Double materiality analysis

Poste Italiane conducted a preliminary context analysis with respect to the Group’s operations and its upstream and downstream value chain, aimed at investigating the specific activities, business relationships, geographies or other factors that present a high risk of negative impacts occurring. This analysis was supplemented with the findings of a desk analysis with respect to reference best practices, which took into account the company’s strategic objectives as well as the interests expressed by stakeholders. Starting from the results of the 2022-2023 materiality cycle, a reconciliation of the Poste Italiane Group’s impacts was carried out, where possible, to the sustainability issues considered by the ESRS Standards (Topic, Sub-Topic, Sub-Sub-Topic) and to additional entity-specific issues.

With reference to impacts, the Group reconciliation of the impacts identified in the 2022-2023 materiality cycle to the sustainability issues considered by the ESRS Standards and to additional entity-specific issues, integrating new impacts in order to ensure an exhaustive coverage of all issues, sub-topics and sub-sub-topics potentially relevant to the Group. The impacts identified were then classified according to their nature, distinguishing between positive or negative, actual or potential. Next, the scope of impacts along the value chain was defined, distinguishing between upstream, own operations and downstream. Finally, the time horizons within which each impact manifests its effects have been established, divided into short term (within 1 year), medium term (within the plan period, between 2 and 5 years) and long term (beyond the plan period, more than 5 years).

In order to identify risks and opportunities, first an analysis of the Group’s relevant activities was carried out, consistent with the 2022-2023 materiality analysis cycle, and then proceeded to relate them to the sustainability-related topics, sub-topics and sub-sub-topics contemplated in ESRS 1. In view of the findings, an analysis of opportunities and risks (strategic and emerging) mapped in the Enterprise Risk Management area was carried out, consistent with the Strategic Plan 2024-2028 and the Annual Financial Report 2023.

Following the verification of ESRS topic coverage, the list of potentially relevant risks/opportunities (long list) was consolidated.
Based on this long list, an assessment of risks and opportunities was carried out in order to identify those relevant to the Poste Italiane Group. The assessment was carried out in consideration of the Impact Materiality and on the basis of possible dependencies of the Poste Italiane Group (e.g. energy resources for the corporate fleet), as well as considering the players in the value chain that contribute to the generation of the identified risks/opportunities and the reference time horizon, divided into short term (within 1 year), medium term (within the plan period, between 2 and 5 years) and long term (beyond the plan period, more than 5 years).

With reference to the significance value of impacts, an evaluation scale was defined, based on the following criteria: Magnitude, extent of the positive or negative effects of the impact on the environment and people, assessed on a scale from 1 (None) to 5 (Very High); Scope, extent of the impact in terms of geography and/or number of individuals affected, measured on a scale from 1 (Limited) to 5 (Systemic); Irremediable nature (only for negative impacts), Poste Italiane Group’s ability to remedy the effects of the impact, assessed on a scale from 1 (Easily remediable) to 5 (Irremediable). On the basis of this assessment scale, the significance of impacts was defined as the mean of the magnitude, extent and irremediable nature values for negative impacts and the mean of the magnitude and extent values for positive impacts. Furthermore, an additional increment of 1 was assigned to all potentially significant human rights impacts, with the aim of increasing their significance in line with the provisions of ESRS 1 and the MAIG Guideline. With reference to the probability of occurrence of impacts, a scale of values from 1 to 5 was defined, assigning a maximum value of 5 to all actual impacts and involving the reference functions to establish the probability of occurrence of potential impacts, based on evidence from an internal desk analysis. The methodology for calculating the significance of each identified impact was defined as the product of its associated significance and probability.
Finally, taking into account the Enterprise Risk Management thresholds used for the assessment of risks and opportunities, a materiality threshold of 8 was determined.

In line with the Enterprise Risk Management framework, risks and opportunities are assessed through the drivers of impact (quantitative and qualitative) and probability of occurrence of the risk event on a 5-value scale. The assessment was carried out consistently with the metrics adopted in the Enterprise Risk Management area and the reference thresholds, in order to attribute a scoring in line with the assessment criteria defined by the ESRS standards.

The combined assessment of probability by impact allows the risks to be classified as follows:

• Tier 1: risks with rating of 12 or higher;
• Tier 2: risks with rating between 8 and 10;
• Tier 3: risks with rating lower than 8.

Based on the assessments performed, and in line with the Enterprise Risk Management methodology, risks and opportunities falling within Tier 1 were identified as relevant for the Poste Italiane Group. Based on the outcome of the assessment of the various risks and opportunities, the Poste Italiane Group has identified priority mitigation/enhancement actions, according to the relevance of the risks and opportunities.

With reference to the impacts, in order to assess their significance, the Poste Italiane Group involved a broad panel of stakeholders in the annual “Multistakeholder Forum” initiative, which, now in its eighth edition, has been updated in accordance with the new regulatory requirements of the CSRD and ESRS standards. Live streamed to ensure the broadest participation possible, in 2024, the initiative involved more than 1,000 participants and created an opportunity for reflection and the sharing of ideas and projects useful for the creation of shared value with the main stakeholders with whom Poste Italiane interacts in carrying out its activities, enabling the achievement of the Group’s strategic objectives. Specifically, the activity provided for the organisation of four thematic focus groups, with the provision of an interactive questionnaire aimed at assessing the significance of potentially material impacts defined by the Poste Italiane Group on the basis of its business activities in relation to the ESRS topics “Climate change”, “Pollution”, “Water and marine resources”, “Biodiversity and ecosystems”, “Resource use and circular economy”, “Own workforce”, “Workers in the value chain”, “Affected communities”, “Consumers and end users”, “Business conduct” and the Entity Specific topic “Sustainable finance”. For each of the potentially significant impacts,
stakeholders were asked to assess their magnitude, extent and irremediable nature (for negative impacts only). The activity thus contributed to the identification of ESG information to be reported within the Group’s Sustainability Report 2024 and to determine the main sustainability issues that, at a strategic level, can define the guidelines of the Group’s ESG commitment.

With reference to the risks arising from the ERM Model, the analysis is updated on a quarterly basis as part of the monitoring activities carried out by the Group Risk and Compliance function. These activities normally envisage, for each relevant risk, the involvement of the competent corporate functions for the purposes of updating the quantitative and qualitative data/information on the basis of which the trend of the risks themselves is determined, reviewing, if necessary, their assessment, in accordance with the Group’s Risk Management methodology.

On the basis of the scoring mechanism and the materiality thresholds established, Poste Italiane identified a total of 45 impacts, 22 risks and 9 opportunities relevant to the Group. These findings were shared with the Sustainability Committee, the Control and Risk Committee and the Board of Statutory Auditors. The Board of Directors subsequently approved the entire process.

It is specified that, regarding ESRS topic E3 “Water and marine resources”, given its nature as a large integrated and omnichannel service platform in Italy, the Poste Italiane Group monitors water consumption for civil use at post offices, without significant impacts on water sources. Nevertheless, the Group targets efficient water management, taking concrete actions to reduce water consumption and promote its proper use to prevent and avoid waste. Furthermore, with reference to ESRS Topic E4 “Biodiversity and Ecosystems”, the analysis led to the identification of the topic of biodiversity as substantially irrelevant in view of the nature, activities and sector in which the Group operates.