markets: solutions for access to capital markets, personalised for SMEs and mid-caps that intend
to pursue a process of organic and non-organic growth and optimise their financial structures. As Global
Coordinator, illimity also assists companies in structuring listing operations and, as Euronext Growth
Advisor, assists companies that intent to be listed on the Euronext Growth Milan market.

98

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Corporate Solutions: investments in the (primary and secondary) markets of corporate bonds and alternative
debt to support companies and finance their current operations and growth, guaranteeing quick execution
and time-to-market. Due to synergies with the Growth Credit, Distressed Credit and b-ilty Divisions, illimity
offers customers a wide range of hedging solutions, providing them with the necessary instruments to
reduce and limit the risks linked to their operations.
Structuring and Alternative Finance: efficient structured financing solutions that require extensive
financial specialisation and expertise to achieve the objectives of diversifying funding sources, improving
companies’ financial positions and optimising the capital absorption of our customers. illimity operates as
an Arranger and Lead Manager in structurings and placements on the market of securitisations, basket
bonds and alternative debt operations.

illimity NOVAS
illimity NOVAS, the Bank's first Equity Conference, was the event at which companies and investors
had the opportunity to meet, discuss and share information.
At this event, the Capital Markets Team of illimity’s Investment Banking Division promoted theincredible progress made in the target segment in just over a year. During illimity NOVAS, eight
corporate customers were able to meet, in person, the most important Italian and foreign fundmanagers specialising in MicroCaps. Through group and one-to-one meetings companies presented
their latest performance data. Specifically, illimity’s first Equity Conference had 80 participants, 40
investors and 52 meetings.

b-ilty: the 100% digital offering for SMEs
b-ilty is the first digital banking offering developed based on listening to the needs of small and mediumsized enterprises making EUR 2 million to EUR 10 million, offering them what they really need for the growthof their activities.
b-ilty was created with the aim of making life easier for entrepreneurs thanks to a latest-generation platformthat combines specialist expertise with cutting-edge technology and offers customers the products andservices of an all-round bank, immediately and naturally, as only the most evolved user experience canguarantee.
For this reason, the design of the platform was inspired by the most common models of digital solutions, tointroduce for the first time ever relational and interactional models typically used on non-financial platforms
to the world of loans and banking services.
b-ilty stands out due to several main characteristics:
b-ilty is comprehensive. It provides entrepreneurs with a complete range of banking products and services:from current accounts to loans, from debit and credit cards to POS. All of this to ensure that companies
choose the products and services most suited to their businesses and their various needs.
b-ilty is digital. It has an intuitive, fast, internal digital platform, conceived with entrepreneurs for

illimity • 2022 Sustainability Report99PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

entrepreneurs, with the aim of making the management of daily company operations simpler. It incorporates,in a single ecosystem, bank transactions, integrating the most cutting-edge tools to support the growthof customers with solutions that meet the needs of the individual company and various goods sectors.
Entrepreneurs can operate and manage all their request internally online, without the need for hard copy
documentation and without the need to go to the branch or depend on other’s working hours.
b-ilty is human. In addition to its digital nature, b-ilty is also made up of people. The team of RelationshipManagers, sector expert professionals, support b-ilty customers to assist them in the growth of theircompanies: a contact person with a name and surname, to guarantee a simple, immediate and long-lasting
relationship with the Bank. In the event of operational needs, a professional call centre - Smart Care - isalways available, 7 days a week.

During 2022, the b-ilty Internet Banking platform added numerous functionalities to simplify entrepreneurs’
lives:

Management. To provide unlimited access to the internet banking platform to the key figures of• Profilethe company, such as the CFO or Directors, but also to partners such as the certified public accountant,making it easy for entrepreneurs to choose which roles and powers these parties can operate with;connect. To connect various current accounts, including those opened with other banks, and• illimity
keep them under control in a single internet banking platform;
analyses. To see the company’s financial situation, always up-to-date, in charts and a• Aggregateddashboard, displaying cash flows and the movements in all connected accounts.
In addition to quick, flexible credit solutions designed for the liquidity needs of SMEs, at the end of 2022,
the b-ilty offering added new services, with the goal of supporting companies in the crucial process ofdigitisation or green transition. We launched b-green, the package designed for companies that intend to
implement sustainable projects (e.g. Installing photovoltaic panels or increasing energy efficiency of plants)
and b-innovative, for investing in the digitisation of business activities and company operations.
The offering also added Cerca il Bando, a service offered in partnership with Cerved, which identifies
tenders available in Italy for the company, assigning to a consultant of the partner the entire process,support in preparing the documents for the tender request and assistance in the phase of administrative
management and final reporting.
With regard to credit processes, at the end of the first year of operations, the parallel run phase of thecredit engine was successfully completed, which made it possible to fine-tune the tool’s credit assessment
logics. The completion of the beta-phase resulted in the definition and implementation of the new credit
process in December: this means that right from the initial months of 2023, loan applications are assessedin an automated manner based on a set of qualitative and quantitative parameters (including the company’s
economic-financial performance indicators, credit, financial statement and risk KPIs) and a forward-looking
assessment to evaluate the sustainability of the loan. Thanks to this innovative tool, b-ilty will significantly
reduce the activities required for approving an application and, as a result, the time needed to disburseloans, guaranteeing the scalability necessary and functional to the increased volume of disbursements
expected in 2023.

Responsibility to distressed credit customers
The Distressed Credit Division is one of the leading Italian operators specialised in distressed corporate
credit. This Division deals with the purchase of non-performing credit, financing for third-party investors
that purchase NPLs and, through the ARECneprix (formerly neprix) servicing platform, the management
and valuation of distressed credit, up to the sale of property and securities, also on behalf of third parties.
The Division is committed to supporting entrepreneurs in difficulty, by engaging in a constructive dialogue
to remedy their position and return to the market. The Division manages activities professionally, identifying
targeted actions and entering into out-of-court agreements to accelerate settlement times, to the mutual
satisfaction of parties concerned.

100

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Additional indicators32

2022

2021

2020

Collaborative Agreement Index
Ratio of the number of positions closed through out-of-court proceedings to
the total of positions successfully closed by the illimity Group33.

77.9%

85.5%

86.5%

5 months

13 months

10 months

Time to solve
Average time recorded to solve out-of-court proceedings34.

The Collaborative Agreement Index and Time To Solve indicator show the attention paid to finalising
out-of-court agreements, which make it possible to accelerate settlement times, and contribute to theentrepreneur’s recovery. The average period for settling out-of-court proceedings decreased due to the
optimisation of the processes of the Distressed Credit Division during 2022, compared to 2021.

BELIEVE“BELIEVE - Giving Credit To The Future” is the first event of illimity regarding the world of credit,
to encourage dialogue between finance and entrepreneurs and facilitate access to credit for SMEs.
Open dialogue to create new solutions and collaborations, to discover the stories of entrepreneurs
with a view towards growth and transformation. A door into a world looking to the future, today.
The objectives was to construct a virtuous ecosystem that facilitates SMEs’ access to credit and to
the tools that the financial sector can offer. Through the testimony of entrepreneurs, senior managers,
opinion leaders and sector experts, the impact of the current situation on companies was analysed,
as well as possible actions to support their recovery. During the event, significant space was given to
the case history of innovation in the Real Estate sector as well as cases of the redevelopment of large
buildings in disuse and the restructuring of buildings under stress in the Energy sector.
Moreover, during the event, the research fostered by illimity and carried out by McKinsey &Company, which explored the megatrends that will drive the evolution of Real Estate as well as thetransformation of companies' business models, was presented. This research was followed by roundtable discussions that involved experts in the reference sectors and presented testimonials fromtwo companies, Nespoli and Fintyre, which told their stories of transformation and relaunch, madepossible with the support of the Growth Credit Division and illimity SGR.

QuimmoIn the distressed corporate credit sector (UTP and NPL), the illimity Group has made waves through its endto-end operating model unique in its nature, which also includes remarketing of assets.
With Quimmo, the Group also entered the “free” real estate market, an extremely large market (over EUR
100 billion in transactions annually), with a business model capable of covering all the phases of the value
chain typical of property brokerage, from the initial online marketing phases up to the completion of thetransactions.
On 5 April 2022, illimity launched Quimmo, the Italian prop-tech created to meet the needs of both private
and institutional buyers and sellers. A cutting-edge platform created to simplify the purchase and sale ofproperties and cover the entire value chain.

32
33
34

The analysis perimeter comprises cases obtained in the two years prior to when the NFS was published.
Excluding positions that were closed.
I.e. the difference between onboarding data (credit information uploaded to the system), and definition data (following the receipt of the last amountagreed in plans with several instalments).

illimity • 2022 Sustainability Report101PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Quimmo brings together, in one single place, everything that is needed to buy and sell a property,
reassembling the fragmentation of the numerous estate agents, portals and services into a single platform,
which can provide the visibility of the large portals, the assistance from estate agents and digital buying andselling processes led by the data.
The platform also includes, in a single interface, value-added services, since both the buyer and the seller
need assistance in selecting all the professional skills required when buying and selling, from technicalassistance to a network of affiliated notaries. Quimmo multiplies the possibilities because it enables accessto all properties regardless of their reference market, including the judicial market. Each seller thus has theability to interact with the single market, in which everything is actually placed for sale, not just displayed.
With Quimmo each seller can interact with each buyer, thereby eliminating distance.
Quimmo was created the illimity Group’s extensive investment in technology and its experience in thefield accumulated in property brokerage. In 2022 it generated 21.1 million visits to the portals, 221,000
registered users and almost 2,000 property transactions, also due to the 200 professionals, both central
and local structures.

Retail customer relations
Unlike traditional banks, illimitybank.com does not have branches. It acquires 80% of its new customers via
smartphone. Technological expertise is flanked however by the “human touch” of expert personnel working
at contact centres, on hand to help customers at any time, from onboarding to the operational managementof services offered.
illimitybank.com pays the utmost attention to the satisfaction of its customers, and potential customers,
proposing innovative, value products and services that meet their needs.
In compliance with internal policies and applicable legislation, illimitybank.com informs its customers in aclear, simple and transparent way, of the benefits of using the products and services the Bank offers, andof how to behave to ensure the safety of their own data and credentials.
All messages that illimitybank.com sends to its customers are in a direct and easy-to-understandlanguage. The messages are simple and clear, because they are intended for everyone, informing about
and explaining financial concepts easily and immediately.
Commercial communication is overseen by an internal process and aligned with applicable regulations.
Controls are in place for each type of communication, overseen by those who produce the content, andby the compliance and legal departments and all structures concerned, that guarantee compliance withregulations on transparency and consumer protection.
In terms of channels, illimitybank communicates with its customers through email marketing campaigns,
push messages, text messages and cards in the user’s Private Banking Area on internet banking.

Clarity and transparency
GRI 417-1

The Group promotes an integrated corporate approach, based on mutual & early cooperation between
operating, business and control functions, from the initial creation of all new products and services,
enabling the compliance by design principle at all company levels. This principle guides and guarantees acorrect configuration of commercial processes and related procedures that supplement the Bank’s andsubsidiaries’ offering, related commercial channels as well as the customer communication and relations
model.
The compliance by design principle translates into the prior involvement of the Chief Compliance & AFC
Officer in all new company initiatives, in order to guarantee conformity to regulations applicable to products
and services, processes and procedures, IT tools and solutions (internal and for customer use) as well as
contractual/precontractual or other types of documents. This prior involvement is designed to ensure theprompt management of significant compliance issues, from the initial stages of product or service creation,
up to approval and subsequent launch on the market.

102

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

In this context, the Group pays considerable attention to guaranteeing transparent relations withstakeholders, also through the dissemination of information that is complete, accurate and comprehensible,
enabling readers to always make informed decisions regarding the relations they have with the Bank andits subsidiaries.
Products and services that are “genetically” in line with transparency requirements help customers
understand their characteristics and how they work, making them aware of the purposes of the Bank
processing their personal data and enabling them to make informed choices, also to the benefit of the Bank.
To this end, the careful representation of the conditions of products and services offered to customers in
all precontractual documentation (information sheets on products and services, specific guides and otherinformation on conditions offered) and contractual documentation, is crucial.
Similarly, promotions and advertising messages that convey clear messages and that are not misleading
promote transparent communications and prevent any claims or disputes concerning potentially unfair
business practices, which once again is (also) a benefit for the Group.
In these activities, the business functions and the Chief Compliance & AFC Officer play an active part in
defining the contents, terms and most suitable channels to use in customer relations, during the entire
product/service life cycle. Moreover, controls and themed reviews are carried out on a regular basis tocontinually monitor the compliance of choices/solutions adopted and any changes over time (complianceby default).

GRI 417-2

GRI 417-3

During 2022, no cases of non-compliance with regulations and/or self-regulatory codes concerning theinformation and labelling of products and services were reported. Similarly, no cases of non-compliancewith regulations and/or governance codes concerning marketing communication - including advertising,promotions and sponsorships - were reported. This is also thanks to the involvement of the Chief Compliance& AFC Officer, who intercepts any anomalies in time and corrects them.

The frequency and contact channels chosen by customers
The Group targeted interest notices to its customers, based on consent for privacy and commercial purposes
given by data subjects, through a system of rules (Contact Policy) defined for each contact channel andaccording to how customer relations evolve.
With this approach, notices are customised, to respect the contact channels and frequency selected bycustomers, and it is possible to send information useful for actual customer needs. The choice of contact
channel and frequency is up to the individual customer and may be changed or withdrawn at any time, fromthe dedicated section of the Bank’s official websites (home banking), and subsidiaries’ websites, if relevant(online auction portals).

The importance of knowing how to listen: the human touchThanks to the continual monitoring of opinions and comments left by users on social channels, community
management activities on proprietary channels and Smart Care activities, illimitybank.com can provide
personalised, one-to-one assistance based on each customer’s needs.
Through its Smart Care services, illimitybank.com gathers requests from all channels made available tocustomers: free phone numbers, email, chat and social networks. The service, available from Mondays to
Fridays, from 9:00 a.m. to 9:00 p.m., and Saturdays and Sundays from 9:00 a.m. to 6:00 p.m., offers an
extremely flexible choice of service, enabling customers and prospects to choose the channel most in linewith their needs.
Different types of requests (commercial and technical) are managed during onboarding and in the aftersales stage by two teams: the first that collects all requests, managing the information, sending morestructured cases to the second level team, where necessary. The technologies used also allow for “get toknow your customer”, steering them towards the most adequate support for their needs, improving service
times and customer relations.

illimity • 2022 Sustainability Report103PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
Governance

INNOVATION

Materiality
Analysis

A cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

In 2022, a service level35 (capacity to respond to calls) of 98% was recorded (as in 2021), and a service levelwith replies within 30 seconds of 87% (91% in 2021).
By using evolved sentiment analysis tools, illimitybank.com can also listen to and continually analyse userconversations on the brand and related offering. This enables a strategic approach to anticipating customer
needs and greater precision in intercepting any critical aspects that may harm the Group’s reputation.
In concrete terms, thanks to these tools, the illimity Group was able to achieve, internally andexternally, a Net Sentiment Score (NSS), which enables it to understand the “health conditions”
of the brand in real time, which came to 26.1% at December 2022 (28% in 2021), as well as acustomer satisfaction rating, based on the level of recommendation indicated (NPS – Net Promoter
Score36). During 2022, illimity reconfirmed the excellent level of satisfaction and recommendationof its retail customers, with an NPS of 43, a score substantially in line with the previous years.
This value once again consolidated ilimity’s position as market leader, with a + 5pts edge over the second
player and far above the average for the banking sector (equal to 6).
illimity customer satisfaction was additionally confirmed in various key areas, such as innovation (NPS = 41),
ability to listen (NPS = 23) and clear, transparent communication (NPS = 37). On these issues, the excellent
levels achieved by the brand, both in absolute terms and compared to the average of the Italian banking
market were confirmed.

Net Promoters Score37

2022

2021

2020

illimitybank illimitybank
vs market
averageillimitybank illimitybank
vs market
averageillimitybank illimitybank
vs market
average

Net Promoters Score

43 pts+37 pts

46 pts+43 pts

40 pts+36 pts

Innovation

41 pts+46 pts

Ability to listen

23 pts+39 pts

47 pts+52 pts

45 pts+49 pts

20 pts+38 pts

17 pts+33 pts

Clear, transparent communication

37 pts+48 pts

34 pts+45 pts

31 pts+41 pts

Vai Oltre la Forma (Beyond Form), the community that gives customers a voice
With over 50 surveys conducted in 2022 and almost 15,000 replies collected during the year, the “Vai Oltre
la Forma” community has been confirmed, yet again, as a fundamental space for innovation, engagement
and improving the experience of illimity customers. Almost 400 new ideas were collected during the year,
which made it possible to state emerging needs, identify new market trends and explore new solutions at
technological level and also from the product offering.
In fact, the community has become an open, shared place, where more than 49,000 participants –customers and prospects – can find the space to express and share their points of view and experience
with other users. In 2022, users shared more than 700 photos and videos through the Community Gallery.
Through surveys, interviews, workshops and focus groups, communiters are given a voice and a direct
listening channel, to continue to create a Bank that is centred around customers’ current and potential
needs. The activities launched are also a way for people to get to know about institutional events andpromotions of illimity.

