Engagement and Common Commitment: The Milestones of SACE’s Sustainable Path

As of today, SACE is more than an Export Credit Agency. Thanks to the extension by the Italian Government of its mandate over the course of the last two years, SACE has evolved into an institution tasked with the mission to support the competitiveness of Italian companies on the domestic market as well as to facilitate the implementation of the Italian Green New Deal.

This broader role brings to the fore the centrality of SACE’s commitment to sustainability, an area in which the company is working on several levels, in an overall integrated logic: both internally and in all its activities, in Italy and abroad.

In Italy, through the Green Guarantees linked to the Green New Deal, SACE can support domestic projects of Italian companies aimed at facilitating the transition towards an economy with a lower environmental impact, integrating production cycles with low-emission technologies for the production of sustainable goods and services, and developing a new mobility with lower polluting emissions.

The first transaction finalized within the Green Guarantee program was with Arvedi Group, one of the main European steel players. Thanks to SACE support, the Group will reduce substantially its emissions during the production cycle and will recover a large percentage of the production waste, creating an integrated circular process.

On the export side, SACE supported the Italian company Prysmian in the construction of an under sea electricity interconnection between the UK and Denmark, the so-called ‘Viking Link’ project. This has been the first ECA-guaranteed ‘Green Loan’.

An other relevant example is the sustainability-linked loan in favour of Archirodon, an international EPC involved in the construction sector with specific regard to maritime infrastructure. The guaranteed loan, in the framework of the SACE untied program ‘Push Strategy’, will finance Archirodon’s sustainable investments facilitating the purchase of related goods and services from Italy.

Therefore, sustainability has become the guiding principle for all SACE’s business activities, creating value for its stakeholders and for Italy as a whole.

SACE’sinternal commitment towards sustainability is summarised within the Consolidated Non-Financial Statement, a strategic report –based on the Global Reporting Initiative standards and audited by an external consultant –that presents SACE’s yearly sustainability results in order to assess major improvements and key challenges. This tool goes far beyond numbers. It represents SACE’s sustainability identity and strategy that guides its business, taking as a benchmark a sustainable and inclusive development model.

In terms of management, SACE has set specific objectives aimed at reducing its environmental impact, ranging from the adoption of eco-friendly strategies and measures to many other initiatives– such as the reduction of energy consumption, separate waste collection and recycling, the development of Mobility Management programmes.

The business model and principles inspiring SACE naturally play a key role in its approach to sustainability. A commitment that SACE has been pursuing for years both in terms of business policies, adhering to international agreements and recommendations, and internal processes.

Since 2001, SACE has been following the OECD Recommendation ‘Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence’, a set of guidelines for assessing export credit transactions from an environmental and social perspective, which SACE also applies to other activities, outside the scope of the“Common Approaches”, in accordance with its own internal procedures.

More recently, in May 2021, SACE introduced the Climate Change Policy, a set of measures, in line with industry best practices, which introduce the ban to support transactions related to coal-fired power plants and to the extraction, production and transport of thermal coal, as well as transactions in the oil&gassector involving the use of routine flaring and fracking techniques. In addition, in October 2021, SACE adhered to the Poseidon Principles, the first global framework for financial institutions promoting the alignment of the shipping sector to the decarbonisation objectives set by the International Maritime Organization, under which SACE undertakes to monitor, on a yearly basis, the greenhouse gas emissions of its shipping portfolio.

In 2021, Italy joined two international initiatives, the Export Finance for Future (E3F) Coalition and the COP26 Statement (Statement on International Public Support for the Clean Energy Transition). Both initiatives focus on the suspension of public support for the fossil fuel sector and the promotion of the green transition. SACE is doing significant work in implementing such commitments in its business practices, in order to reduce the greenhouse gas (GHG) emissions of supported projects and to be aligned with the goals of the Paris Agreement.

“With respect to sustainability, it has to be highlighted that the export finance business and the relevant international context are experiencing a phase of profound transformation. –recently stated Michal Ron, Chief International Officer at SACE and President of the Berne Union(the leading global association for the export credit and investment insurance industry) speaking at an international conference –According to Berne Union data, in 2021 the entire industry has experienceda rebound in medium-long term transactions after a huge drop in the previous year at the peak of the pandemic. Amongst all sectors that have been leading this rebound, a large increase was noted in the renewable energy. New transactions in this sector amounted to approximately 7 billion dollars in 2021, which corresponds to a 47% increase compared to the pre-pandemic level. This increase represents the beginning of a long-term trend that we will certainly continue to register in the future at a rising speed. In line with the transformation of the industry, the international context is evolving too and climate issues are heading up the agendas of major international fora and organizations. SACE proactively contributes to the evolution of the international regulatory framework, with a view to enhance its support to the green transition of the economy”.

“Sustainability represents today one of the major issues for the finance sector, but it also brings with it many opportunities. –said Dario Liguti, Chief Underwriting Officer of SACE, at the same Conference dedicated to the export & trade finance business– SACE, as an ECA, works in the long-term business and none of us knows exactly how the world will evolve in the next 5, 10, 25 years. Regarding climate change, there is still a lot of confusion about standards, and we, as an industry, need to agree on one set of ESG criteria. Such evolution is essential since our business contributes to building the future, and we have the opportunity to do it together with the younger generations, transmitting the message that we all are actors of how the world will evolve”.

In fact, SACE’s attention is not only directed to the implementation of greener practices. The social aspect of sustainability has also acquired more relevance. SACE considers its people to be the most valuable assets of the Group and therefore is committed to enhance their skills and positive behaviours so that they can express their full professional and human potential.

That is why SACE has renewed itself both from the point of view of the offices, having developed a dynamic and inclusive work environment, and of its own organization, establishing the first corporate community dedicated to diversity and inclusion(D&I) issues. This is because for SACE diversity represents a value, but also a success factor for each individual and for the company.

The values and principles that guide SACE Group and its community are described within the Code of Conduct, based on the principles of solidarity, transparency and cooperation between people in order to build an ethical, sustainable and inclusive future. A pivotal tool –open to continuous improvements – that is the living testimony of the strong engagement and commitment that have always accompanied the evolution of SACE Group in the service of the Country.