The Group's Environmental Social and Governance (ESG) Strategic Plan

The Poste Italiane Group's Integrated Report is now in its fifth edition and aims to illustrate how sustainability is increasingly integrated into the business model and corporate strategies, providing a clear and comprehensive representation of the Company's financial, environmental, social and governance performance.

The Integrated Report allows Poste Italiane to effectively represent the interrelationship between the financial and sustainability elements that contribute to the definition of the Group's business model and strategy, such as the external context, strategy, business model and forms of financial and non-financial capital. The document is a useful tool for stakeholders to gain a comprehensive understanding of the processes the Group has put in place to support the country's growth and create shared value, describing what has been achieved while offering an overview of short-, medium- and long-term ambitions and goals.

The social and environmental impacts generated by the Group place the process of integrating sustainability into the business model at the centre of the value creation process for the Company and all its stakeholders, with the aim of contributing to the achievement of the United Nations Sustainable Development Goals. The path taken by the Group is underpinned by certain strategic and investment choices in the main forms of capital, such as financial, human, physical-structural, intellectual, social- relational and natural, i.e. assets which contribute to sustainable success of the Company, but which on the other hand are impacted by the activities of the Company itself.

Poste Italiane, through numerous ESG projects, aims to lead the country's sustainability path, build an inclusive society and offer a greener future. Through this document, the Group aims to represent its green strategy, aimed at continuing its path of entry into the energy market, accelerating the energy transition process of the business. In addition to proposing sustainable products and offers, entering the energy market gives Poste Italiane a further boost in engaging customers and guiding them towards environmentally aware behaviour.

In continuity with the preparation of the previous Integrated Report and consistent with regulatory requirements, the 2022 Integrated Report contains the section dedicated to the European Environmental Taxonomy, found within Chapter 9 "Consolidated Non-Financial Statements". To this end, the Group undertook a careful analysis of its activities and the regulatory framework issued by European institutions and developed a specific methodological approach aimed at providing adequate disclosure. In line with EU Regulation no. 852/2020 (Taxonomy Regulation), Poste Italiane's Integrated Report include a differentiated disclosure of regulated KPIs, based on its industrial operations (Non Financial Undertakings) and financial operations (Financial Undertakings): in relation to industrial operations, the Group carried out an assessment in order to identify its share of Turnover, Capex and Opex aligned to the Taxonomy, while in relation to financial operations it has provided - for the second year of reporting - a disclosure of KPIs in accordance with the Eligibility analyses, in line with the Regulation.

In addition, Chapter 5 describes the methodology adopted by the Group for materiality analysis, revised to comply with the provisions of the 2021 update of the GRI standards for the inside-out perspective, and taking into account the EFRAG recommendations, albeit still in draft, for the outside-in perspective. The adoption of the dual materiality process to identify Poste Italiane's material issues allows the Group to anticipate the entry into force of the Corporate Sustainability Reporting Directive, scheduled for FY 2024. In this regard, the main change from previous years is the updated system of indicators used for ESG performance reporting, in line with the new GRI Universal Standard 2021.

In continuity with previous years, the 2022 Integrated Report contain the Consolidated Non-Financial Statement, which is integrated into the Report on Operations in the Chapter 9 thereof. The NFS was drawn up in accordance with the requirements of Articles 3 and 4 of Legislative Decree no. 254/2016 and the "Global Reporting Initiative Sustainability Reporting Standards" defined by the GRI - Global Reporting Initiative (hereinafter "GRI Standards") according to "in accordance" option. Chapter 9 of the section "Reporting standards and criteria" includes a connecting table that indicates the information content required by the Decree and its positioning within the Integrated Report, with the aim of making it easier to find all non-financial information.

The Group's fifth Integrated Report was prepared by applying the Integrated Reporting framework published by the International Integrated Reporting Council (IIRC). In addition, Poste Italiane also provided disclosure of the impacts of the Russian invasion in Ukraine, which ESMA  required issuers to report in their 2022 Annual Financial Reports and Non-Financial Statements. In addition to the impacts of the conflict, ESMA also identifies climate change issues as a priority in the non-financial report for 2022. Confirming Poste Italiane's commitment to combating climate change, it should be noted that as of 2021 the Group has officially joined the supporters of the Task Force on Climate-related Financial Disclosure. In order to broaden the Group's disclosure on the management of risks and opportunities related to climate change, this document illustrates how the Group's activities are managed according to the recommendations of the TCFD, and also provides a table linking the TCFD recommendations with the contents of the Integrated Report. Finally, with the aim of reflecting potential future developments regarding climate change, Poste Italiane once again this year carried out a review of climate scenarios using as a reference the documents drawn up by the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) and the main literature on the subject.