35
36
37

Ratio between number of calls managed and incoming calls.
Identifying the NPS from the question: “How likely is it that you would recommend this brand to a friend?”. The answers, on a scale from 0 – 10, make itpossible to classify respondents as promoters (a rating of 9 – 10), neutral (a rating of 7 – 8) and detractors (a rating of 0 – 6). The KPI indicator is given by
the difference between the number of promoters and number of detractors of a brand, and is represented by an index that can range from -100 to +100.
illimity processing of DOXA data – Data from FY 2022 (for illimity, interviews conducted on the customer base as of 31/12/2022), FY 2021 and FY 2020.

104

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDS

illimity • 2022 Sustainability Report

APPENDIXGRI Content Index

105

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

10. Value chain andbusiness relationships
The ecosystem of partnerships
illimity works on a continual basis to create an ecosystem of partnerships that ensures an extensive offer
of integrated, comprehensive solutions for customers. The choice of partner is guided by numerous factors,
including the objective to innovate, streamline complicated factors, give value to end customer and startfrom their needs, not from the product.
By following these drivers, illimity selects and works with the best partners in the Italian and internationallandscape, who share the same principles and values of competency, innovation and cooperation.
Since it was founded, and thanks to its partnership with Microsoft, based on a shared vocation andapproach focussed on speed and scalability, illimity has a complete in cloud infrastructure, exploiting
functionalities that range from infrastructural aspects to the productivity of people and work teams, up toprocess management.
illimity uses the core banking system of Centrico, a Sella Group company providing specialist services tobanks, fintech and financial operators.
The shared sentiment and partnership with Fabrik has been in place since the inception of illimitybank.com.
Fabrick was singled out as the ideal partner to enable illimity to be created with an “open by design” approach- an infrastructure capable of combining banking applications and services with fintech solutions.
The partnership also made it possible to give illimity customers a Personal Financial Management (PFM)
tool to have all information about their spending, to categorise and analyse how they spend and how they
can better manage their finances, alongside Account Aggregation (AIS) and the Payment Initiation Service(PIS) to link up accounts held at other banks when in the illimity app, and manage payments from them,without having to quit the app. An Open Banking approach that Fabrick and illimity are evolving together,day after day.
Through the potential of open banking, the partnership with Azimut has made it possible to add a fully
digital, paperless banking product to this partner's offering. Azimut consultants' customers have access to
exclusive products to meet their requirements, being able to view the complete situation of the products
and services provided by Azimut and illimity in a single App.
Since May 2019, the partnership with Raisin, the open banking platform that gives EU customers the chanceto access the deposit products of nearly one hundred European banking partners and compare and selectthe best offers to suit their needs, has made it possible to look beyond national borders, diversifying funding
channels and making illimity’s deposit accounts available to Raisin customers in Germany.
Since November 2019, with the launch of the partnership with Santander Consumer Bank, has been
integrated to the offer of products and services of illimitybank.com the possibility for customers to access
Santander Consumer Bank personal loans in just a few minutes. In fact, customers can opt for the solutionthat best meets their needs, using an integrated home banking simulator of illimitybank.com, which allows
them to choose the loan duration and make an online loan applications in just a few minutes.
With an open business logic, illimity gives it customers the chance to convert their expenditure projects
into Amazon.it gift vouchers, with a fully digital API-integrated process, and an additional benefit of 1%, in
addition to the rate of 0.5% offered by illimity to customers for their savings projects.
Since 2020 illimity, has expanded its customer offering to include the cards of American Express, a worldwide
leader in the payments sector and main company issuing credit cards for purchase volumes, operating througha network that can manage millions of commercial transactions the world over, day in, day out.
Credit and debit cards, that can be used for online purchases, have been developed with Nexi, so that
customers can make secure payments, anywhere. This is possible because illimitybank.com has beencreated based on evolved protocols, with the support of the open banking platform, Fabrick.

106

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

In addition, the partnership with the MIP Milan Polytechnic Graduate School of Business has resulted in
the first Master’s Course, dedicated to credit management as part of the illimity academy.
Lastly, during the year, b-ilty continued to gradually enrich is range of offerings, activating numerous
partnerships. In the insurance field, partnerships were activated with Helvetia Vita S.p.a. and Italiana
Assicurazioni S.p.a. Due to the partnership with Italiana Assicurazioni, customers are offered various
solutions to protect their businesses’ assets and activities. Due to the partnership with Helvetia, thepossibility of entering into a CPI (Credit Protection Insurance) policy is offered. The placement of CPI
policies has been active since the second quarter.
To support daily operational needs, two partnerships were launched with Zucchetti and Microsoft to assist
businesses in their digitalisation processes. Due to the partnership with Zucchetti, SMEs can benefit from
special economic terms and conditions for Zucchetti applications (e.g credit intelligence service, company
check-ups for economic-financial monitoring of companies). Due to the partnership with Microsoft andIWG (a Microsoft Golden Partner specialising in solutions for SMEs), companies that are customers of
b-ilty can use Microsoft products and the digital and consulting services of IWG to support their digitaltransformation processes.
In the area of sustainability, the partnership with ENI continued. Through the Open-es platform, it supports
companies in sustainable development, first assessing their ESG score and then providing assistance in theprocesses of improvement and growth in their sustainability performance. To date, illimity is the first bankon board Open-es.
In the third quarter, b-ilty’s offering expanded to include solutions for digital collection, strengthening thepartnership with Nexi. As a result, customers can directly request online the POS most suited to theirneeds, choosing from among the best solutions on the market.
Lastly, in terms of training, illimity continued to participate in Accelera con Amazon, an initiative that
supports the development of digital skills of SMEs for online sales and success in the world of e-commerce,
through webinars with experts in the digital and financial sectors.

Responsible supply chain management
GRI 2-6

In supply chain management, the illimity Group acts responsibly, with the final goal of minimising its
indirect environmental and social impacts and favouring, as much as possible, responsible managementof its operations, of suppliers and of the initiatives in which it participates. The entire procurement process
is regulated by the “Expenditure Procedure”, as well as the Sustainable Supply Chain Policy of the illimity
Group, approved in June 2022.
The Spend & Procurement Management Area, which is responsible for the process, guarantees that managementof the procurement chain is in line with criteria of transparency and objectivity. It manages the flow, starting fromthe product purchase requests made by requesting units, and carries out required quality checks, assisting
the requesting units in supplier sourcing, and in the planning and management of RFQ (Request for Quotation)and tender procedures. Moreover, as the main player in supplier governance activities, this Area oversees aperimeter of action that includes the supplier qualification process, management of commercial relations, related
negotiations, management of tenders and, in general, of the phase of purchasing goods and services.
Besides the Spend & Procurement Management Area, the following structures are involved in the expenditureprocess:
General Counsel: for legal opinions on contracts and documentation shared with suppliers;
Chief Compliance & AFC Officer: with reference to anti-money laundering legislation, privacy regulationsand Legislative Decree 231/2001, Outsourcing and Related Parties;
Administration, Accounting & Control: for controls on accounting, and invoice registration and payments;
Strategy & Planning: for controls on the scale and consistency of budget items for expenditure allocations;
IR & Sustainability: to favour the development of supply chain management processes that increase
and improve the Group’s levels of sustainability and periodically monitor the levels of indirect emissions
relating to suppliers (Scope 3) based on the principles of proportionality and materiality.

•
•
•
•
•

illimity • 2022 Sustainability Report107

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Suppliers are an integral part of the Bank’s organisational process and must therefore be selected so as
to offer the highest guarantees possible (service reliability, technical/sector expertise, etc.). The Group
undertakes to select suppliers and partners based on clear, transparent criteria, considering professional
quality and adequate service levels, reputation, reliability and observance of rules, human rights andworkers’ rights, also requiring high ethical, environmental and social standards. Through its suppliers, theGroup also promotes the principles sanctioned by the (UN) Universal Declaration of Human Rights, the ILO
Declaration on Fundamental Principles and Rights at Work and the Principles of the UN Global Compact,which the Group endorses.
Apart from exceptions due to size, the specific nature of the supply and non-strategic profile of the supplier,
new suppliers are evaluated based on the following evaluation criteria:• the absence of exclusion clauses (convictions or the adoption of penalties);
absence of convictions or the adoption of penalties, also which are not final, for one or more of the• thecrimes contemplated in Articles 648 of the criminal code, 648-bis, 648-ter and 648-ter1;• not having been declared bankrupt, or subject to creditor arrangements under bankruptcy law;
• registration with the Chamber of Commerce;• international certification on quality, the environment and anti-corruption;statement of compliance with obligations of Legislative Decree 81/08 on occupational health and• asafety;
use of collective bargaining agreements made with trade union organisations which are comparatively• themore representative, for employees;• the absence of significant conflicts of interest;• compliance with the technical product/service specifications requested.
Moreover, in the qualification process configured based on the Expenditure Procedure, as well as based onthat set out in the Sustainable Supply Chain Policy, suppliers must:• subscribe illimity Way (the Code of Ethics and Conduct of the Group);• read the Sustainable Supply Chain Policy;• submit their Single Insurance Contribution Payment Certificate (DURC);
if available, that they hold international certifications on quality, the environment and anti• demonstrate,
corruption (ISO 9001, ISO 14001, ISO 18001/45001, ISO 27001 and ISO 37001).

The supplier evaluation process may also comprise other criteria, including: past data, access to information
databases, direct visits or meetings with the supplier, evaluation of the product/service, evaluation by third
parties or the market or notification by the organisational structures.
It is also noted that during 2022, the illimity Group supplemented the services offered by ABC - Procurement& Cost Management, a non-profit Consortium with a Vendor Management portal for the management of
supplier qualification and monitoring, which the Group signed up for in 2021. The Portal can be used toconfigure and manage the supplier qualification process in compliance with internal and external regulations,making it possible to mitigate economic and reputational risks arising from supplier relations. This portal
can also be used to administer an ESG questionnaire to suppliers, described in detail in the section below.
During 2022, with over 3,000 Purchase Orders, the illimity Bank Spend & Procurement Management Area
managed approximately 500 habitual suppliers.
The main goods’ sectors were:• Information and Communication Technology (ICT);• Consulting;• Legal expenses and due diligence expenses;• Facility and security costs;• Personnel expenses (rewards, policies);• Advertising, marketing and entertainment.
108

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

The ESG assessment of illimity’s supply chain
The illimity Group believes that environmental sustainability, social responsibility and good governance(ESG) are key elements to be taken into consideration during supplier selection and management.
In that regard, as previously mentioned, a customised policy has been drawn up (Sustainable Supply Chain
Policy) to introduce, from time to time and in line with the characteristics of the illimity Group’s businessmodel, best practices for the sustainability of the supply chain.
As part of tender procedures for the procurement of supplies within its assessment process, the Group is also
committed to taking into consideration the information and data regarding the environmental sustainability
and governance of the suppliers taking part in the tenders. Promoting the use of supplies that respect theenvironment, the Bank gives preference, all things being equal, to suppliers that possess guarantees on thesustainable management of their activities.
During 2022, the illimity Group conducted an ESG analysis of its suppliers, with the dual aim of identifying,according to the principles of proportionality and materiality, the commitment to ESG factors and theindirect environmental impact generated by the supply chain.
In that regard, the Bank launched an analysis aimed at assigning an ESG score to its suppliers, using aquestionnaire administered through the portal of Consorzio ABC. The areas analysed in the questionnaireare:• Corporate Governance;• Environment;• Correct Management Practices;• Working relationships and conditions;• Human Rights;• Community engagement and development;• Aspects regarding consumers.

After processing the responses received, along with the information collected using infoproviders, eachsupplier is assigned an ESG score, also calibrated based on the classification of the supplier’s size.
In order to measure impacts in terms of emissions of the supply chain, data is collected (through thequestionnaire of Consorzio ABC or through external infoproviders) on suppliers’ Scope 1 and Scope 2
emissions. That data, combined with the expenditure volumes of the Bank, are used to calculate Scope 3
emissions, Category 1 - Purchased Goods and Services38.
At the end 2022, around 280 suppliers were qualified. All the most significant suppliers of the Bank
(exceeding the materiality threshold) were also subject to ESG assessments. These suppliers account foraround 45% of the Group's expenditure.
Moreover, it was found that a large part of the Group’s commitment to expenditure was concentrated on
suppliers with Medium-High ESG scores, meaning ESG-conscious suppliers.
For further details:

Sustainable Supply Chain Policy38

For more details, see GRI 305-3 in Chapter 13 “Environmental impacts and climate challenges”.

illimity • 2022 Sustainability Report109Costa Edutainment
A company that teaches using fun,through edutainment

Frame the cover photo to watch the video"The Story of Costa Edutainment” using the ARIA App

Find out more:

illimity, Costa Edutainment

Planetand society

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

11. Sustainable finance
Since its foundation, the illimity Group has paid considerable attention to investment choices, very carefully
evaluating the capacities of counterparties to generate adequate cash flows to meet financial commitments,
but also analysing their reputational, transparency and fairness profiles as well as environmental andsocial sustainability aspects. Prior analysis and collecting necessary information from several (internaland external) sources about the background and changes, also concerning conduct, of the counterparty isfundamental for starting and continuing relations.

Integrating environmental and social factors into
investment opportunities
During 2022, illimity described, in a more granular way, the economic sectors excluded from its investments.
Considering the UN Guiding Principles on Business and Human Rights, and in line with the strategic
guidance of the Bank and guidelines set out in credit strategies, the Growth Credit, Distressed Credit andb-ilty Divisions, excluding portfolios and individual positions managed with a view to being a gone concern,
do not grant loans to counterparties belonging to some sectors.
For example, in general, illimity does not finance:• political parties;• companies that manufacture and/or sell:- “controversial” weapons (anti-personnel mines, cluster munitions, chemical weapons and biologicalweapons);- military weapons, common firearms and/or security or defence equipment destined for non-government
entities outside of OECD countries and/or to private or state counterparties involved in violations ofembargoes;- devices, equipment or goods whose export is prohibited pursuant to the current regulations of theEuropean Union (Reg. EU 1236/2005, as amended);• companies that manufacture and/or sell tobacco;• activities linked to gambling, betting and similar activities;• activities linked to the production and distribution of pornographic materials;
that significantly worsen the environment and natural resources, including: the sector of coal
• activities
and/or oil-burning power stations; the sector of gas and oil from unconventional sources (e.g. shale gas
and tight oil, through fracking); production and/or sale of asbestos fibers and/or products containing
PCBs (polychlorinated biphenyl); manufacture of phytopharmaceuticals or other chemical products for
agriculture, limited to the activities falling within Annex I, Division 20.2 of Regulation (EC) No. 1893/2006;
production, sale and/or use of drift gillnets, known as “trawling” (passive barrier nets); production ofpalm oil without Roundtable on Sustainable Palm Oil (RSPO) certification or compliance with sector
practices promoted by the RSPO.
Instead, loans for counterparties operating in the above sectors, in cases where the Bank’s support is for
production reconversion to environmentally friendly models and/or for improving the sustainability profilesof these activities is permitted.
The phase of assessment of investment opportunities identified by the various business structures of the
Growth Credit, Distressed Credit, Investment Banking and b-ilty Divisions, which include performing loans
originated as well as those acquired on the secondary market, with the sole exception of (non-organic) loansclassified as bad loans as well as non-performing loans acquired en bloc, requires, in line with the Group’s
sustainability strategies, an assessment of the ESG factors and the associated risks relating to businesscustomers, thus pursuing the dual purpose of creating sustainable value over time, while improving theoverall management of sustainability risk for each portfolio.

