Second-Party Opinion Download

Sustainalytics is of the opinion that the Generali Green, Social and Sustainability Insurance-linked Securities Framework is credible, impactful and will deliver overall positive environmental and social impacts. Sustainalytics is further of the opinion that the principles of impact and transparency that underlie the responsible investment industry, as well as many of its norms and standards, are applicable to the green, social and sustainable insurance-linked securities (ILS) instruments to be issued under the Framework. This assessment is based on the following:   

IMPACT

Generali’s issuance of green, social and sustainability ILS instruments is expected to generate environmental and social impacts by following two approaches: i) investment of the proceeds from the ILS instruments, through third-party special purpose vehicles, in a portfolio of green, social and sustainability instruments, namely investments in redeemable notes issued by highly rated multilateral institutions, short-term securities issued by government or supranational entities with green, social or sustainability characteristics (and repos of such securities); and ii) use of freed-up capital through the issuance of ILS instruments, which will be used by Generali to fund eligible green and social assets meeting the Framework’s eligibility criteria and to support insurance products aligned with the insurance solutions criteria of the EU Taxonomy. Sustainalytics is of the opinion that Generali’s investment of the ILS instruments’ proceeds in redeemable notes, which in turn finance projects in the defined areas in the Framework, and the use of freed-up capital to finance eligible assets and support insurance products in these areas, will deliver positive environmental and social outcomes and advance the UN Sustainable Development Goals, specifically SDGs 3, 4, 7, 8, 9, 11, 13 and 15.  

TRANSPARENCY

Generali’s internal processes providing transparency regarding the use of its freed-up capital funds are aligned with market practice. Generali will establish a Sustainability ILS Committee for selecting, reviewing, managing and monitoring the eligible assets and insurance products, as well as identifying and managing risks related to these assets or products. Generali will monitor and track funds through its internal accounting and risk management procedures and will aim to reach full allocation within one year from each issuance. Unallocated capital will be temporarily allocated or invested in cash, money market instruments or other socially responsible investments. The Group plans to report annually on allocation and impact in relation to the eligible categories in the Framework until full allocation. In relation to the proceeds from the ILS issuances, Generali has limited control over the selection of notes and management of proceeds and will report on allocation and impact based on the reporting of the original issuers of the notes. Nevertheless, Sustainalytics considers the following to be sufficient transparency measures: i) disclosure of eligible investments to investors prior to issuance; ii) legally-binding agreements signed by the SPV to allocate to eligible instruments as defined by the Framework; and iii) the disclosures on allocation and impact through reporting, including the non-allocated portions of the portfolio that cease to be eligible.