In line with previous years, the indicators used for the preparation of the 2022 Integrated Report were reclassified according to SASB (Sustainability Accounting Standards Board) standards, with the aim of contributing to the development of a shared and universal framework for non-financial reporting. In this sense, the indicators relating to "material ESG metrics" found in the latest version, from September 2020, of the document "Towards Common Metrics and Consistent Reporting of Sustainable Value Creation" presented to the World Economic Forum in January of the same year, have been reported again this year. By continuously updating its non-financial reporting methodology, the Poste Italiane Group demonstrates its commitment to the demands of the financial market, which is increasingly focused on assessing companies according to environmental, social and governance criteria.

The document also contains a table linking the objectives pursued by the Group, the GRI Standards indicators and the SDGs, which represents a useful tool to illustrate how the Company contributes to the achievement of the 17 United Nations Sustainable Development Goals and their 169 targets, also incorporating the latest guidelines of the most up-to-date version of the "SDG Compass" document drawn up by GRI, UN Global Compact and WBCSD (World Business Council for Sustainable Development).

In addition to the Integrated Report, the Annual Financial Report is composed of the following documents: the consolidated financial statements of the Poste Italiane Group, Poste Italiane's separate financial statements, including Bancoposta RFC's Separate Report, and the related attestations pursuant to art. 154 bis paragraph 5 of Legislative Decree no. 58/1998 and the reports of the Board of Statutory Auditors and the Independent Auditors, referring to the financial year ended 31 December 2022, and the Report on Corporate Governance and Ownership Structure published on the Company's website, in the Governance section, which is to be considered an integral part and to which reference should be made for further details on the Corporate Governance structure.

Poste Italiane's ESG Strategic Plan consists of 8 pillars in the ESG areas relevant for the Group. The materiality analysis, held during the Multistakeholder Forum in December 2022, enabled the identification of priority topics on the basis of the significance of their related impacts, to be included in the Group's Sustainability Strategy. Each Pillar is based on specific objectives and targets that contribute to the achievement of the United Nations Sustainable Development Goals (SDGs). Please refer to chapter 7 "Creation of value", for further information on the objectives, management methods and performances achieved within the Pillars of the Group's ESG Strategic Plan.

The company is committed to creating shared value on a daily basis, also in relation to the achievement of the SDGs, and aims to move the country towards carbon neutrality by 2030. In particular, through initiatives such as the so-called Green Challenge, which includes entering the energy market with an offer 100% from renewable sources and offsetting CO2 emissions through the development of ad hoc tools, Poste Italiane is able to best communicate the innovative green business philosophy adopted by the Group, i.e. a holistic approach that incorporates all Poste Italiane's products, services and processes.

To be sustainable for Poste Italiane means defining a clear strategy on ESG issues.
 

The strategic objective of the Mail, Parcels and Distribution segment is to accelerate its transformation from a pure mail operator to a full logistics operator, ensuring the economic and environmental sustainability of its operations. Implementation of the strategy is based on streamlining of the distribution networks, including the integration of Nexive, acquired at the end of 2020, consolidation of leadership in the B2C market and growth in the C2X and B2B segments through the introduction of specific offers and initiatives aimed at improving the customer experience. From this point of view, the Plurima acquisition will reinforce the contract logistics segment. Through the implementation of these strategic directions, the segment aims to achieve operating profit in 2024.
 

The Payments and Mobile area aims to establish itself as a complete and omnichannel platform for its customers, flanking the traditional business lines of payments and telecommunications with an offer dedicated to Energy from 2022, a market which the company will enter by taking advantage of its liberalisation.

From this point of view, the LIS acquisition will contribute further to the Group’s omni-channel strategy. The expansion of products, together with the ability to exploit physical and digital channels and third-party networks, will make it possible to fully exploit cross-selling opportunities for customers, thereby increasing value for Poste Italiane as a whole.
 

Financial Services aims to further evolve its service model by combining the traditional physical model with the opportunities provided by technological innovation. The priorities of the Strategic Plan include growth in wealth management, thanks to the diversification of customer portfolios to optimise their risk-return profile, the integration of non-life policies within the advisory model and a renewed focus on loans, with particular emphasis on the CQS segment, also thanks to partnerships signed with leading operators in the sector. The business related to the purchase of tax credits on building bonuses represents an opportunity to diversify the investment portfolio.
 