112

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

During the last two years, in the larger processes relating to lending activities regulated by the Cosolidated
Credit Procedure, the Bank introduced and adopted a model for measuring company ESG risks, withspecific focus on environmental risk and on the impact on climate change, by acquiring granular informationand ESG scores of counterparties, obtained through a leading third party supplier, which is reliable on anational scale.
That information and those ESG scores are requested from the external supplier during the preliminary
analyses, based on the status of negotiations and the direct relationships with the borrowers. In the caseof assessments that are particularly negative, regarding both the overall ESG score and one or more of its
basic components (Environment, Social, Governance), the feasibility of the operation is subject to an action
plan being presented, defined and or agreed with the borrower, with the aim of adopting useful measures,in a suitable timeframe, to adequately remedy the shortcomings identified. In this case, a monitoring andreporting process will be activated regarding the implementation of the action plan and the related impacts
in terms of updating the ESG score, to be illustrated to the decision-making bodies with a frequency
proportionate to the duration of the plan.
For Growth Credit positions, the process of verifying the validity of the ESG scores is conducted by theCredit Machine Area, which checks the validity of the ESG scores when an application is submitted and by
the Business Operations & Credit Support Area (Loan Agency operating area), which ensures that the ESG
score is updated on an ongoing basis, every 12 months of its validity.
For companies with a higher ESG risk, the Bank conducts a more in-depth analysis of their actual businessmodels, the market context and the probable impact of ESG regulations on their financial position. Morespecifically, regarding the elements that the Bank considers in supplementing the assessments of thecounterparty's creditworthiness, it may decide to acquire information on:

characteristics of the economic sector the counterparty belongs to, and the consistency of current• theand forward-looking technological profiles of the company in relation to processes for the transition
towards a “low carbon economy”;• the presence and consolidation of components related to developments in the circular economy;• ISO certifications (e.g. certifying the adoption of an environmental, social management system);significant information inferred from the Non-Financial Statements of the counterparty, where• otheravailable;• potential reputational impacts connected with the significant aspects in the ESG area.
The outcome of analyses – including, if necessary, also an opinion on climate-environmental risks – andrelated supporting documentation are sent to the CLO Department and become part of the set of application
information supporting the assessments conducted by the Bank’s decision-making bodies.
Supplementing the detailed ESG assessments, due to the use of an automatic scoring method and theacquisition of granular data from an external provider, it was possible to analyse the ESG ratings of the
Italian counterparties in the illimity loan portfolio, mainly of the Growth Credit Division and a portion fromthe Distressed Credit and b-ilty Divisions, to assess the sustainability profile of the portfolio of companies
and counterparties financed, or to which the Bank is exposed.
For further details:

Cosolidated Credit Procedureillimity • 2022 Sustainability Report113

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

illimity SGR’s ESG Investment Policy
In line with the Group’s sustainability strategy, illimity SGR (also the Company) guides the investment choicesof its funds in compliance with ESG issues, with the aim, on the one hand, of generating sustainable value
over time, which also takes into account the economic, social and environmental impact that individualcompanies may have on the territory, and on the other hand, of satisfying investors’ interests, mitigating any
financial, operational and reputational risks.
In compliance with the reference legal framework, in particular Regulation (EU) 2019/2088 (theSustainable Finance Disclosure Regulation or SFDR) and Regulation EU 2020/852 (European Taxonomy
for environmentally sustainable economic activities), illimity SGR has adopted an ESG Investment Policy
aimed at defining strategic guidelines on integration of sustainability risks within investment decisions aspart of the management of Alternative Investment Funds (AIFs).
The ESG Policy applies to all AIFs set up and/or managed by the SGR according to integration procedures
and selection criteria governed in the policy, and also in compliance with the specific characteristics ofeach fund, in conformity to indications in related offering and/or contractual documentation.
In February 2023, through illimity SGR, the Group endorsed the Principles for Responsible Investment(PRI), promoted by the United Nations for the purpose of developing a more sustainable global financial
system. Through this endorsement, illimity SGR committed: (i) to incorporate environmental, social andgovernance (ESG) issues into investment analysis and decision-making processes; (ii) to be an active
owner and to incorporate ESG issues into our management policies and practices; (iii) to seek appropriate
disclosure on ESG issues by the entities in which we invest; (iv) to promote acceptance and implementationof the Principles within the investment industry; (v) to work with the PRI Secretariat and other signatories toenhance their effectiveness in implementing the Principles; and (vi) to report on our activities and progress
towards implementing the Principles, of which illimity SGR will publish, according to the PRI Reporting
Framework, on an annual basis, starting next year.
Consistent with the nature and mission of the Company and the funds it manages, and as part of theassessment of investment opportunities, sustainability risks are considered, on the one hand, meaning anenvironmental, social or governance event or condition that, if it occurs, could cause a negative material
impact on the value of the investment as defined by the SFRD, and on the other hand, ESG factors aretaken into account, meaning the criteria to select investment opportunities that promote, through specific,
documented strategies, the environmental, technological and digital transition and social inclusion.
illimity SGR intends monitoring and assessing the main issues connected with sustainability, considering
usual economic/financial data, as well as non-financial information that mainly concerns the following
components:
environmental policies, emissions of greenhouse gases, biodiversity, water and waste• Environmental:
management, impact of products/services, type of energy used, pollution levels generated, exposure
to physical and climate risks and transition risks (legal, technological, regulatory, market and conduct);human rights, workers’ rights, the impact on social communities, product safety, customer and• Social:
supplier relations, supply chain sustainability;
analysis of governance systems adopted, integration of ESG variables in company strategy,• Governance:
the composition and functioning of corporate boards, key-person risk, measures to prevent corruption,
money laundering and unfair trade practices, the risk of fraud and level of tax transparency, risk control,
the transparency and quality of disclosure to all company stakeholders.
For illimity SGR, a responsible investment strategy means incorporating ESG topics into investment decision
making process, thus achieving the dual scope of creating sustainable value over time and concurrently
improving the overall management of sustainability risks relating to each portfolio.

114

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

In compliance with the specific qualities and characteristics of the funds set up and/or managed by illimity
SGR, the principal stages of the responsible investment process comprise the following main activities:
1.

Negative screening: exclusion based on ethics/value-based, regulatory or sector criteria, based on
exposure to controversial economic activities (norm-based and controversial screening);

2.

Positive screening: inclusion based on the adoption of assessment models of the ESG profile,which awards “best in class” businesses, i.e. leaders in sustainable development, or businesses
committed to adopting virtuous sustainability paths, during the lifetime of the investment;

3.

Engagement: active dialogue with the management of investment target companies, that will
be otherwise structured depending on the oversight and governance rights of the specific Fundconcerned and based on the specific financial instrument;

4.

Reporting and monitoring: in order to give clear, prompt and transparent communication to own
investors and stakeholders on the progressive achievement of sustainability objectives agreed on.

To achieve this strategy, illimity SGR uses tools to analyse the ESG profile of single target companies, also
relying on the support of ESG Advisors and/or ESG data providers.
illimity SGR works in an active and transparent way with its stakeholders, in order to improve the effective
adoption of responsible investment principles, undertaking to disclose its progress in integrating ESG topics in
the investment processes and in interpreting and adopting the taxonomy regulations which are still taking shape.
For further details:

illimity SGR’s ESG Investment Policy

Sustainable finance supporting businesses
Structured financelinked tosustainability

Assessmentof ESG
factors

Sustainability-linked
Loans

Investments and structured financewith mechanisms that reward
undertakings committed to processesof transition and sustainable
development

Monitoring of
the counterparty's
ESG profileand relatedrisks

Loans linked to sustainability
commitments, with measurable
targets and ESG KPIs

Origination &Monitoring

Green Loans

Ecosystem of
ESG services

Environmentally sustainablelending to finance specificactivities/projects (i.e. Renewableenergy, energy efficiency, etc.)

Services and instruments (withthird party partners) to support
SMEs in environmental and social
measurement, planning and reporting

Verificationof ESG targets
set and theuse ofproceeds

illimity • 2022 Sustainability Report115

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Structured finance and sustainability-linked loans
Sustainable Energy Basket Bond
Access to the capital market is a significant constraint for SMEs, which may make it complex for them tostart or expand suitable energy transition processes.
In order to support companies in obtaining the resources necessary to that end, in November 2021 the“Sustainable Energy Basket Bond” programme was begun, launched by ENI along with ELITE (launched by
Borsa Italiana and now part of Euronext Group), and illimity, in the role of arranger and investor, to favour
the growth and sustainable development of the supply chain.
This programme is the first innovative structured finance tool aimed at all companies, with a specific focus
on SMEs, and dedicated to the Sustainable Development Goals (SDGs). Qualifying companies can accessfinancial resources at favourable terms and conditions, according to their current and expected sustainability
profiles. For greater inclusivity, in addition to companies with a robust ESG profile, the programme has also
been opened to those companies willing to commit themselves, allocating a portion of funds collected toconcrete sustainability initiatives.
The companies qualifying for the programme, based on their fulfilling specific ESG commitments, issued
minibonds, which were included in a basket bond and placed with institutional investors, with illimity in theroles of arranger, lead manager and coinvestor.
During 2022, four issues were finalised, whose proceeds were largely allocated to investments to support
companies’ energy transitions. These minibonds were subscribed by illimity in favour of multi-utility
companies in the energy and environment sectors, and, specifically, in power plants for generating energy
from renewable sources.
Through this programme, it was possible to finance sustainable development plans of the issuer companies,
linking the terms and conditions to the commitment on various ESG goals and projects, including: (i) works
on plants to increase energy efficiency and access renewable sources, (ii) sustainable mobility or circular
economy initiatives, (iii) protection of workers’ health and safety, and (iv) development of workers’ skills.
Thus, illimity enhanced its commitment to support SMEs in their sustainable transitions.

Loans with social benefits
The Turnaround Area of the Growth Credit Division takes actions in difficult situations of customer companies,
supporting them with its specific expertise in rebalancing financial structures, assisting in the restructuring
and recovery process, with consequent, positive social/economic effects, such as safeguarding jobs andrelaunching and developing production in site areas, also in terms of side industries and local communities.
At 31/12/2022, overall investments of the Turnaround portfolio amount to €692 million, of which approximately€351 million with the specific aim of restructuring companies in economic/financial difficulty, whose
relaunch, as mentioned, also creates benefits in the social sphere.
More generally, illimity supported the liquidity needs of its customer companies in dealing with the effectsof the pandemic crisis, also using tools made available by the law, to support Italian businesses during
this delicate stage. In 2022, in line with the previous year, the lending activity of the Growth Credit Division
featured a considerable use of public guarantees, designed to enable companies to obtain financial
resources to make up for their liquidity shortcomings, remodulating the capital structure and supporting
investments necessary for relaunch and future development.
Overall, up to 2022, the Growth Credit Division provided loans secured by public guarantees for morethan EUR 1,022 million, of which more than EUR 185 million with the guarantee furnished by the Central
Guarantee Fund for SMEs, more than EUR 80 million guaranteed by the European Investment Fund andapproximately EUR 750 million from the guarantee issued by the Italian State Institute SACE.

116

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Loans with environmental benefits39
In 2022, the Growth Credit Division granted loans and credit lines to support specific projects with the aimof achieving environmental benefits, for a total of approximately EUR 40 million. Considering the amount ofthese operations in 2020 and 2021 (for nearly EUR 66 million), overall, loans with “environmental” objectives
were granted for EUR 106 million.
Specifically, in 2022 loans were concentrated primarily on the Green Transportation and Renewable andSustainable Energy segments, also due to the structuring of the Bond Basket, supporting investments andcash flow needs of companies that are on the front lines of innovation, with a significant commitment to thesustainable transition of their business models.
2022
Category

Financedamount2021%(millions ofeuros)

Financedamount2020%(millions ofeuros)

Financedamount%(millions ofeuros)

Circular economy

3.0

7.4

28.9

78.3

14.1

48.7

Green transportation

17.4

43.1

0.0

0.0

12.7

43.9

Renewable/sustainable energy

20.0

49.5

8.0

21.7

2.1

7.4

Total

40.4

100.0

36.9

100.0

28.9

100.0

In this regard, the aggregate was identified based on management criteria focussed on the purpose of
the loan, as an aspect for the disclosure of some specific initiatives generating positive returns for theenvironment, even though, in strictly regulatory terms, these loans are not classified as “environmentally
sustainable lending”, pursuant to the Guidelines on loan origination and monitoring (EBA/GL/2020/06), or
as “specialised lending” relevant to the environmental objectives outlined in EU Taxonomy (Regulation (EU)2020/852).

The new b-ilty offer
2022 saw the development and launch of b-ilty, the first offering dedicated exclusively to SMEs. A complete
range of digital financial services that are easy to use with transparent terms and conditions: a current
account, debit and credit cards, but also digital tools for collecting payments, credit to fund working capitaland investments, insurance cover products, and the services of the best partners on the market to support
entrepreneurs in developing their business.
In December 2022, the value proposition of b-ilty was further expanded with new products that focus on
initiatives to support companies in the crucial processes of green transition and digitalisation.

b-green: support to companies’ ecological transitions (Green loan)
b-green, the offer designed for companies that intent to implement sustainableprojects, which makes it possible to apply for special-purpose loans for up to EUR 2
million, with particularly favourable interest rates and structuring commissions. The
beneficiary companies can thus obtain funds to invest in targeted works, such as
installing photovoltaic panels, purchasing low-emission vehicles and their charging
stations, machinery for the smart processing of waste, and expenses for increasing
the energy efficiency of plants.

39

As regards EU taxonomy-eligible exposures, reference is made to the next chapter.

illimity • 2022 Sustainability Report117

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusionb-innovative: support to companies’ digital transitions
b-innovative, the offer that aims to assist companies in their digital development,
thereby increasing their competitiveness in their market segments. Loans dedicatedto small and medium-sized enterprises to incentivise and support investments
in innovative projects that have a positive impact in terms of sustainability (e.g.
management and mitigation of cybersecurity risks, activation of broadband services
and digital training). The loan aims to support digital transformation projects that
contribute to a positive, concrete impact on the Sustainable Development Goals set
in the UN Agenda 2030 (specifically, on Goals 8 and 9)40.

Ecosystem of ESG services: Open-es
illimity is the first Bank to join Open-es, the digital platform launched by ENI, in partnership with Boston
Consulting Group (BCG) and Google Cloud, and open to all companies to support the sustainable
development of production chains.
Open-es offers an innovative, inclusive tool, with the goal of forging an alliance of businesses committed
to involving their own value chains (suppliers, customers and stakeholders in general), in improving
sustainability performance.
Using this platform, businesses that are customers of illimity can measure their ESG performance byfilling out a questionnaire of simple questions based on international standards, to index their level ofintegration of sustainability into their business models and obtain a customized development plan to
identify the solutions to adopt to improve their process of sustainable transition.
The platform also provides specific analyses and reports for their business sectors, and a development
hub in which the businesses in the community can identify services and products useful in implementing
their Development Plans and closing the gaps founds, offered at economic terms and conditions morefavourable than the market.

Commitment in the energy and real estate sector
illimity’s Distressed Credit Division, which operates in the distressed corporate credit segment, identified
the energy sector as a specialisation area, in 2019, to create greater value compared to its competitors’
strategies. Besides the potential offered by this segment, the contribution the sector can make to sustainableenergy conversion, and thus to sustainable growth models in line with the demands of modern society andthe context and trends of sustainable finance, was also taken into consideration.
A dedicated desk was created, with professionals, not only from financial sectors, but also from energy andenvironment-related technical and legal backgrounds. The business model, initially based on the partnershipwith an industrial company, evolved at the end of 2022 with a view to the Bank's full autonomy, as it has
acquired consolidated know-how also in directly managing plants, for the purpose of recovering their fullcontribution to green production.
The desk operates through a dedicated securitisation vehicle, set up in May 2020, which to date hascompleted acquisitions for EUR 122 million.
The deployment of these resources to dedicate to the renewable energy sector reflects illimity’s commitment
to sustainability according to a business model that aims to relaunch crisis situations creating a shared,
pro-environmental value. In particular, illimity’s approach in this sector aims to forge relationships of trustwith acquired borrowers, identifying together the quickest way to remedy the causes of their financial
difficulties, and in the meantime providing necessary resources, with an agreement where the revamped
plants are sold in the shortest time possible. The sale of revamped plants makes it possible to recoverconsiderable value, remunerating illimity’s commitment, as well as to give back to the borrower a part oftheir original investment. In the meantime, returning revamped plants to the production system increases
the future environmental contribution (the residual life of plants is usually 10 years).
40 UN Agenda 2030: Goal 8. Decent work and economic growth (promote sustained, inclusive and sustainable economic growth, full and productive
employment and decent work for all); Goal 9. Industry, innovation and infrastructure (build resilient infrastructure, promote inclusive and sustainableindustrialisation and foster innovation).

118

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

In 2021, agreements were reached with 4 borrowers, which made it possible to return their credit positions
to performing status and to repossess seven photovoltaic plants, some of which were sold. In 2022 the same
goal was achieved with 6 borrowers and just as many plans, for aggregated energy generation of around 3.8
GWh of renewable energy, equal to a total of 1,002 tCO2e of emissions avoided.

Regeneration of real estate assets
illimity’s Distressed Credit Division and ARECneprix (formerly neprix) are committed to promoting thedevelopment of a sustainability culture, also when managing distressed assets. In fact, buildings and theconstruction industry are responsible for 36% of CO2 emissions in Europe and 38% at global level41, and sohave a central role in the EU’s decarbonisation goals. Requalification is an opportunity to reduce emissions,besides producing clean energy through installing photovoltaic plants. To achieve this goal, ARECneprix
real estate works closely with illimity’s energy desk, to identify real estate assets in its portfolios that canpotentially be exploited in energy terms, through the development of photovoltaic plants.
Another sector in which ARECneprix operates, also supporting fondazione illimity, is the regeneration ofassets, i.e. increasing the value of the loan underlying - often an obsolete building, an abandoned industrial
building or worksite that is not operating - through requalification that can have positive impacts on thesurrounding area.
This process may concern individual assets or even regeneration on an urban scale, as in the case of the“Vista Mar” property project, in the municipality of Albenga, where the acquisition of a loan led to a worksite
starting up again, with the aim of the urban redevelopment of an important area of the town, with planningfocused on respecting the landscape and environmental sustainability. In addition, investment in secured
portfolios (in particular lease receivables) and the subsequent replacement of the underlying property on
the market at appropriate values makes it possible to often start processes for the re-use, reconversion andregeneration of local areas which are economically sustainable, also implemented through third parties,
with positive impacts on minimising land use.

