From Internal Audit perspectives, we understand the importance of Environmental, Social, and Governance (ESG) factors in driving sustainable business practices and managing risks and opportunities. In line with Generali Group's proactive approach towards sustainability, the integration of ESG megatrends into the audit plan is a crucial step in ensuring that the Group effectively addresses these factors.

The identification and classification of ESG megatrends by the Group Sustainability & Social Responsibility Department demonstrate Generali's commitment to understanding the systemic changes that will shape the business landscape over the next 10 years. By mapping these megatrends and their implications, the Group can develop appropriate mitigation factors to prevent, mitigate, or reduce risks and impacts for both the Group and the wider community.
Since 2022, the consideration of ESG megatrends was integrated into the audit plan in Vietnam, in providing a solid foundation for assessing the Group's performance in relation to sustainability. This integration ensures that the audit process encompasses the evaluation of ESG factors, enabling a comprehensive understanding of the Group's sustainability practices and identifying areas for improvement.

Besides, the establishment of a common library for mapping Group business responses, known as Key Mitigation Factors, is an important resource for the entire Audit Community. These factors serve as a basis for consultation, enabling auditors to access and leverage best practices and strategies to address ESG risks and implications effectively. This collaborative approach strengthens the Group's ability to manage ESG factors and aligns with the goal of being recognized as a sustainable player in the industry.
Moreover, the trainings and open sharing discussions on ESGs is one of the key goals for each Internal Auditors, to ensure that the proper training and deep dive knowledge about the topic are well established.

Group Internal Audit has taken further steps to integrate ESG megatrends into the audit scope. This includes conducting "specific" audits dedicated to ESG topics such as underwriting insurance policies covering pandemic risk and incorporating ESG factors into the financial investment process. Additionally, ESG considerations will be embedded as dedicated elements in a variety of other audits, ensuring a holistic approach to sustainability across the Group.
Some examples of ESG megatrends that will be addressed in our annual risk assessment for the audit plan include ageing and new welfare, pandemics and extreme events, digital revolution and cybersecurity, geopolitical and financial instability, regulatory complexity, changing nature of work, transportation and purpose-driven businesses, polarization of lifestyles, change in healthcare, resource scarcity and sharing economy, biodiversity degradation, women and minorities inclusion, and increasing inequalities.

By embedding ESG factors into the audit plan engagements, we are taking a proactive approach towards sustainable business practices. This ensures that the Group is well-prepared to manage risks arising from ESG megatrends, capitalize on relevant opportunities, and align its operations with the principles of sustainability, ultimately enhancing long-term value for stakeholders and contributing to a more sustainable future.