In Insurance Services, Poste Italiane aims to establish itself as an insurance operator capable of serving all customers' investment and protection needs. Poste Vita aims to confirm its position as leader in the life insurance sector, continuing to offer customers safe products that are both more profitable and more capital efficient. Lastly, the non-life insurance strategy envisages an increase in profitability thanks to the modular offer, supplemented by car insurance, provided to customers without assuming risk thanks to distribution agreements signed with leading Italian insurance companies.

It is with great satisfaction that we present to you, on behalf of the entire Board of Directors, whom we thank for their commitment, the fifth Integrated Report of the Poste Italiane Group.

2022 was a challenging year, spent in the full throws of recovery from the Covid-19 health crisis and in the knowledge that we are operating, now and in the near future, in an increasingly changing and unpredictable environment. The Russian-Ukrainian conflict, and the resulting humanitarian and energy supply crisis, has strained the resilience of our economy and community. This dramatic event, significantly altering the geopolitical balance at global level, which marked the first months of last year and whose effects, however, persist, draws attention to the need for companies to orient their business strategies towards a path of transition to a more sustainable economy, which places the central focus on the needs of the communities and territories in which they operate. Moreover, the continuation of the pandemic for the third consecutive year, although presenting an opportunity for change and accelerating crucial processes for the country's development such as the digital transition, risks, however, aggravating, in a broader context, inequalities by eroding social cohesion and increasing the social gap. In fact, this risk, according to the World Economic Forum's 2023 Global Risk Report, ranks seventh - globally - among the most burdensome risks of the next ten years, along with climate change, biodiversity loss, large-scale involuntary migration and the depletion of available natural resources.

In order to face the many challenges arising from the current context, we are convinced of the effectiveness of our sustainable business model in the medium to long term, with a solid strategy based on measurable objectives that take into account the demands of all stakeholders, part of the commitment to maintaining ongoing dialogue. Aspects of innovation and sustainability have been at the core of all Group strategies since 2020, but in 2022 they were further strengthened and integrated into the challenging goals contained in the Strategic Plan. Thanks to numerous initiatives and projects in line with an integrated vision, we can say that the Group is solid and sustainable, capable of providing the most innovative answers to seize the best opportunities even in a highly challenging and changing environment.

Poste Italiane aims to support the sustainable development of the country and to be a guide for responsible growth and digital evolution through the definition and achievement of financial, operational and sustainability objectives - understood in its broadest sense. With regard to environmental sustainability, in recent years we have seen a growing importance of these issues both at a global level, with the great resonance of COP 26 and the historic success of the establishment of the Loss & Damage fund during COP 27, and at a European level, with the publications on Environmental Taxonomy. At the national level, on the other hand, the substantial allocations in the PNRR (National Recovery and Resilience Plan) for the country's green transition confirm the need to implement processes increasingly focused on circular economy, sustainable mobility, energy efficiency of buildings and pollution monitoring, in order to improve the sustainability of the economic system to achieve a zero environmental impact society. In this regard, in order to meet the demands of institutions and our stakeholders, we have continued to pursue numerous activities to combat climate change. The ambitious commitments made by Poste Italiane are aimed at achieving carbon neutrality by 2030, well ahead of the time-line set by the European Union, and at the same time reflect the innovative green philosophy adopted by the Group that pervades all our services, processes and products. The holistic approach is also reflected in a greater involvement of customers through a carbon offsetting programme, the "Green Challenge", which rewards their "green behaviour", i.e. all those virtuous aspects of behaviour that benefit the environment.

From a social point of view, in 2022 Poste Italiane once again demonstrated that it is close to people and territories by making a significant contribution to the country. In fact, the Group, continuing with the approach adopted in 2021, made its channels available to the public for booking requests for the fourth dose of the Covid vaccine, giving them the opportunity to book in different ways. Moreover, Poste Italiane's commitment to accompanying the country's recovery is further demonstrated by the Polis Project, a social inclusion programme aimed at countering the depopulation of small towns and contributing to their socio-economic development by fostering interaction with the local areas and synergies with local institutions.