Integration of sustainability criteria in real estate evaluations
In addition to the ESG analyses, while monitoring distressed portfolios with regard to the carbon footprint(financed emissions) of exposures and their eligibility for the EU Taxonomy, on origination all the valuationsof the Distressed Credit Division, with the support of ARECneprix, are carried out in line with the International
Valuation Standards and the “Red Book” standards of RICS42 referred to in Bank of Italy Circular 28543 and in
the ECB Guidelines for banks regarding non-performing loans44.
These standards recommend that valuers pay particular attention to aspects related to sustainability(including energy efficiency, the environment and risk related to climate change, health, well-being andbusiness accountability), that have or may have an impact on the assessment of an asset. In particular,
in RICS standards, with reference to analyses of the implications on value, it is recommended, whereappropriate, to assess the extent to which the property being valued actually conform to sustainability
criteria45. The RICS Guidance Note “Sustainability and ESG in commercial property valuation and strategic
advice” - in effect since 31 January 2022 - provides relative indications, and specifically for the valuation of
non-residential assets.
As regards the screening of environmental aspects, for which leasing portfolio are analysed - with the times,
access to the assets and documentation permitting, the Distressed Credit Division supplements valuation
activities with technical due diligence that focuses, in particular for industrial assets, on environmental
conformity aspects. In addition, when taking over all repossessed leased assets and the assets of a REOCO,
outsourcers appointed to carry out the activity perform additional screening, based on document analysis
and site inspections, of potential critical aspects of property, in particular of an environmental nature.
41
42
43
44
45

European Commission, “The energy performance of buildings directive” and Global Alliance for Buildings and Construction – UNEP, “2020 Global Status
Report for Buildings and Construction”.
The Royal Institution of Chartered Surveyors (RICS) is a global professional organisation, that establishes and adopts standards for the valuation,functioning and development of various types of real estate and property.
Bank of Italy, Circular no. 285 of 17 December 2013, First Part, Title IV, Chapter 3, paragraph 2.2. Valuation of real estate guaranteeing exposures.
European Central Bank “Guidance to banks on non-performing loans (NPL)”, March 2017, Chapter 7.4 Evaluation methodology.
RICS, IVS, VPGA 8 - 2.6 Environmental issues - c) Sustainability. Analysis of implications on value. Where appropriate, it is recommended to: assess
the extent to which the evaluated property currently conforms to sustainability criteria normally used in the context of its market position and reachan informed opinion on the likelihood that this influences the relative value; this means, valuing to what extent a well-informed purchaser would takethis into account in making a decision about the price s/he is prepared to pay; provide a clear description of the characteristics of sustainability andattributes identified for the property in question, also indicating, where appropriate, factors not directly reflected in the final valuation; (...) provide advice
on the potential impact that these risks and/or benefits could have on the relative values of the property over time.

illimity • 2022 Sustainability Report119PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

12. The European taxonomyof eco-sustainable activities
EU Taxonomy Eligibility ReportingOn 18 June 2020, the European Parliament adopted Regulation (EU) 2020/852 on the establishment of aframework (“Taxonomy”) to facilitate sustainable investment, and amending Regulation (EU) 2019/2088.
The taxonomy contributes to the objectives of the European Green Deal, creating the first system for theclassification of economically sustainable activities.
Regulation (EU) 2020/852 and related commission delegated regulations establish the criteria for determining
whether an economic activity qualifies as environmentally sustainable, for the purposes of establishing theextent to which an investment is environmentally sustainable; these criteria apply:
to measures adopted by Member States or by the Union that set out requirements for financial market
participants or issuers in respect of financial products or corporate bonds that are made available asenvironmentally sustainable;
to financial market participants that make available financial products;
to undertakings which are subject to the obligation to publish a non-financial statement or a consolidated
non-financial statement.

•••

Regulation (EU) 2020/852 also defines the criteria for determining whether an economic activity canbe considered environmentally sustainable, i.e. aligned with the Taxonomy, starting with identifying 6
environmental objectives:
climate change mitigation;
climate change adaptation;
the sustainable use and protection of water and marine resources;
the transition to a circular economy;
pollution prevention and control;
the protection and restoration of biodiversity and ecosystem.

•
•
•
•
•
•

Legal framework(EU) 2020/852 and related commission delegated regulations (2021/2139 and 2021/2178);• Regulation
Commission
Regulation (EU) 2019/2088;• Directive 2013/34/EU(“NFRD”).
•
In compliance with Article 10 of the Delegated Act of Regulation (EU) 2020/852 on taxonomy, illimity
discloses the following KPIs for the related financial reporting period, from 1 January 2022 to 31 December
2023, in terms of its total assets:
the proportion of exposures to Taxonomy-eligible and Taxonomy-non-eligible in economic activities;
the proportion of exposures to central governments, central banks and supranational issuers46;
the proportion of exposures in derivatives47;
the proportion of exposures in companies not subject to the NFS obligation48;
the proportion of the trading portfolio;
the proportion of on demand interbank loans.

•
•
•
•
•
•

The EU Taxonomy Eligibility Reporting was processed at Group level with an approach coordinated between
the central function and business functions involved. The methodology to calculate quantitative KPIs is
based on the harmonised FINREP supervisory reporting data and exposures are indicated in terms of thegross carrying amount with the reporting date 31 December 2022. Referred to Annex IX to Commission
Delegated Regulation 2021/2178, quantitative KPIs are accompanied by qualitative information, to support
the disclosure of and markets’ understanding of these KPIs.

46
47
48

In compliance with Article 7, paragraph 1, of Del. Reg. 2021/2178.
In compliance with Article 7, paragraph 2, of Del. Reg. 2021/2178.
In compliance with Article 7, paragraph 3, of Del. Reg. 2021/2178, exposures to undertakings that are not obliged to publish non-financial information
pursuant to Article 19 bis or 29 bis of Directive 2013/34/EU shall be excluded from the numerator of key performance indicators of financial undertakings.

120

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

The KPIs reported herein are not comparable with those of 2021, either for the mandatory disclosure or
the voluntary disclosure, as the valuation methods applied are different and have evolved in relation toboth that set out by the EU Commissions in its clarification note only for the first year of reporting (for thevoluntary part) and the choice to exclusively apply the reference perimeter set out in the current regulations
and the EBA technical standards (also with a forward-looking view to the valuation for aligning the banking
book in subsequent years). Therefore, last year’s perimeter limits were not applied, with a view to voluntary
revision, with the resulting expansion of the denominator (Total Covered Assets), with a more or less stablenumerator year-over-year.
Voluntary Disclosure (data relating to the Group’s scope of consolidation as of 31/12/2022)
Indicator

KPIs out of
Total Assets

KPIs out of Total
Covered Assets

Taxonomy-Eligible Exposures in economic activities(undertakings subject to an NFS obligation)

3.0%

3.4%

Taxonomy Non-Eligible Exposures in economic activities(businesses subject to an NFS obligation, mortgage lending and other assets)

23.9%

27.0%

Proportion of exposures in non-trading derivatives

0.5%

0.5%

Proportion of exposures in undertakings not subject to the NFS obligation

58.7%

66.2%

Proportion of the portfolio of on demand interbank loans

2.6%

2.9%

Proportion of the trading portfolio

0.5%

Not included in
Total Covered Assets

Proportion of exposures to central governments, central banks and supranational issuers

10.8%

Excluded from the
KPIs

The proportion of Taxonomy-Eligible exposures to economic activities subject to non-financial reporting
obligations reflects illimity’s specific business model, focused on supporting high-potential businesses
and companies in complex situations. Above all, it supports small and medium-sized enterprises which, inalmost all cases, are not subject to non-financial statement obligations, and therefore, are not assessed for
eligibility. The proportion of Taxonomy-Non-Eligible exposures in economic activities includes, in addition
to those to businesses subject to non-financial reporting obligations (9.1% of Total Assets and 10.3% of Total
Covered Assets) also mortgage lending (3.1% of Total Assets and 3.5% of Total Covered Assets) and otherassets (i.e. goodwill, fixed assets, commodities, in addition to cash-related assets; equal to 11.7% of Total
Assets and 13.2% of Total Covered Assets). In order to provide greater information on Taxonomy-eligible
assets, the following information is provided on a voluntary basis.
Voluntary Disclosure (data relating to the Group’s scope of consolidation as of 31/12/2022)
Indicator
Taxonomy-Eligible Exposures in economic activities(undertakings subject to an NFS obligation and undertakings not subject to an NFS
obligation)
Taxonomy Non-Eligible Exposures in economic activities(undertakings subject to an NFS obligation and undertakings not subject to an NFS
obligation)

KPIs out of
Total Assets

KPIs out of Total
Covered Assets

15.2%

17.1%

58.8%

66.3%

On a voluntary basis, Taxonomy-eligible and non-eligible exposures are shown, referring to both companies
subject to the NFS obligation and those not subject to that obligations. Moreover, this was determined netof (i) exposures to central administrations, central banks and supranational issuers and derivatives and (ii)the trading portfolio, which are excluded from the calculation of the numerator and the denominator of
the fundamental performance indicators of financial companies and (iii) other assets (i.e. goodwill, fixed
assets), on demand interbank loans and cash/cash-related derivative instruments, as the assessment ofeligibility for those items was not provided for in the year in question (total complementing percentages:
around 26% of Total Assets and around 17% of Total Covered Assets).

illimity • 2022 Sustainability Report121PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Qualitative information
An integrated approach to sustainability and the disclosure of non-financial information is a cornerstoneof the Group’s strategy, in order to guarantee conformity to reporting requirements, promoting transparency
and the integration of non-financial considerations in existing processes. The ESG targets of the Group's
Strategic Plan and Sustainability Plan are also part of that approach, relating to the Group's commitment onenvironmental topics with stakeholders, aimed at finalising the integration of ESG factors in the processes ofgranting and monitoring credit and, specifically, in designing and developing sustainable finance products.
The Group has carried out actions necessary to implement the Taxonomy eligibility assessment of its
assets and planned the subsequent measurement of the aligned assets within regulatory deadlines.
These alignments will be based on a careful assessment of technical screening criteria, using data on
counterparties with a level of granularity that is consistent with required disclosure.
Specific projects have been started for the purpose of obtaining the accurate data publicly available andthe information necessary for the disclosure required by the regulations in force, managing reporting in an
automated manner. In that sense, a market solution was adopted, integrated into the suite used to draw
up the consolidated financial statements, which covers the disclosure requirements of the EU Taxonomy
for credit institutions based on the current evolution of the regulatory framework. The data management
process for Taxonomy Eligibility Reporting is based on data collection with granular information and data of
individual exposures and counterparties (validated for reporting purposes also with additional reconciliation
by external consultants). Information from proprietary environments of illimity is directly populated by
the statistical reporting (FINREP), accounting and database systems (data ingestion). Following the datacollection and data ingestion phases, the solution provides a data quality phase, in which checks are
conducted on specific input fields in the data collection flows. Subsequently, the KPIs are calculated
through the eligibility test conducted by a tool. The resulting output is represented through population of
the disclosure template with data processed by the solution’s analytical layer. The solution sets out theofficial reports (data reporting) that are part of Annex VI of Delegated Regulation 2021/2178 (Disclosure
Delegated Act) and the Template under Article 10 of that Delegated Regulation as suggested by the Platformon Sustainable Finance to publish the aggregate data required for the reporting. The solution also managed
the centralised consolidation operations using the same consolidation engine to generate the consolidated
amounts required by EU Taxonomy reporting. Pursuant to Regulation (EU) No. 575/2013, the KPIs are posted
on a prudential consolidation basis.

Methodological Note
Reference perimeter
Regulation (EU) 2020/852 (Taxonomy) and related commission delegated regulations require financialgroups and undertakings to provide disclosure, in the 2022 Non-Financial Statement (NFS), of the qualitative
indicators relating to the proportion of taxonomy-eligible and taxonomy non-eligible exposures comparedto the total of covered assets (Total Covered Assets), and of specific indicators for banks. Those provisions
were clarified by two sets of frequently asked questions (FAQs) published on the website of the European
Commission.
Specifically, the following categories of activities were identified:

activities: described in the Delegated Regulations, adopted to indicate the technical screening• Eligible
criteria irrespective of whether they meet one or all of the criteria.
• Non-eligible activities: economic activities that are not described in the Delegated Regulations.
activities: activities that do not directly contribute to the achievement of the environmental• Enabling
objectives, but enable other economic activities to make a substantial contribution thereto.
activities: activities for which there are currently no alternatives with low carbon emissions• Transitionalthat can be technologically and economically implemented, but which support the transition towards a
climate-neutral economy (only for the mitigation of climate change).

activities: eligible economic activities which satisfy the conditions of environmental• Taxonomy-aligned
sustainability set by the Climate Delegated Act and specified by the technical screening criteria.
For 2022, the key performance indicators only concern objectives to mitigate climate change and adapt toclimate change, as envisaged in Article 9 of Regulation (EU) 2020/852.

122

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

The illimity Group’s prudential consolidation perimeter at 31/12/2022 was therefore considered, startingfrom the FINREP statistic supervisory reporting.

Methodological approach to reportingTo calculate the quantitative indicators to report in the 2022 NFS, the notice on interpretation published by
the European Commission49 on implementation of Article 8 of the EU Taxonomy Regulation (2020/852) was
considered. This notice allows Banks to create two sections of disclosure: (i) a mandatory section (Mandatory
Disclosure), in which the assessment of Taxonomy Eligibility may only be carried out using the exact dataof the counterparties subject to obligations deriving from the Non-Financial Reporting Directive (NFRD),
obtained from the NFSs published by the counterparties; (ii) a voluntary section (Voluntary Disclosure),that permits the extension of the assessment of Taxonomy Eligibility also to counterparties not subject toobligations deriving from the NFRD. In the voluntary section, the eligibility assessment is conducted using
the ATECO business code and NACE code, and verifying whether the counterparty’s NACE code is includedin the Delegated Acts on Climate Change Mitigation (CCM) or Climate Change Adaptation (CCA), in line withthe definition of Taxonomy-Eligible of Regulation (EU) 2020/852.
In order to guarantee a sound methodological approach, the Bank implemented a series of actions to
structure a process of holistic management of disclosure, streamlining the overall data lineage andguaranteeing constant quality of data in all of their phases. Specifically, this regards sustainability reporting
governance according to the new EFRAG standards, with a data management framework that guarantees
full visibility of the documentation required for audits. Specifically, the following processes were designed
and implemented:

and collection of raw data from the source system, and enrichment of the data through other• Originsource systems and external providers;• Normalisation of the data;of calculations in line with the regulatory requirements on disclosure set out in Regulation• Execution(EU) 2020/852 and the related Delegated Regulations;and consolidation of the data according to the disclosure tables set out in Regulation (EU)• Preparation
2020/852 and the related Delegated Regulations.

The two procedures for disclosure, in line with requirements of Regulation 2020/852 and the technicalnotes of the European Authorities, are indicated below.

Section - in calculating the Taxonomy Eligibility KPIs, the exact eligibility data of the companies• Mandatory
subject to NFRD obligations at individual level are included, also including companies in their scope of
consolidation. That list of companies is sourced from the CONSOB list of Italian companies required to
publish an NFS, according to the NFRD50. The Taxonomy Eligibility data were obtained directly from the
NFS of the counterparties. The calculation methodology adopted is as follows:- Identification of all companies subject to the NFS obligation, including companies in their scope of
consolidation.
-
Identification of the KPIs relating to the percentage of Taxonomy Eligibility of Turnover of thecounterparty, directly from the company’s NFS.
- Inclusion in the numerator of the KPI of the Taxonomy Eligibility of the proportion resulting from theapplication of the percentage of Taxonomy Eligibility to the value of the exposure.

49

European Commission, “Commission Notice on the interpretation of certain legal provisions of the Disclosures Delegated Act under Article 8 of EU
Taxonomy Regulation on the reporting of eligible economic activities and assets (2022/C 385/01) published in the Official Journal of 6 October 2022.
50 List of subjects that have published the Non-Financial Statement ("NFS") as of 31 December 2022 https://www.consob.it/web/consob-and-its-activities/
subjects-that-have-published-the-nfs

illimity • 2022 Sustainability Report123PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Section - the calculation methodology is as follows:• -Voluntaryfor companies with an NFS obligation, the process follows the same steps illustrated in the mandatory•

section.
for companies without an NFS obligation:-
the ATECO business codes of each counterparty/issuer is obtained from leading national andinternational providers.
- the single ATECO codes are converted to the corresponding NACE codes, to verify whether the latterare included in the delegated acts on CCM and CCA (available on European Compass);- for counterparties/issuers whose associated NACE code falls under the delegated acts on CCM and
CCA, as per the regulations, the value of the exposer is considered fully eligible;- as benchmarks, the Bank also considered the sector-based Taxonomy Eligibility identified by the
analyses published by the JRC of the European Commission51.

Information requirements
From 1 January 2022 to 31 December 2023, financial undertakings must communicate the following
information:
1.

proportion of Taxonomy-eligible exposures in relation to their total assets;

2.

proportion of Taxonomy non-eligible exposures in relation to their total assets;

3.

proportion of exposures to central administrations, central banks and supranational issuers in relation
to their total assets;

4.

proportion of exposures to derivatives in relation to their total assets;

5.

proportion of exposures to undertakings that are not obliged to publish non-financial information
pursuant to Article 19 bis or 29 bis of Directive 2013/34/EU in relation to their total assets;

6.

proportion of the trading portfolio and on-demand interbank loans in relation to their total assets;

7.

qualitative information.

