Lucia Silva has been Generali’s Group Head of Sustainability and Social Responsibility for more than 5 years. Today she discusses the potential impacts Covid-19 has had on her firm, with an insight on ESG strategies.

Generali is the third most important insurance firm in the world. This multinational group has 400 companies in 50 countries, gathering more than 70,000 employees. For many years, the company has been committed to integrate sustainability into its business strategy.

What’s Generali’s approach to sustainability?

Generali has been trying to find the best solutions to put together people, the planet and profits. Generali’s sustainability strategy is organized around two main pillars. The first pillar concerns the integration of sustainability into the core business, that is into insurance and investment activities. This includes green and social products and investments. The second pillar concerns the Human Safety Net. Since 2017, Generali works with communities to address small and local problems all over the world. These actions are designed to accelerate the financial, technological and economic development of the places concerned that should, in turn, have positive impacts on the society and on Generali’s internal network. As an international company, Generali has also had to found ways to apply its group policy at the global level, based on the concept of ‘adjust-transition’. For instance, Generali has adopted a strong positioning on coal that aims at stopping coal investments while divesting its coal exposure. However, the Group has to cope with some countries’ specificities. For instance, Generali’s coal strategy is adapted to countries where coal represents more than 45% of the energy mix (as for Eastern European countries). The strategy is about engaging national companies and public institutions to accelerate the transition towards greener activities, as well as coping with the potential negative social impacts of that transition (the need to reskill workers for instance).

How would you position Generali in terms of ESG achievements compare to other private companies?

Generali has had the chance to understand quite early the significance of sustainability in business. Thus, it has been integrating ESG concerns and targets into its group strategy at different levels – investments, customers, operations, communities, people – for a long time. In 2019, it has reduced its GHG emissions by 20% versus 2013 – a target that had been set for 2020. As for the first half of 2020, it has achieved €4 billion of new green and sustainable investments. Today, Generali focuses on accelerating its green transition process. In November 2020, during its Investors’ Day, Generali has also reinforced its positing on sustainability, updating its audience on the progresses against the goal set in the Generali 2021 strategy. By 2021 it aims at increasing its green and sustainable investments by 5.5 billion, together with a rise of 7-9% of its GWP (Global Warming Potential) growth in green and social products. Nevertheless, one of the greatest challenges that Generali faces today in terms of its green achievements, is to make them long-lasting. On a more general note, one significant challenge that we all face in the green transition process, remains to find rigorous, trustable and quantifiable ways to measure the impact of sustainability on business.

Has Generali’s sustainability strategy been directly impacted by the 2020 Covid-19 pandemic? If yes, how?

The Covid-19’s direct impacts on Generali have been quite limited. As mentioned previously, sustainability was already under acceleration before Covid-19 happened. Thus, nothing has changed for Generali, but in a positive sense: Generali’s focus on sustainability was already increasing and is still a central part of the Group’s strategy as illustrated by the November 2020 Investors’ Day discussions. Has then Generali’s sustainability strategy been indirectly impacted by Covid-19? Covid-19 has had some side-effects on the group’s green transition. More specifically, it has considerably increased smart working: Generali’s objective was to achieve 60% of remote working by 2021, when it reached 100% during the pandemic. It has also fostered the digitalization of the relationships with clients and stakeholders. Finally, it has helped reducing to zero the impact of travels and has considerably reduced all expenses related to the use of the company’s buildings (electricity, paper waste, heating…). However, one needs to remember that these changes are not only Covid-19-related but are also the results of a synergy of other factors.

Could you explain the role of other actors/factors in generating positive sustainable responses to the Covid-19 pandemic?

Well, if we focus on the example of Europe, the European Commission has played a very important role in sending a ‘green signal’ to the market. In the first semester of 2020, there was a big concern that the dramatic economic and social consequences of Covid-19 would lead to the relegation of sustainability concerns to the second level. However, on 10th March 2020, just during the Covid-19 crisis outbreak, the European Commission launched its ‘Small and Medium Enterprises strategy for a sustainable and digital Europe’. In addition to this, on July 2020 the European Commission announced that around 40% of its €750 billion recovery fund (‘Next Generation EU’) would be dedicated to meet its climate objectives, while the rest of the money would be spent respecting some pre-set sustainability criteria. Thus, these actions have given strong signals to the market in terms of the nature of the post Covid-19 recovery that aims to be ‘green’. Following these announcements, private and public companies are more likely to orientate the way they do business towards greener strategies.

Moving away from Generali, what would you say were the 3 main positive impacts that Covid-19 has had on ESG?

First, Covid-19 has enabled many scientists to prove the strong correlation between pollution and human activities, as illustrated by the crystal-clear waters of Venice during the lockdown. Second, this has raised awareness within citizens regarding the impact their ways of consumption have on the environment. This has started to trigger what we can call ‘responsible consumption’. However, this second effect, that could correspond to a more expensive way of consumption, has to be balanced by the fact that people have been financially affected by the crisis and thus have less money to spend. Finally, we have seen a sharp increase in ESG investments compared to traditional ones, not only coming from the investors’ side but also driven by new expectations on the consumers’ part.

What would you identify as the main challenges that could arise because of Covid-19?

To me, diversity inclusion and gender diversity are likely to be strongly impacted by Covid-19. Indeed, sectors like personal care services or food service occupations, where women predominate, have been strongly affected by the crisis. Moreover, women have sometimes been confronted to company inflexibilities and stress that prevent them from meeting what they feel are their ‘childcaring and households’ responsibilities’, and in extreme cases leads to their departure. This crisis has also highlighted a greater need for digitalization, a sector predominated by men. This is a wake-up call for women that need to diversify their skills by studying topics that are usually mainly mandominated, by building digital skills for instance.

Interview realized by Blanche Comolli, for the Econogy Project.