Poste Italiane has once again been able to monitor the changes in an increasingly demanding market, identifying the challenges of the future by adopting a long-term perspective to achieve competitive advantage. A demonstration of this is the Group's recent entry into the energy market, which confirms the Company as a reference point for satisfying the needs of Italian families, no longer only related to savings, investment, financing, fixed and mobile telephony and fibre, but also linked to electricity and gas. The evolution of our activities and our growth path have always been geared towards customers, who can count on the widespread presence of our organisation, which boasts a physical network of around 13,000 Post Offices, as well as an extensive digital infrastructure capable of serving the entire national population. And it is precisely in order to anticipate the economic and social needs of citizens, especially at a delicate time such as that dictated by the current energy crisis, that Poste Italiane invests in its all-round expertise, with a special focus on the development and continuous improvement of its range of products and services.

The Poste Italiane Group plays a central role in the country's economy. With a turnover of around €11.9 billion and the highest number of employees among Italian companies, it is confirmed in 2022 as the leading employer and the largest company in the logistics sector in Italy, with a leading position also in the financial, insurance and payment services sectors. The Group's recent entry into the energy sector further strengthens our presence in the region and our ability to meet citizens' needs even during a crisis.

Goals such as these are certainly the result of the effectiveness of the path taken towards the creation of shared value, with a view to achieving the Sustainable Development Goals (SDGs) as defined by the United Nations. The business model adopted by Poste Italiane is constantly evolving and adapting to the needs dictated by the economic and social context and the demands of the company's stakeholders, while maintaining its values and principles.

In particular, Poste Italiane's Sustainability Strategy consists of the Strategic Plan, which contains sustainability targets and objectives aligned to the highest national, European and global targets, and of a body of corporate regulations including all the Sustainability Policies that regulate the non-financial aspects of the Group, its principles and corporate values.

Although in 2022 we were able to experience an effective return to the habits that had been lost due to the Covid- 19 pandemic, the desire to establish an increasingly resilient business approach was reinforced. The integration of social, environmental and governance factors into our business model - which enabled us to overcome a period of sudden destabilisation - has been and will continue to be the key to a broader risk assessment, enabling the Group to think long-term.

Given the historical context in which we operate, and as the leading company in the logistics sector in Italy, the relationship with our stakeholders is increasingly central, and fostering dialogue with them allows us to maintain a solid relationship of trust, based on shared values such as transparency and inclusion, which are at the heart of our growth path towards a sustainable future. In this regard, this year's Multi-stakeholder Forum once again was a crucial opportunity to discuss and listen to stakeholders, in full agreement with the key objectives of the Group's Sustainability Strategy, based on eight pillars: Integrity and transparency, People development, Diversity and inclusion, Creating value for the country, Green transition, Customer experience, Innovation and Sustainable finance. The event, now in its sixth year, was live streamed and was attended by more than 1,000 people, together with whom we assessed the significance of the sustainability impacts related to our business and defined the material issues for Poste Italiane, in line with the regulatory developments of the GRI and CSRD standards.

The multiple recognitions obtained, nationally and internationally, from the most prestigious rating agencies confirm the effectiveness and far-sightedness of the sustainable strategies undertaken by the Group in recent years. In continuity with 2021, in 2022, Poste Italiane confirmed its presence in the Dow Jones Sustainability World Index, a prestigious sustainability index which incorporates the best companies in the world in terms of the sustainable management of their business, and within the more selective Europe segment. In addition, the Group was not only reconfirmed as a leader in the fight against climate change by CDP (formerly the Carbon Disclosure Project), being placing for the third consecutive year in the "Leadership" bracket of the international rankings with an A- rating, but was also ranked by Sustainalytics as a top ESG performer from a panel of more than 15,000 companies assessed globally, achieving an ESG Risk Rating of 12.7 (Low Risk). These prestigious awards are followed by further confirmations in equally important indices, such as Bloomberg Gender-Equality Index (GEI), FTSE4GOOD, MIB ESG and Euronext Vigeo-Eiris World 120. With regard to the latter, we are proud to report that the company was again ranked first among out of 5,000 companies evaluated on the basis of sustainability performance. In addition to being included again this year in the 2023 edition of S&P Global's Sustainability Yearbook, ranked in the Top 5% S&P Global ESG Score 2022, the Group also earned the "AA" rating from MSCI, for the significant progress it has made with regard to the social sphere, improving its corporate sustainability performance and leadership in the sector.

The results achieved in 2022, pursued with great determination thanks to our people, not only give us special satisfaction with the path taken, but also strengthen our reputation as they highlight Poste Italiane's concrete commitment to creating shared value. We are also aware that it is only possible to meet the new challenges of sustainable development through constant listening and dialogue with regard to the needs of our stakeholders and the pursuit of common goals.