Calculation methodology
Proportion of taxonomy-eligible and taxonomy-non-eligible exposures for the purposes of the Taxonomy(Eligibility Ratio)
This KPI is calculated as the ratio of the overall value of Taxonomy-eligible and Taxonomy-non-eligible
exposures to the value of Total Covered Assets and Total Assets. The next table shows the steps to calculate
the KPIs related to the proportion of taxonomy-eligible exposures.
Covered Assets: correspond to the denominator of Taxonomy Eligibility KPIs, based on definitions• Totalin Annex V to Commission Delegated Regulation (EU) 2021/2178. The calculation of Total Covered Assets

shall cover the following accounting categories of financial assets including loans and advances, debt
securities, equity holdings and repossessed collaterals: (a) financial assets at amortised cost; (b) financial
assets designated at fair value through other comprehensive income; (c) investments in subsidiaries; (d)joint ventures and associates; (e) financial assets designated at fair value through profit or loss for theyear and financial assets not held for sale, mandatorily measured at fair value in profit/(loss) for theyear; and (f) real estate collaterals obtained by credit institutions by taking possession in exchange
for the cancellation of debts. These exclude exposures to central administrations, central banks andsupranational issuers and those relating to the trading portfolio.

Assets: represent the perimeter of products to include in the numerator of Taxonomy Eligibility• Eligible
KPIs.
perimeter: defines the perimeter of companies to include in Taxonomy Eligibility KPIs, according• Eligibility
to the distinction made between “Mandatory” and “Voluntary”.
of data used: indicates the level of granularity of the data required by Regulation (EU) 2020/852 and• Typerelated Delegated Regulations.
51

Specifically, the Joint Research Center publication “Market’s Taxonomy alignment and Transition-exposure” provides an overview of the sector averages,
by NACE code, of the Taxonomy Eligibility of debt securities and equity instruments of European companies (source: “JRC Working Papers in Economics
and Finance, 2021/14 - Two sides of the same coin: Green Taxonomy alignment versus transition risk in financial portfolios).

124

illimity • 2022 Sustainability Report

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

APPENDIXGRI Content Index

Data underlying the Eligibility Analyses for Taxonomy purposes
Mandatory
Type of Data Used

Exact data from the counterparty/issuer

Reference perimeter

Counterparties subject to NFRD (NFS obligation)

Voluntary
Exact data collected and/or obtained from info
providersCounterparties subject to NFRD (NFS obligation)
Counterparties not subject to NFRD (NFS
obligation)

Including:•

Total Covered
AssetsTotal assets relating to FINREP statistic prudential supervisory reporting with consolidated
perimeter

Excluding:••Exposures to central administrations, central banks, supranational issuers
Financial instruments held for trading (trading portfolio)

Including:•••

Customer loans (loans and advances)
Securities and debt securities
Equity investments (equity instruments not held for trading)Excluding:Eligible assets

•
•
•
•
•

Exposures to central administrations, central banks, supranational issuers
Trading portfolio
Derivatives
On-demand interbank loans
Cash and cash equivalents

Proportion of exposures to central administrations, central banks and supranational issuersThis KPI is calculated as the ratio of the overall value in the consolidated financial statements of exposures
to central administrations, central banks and supranational issuers of illimity in relation to the value of“Total Assets”. These exposures were identified considering exposures represented in the harmonised
FINREP statistic reporting at consolidated level.
Proportion of exposures in derivatives
This KPI is calculated as the ratio of the overall value in the consolidated financial statements of exposuresin derivatives of illimity, in relation to the value of “Total Assets”. The derivatives were identified considering
exposures represented in the harmonised FINREP statistic supervisory reporting at consolidated level.
Proportion of exposures in companies not subject to the NFS obligation
This KPI is calculated as the ratio between the overall value in the financial statements of exposures incompanies not required to publish the NFS in relation to the total value of “Total Assets”. Exposures tocompanies not subject to the NFS obligation were identified in total assets, as represented in the harmonised
FINREP statistic supervisory reporting at consolidated level.
Proportion of the trading portfolio and on-demand interbank loans
This KPI is calculated as the ratio between the overall value in the financial statements of exposures relating
to the trading portfolio and interbank loans of illimity, in relation to the value of “Total Assets”, as represented
in the harmonised FINREP statistic supervisory reporting at consolidated level.

illimity • 2022 Sustainability Report125PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

13. Environmental impacts andclimate-related challenges
The very nature of the illimity Group’s business model, with a 100% digital infrastructure that is completely
cloud-based, is designed to minimise direct environmental impact and increase the efficient, responsible
use of resources. Since it was founded, the Bank has been committed to monitoring and reporting on its
energy consumption, greenhouse gas emissions and waste production, also in the light of a regulatory
framework on environmental protection, defined by EU regulations, and national and regional laws that are
constantly evolving.
illimity has defined a set of dedicated regulations (Facility Management Procedure) with the aim of regulating
the management and maintenance of property used by the Bank, facilities and any related instruments, witha particular focus on environmental impact and the management of natural resources. The purpose of theprocedures is to promote awareness and individual conduct that are consistent with principles of correct
corporate management and sustainable development.
The head office sites in Milan have a system of timers that automatically turn of lights and air conditioning,
to reduce unnecessary energy consumption. These sites are also plastic-free: employees may use waterbottles, as water fountains have been installed, and each floor has washable tableware which can be reused. The use of lifts is not encouraged, and printers have to be accessed using a badge, to minimise theuse of paper and ink. Sorted waste collection is encouraged in the building, including organic waste, withspecial bins provided on all floors.
Since 2021, the electricity used at the Milan and Modena sites (illimity, illimity SGR and ARECneprix (formerly
neprix)) has been produced 100% by renewable sources with a certificated Guarantee of Origin (“GO”).
illimity’s business model, which has no branches and instead has a digital, in cloud infrastructure, aims tointrinsically offset climate change. Despite this, during 2020 the Group began a project to define a carbon
neutrality strategy, by the company’s carbon footprint calculation, identifying activities to streamline andreduce emissions and selecting carbon credit certificates to offset emissions that cannot be avoided,
related to its own carbon footprint (Scope 1 and Scope 2).
Thanks to its association with Carbonsink, the consulting company specialised in the developmentof climate strategies for businesses, the Bank joined the “Maputo Clean Cookstoves” project in 2021,
which has the aim of improving the living conditions of the population, while also reducing emissions ofgreenhouse gases. Due to the purchase of new stoves, local households have improved their health andfinancial situations, avoiding the inhalation of toxic fumes and saving over USD 190 per year in the use ofcoal, in addition to reducing emissions produced by a total of 30,000 tonnes of CO2 per year. In 2022 theBank supported the “Svilosa Biomass Bulgaria” project, which aims to generate sustainable, alternative
energy from vegetable waste and to create new jobs in the local areas. Specifically, the factory in Svishtov
Town manufactures paper using a process that required a large amount of energy in all phases. This process
now uses biomass as an ideal sustainable alternative fuel. Renewable energy is, in fact, generated by using
biomass residues from the processing of wood, concretely reducing the environmental impact, leading togreater energy safety, greater air quality, an improvement of the means of subsistence in the surrounding
communities and the development of new industries of sustainable renewable energy.
With a view to oversight of environmental sustainability issues with increasing attention, as set out inLegislative Decree 34/2020 (Relaunch Decree), illimity has also appointed a Mobility Manager for theillimity Group. Specifically, in line with that set out in the reference regulations, the Mobility Manager has
drawn up the Commuting Plan (“CP”) for 2022, with the goal of examining the methods of commuting usedby employees, with a view to evolving towards types of sustainable mobility.
The CP 2022 illustrated the initiatives that the Group has already adopted to support the reduction/
optimisation of commutes (e.g. company welfare) in addition to projects launched in 2022 that aim to
reduce/optimise commutes, specifically:

126

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Fridays”, the initiative launched at the Milan office, which on all Fridays and periods of lower• "Green
attendance in the offices (i.e. the end of the year and the central weeks of August) the lighting and air
conditioning systems on three floors are turned off, reducing the number of workstations, to incentivise smart
working and reduce commutes,as well as to enable energy savings, reducing the environmental impact;

smart working system, which provides multiple levels of flexibility, to be agreed with one’s• Modular
manager, to guarantee illimiters a correct work-life balance and reduce their commutes.
The effectiveness of those initiatives will be monitored during 2023 and reported in the CP 2023.
Moreover, at the beginning of 2023, illimity signed a partnership with Ogyre, a start-up whose mission
is to protect the oceans and seas (contributing to the achievement of Sustainable Development Goal 14:“Conserve and sustainably use the oceans, seas and marine resources for sustainable development”) byprotecting biodiversity and supporting local communities that making a living from fishing activities. Ogyre
collects waste in the oceans and seas through a fleet of fishing boats, operating both in Italy and abroad.
The waste collected during normal fishing operations is weighed and recorded in a specific digital platformthat tracks numerous items of information and associates the waste collected with a digital token to follow
the recycling and disposal of that waste. The waste is handed over to the local disposal organisation.
The environmental data reported on in this chapter refer to the sites of the Group’s companies (Milan,
Modena, Faenza and Rome). Any exclusions to this boundary are appropriately reported in a note in thechapter.

For further details:

Facility Management Procedure

Direct and indirect environmental impacts
GRI 301-1

The services offered by illimity, due to their 100% digital nature, affect the environment in a limited way. The
materials used by the Group in 2022 were paper and toner cartridges.
In observing its commitment to the environment, illimity exclusively uses FSC (Forest Stewardship Council)
certified paper. This practice was also extended to neprix (ARECneprix from 1 January 2023) during 2021,
while AREC was already using low-impact certified paper at the time of acquisition.
In 2022, the weight of paper decreased on 2021, while the use of toner was in line with the previous year.
For reporting purposes, illimity considers toner cartridges as a single, used non-renewable material.
The consumption of paper and toner during the last two years was in line with the return in-person working
in the office, while the decrease observed in 2022 was, instead, attributable to the new modular system ofsmart working adopted by the personnel of illimity.

illimity • 2022 Sustainability Report127PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesTotal weight of materials used (kg)

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

2022

2021

2020

52

2,426.2

3,014.4

427.5

Toner53

95.5

128.0

60.0

-

-

14.0

2,521.7

3,142.4

501.5

3.0

4.4

0.9

2022

2021

2020

2,426.2

3,014.4

1,847.5

2.9

4.2

3.2

Paper

Cartridges
Total
Ratio per FTE (kg/FTE)54
Total weight of FSC/FSC Mix material used (Kg)
Paper
Ratio per FTE (kg/FTE)GRI 302-1

The Group’s energy consumption is considered equivalent to only the consumption of electricity and of fuelby the company fleet.
In 2022, overall purchased electricity consumption was equal to 3,359 GJ, of which 2,568 GJ covered bypurchases of renewable energy, mainly certified with Guarantees of Origin. The Guarantee of Origin (GO)is an electronic certification issued by the Energy Services Operator (GSE) in compliance with Directive
2009/28/EC, to guarantee that energy consumed is actually produced by renewable sources.
During 2022, the Group gradually covered ever-increasing percentages of supplies of electricity with GOpurchases, to mitigate the environmental impact associated with its consumption: to date, the GO cover allof the electricity needs of illimity, illimity SGR and ARECneprix (Via Soperga offices in Milan), representing
76% of consumption of energy purchased by the Group. illimity aims to extend the procurement of electricity
from renewable sources also to Abilio and ARECneprix for the Rome offices, thereby reaching 100% coverageof the Group's offices from renewable sources.
Consumption of direct energy (GJ)55
Electricity purchasedfrom renewable sources

2022

2021

2020

3.358,7

2,887.9

2,511.5

2,568.1

2,500.7

383.2

Fuel consumption of Group companies is attributed to the use of the vehicles in the company vehicle fleet,leased and provided to employees for combined company/personal use. The criteria and rules governing theassignment and use of company cars are described in the “Car Policy” contained in HR Procedures. Cars for
a combined company/personal use are cars that may be used for both work and personal reasons.
In 2022, a portion of the company fleet was sold, decreasing the total number of cars to 82 vehicles (from107 in the previous year) with fuel consumption of 2,515 GJ.
Use of vehicle fuel (GJ)56

2022

2021

2020

Petrol

390.0

192.3

145.8

Diesel2,125.9

4,719.6

2,078.3

GPL

-

71.6

240.3

Total

2,515.9

4,983.5

2,464.5

Total purchased energy consumption (GJ)

5,874.6

7,871.4

4,976.0of which renewable energy (GJ)

2,568.1

2,500.7

383.2% of renewables out of the total

43.7%

31.8%

7.7%

The percentage of renewable energy, 44% in 2022, up sharply on the previous years, is attributable not only
to the maintenance of the coverage of electricity from renewable sources, but also to procurement of lessfuel as a result of the decrease in the number of cars in the vehicle fleet. Energy consumption of this last
driver, which is non-renewable, amounts to 43% of the total of consumption of the illimity Group.

52 1 ream = 2.64 kg (average figure 2022).
53 1 toner cartridge = 0.86 kg (average figure 2022).
54 The figure is given as full-time equivalent (FTE) in order to indicate consistently and over time, the effort made by illimity’s full-time resources.
55 Source of conversion factors: Italian Greenhouse Gas Inventory 1990 – 2020 – National Inventory Report 2022.
56	Data on fuel consumption and greenhouse gas emissions for vehicles for company/personal use were reported for 70% of total consumption recorded,
adopting ABI guidelines on the adoption by banks of GRI (Global Reporting Initiative) Standards concerning environmental indicators - December 2022.

128

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

GRI 305-1

Direct greenhouse gas emissions (Scope 1) of the Group refer to fuel consumption for the illimity Group’s
fleet of cars.
Direct greenhouse gas emissions (tCO2e)57

2022

2021

2020
171.8

Vehicle fuel

175.1

307.7

Petrol

26.3

15.3

10.0

Diesel

148.8

288.1

147.3

GPL

-

4.3

14.5

Total

175.1

307.7

171.8

2.1

2.9

2.0

Total emissions per vehicle

GRI 305-2

Indirect greenhouse gas emissions (Scope 2) refer instead to the electricity consumption of buildings, usedmainly for lighting and air conditioning of the offices.
Indirect greenhouse gas emissions (tCO2e)58

2022

2021

Total indirect emissions - Location-based method

243.8

224.0

2020
185.1

Total indirect emissions - Market-based method

100.4

50.1

302.5

Greenhouse gas emissions were calculated using two methodologies:

an approach that considers the average emissions of the distribution network used by• Location-based:
the organisation based on the geographic location (Italy) of its electricity utilities;
an approach that considers the specific emissions related to the type of electricity• Market-based:
contract chosen by the organisation.

As a result of purchasing electricity mainly covered by Guarantees of Origin, emissions calculated using theMarket-based methodology in 2022 were lower than those calculated using the Location-based approach.
The latter are only associated with the utilities of Abilio and AREC, for its Rome offices, amounting to 24%of the Group's electricity.

GRI 305-4

The Group’s emission intensity for total Scope 1 and Scope 2 emissions (Location-based approach) was
calculated for both employees with a full-time contract (FTE) and for the total net operating income realised,reaching an intensity of 0.5 tCO2e/FTE and 1.3 tCO2e/mln€ respectively for 2022, down on the previous year,
due to the decrease in fuel emissions due to the decrease in the number of vehicles in the fleet.
Emission intensity (Scope 1 and 2 Location-based)
For FTE
Numerator
Denominator

UoM

2022

2021

2020

tCO2e/FTE

0.5

0.7

0.6

tCO2e

418.9

531.7

356.9
580

FTE

844

718

tCO2e/mln€

1.3

2.0

2.0

Numerator

tCO2e

418.9

531.7

356.9

Denominator

mln€

324.6

271.2

174.8

Total net operating income

57 The source of the conversion factor is DEFRA databases, updated for 2022. The gases included in the calculation are CO2, CH4, N2O.
58 The source of the conversion factors is from ABI guidelines on the adoption by banks of GRI (Global Reporting Initiative) standards - Environmental
Indicators – December 2022. The gases included in the calculation - and indicated in the guide - are CO2, CH4, N2O. To calculate emissions according
to the market-based method, the conversion factors in the European Residual Mixes 2021, AIB (Association of Issuing Bodies), version 1.1 of 31.05.2022,
were used.

illimity • 2022 Sustainability Report129

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
Governance

INNOVATION

Materiality
Analysis

A cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

GRI 305-3

Additional sources of indirect emissions (Scope 3), after those related to property management, include theprovision of goods and services purchased, staff business trips by car, plane and train, and waste disposal.
In order to carry out a full mapping of its GHG inventory, in 2022 illimity quantified its Scope 3 indirectemissions relating to all applicable, significant categories, as shown in the table below. Each Scope 3
category was quantified in accordance with the methodologies of the GHG Protocol Corporate Value Chain(Scope 3) Accounting and Reporting Standard, the main international standard recognised for measuring
emissions of organisations’ value chains.
Specifically, with regard to Category 1 – Purchased Goods and Services, in 2022 the calculation included
all purchases of goods and services incurred by the Group. The amount is significantly higher than thedata reported in 2021 and 2020, due to the change in the calculation perimeter. Moreover, compared to theprevious reports, the emissions referring to Category 7 (Employee Commuting) were also quantified.
For this calculation, in November 2022 a questionnaire was administered to the entire population of thecompany to find out about employees’ commuting habits. The reply rate was around 78%. The remaining
22% was estimated proportionately, based on the results obtained from respondents.
Other indirect greenhouse gas emissions (tCO2e)Cat. 1

Purchased Goods and Services59

Cat. 5

Waste generated in operations

Cat. 6

Business Travel

Cat. 7

Employee Commuting

60

61
62

Total

2022

2021

2020

2,925.7

5.4

2.0

4.2

3.2

1.5

125.6

51.0

28.6

521.5

-

-

3,577.0

59.6

32.1

Financed emissions (Scope 3 – Cat. 15)
To guarantee a better management of transition risk and be able to identify the associated opportunities,
the Group decided, from 2020 onwards, to adopt a process to collect data and information that led, in 2022,
to the first quantification of indirect emissions (Scope 3) attributable to its financing activities (“financed
emissions”).

Perimeter
With reference to 2022, illimity quantified the GHG emissions associated with its portfolio, including loans
and securities of the Distressed Credit63, Growth Credit, b-ilty and Investment Banking Divisions, in addition
to partecipation and proprietary investments and investments. Specifically, the measurement of financed
emissions included around 90% of receivables from customers and around 25% of financial assets (HTC/
HTCS/FVPTL) and investments, as of 31/12/2022. Those percentages of coverage are the best applicable inrelation to the calculation methods available to date64.

59

Spend-based calculation methodology,, based on emissions data of suppliers from info providers and on sector data, where exact data is not available(source of sector intensity: Environmentally-Extended Input-Output (EEIO) of Eurostat). The figure reported considers the material suppliers of illimity,
representing around 80% of expenditure incurred in 2022. For 2021 and 2020 the calculation scope was different and considered, instead, the supply of
paper with supplier-specific calculation methodology.
60 Average-data calculation methodology, based on the quantities of waste generated and the average methods of disposal, declared by the main waste
disposal company in Lombardy (A2A) and Emilia Romagna (Hera). Source of emission factors: DEFRA.
61 Distance-based calculation methodology. Source of emission factors: DEFRA.
62 Distance-based calculation methodology, based on the results of a survey sent to all employees of the Group. Source of emission factors: DEFRA.
63 With regard to the Distressed Credit Division, the emissions of inactive bad loans, inactive positions in liquidation and UTPs with available and “ended”
legal status were accounted for as nil.
64 The portion excluded from the calculation of financed emissions are those not explicitly attributable to an assets class set out in the reference standard
or which are not associated with a calculation methodology to date.

130

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Methodological approach
illimity calculated its financed emissions (Scope 3 - Category 15: “Investments” of the GHG Protocol) in
accordance with the standard promoted by the PCAF (Partnership for Carbon Accounting Financials) “TheGlobal GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition”, publishedin December 2022. This is the global standard most commonly adopted by financial institutions to measure
and account for financed emissions.
Firstly, the Group categorised its portfolio according to the asset classes and the related financial products
set out by the PCAF.
Specifically, for each asset class, the PCAF sets out 5 different calculation methodologies, equal to 5 levelsof quality, based on the data of the counterparty available, as reported below:• Score 1: calculation based on emissions reported and verified by each counterparty;
2: calculation based on emissions reported but not verified by each counterparty,• Scoreor emissions estimated based on energy consumption;• Score 3: calculation based on estimated emissions from production data of each counterparty;• Score 4: calculation based on estimated emissions from sector emission intensity;• Score 5: calculation based on sector emission intensity (per asset unit or revenue).

Certain
Score 1
Score 2
Score 3
Score 4
Score 5

Uncertain

To quantify financed emissions, illimity used the methodologies provided by the PCAF in a combinedmanner, enhancing the exact data of the counterparties (Scores 1 and 2), where available, and sector data
(Scores 4 and 5) to cover the remaining part of the portfolio.
Measurement of financed emissions entailed using exact (verified and unverified) emission data (Scopes 1
and 2) of counterparties, obtains through external providers65, internal master record databases, accounting
records and ERP systems or, if not available, sector emission intensity.
Emission data were subject to specific analysis to understand their reliability. In some cases, these checks
highlighted significant deviations between the different data provided, leading the Group to proceed using
a prudential approach. In particular, emission data were selected by choosing the most cautious value orapplying the sector data.
Instead, as regards the use of sector data, illimity, always in line with the PCAF, has used the EnvironmentallyExtended Input-Output (EEIO) tables66 of Eurostat, which provide average emissions factors per NACE
sector, expressed in terms of the average European emission intensity per turnover.
The emissions of counterparties, obtained as stated above, were allocated to illimity, through an attribution
factor67 calculated based on the Group’s exposure as of 31/12/2022.
Results obtained
The most important indicators in the reporting on financed emissions of illimity’s portfolio are shown below,
in accordance with the definitions of the ECB68:

emissions: total greenhouse gas (GHG) emissions of a debtor/issuer weighted by the exposure• Financedof the financial institution as a share of the company’s total value.
Footprint: financed emissions standardised by the total value of the financial institution's• Carbonportfolio.

65
66
67
68

Crif, Cerved and Bloomberg.
Eurostat: Consumption-based accounting tool, 2022.
The attribution factor is defined as the portion of the total annual emissions of the counterparties allocated to the relative exposures of the bank, and is
calculated as the ratio of exposure to the total assets of the counterparty.
European Central Bank, “Towards climate-related statistical indicators”, January 2023.

illimity • 2022 Sustainability Report131PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rules

PEOPLE

Innovation

Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

The table below illustrates the breakdown of illimity's exposure as of 31/12/2022 by counterparty sector
and, for each one, the result69 of the calculation of financed emissions in terms of percentage and Carbon
Footprint in tCO2/mln€ financed/invested.
SectorMeasured Exposures(%)

Financed Emissions(%)

Carbon Footprint(tCO 2 /Mln Euro)
359

0.09%

52%
9%
9%
6%
4%
4%
3%
3%
3%
3%
2%
1%
1%
0.5%
0.5%
0.2%
0.1%
0.01%
0.01%

100%

100%

187

C

Manufacturing

27%

H

Transportation and storage

19%

F

Construction

8%

G

Wholesale and retail trade; repair of motor vehicles and motorcycles

8%

K

Financial and insurance activities

12%

DElectricity, gas, steam and air conditioning supply

3%

M

Professional, scientific and technical activities

7%

I

Accommodation and food service activities

2%

L

Real estate activities

7%

A

Agriculture, forestry and fishing

2%

N

Administrative and support service activities

2%

B

Mining and quarrying

0.3%

E

Water supply; sewerage, waste management and remediation activities

0.1%

Q

Human health and social work activities

0.7%

J

Information and communication

2%

R

Arts, entertainment and recreation

0.2%

S

Other service activities

0.3%

O

Public administration and defence; compulsory social security

0.01%

P

Education

94
209
148
65
223
91
229
75
242
168
619
797
127
47
202
38
151
17

The table demonstrates that slightly more than 50% of the financed emissions are attributable to the“Manufacturing Sector”, in line with illimity's business. The sectors with the greatest Carbon Footprint are“Water supply; sewerage; waste management and remediation” and “Mining and quarrying”, in relation towhich the Group has minimal economic exposure.

Looking to the futureWith the goal of respecting its commitment to sustainability, the Group commits to keep updated andmonitor its Financed Emissions and the Carbon Footprint of its portfolio, in the short and long term, in linewith the calculation methodologies available.
With a view to improvement, illimity undertakes to:• ensure transparency in its methods of reporting the financed emissions;the availability and quality of data relating to counterparties, to increase the level of• fine-tune
representation and accuracy of the measurement of financed emissions;
possible decarbonisation strategies with the business structures, to focus on the sectors with the• definegreatest impact, also during origination.

69

The emissions reported in the table do not include the share relating to property assets / residential mortgages (Carbon Footprint of 21 tCO2/mln€
exposure) or the share relating to sovereign debt, for which the methodology introduced by the second edition of the PCAF was applied (Carbon Footprintof 182 tCO2/mln€ exposure).

132

illimity • 2022 Sustainability Report

The central roleof SME and retailcustomers

GRI 306-1

GRI 306-2

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

APPENDIXGRI Content Index

GRI 306-3

The absence of branches and the digital, in cloud infrastructure of illimity’s business model make it possible
to limit the production of waste, which is related only to the activities of staff at sites and can be equatedwith non-hazardous municipal waste (e.g. paper, plastic, glass). For these reasons, the environmental
impacts generated by the production of waste are not significant compared to other categories of interestfor the Group - first and foremost energy consumption.
To ensure correct oversight of the issue, the Facility Area monitors and continually manages the volume ofwaste produced, through the company which handles site cleaning, while waste collection and disposal isentrusted to the local municipal non-hazardous waste collection service.
During the two-year period 2021-2022, the production of waste increased, due to the higher number of staff
at the Group’s offices, compared to 2020.
Waste produced, recovered and disposed of (t)

2022

2021

2020

Total waste produced

6.7

17.3

13.6

of which hazardous waste

-

-

-

of which non-hazardous waste

17.3

13.6

6.7

of which paper

6.2

3.0

2.4

of which plastic

1.4

2.1

0.8

of which glass

0.2

0.4

0.1

of which organic

0.6

1.2

0.2

of which non-sorted
Recycled waste out of the total (%)

8.9

6.9

3.2

48.6

49.3

52.2

Water consumption
In 2022 the total water consumption of the companies in the Group came to 1.68 megalitres.
Considering the negligible amount of water consumed, the type of use (only for hygiene and sanitary
purposes), and geographic locations of illimity’s sites, the illimity Group’s water consumption was deemed
insignificant and its environmental impacts were considered negligible.

illimity • 2022 Sustainability Report133

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Task Force on Climate-Related Financial Disclosures(TCFD)
Since its inception, the illimity Group has placed specific attention on environmental issues, in order toalign with the commitments established in the UN Agenda 2030 and the Paris Agreement.
More specifically, starting from 2020, the Bank concentrated its efforts on integrating ESG factors into
overall risk management, by integrating environmental risks to the RAF-RAS and defining a roadmap toenhance the risk control process from an ESG approach.
Those efforts continued over the years, through the CRO's continuous collaboration with the Bank’s
Sustainability Team and Business Structures. It will continue with the update of the 2023 RAF by introducing,as described, Risk Appetite/Tolerance thresholds for several ESG indicators which were developed andmonitored during 2022 in the Risk Tableau de Bord.
In order to ensure greater alignment of the reporting of Group’s commitments on climate-environmental
issues with international best practices, this year illimity has introduced initial reporting, through thereconciliation table below,aligned with the recommendations of the Task Force on Climate Related Financial
Disclosures (TCFD). The table is useful to identify, within the document, the information relating to climateenvironmental issues in line with the recommendations of the TCFD.
TCFD Pillar

Governance

Strategy

Riskmanagement

Metrics
and Targets

134

TCFD Recommendations

Reference pagea) Describe the board’s oversight of climate-related risks and opportunities.

29-30b) Describe management’s role in assessing and managing climate-relatedrisks and opportunities.

29-30

a) D
 escribe the climate-related risks and opportunities the company has
identified over the short, medium, and long term.

30-39b) Describe the impact of climate-related risks and opportunities on thecompany’s businesses, strategy, and financial planning.

30-39

c) D
 escribe the resilience of the company’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or
lower scenario.

30-39

a) D
 escribe the company’s processes for identifying and assessing
climate-related risks.

135-137b) Describe the company’s processes for managing climate-related risks.

135-137c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the company’s overall risk
management.

135-137a) Disclose the metrics used by the company to assess climate-related risks
and opportunities in line with its strategy and risk management process.

135-137b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas(GHG) emissions, and the related risks.

129-132c) D escribe the targets used by the company to manage climate-relatedrisks and opportunities and performance against targets.

21-22

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Governance, management and control ofclimate-related risks
Climate changes and environmental degradation give rise to structural changes that impact economic
activity and consequently the financial system.
The CRO is responsible for the correct implementation of the risk management process, aimed at identifying,measuring, preventing and mitigating all risks that are or may be assumed by the Bank. Therefore, climate
and environmental risks, which act as causal factors for other categories of risk (particularly with regard
to credit, operational, market and liquidity risk, as well as risks not included in the first pillar, such as
reputational risk), are also identified and assessed.
Climatic and environmental risks refer to two types of risk:

risk indicates the impact of climate change, including extreme weather events which are more
• Physicalfrequent and gradual climate changes, as well as environmental degradation, i.e. atmospheric, waterand soil pollution, water stress, loss of biodiversity and deforestation. These can be classed as “acute”
risks, if caused by extreme events such as drought, floods, cyclones, storms, heat waves and forest
fires; or as “chronic”, if caused by gradual changes such as rising temperatures, rising sea levels, water
stress, changes in atmospheric precipitation levels, loss of biodiversity and scarcity of resources. Sucha risk can directly cause, for example, material damage or a drop in productivity, or can indirectly cause
subsequent events such as the interruption of production and logistical chains.

risk indicates the financial loss the Bank may incur, directly or indirectly, following the• Transition
process to adjust to a low carbon emission economy, which is more sustainable from an environmental
perspective. This situation could be caused, for example, by the relatively unexpected adoption of climate
and environmental policies, technological progress, or changes in market confidence and preferences.
This impact may occur directly, for example due to a lower profitability of companies or write-down of
their activities, or indirectly through macro-financial changes.

In a context of uncertainty linked to both the scope of the effects of climate change and the time horizon of
occurrence (which require a longer risk assessment compared to the traditional tests), the scenarios drawn
up by the NGFS70 are a useful tool for the Bank to develop a medium/long-term strategic vision that takes
account of both the (physical and transition) risks and opportunities connected with climate change.
Specifically, during 2022, illimity used scenario analysis to start assessing the impact of climateenvironmental scenarios on the credit risk profiles of exposures referring to counterparties of the GrowthCredit Division.
Through the info providers that illimity uses to provide the macroeconomic scenarios to use in the strategicplanning, budget, ICAAP-ILAAP, Recovery Plan and RAF processes, macroeconomic scenarios affected byclimate-environmental factors were obtained, which reflect three of the scenarios provided in the NGFS
framework for the analysis of physical and transition risk: Net Zero, Delayed Transition and No Further
Action.
Moreover, using a satellite model71 developed internally by the CRO, which correlates the performance ofthe macroeconomic variables and the risk of the credit portfolio, we obtained an estimate of the impact ofclimate-environmental scenarios on the PD (Probability of Default) of illimity's portfolio.

70

71

Network for Greening the Financial System (NGFS), a global network of central banks and supervisory authorities that promotes the sharing ofexperiences and best practices on the management of environmental risks in the financial sector, with a specific focus on climate risk. In 2022, theBank of Italy joined the Steering Committee of the NGFS, highlighting its central role in strengthening collective action to improve the resilience of thefinancial system to environmental risk.
Summary of the model: machine learning (Elastic Net) model that transforms default rates into delta scores and models them using a linear relationship(General Additive Model) in relation to the changes in macro-variables (considering both the exact values and values with a time lag of up to 2 years,
in order to incorporate medium/long-term relationships). For input, the adjusted default rates of the Bank of Italy and the historical macro-variables
developed by info providers are used.

illimity • 2022 Sustainability Report135

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

1

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Climate andEnvironmental
AnalysisDefinition ofclimate-environmental
scenario

The info provider Oxford Economics provides macro scenario of impacts ofclimate-environmental factors that reflect 3 of the scenarios set out in the
NGFS framework. Specifically, “Net Zero”; “No Further Action” and “Delayed
Transition”. Some of the macreconomic and climate variables available are: GDP,
Consumer Price Index, Carbon Emissions and Employment.

Satellite
Model

Input tothe satellite
model

Through a satellite model* developed internally by the CRO, it is possible toobtain an estimate of the impacts on the Bankit Pds using as input the data of
the annual change in the macroeconomic variables (impacted by the n NGFS
scenarios), from 2003 up to 2050.

Scenario
Analysis

Estimate of impacts
on Probabilityof Default

2
3

The output of the model is translated, on a time horizon of up to 30 years, into
the estimate of the native PD delta of the model, to be applied to the Bank's
Probabilities of Default.

The application of these climate-environmental risk scenarios to the Probabilities of Default over a time
horizon of 30 years translated into initial estimates with a relatively limited impact. This is the result of both
macroeconomic scenarios affected by climate-environmental scenarios (NGFS) which are not significant
differentiated from the baseline scenario, and of the medium/long-term horizon in which the greatest
climate-environmental impacts will occur, which is not fully factored by the modelling currently used.
Lastly, for the purpose of complete analyses, the limits of this first test conducted during 2022 should also
be considered:estimated based on historical relationships observed between the macro-variables and• modelmicroeconomic figures (for ex. financial statements, historical data on climate-environmental scenariosthat do not exist to date);• uncertainty of estimates: the longer the time horizon, the less specifically reliable the estimates are;of overall impact not differentiated, for example, by economic sector-NACE code and, therefore,• estimate
by the counterparty's type of activity;• impacts at the level of the Italian banking industry, then with application to illimity’s portfolio.
Based on the scenario analysis conducted, considering the recommendations of the “Task Force on Climaterelated Financial Disclosures” (TCFD) and analysing the materiality and impact of ESG risks for the 2023
ICAAP, the illimity Group assessed the materiality of these risks considering both the risks connected withthe financial counterparties and/or counterparties served and those to which illimity is exposed.
Specifically, for each business area of the Bank (Growth Credit, Distressed Credit, b-ilty, Investment
Banking and CFO), the following were investigated: the materiality of ESG risks on the business modeland current operations, strategies and outlook for development of the business, strategies and policies ofrisk assumption, management and control, risk management and risk controls and the macroeconomic andmarket context and reference regulatory framework.
Once the materiality of those risks was defined, an impact analysis was conducted, which took the form of
the analytical mapping of:
1. ESG risk drivers on the Bank’s business (i.e. physical and transition risk in acute and chronic cases,
governance policies and rules, technological evolution, changes in investors’ preferences and changes incustomers’ preferences);
2. Transmission channels of the risks (i.e. microeconomic or macroeconomic channels as impacts on counterparties,
on operations of the Bank, on the funding capacity or on economic growth, interest rates or inflation);
3. Traditional banking risks impacted (credit, market, liquidity, operational and reputational risk);
4. Impacts in terms of time horizon of occurrence (short, medium or long term), areas/activities/portfolios(i.e. Secured loans to counterparties located in areas with high physical risk) or financial statement items;
5. Risk management, as regards possible mitigation actions to be implemented based on the risk drivers
identified.

136

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Climate Risk
Transition Risk
Regulationand policies
Technologicaldevelopment
Market changes

Physical Risk
Extreme events• Floods• Forest fires• Cyclones• Earthquakes
Chronic changes• Temperature increase• Changes in precipitation• Rise in sea levels

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Areas of economic propagation

Financial Risk

Consumers

Credit Risk
• Default• Depreciation of collateralCompanies
Businessinterruption anddamage to assets

Marketpreferences andloss of income

Impacts on fixed
assets and new
CapEx

Property
damageThird party
liabilities

Disputes(carbon tax,
energy costs...)Changes in
production
processes

Liquidity Risk
• Increase in demand for liquidity• Refinancing of risk
Operational Risk
• Interruption of supply chain• Limits to company operations• Legal Risk

Macroeconomic area

Changes inpricesMarket Risks• Repricing of equity,
fixed income, commodities, etc.

Difficulties
in the labour
marketReputational Risk
• Greenwashing• Incorrect valuation (indirectrisk)• Lack of oversight(employment,social topics...)Lastly, referring to the recommendation in the TCFD, it is clear that the efforts to mitigate and adapt toclimate change can also lead to opportunities72 for organisations, such as streamlining resources and costsavings, adopting low emission energy sources, developing new products and services, accessing newmarkets and building resilience over the entire supply chain.

72

See the risks and opportunities table in the section “ESG risks and opportunities” of Chapter 1.

illimity • 2022 Sustainability Report137PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

14. Recognition and awards
Recognition and awards achieved by illimiters, thanks to the trust placed in them by investors, partners andcustomers in 2022.

Best Workplaces Italy 2022
illimity was ranked in the Best Workplaces Italy classification for the third year running. This importantmilestone is proof of illimity's commitment and ability in creating an inclusive and dynamic working
environment in which illimiters are listened to and valued. A workplace that is based on trust in the
management, pride for the company, team spirit and a positive approach to colleague relations.

2022 Sustainability Leader
illimity is among the 200 companies classified as “2022 Sustainability Leader” according to the analysis
conducted by Il Sole24Ore and Statista. This recognition was based on illimity’s commitment and results
achieved in the three aspects of sustainability: environment, social and corporate governance. illimity is
continuing its process integrating ESG topics, in line with the 2021-2025 Strategic Plan, for the sustained
and sustainable growth of its business.

IUSVE Research & Innovation Award
The Salesian Institute of Venice (IUSVE) assigned illimity the Research & Innovation Award for b-ilty, thedigital business store platform for managing financial and credit services for small and medium-sizedenterprises. The project derived from the deep connection with the entrepreneurial fabric, the promotion of
the local areas and the integration of digital innovation dynamics.

Chief Compliance Officer of the YearAt the TopLegal Corporate Counsel & Finance Awards, the event created to celebrate the successes of
Italian Legal Affairs Departments, tax teams, compliance teams and Human Resource Managers, Francesco
Martiniello won the award of Chief Compliance Officer of the Year. This award aims to highlight company
best practices, in order to grant the right weight to single professionals and teams that work to achieve
company strategic targets, with the awareness that illimity's success depends on numerous factors andskills.

Best Workplaces Europe 2022
For the second year running, illimity was included in the Best Workplaces Europe 2022 ranking, which
selects the best companies to work for in Europe, obtaining thirteenth place overall and ranking first among
Italian companies in the category of businesses with over 500 employees. This reward recognises illimity’seffort to create a dynamic, formative and innovative working environment, focused on the issues of Diversity
Equity & Inclusion, in a place that is capable of promoting illimiters.

138

illimity • 2022 Sustainability Report

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Inhousecommunity Awards Italy 2022
At the week-long event of the Inhousecommunity Awards Italy, illimity received two important awards: “Best
Performer Award” and “HR Director of the Year”. The first was received by the Legal & Corporate GovernanceTeam, rewarded for their sound, extensive expertise, as they are capable of finding solutions outside the box,
resulting in the efficiency and soundness of company business. The second went to Marco Russomando,
illimity’s Head of Human Resources & Organization, rewarded for his innovative approach implemented inpersonnel management and promotion.

LC Sustainability Awards 2022
illimity was awarded the LC Sustainability Award for its consideration and implementation of sustainability
and inclusivity initiatives. Due its business model and partnership with Microsoft, the Bank has set up
digital and cloud infrastructure, minimising its direct impacts and increasing the efficiency and responsible
use of resources. illimity also supported the “Maputo Clean Cookstoves” project, with the goal of offsetting
emissions and achieving carbon neutrality, and demonstrated specific attention and sensitivity to genderequality issues, due to the illimitHER project, which aims to empower the potential of young women throughrole models that share their experience and professional skills.

2023 Growth Leader
illimity is among the 500 companies classified as “2023 Growth Leader” according to the analysis
conducted by Il Sole24Ore and Statista. This award was assigned based on the financial results, in terms ofturnover, which grew steadily in the three-year period 2018-2021. This reward highlights the Bank’s excellent
performance on the market.

IBS Global Fintech Innovation Awards 2022
Due to the b-ilty project, illimity received the Most Impactful Project award in the Best Digital Channel/
Platform Implementation category of the IBS Global Fintech Innovation Awards 2022, organised by IBSIntelligence, a research, consulting and media firm in the fintech sector with global coverage and acomprehensive portfolio of intelligence services. This recognition rewards banks and technology companies
that did an exceptional job in implementing and innovating banking technology, using new technologies.

Financecommunity Awards 2022
The b-ilty team received the a Financecommunity Award 2022 as “Innovation & Fintech Team of the Year”
for its approach to innovation, due to the launch of the first digital business store platform for financial
and credit services to small and medium-sized enterprises. The platform brings together specialist skills,
cutting-edge technology and formidable user experience.

illimity • 2022 Sustainability Report139PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

Appendix
Annex
Reclassification of the income statement to determine the Economic value generated and distributed.
(Amounts in thousands)

Income Statement items

31.12.2022

31.12.2021

Item 10. Interest income and similar income

194.288238.693

Item 20. Interest expenses and similar charges (-)(61.223)(74.558)

Item 40. Fee and commission income

40.28365.701

Item 50. Fee and commission expense (net of expense for external networks - e.g. agents,
financial advisors) (-)(5.708)(6.451)-200

Item 80. Net trading result

Item 70. Dividends and similar income

3.167

4.729

Item 100. Profits (losses) on disposal or repurchase of:

5.393

(467)

a) financial assets measured at amortised cost

302

11

b) financial assets measured at fair value through other comprehensive income

5.091

(174)

c) financial liabilities
Item 110. Profits (losses) on other financial assets and liabilities measured at fair value throughprofit or lossa) financial assets and liabilities carried at fair valueb) financial assets and liabilities subject to mandatory measurement at fair value
Item 130. Net losses/recoveries for credit risks associated with:a) financial assets measured at amortised costb) financial assets measured at fair value through other comprehensive income
Item 140. Profits/losses on changes in contracts without derecognition

-

(304)

10.034

8.753

-

-

10.0348.753

43.13548.89143.50550.183(370)(1.292)

196-

Item 160. Net premiums--

Item 170. Balance of other income/charges from insurance management--

21.42127.715Item 230. Other operating income/expenses
Item 250. Profits (losses) on equity investments (for the portion of “gains/losses from sale”)
Item 280. Profits (losses) on disposal of investments
Item 320. Net income (Loss) (+/-) from discontinued operations after taxes

8.344

266

253

-

A. TOTAL ECONOMIC VALUE GENERATED

259.583

313.472

Item 190.b Other administrative expenses (net of indirect taxes and donations/gifts andprovisions for termination and deposit guarantees) (-)(67.705)(99.102)(99.102)

ECONOMIC VALUE DISTRIBUTED TO SUPPLIERS(67.705)

Item 190.a Personnel expenses(73.563)(85.871)

ECONOMIC VALUE DISTRIBUTED TO EMPLOYEES, STAFF AND ASSOCIATES(73.563)(85.871)

Item 340. Profit (loss) for the period attributable to minority interests--

ECONOMIC VALUE ASSIGNED TO THIRD PARTIES--

Profit assigned to shareholders-(15.065)

ECONOMIC VALUE DISTRIBUTED TO SHAREHOLDERS-(15.065)

190 b) Other administrative expenses: indirect taxes and duties (-)(11.741)(8.715)Item 190.b Other administrative expenses: provisions for termination and deposit guarantees (-)(4.700)6.703

Item 300. Income taxes for the year on current operations (for the portion relating to current
taxes, the change in current taxes for previous years and the reduction in current taxes for theyear)(20.917)(35.850)

ECONOMIC VALUE DISTR. CENTRAL AND LOCAL ADMINISTRATION(37.359)(37.862)

(10)

(14)

190 b) Other administrative expenses: donations and gifts (-)
Profit assigned to the charity fund
ECONOMIC VALUE DISTRIBUTED TO THE COMMUNITY AND ENVIRONMENT

140

illimity • 2022 Sustainability Report

-

-

(10)

(14)

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index(Amounts in thousands)

Income Statement items
B. TOTAL ECONOMIC VALUE DISTRIBUTED

31.12.2022(178.636)

Item 200. Net provisions for risks and chargesa) commitments and guarantees givenb) other net provisions

31.12.2021(237.914)(2.622)(707)(2.404)

(669)

(218)

(38)

Item 210. Net adjustments/recoveries on property and equipment(3.132)(4.201)

Item 220. Net adjustments/recoveries on intangible assets(7.600)(13.070)

Item 250. Profits (losses) on equity investments (for the portion of the valuation component:“write-downs/write-backs” “impairment/impairment reversals”, “other expenses and income”)(7.758)(7.633)Item 260. Net gains/losses on the measurement at fair value of property and equipment andintangible assets--

Item 270. Adjustments/recoveries of goodwill (-)
Item 300. Income taxes for the year on current operations (for the portion relating to the change
in deferred tax assets and liabilities)
Profit allocated to reserves
C. TOTAL ECONOMIC VALUE RETAINED

-

-

5.756

10.314(0)-80.94775.558

illimity • 2022 Sustainability Report141PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

GRI Content Index
GRI
Standard

DisclosurePagenumberGRI 2 General Disclosures 2021
The organization and its reporting practices
2-1

Organizational details

10

2-2

Entities included in the organization’s sustainability
reporting10

2-3Reporting period, frequency and contact point

40

2-4

Restatements of information

40

2-5

External assurance

40

Activities and workers
2-6

Activities, value chain and other business relationships

10, 11, 107

2-7

Employees

72

2-8

Workers who are not employees

72

Governance
2-9

Governance structure and composition

27

2-10

Nomination and selection of the highest governance body

24

2-11

Chair of the highest governance body

27

2-12

Role of the highest governance body in overseeing themanagement of impacts

29

2-13

Delegation of responsibility for managing impacts

29

2-14

Role of the highest governance body in sustainability reporting

29

2-15

Conflicts of interest

47

2-16

Communication of critical concerns

56

2-17

Collective knowledge of the highest governance body

78

2-18

Evaluation of the performance of the highest governance body

30

2-19

Remuneration policies

81

2-20

Process to determine remuneration

81

2-21

Annual total compensation ratio

88

Strategy, policies and practices
2-22Statement on sustainable development strategy

6

2-23

Policy commitments

18

2-24

Embedding policy commitments

49

2-25

Processes to remediate negative impacts

32

2-26

Mechanisms for seeking advice and raising concerns

56

142

illimity • 2022 Sustainability Report

Notes /
Omissions

The central roleof SME and retailcustomers

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

GRI
Standard

DisclosurePagenumber2-27

Compliance with laws and regulations

-

2-28

Membership associations

19

APPENDIXGRI Content Index

Notes /
Omissions
In 2022 there were no
significant cases of noncompliance with laws andregulations.

Stakeholder engagement
2-29

Approach to stakeholder engagement

2-30

Collective bargaining agreements

41, 43
72

GRI 3: Disclosures on material topics
3-1

Process to determine material topics

43

3-2

List of material topics

44

Material topic: Robustness and creation of shared value
GRI 3: Management approach
3-3Management of material topics

94

GRI 201: Economic performance 2016
201-1

Direct economic value generated and distributed

95

Material topic: Integrity in company conduct
GRI 3: Management approach
3-3Management of material topics

46

GRI 205: Anti-corruption 2016
205-2

Communication and training about anti-corruption policies
and procedures

51

205-3

Confirmed incidents of corruption and actions taken

51

GRI 206: Anti-competitive Behaviour 2016
206-1

Legal action for anti-competitive behaviour, anti-trust andmonopoly practices-

No lawsuits for anticompetitive behaviour,
antitrust, and monopolistic
practices occurred in 2022.

-

In 2022 there were no casesof non-compliance withsocial and economic laws
and regulations.

GRI 419: Socioeconomic compliance 2016
419-1

Non-compliance with laws and regulations in the social andeconomic area

Material topic: Environmental impacts and climate-related challenges
GRI 3: Management approach
3-3Management of material topics

51

GRI 301: Materials 2016
301-1

Materials used by weight or volume

127

GRI 302: Energy 2016
302-1

Energy consumption within the organization

128

illimity • 2022 Sustainability Report143PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

GRI
Standard

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

DisclosurePagenumberGRI 305: Emissions 2016
305-1

Direct GHG emissions (Scope 1)

129

305-2

Energy indirect (Scope 2) GHG emissions

129

305-3

Other indirect GHG emissions (Scope 3)

130

305-4

GHG emissions intensity

129

GRI 306: Waste 2020
306-1

Waste generation and significant waste-related impacts

133

306-2

Management of significant waste-related impacts

133

306-3

Waste generated

133

Material topic: Empowerment, engagement and well-being of illimiters
GRI 3: Management approach
3-3Management of material topics

72

GRI 403: Occupational health and safety 2018403-1

Occupational health and safety management system

84

403-2

Hazard identification, risk assessment, and incident
investigation

84

403-3

Occupational health services

84

403-4

Worker participation, consultation, and communication on
occupational health and safety

84

403-5

Worker training on occupational health and safety

84

403-6

Promotion of worker health

84

403-7

Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships

84

403-9

Work-related incidents

84

GRI 404: Training and education 2016
404-1

Average hours of training per year

80

404-3

Percentage of employees receiving regular performance andcareer development reviews

75

Material topic: Diversity, Equity and Inclusion in the company
GRI 3: Management approach
3-3Management of material topics

86

GRI 202: Market Presence 2016
202-1

Ratios of standard entry level wage by gender compared to
local minimum wage

88

GRI 401: Employment 2016
401-1

New employee hires and employee turnover

74

401-3

Parental leave

83

144

illimity • 2022 Sustainability Report

Diversity, Equity
and Inclusion

Notes /
Omissions

The central roleof SME and retailcustomers

GRI
Standard

RECOGNITION
AND AWARDSPLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

DisclosurePagenumber

APPENDIXGRI Content Index

Notes /
Omissions

GRI 405: Diversity and equal opportunity 2016405-1

Diversity of governance bodies and employees

86

405-2

Ratio of basic salary and remuneration of women to men

87

Material topic: Safeguarding of human rights
GRI 3: Management approach
3-3Management of material topics

49

GRI 406: Non-discrimination 2016406-1

Incidents of discrimination and corrective actions taken

50

Material topic: Customer Satisfaction
GRI 3: Management approach
3-3Management of material topics

98

GRI 417: Marketing and labelling 2016
417-2

Incidents of non-compliance concerning product andservice information and labelling

103

417-3

Incidents of non-compliance concerning marketing
communications

103

Material topic: Cyber Security and Data Protection
GRI 3: Management approach
3-3Management of material topics

64

GRI 418: Customer privacy 2016
418-1

Substantiated complaints concerning breaches of customer
privacy and losses of customer data

69

Material topics: Support to entrepreneurs and financial inclusion
GRI 3: Management approach
3-3Management of material topics

94

Material topic: Sustainable finance
GRI 3: Management approach
3-3Management of material topics

112

Material topic: Innovation
GRI 3: Management approach
3-3Management of material topics

60

Material topic: Value chain and business relationships
GRI 3: Management approach
3-3Management of material topics

106

illimity • 2022 Sustainability Report145

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

GRI
Standard

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

DisclosurePagenumberMaterial topic: Transparent communication and company reputation
GRI 3: Management approach
3-3Management of material topics

98

GRI 417: Marketing and labelling 2016
417-1

146

Requirements for product and service information and labelling

illimity • 2022 Sustainability Report

102

Diversity, Equity
and Inclusion

Notes /
Omissions

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

RECOGNITION
AND AWARDSAPPENDIXGRI Content Index

Additional indicators
Indicators

Page number

Notes

Material topic: Robustness and creation of shared value
CET1 (Common Equity Tier 1)

94

ROE (Return on Equity)

94

Net Organic NPE Ratio

94

COR (Cost of Risk)

94

Material topic: Diversity, Equity and Inclusion in the company
Average remuneration of the Top Management to average employee remuneration
ratio

88

Percentage of welfare out of the average RAL

83

Material topic: Customer Satisfaction
Service level - Capacity to respond to calls

104

30” service level - Capacity to respond to calls within a certain time104

NPS - Net Promoter Score

104

Cookie Policy

69

Material topic: Transparent communication and company reputation
NSS - Net Sentiment Score
Material topic: Cyber Security and Data Protection
Number of serious IT security incidents out of the total of IT security incidents
reported

66

Percentage of software covered by security application checks in the process tomanage application vulnerability

66

Percentage of vulnerabilities resolved, identified by the new Vulnerability
Management process

66

Material topic: Sustainable financeCollaborative Agreement Index

101

Time to solve

101

Material topic: Innovation
Digital communication out of total customer communication60

End-to-end digital onboarding of consumer customers

60

Active consumer customers (at least one login a month)60

Proprietary cloud banking systems

60

Customers using PSD2/Open Banking functionalities

60

Employees who have the resources to do smart working

60

Logins from apps vs desktops

60

illimity • 2022 Sustainability Report147

PRINCIPLES OF GOVERNANCE
illimity.
Bank beyond form

Corporate
GovernanceMateriality
Analysis

INNOVATIONA cultureof rulesInnovation

PEOPLE
Empowerment, engagement
and well-being of illimiters

Diversity, Equity
and Inclusion

SASB Index
The Sustainability Accounting Standards Board (SASB) standards reported in this document refer to thesector standards “Commercial Banks” (SASB code FN-CB), “Asset Management & Custody Services” (SASB
code FN-AC) and “Consumer Finance” (SASB code FN-CF). All indicators belonging to the mentioned
sectors were considered and evaluated. Those considered relevant to illimity’s business have been reported
in the SASB Index of Indicators.
TOPIC

ACCOUNTING METRICOUR DISCLOSURE

SASB CODENOTESCOMMERCIAL BANKS(1) Number of data breaches,(2) Percentage involving
personally identifiable
2022 Sustainability Report:
information (PII),
Cyber Security” pages 64-69(3) Number of accountholders affected.
Data Security
Description of approach toidentifying and addressing
data security risks.

Incorporation ofEnvironmental,
Social andGovernanceFactors in Credit
Analysis

Description of approach
to incorporation ofenvironmental, social, andgovernance (ESG)
factors in credit analysis.

FN-CB-230a.1

2022 Sustainability Report:“Cyber Security” & “Datamanagement and protection”,
FN-CB-230a.2
pages 64-69.
ICT Security Policy
Policy Privacy
2022 Sustainability Report:
Risk management and
ESG risks”, pages 30-39.
“Integration of environmental
and social factors into
investment opportunities”,
pages 112-115.

FN-CB-410a.2

Consolidated Credit
ProcedureBusiness Ethics

Systemic Risk
Management

148

Total amount of monetarylosses as a result of legal
proceedings associatedwith fraud, insider
trading, anti-trust, anticompetitive behavior, market
manipulation, malpractice,or other related financial
industry laws or regulations.

2022 Sustainability Report:“The fight against fraud,money laundering, corruption
and violations of Financial
Sanctions”, pages 50-53.

FN-CB-510a.1

2022 Sustainability Report:
Description of whistleblower Whistleblowing, page 56.
policies and procedures.
Policy Whistleblowing

FN-CB-510a.2

Description of approach toincorporation of results ofmandatory and voluntarystress tests into capital
adequacy planning, longterm corporate strategy, andother business activities.

illimity • 2022 Sustainability Report

2022 Sustainability Report:“Risk management and
ESG risks”, pages 30-39.
“Integration of environmental
and social factors into
FN-CB-550a.2
investment opportunities”,
pages 112-115.
Consolidated Credit
Procedure

During the year 2022
illimity did not receive
any legal action or
sanctions

PLANET AND SOCIETYPROSPERITY
Robustness andcreation ofshared value

The central roleof SME and retailcustomers

TOPIC

Value chain andbusinessrelationships

Sustainable The European taxonomy Environmental impacts
financeof eco-sustainable
and climate-related
activities
challenges

ACCOUNTING METRICOUR DISCLOSURE

RECOGNITION
AND AWARDSSASB CODE

APPENDIXGRI Content IndexNOTESASSET MANAGEMENT & CUSTODY SERVICES

Transparent
Information & Fair
Advice for
Customer

Total amount of monetarylosses as a result of legal
proceedings associatedwith marketing andcommunication of financial
product related information
to new and returning
customers.
Description of approach to
informing customers about
products and services.

Percentage of genderand racial/ethnic grouprepresentation for
Employee Diversity (1) executive management,& Inclusion(2) non-executive
management,(3) professionals, and (4) allother employees.

Incorporation ofEnvironmental,
Social andGovernanceFactors in
Investment
Management &Advisory

Description of approach
to incorporation ofenvironmental, social, andgovernance (ESG) factors ininvestment and/or wealthmanagement processes andstrategies.

Description of proxy voting
and investee engagement
policies and procedures.

2022 Sustainability Report:“The relationship with retailcustomers”, pages 102-104.
Policy Transparency
Fairness with Customers
2022 Sustainability Report:“The relationship with retailcustomers”, pages 102-104.

During the year 2022
FN-AC-270a.2 illimity did not receive
any legal action.

FN-AC-270a.3

Policy Transparency
Fairness with Customers
2022 Sustainability Report:“Empowerment, involvement
and well-being of illimiters”
pages 72-85;“Diversity, Equity andInclusion”, pagine 86-91.

96% of the employees
have Italian nationality,
the remaining 4% have
FN-AC-330a.1 origins from Africa,
Central America,
Eurasia and SouthAmerica.

2022 Sustainability Report:“Sustainable Finance”,
pages 112-119.
Consolidated Credit
Procedure
illimity SGR - ESG
Investment Policy.
2022 Sustainability Report:“Engagement with thefinancial community”,
pages 96-97.

FN-AC-410a.2

FN-AC-410a.3

Engagement Policy.
CONSUMER FINANCE
Number of account holders
whose information is used
for secondary purposes.

Customer Privacy
Total amount of monetarylosses as a result of legal
proceedings associated withcustomer privacy.

2022 Sustainability Report:“Data management andprotection”, pages 64-69.

FN-CF-220a.1

ICT Security Policy
Policy Privacy.
2022 Sustainability Report:“Data management andprotection”, pages 64-69.
ICT Security Policy
Policy Privacy.

During the year 2022
illimity recorded
FN-CF-220a.2 no losses for legal
proceedings in the fieldof privacy

illimity • 2022 Sustainability Report149Independent Auditors’ Report

KPMG S.p.A.
Revisione e organizzazione contabile
Via Vittor Pisani, 25
20124 MILANO MI
Telefono +39 02 6763.1
Email it-fmauditaly@kpmg.it
PEC kpmgspa@pec.kpmg.it(This independent auditors’ report has been translated into English solely for the convenience ofinternational readers. Accordingly, only the original Italian version is authoritative.)

Independent auditors’ report on the consolidated non-financial
statement pursuant to article 3.10 of Legislative decree no. 254 of 30
December 2016 and article 5 of the Consob Regulation adopted with
Resolution no. 20267 of 18 January 2018
To the board of directors of
illimity Bank S.p.A.
Pursuant to article 3.10 of Legislative decree no. 254 of 30 December 2016 (the “decree”) and article 5 of
the Consob (the Italian Commission for listed companies and the stock exchange) Regulation adopted
with Resolution no. 20267 of 18 January 2018, we have been engaged to perform a limited assurance
engagement on the 2022 consolidated non-financial statement of the illimity Bank Group (the “group”)
prepared in accordance with article 4 of the decree and approved by the board of directors on 9 March2023 (the “consolidated non-financial statement”).
Our procedures did not cover the information set out in section 12 “EU taxonomy for eco-sustainable
activities” of the consolidated non-financial statement required by article 8 of Regulation (EU) 852 of 18
June 2020.

Responsibilities of the directors and the Audit Internal Control Committee (“Comitato diControllo sulla Gestione”) of illimity Bank S.p.A. (the “parent”) for the consolidated nonfinancial statement
The parent’s directors are responsible for the preparation of a consolidated non-financial statement inaccordance with articles 3 and 4 of the decree and the “Global Reporting Initiative Sustainability
Reporting Standards” issued by GRI - Global Reporting Initiative (the “GRI Standards”), which they haveidentified as the reporting standards.
The directors are also responsible, within the terms established by the Italian law, for such internal
control as they determine is necessary to enable the preparation of a consolidated non-financial
statement that is free from material misstatement, whether due to fraud or error.
Moreover, the directors are responsible for the identification of the content of the consolidated nonfinancial statement, considering the aspects indicated in article 3.1 of the decree and the group’sbusiness and characteristics, to the extent necessary to enable an understanding of the group’sbusiness, performance, results and the impacts it generates.
The directors’ responsibility also includes the design of an internal model for the management andorganisation of the group’s activities, as well as, with reference to the aspects identified and disclosed in

KPMG S.p.A. è una società per azioni di diritto italiano e fa parte delnetwork KPMG di entità indipendenti affiliate a KPMG International
Limited, società di diritto inglese.

150

illimity • 2022 Sustainability Report

Ancona Bari Bergamo
Bologna Bolzano Brescia
Catania Como Firenze Genova
Lecce Milano Napoli Novara
Padova Palermo Parma Perugia
Pescara Roma Torino Treviso
Trieste Varese Verona

Società per azioni
Capitale sociale
Euro 10.415.500,00 i.v.
Registro Imprese Milano Monza Brianza Lodi
e Codice Fiscale N. 00709600159
R.E.A. Milano N. 512867
Partita IVA 00709600159
VAT number IT00709600159
Sede legale: Via Vittor Pisani, 25
20124 Milano MI ITALIA

illimity Bank Group
Independent auditors’ report
31 December 2022

the consolidated non-financial statement, the group’s policies and the identification and management of
the risks generated or borne.
The Comitato di Controllo sulla Gestione is responsible for overseeing, within the terms established by
the Italian law, compliance with the decree’s provisions.

Auditors’ independence and quality control
We are independent in compliance with the independence and all other ethical requirements of theInternational Code of Ethics for Professional Accountants (including International IndependenceStandards, the IESBA Code) issued by the International Ethics Standards Board for Accountants, which
is founded on fundamental principles of integrity, objectivity, professional competence and due care,confidentiality and professional behaviour. Our company applies International Standard on Quality
Control 1 (ISQC Italia 1) and, accordingly, maintains a system of quality control including documented
policies and procedures regarding compliance with ethical requirements, professional standards andapplicable legal and regulatory requirements.

Auditors’ responsibility
Our responsibility is to express a conclusion, based on the procedures performed, about the complianceof the consolidated non-financial statement with the requirements of the decree and the GRI Standards.
We carried out our work in accordance with the criteria established by “International Standard on
Assurance Engagements 3000 (revised) - Assurance Engagements other than Audits or Reviews ofHistorical Financial Information” (“ISAE 3000 revised”), issued by the International Auditing andAssurance Standards Board applicable to limited assurance engagements. This standard requires thatwe plan and perform the engagement to obtain limited assurance about whether the consolidated nonfinancial statement is free from material misstatement. A limited assurance engagement is less in scopethan a reasonable assurance engagement carried out in accordance with ISAE 3000 revised, andconsequently does not enable us to obtain assurance that we would become aware of all significant
matters and events that might be identified in a reasonable assurance engagement.
The procedures we performed on the consolidated non-financial statement are based on our professional
judgement and include inquiries, primarily of the parent’s personnel responsible for the preparation of theinformation presented in the consolidated non-financial statement, documental analyses, recalculations
and other evidence gathering procedures, as appropriate.
Specifically, we carried out the following procedures:
1. Analysing the material aspects based on the group’s business and characteristics disclosed in the
consolidated non-financial statement, in order to assess the reasonableness of the identification
process adopted on the basis of the provisions of article 3 of the decree and taking into account thereporting standards applied.
2. Analysing and assessing the identification criteria for the reporting scope, in order to check theircompliance with the decree.
3. Comparing the financial disclosures presented in the consolidated non-financial statement with thoseincluded in the group’s consolidated financial statements.
4. Gaining an understanding of the following:-

the group’s business management and organisational model, with reference to the managementof the aspects set out in article 3 of the decree;2

illimity • 2022 Sustainability Report151illimity Bank Group
Independent auditors’ report
31 December 2022-

the entity’s policies in connection with the aspects set out in article 3 of the decree, the achieved
results and the related key performance indicators;-

the main risks generated or borne in connection with the aspects set out in article 3 of the decree.

Moreover, we checked the above against the disclosures presented in the consolidated non-financial
statement and carried out the procedures described in point 5.a).
5. Understanding the processes underlying the generation, recording and management of thesignificant qualitative and quantitative information disclosed in the consolidated non-financial
statement.
Specifically, we held interviews and discussions with the parent’s management personnel. We also
performed limited procedures on documentation to gather information on the processes andprocedures used to gather, combine, process and transmit non-financial data and information to theoffice that prepares the consolidated non-financial statement.
Furthermore, with respect to significant information, considering the group’s business andcharacteristics:-

at parent and subsidiaries level:a) we held interviews and obtained supporting documentation to check the qualitative
information presented in the consolidated non-financial statement and, specifically, thebusiness model, the policies applied and main risks for consistency with available evidence,b) we carried out analytical and limited procedures to check, on a sample basis, the correct
aggregation of data in the quantitative information;-

we visited illimity Bank S.p.A., which we have selected on the basis of its business, contribution
to the key performance indicators at consolidated level and location, to meet its management andobtain documentary evidence supporting the correct application of the procedures and methods
used to calculate the indicators.

Conclusion
Based on the procedures performed, nothing has come to our attention that causes us to believe that the2022 consolidated non-financial statement of the illimity Bank Group has not been prepared, in allmaterial respects, in accordance with the requirements of articles 3 and 4 of the decree and the GRI
Standards.
Our conclusion does not extend to the information set out in section 12 “EU taxonomy for ecosustainable activities” of the consolidated non-financial statement required by article 8 of Regulation (EU)852 of 18 June 2020.
Milan, 16 March 2023
KPMG S.p.A.
(signed on the original)
Alberto Andreini
Director of Audit

3

152

illimity • 2022 Sustainability Report

This year, Sustainability Reportfocuses on the work and values ofillimity through the testimonials
and faces of the companies wehave supported.
Through the “illimity for SMEs”
project we wanted to narrate stories
of companies, entrepreneurs, skills
and passions in a shooting aimed
at disseminating the concepts ofrelaunch, recovery and restart.
Because illimity’s business model
is designed not just to makeprofits, but also to be useful to thecommunity of which we genuinely
feel part.

154

illimity • 2022 Sustainability Reportillimity • 2022 Sustainability Report155

We would like to thank everyone who helped contribute to the 2022 Consolidated Non-Financial Statement of Gruppo illimity
Bank S.p.A.
For further information on sustainability activities: www.illimity.com/en/sustainability
Edited by:
Investor Relations & Sustainability Department
sustainability@illimity.com
Graphic and creative design in association with:
Redpoint Communication
Gruppo illimity Bank S.p.A.
illimity.com

March 2023

illimity Bank S.p.A.
Registered office: Via Soperga, 9 – 20124 Milan
Share capital: EUR 54.513.905,72 fully subscribed and paid up
Registered in the Milan Companies Register - Milan Economic and Administrative Register MI 2534291
Taxpayer identification number 03192350365
Representative of the “illimity” VAT group, VAT number 12020720962
Bankers’ Association Code 03395 – A member of the Interbank Fund for the Protection of Deposits
A registered bank no. 5710 - A Parent Company of the Gruppo illimity Bank S.p.A. A registered Banking Group no. 245
www.illimity.com

www.illimity.com

LandorVia Galvano Fiamma 18
Milan I-20129
Italy
Tel. +39 02 764517.1

Illimity
Marchio + brandline - RGB
Date - Data 08.10.18

Company - Cliente Illimity bank
Artwork - Esecutivo AW_ILLIMITY_BRANDLINE_RGB.ai

Country - Paese ITALIA

Implementation - Esecutivista CDL

Soware Adobe Illustrator CC 2018

Recommended colours - Colori raccomandati
R0
G0
B0

R 255
G 155
B0

R 255
G0
B 255

R 255
G0
B 30

-

-

-

-

Il presente documento è un esecutivo. La stampa laser
fornisce un'indicazione del posizionamento dei colori,

Note
Text

forniti insieme al presente documento in baseall'art. L. 22-4 del codice della proprietà intellettuale.

Approval signature - Firma per approvazione