Today UniCredit announced it is disclosing 2030 targets for the three most carbon intensive sectors within its portfolio which include Oil & Gas, Power Generation and Automotive sectors, to reach its Net Zero ambition at 2050. This is in line with the Net Zero commitment the bank signed in October 2021 and its continued support for a more sustainable global economy.
Fiona Melrose, Head of Group Strategy & ESG at UniCredit, commented: "These targets reinforce our commitment to reach Net Zero on our own emissions by 2030 and on our financed emissions by 2050. This is alongside the action we have taken to drive forward a just and fair transition for all, particularly through green and sustainable financing and advisory activities. We have made significant progress against the ESG business targets we have set, mobilising €11.4 billion of Environmental Lending, €28.7 billion of ESG Investment Products, €12.8 billion of Sustainable Bonds and €4.8 billion of Social Lending in 2022 compared to the Group's cumulative ESG volume goal of €150 billion over 2022-2024."
Targets for key carbon intensive sectors by 2030 compared to 2021 baseline
For the three most carbon intensive sectors the targets have been calculated using the International Energy Agency (IEA) Net Zero 2050 pathway as the benchmark scenario.
- Oil & Gas sector - UniCredit will target a 29% reduction in its Scope 3 financed emissions, starting from a baseline of 21.4Mt CO2e[1] in 2021. This target is related to the bank's Oil & Gas drawn balance of €7.8 billion, focusing on lending on-balance exposure, including NPEs[2]. It relates to extraction, refining and distribution of Oil & Gas products.
In addition, UniCredit's Oil & Gas Policy now prevents all support to Oil & Gas activities in the Artic Region, and all new explorations and expansions of oil reserves. Meanwhile, our Coal Policy anticipates the phase-out of coal financing by 2028.[3]
- Power Generation - UniCredit will target a c. 47% reduction in Scope 1 weighted physical intensity at 111 gCO2e/kWh[4] from a baseline of 208 gCO2e/kWh in 2021, through rebalancing its portfolio and significantly increasing green lending activities.
This target is related to the bank's Power Generation drawn balance of €8.9 billion and only includes electricity generation companies.
- Automotive - UniCredit will target a c. 41% reduction in Scope 3 "Tank To Wheel"[5] weighted physical intensity at 95 gCO2/vkm[6] from a baseline of 161 gCO2/vkm.
This target is related to the bank's Automotive drawn balance of €1.8 billion, excluding parts' manufacturers, heavy-duty vehicles' manufacturers and small retail companies (c. 1% of total drawn balance).
To support the achievement of these goals, dedicated initiatives are being developed focusing on:
o Strengthening of advisory services for corporates in high emitting sectors.
o Significantly boosting our sustainable lending (green loans and sustainability linked loans) to support our clients in their journey to decarbonise their operations and diversify away from carbon intensive sectors.
o Support to clients in the development and scaling up of innovative climate solutions.
o Targeted partnerships with companies specialised in sustainability for specific sectors.
All the above actions are complemented by our sector policies, including for Oil & Gas and Coal. These ensure we constantly reinforce our responsible and sustainable approach to the phase-out from hard-to-abate sectors with a clear focus on accelerating the energy transition through green financing. In addition to internal actions, UniCredit is proud to join the collective efforts of external industry working groups, including the Sustainable STEEL Principles and the European Clean Hydrogen Alliance, to support the necessary transformation of these sectors through cross-company collaboration and engagement.
UniCredit has been making tangible and consistent progress to cut its own greenhouse gas emissions over the last few years, reducing its combined Scope 1 and 2 market-based emissions by 32% between 2017 and 2021. The bank is committed to accelerate this progression, with the ambition to reach Net Zero on own emissions by 2030. Some examples of UniCredit's progress so far include deriving 80% of the electricity across the Group from renewable sources in 2021 already (100% in Italy and Germany, 98% in Austria). Furthermore, UniCredit was among the first movers in the European financial services sector and the first bank in Italy to sign a corporate power purchase agreement (PPA) with a specialist green power producer, CVA, to supply the energy for its core data centres in Italy, strengthening the bank's global Green Energy Procurement strategy. In addition, it was the first bank in Europe to obtain the Global Real Estate Sustainability Benchmark (GRESB) scoring on its corporate real estate portfolio across the Group's main markets.
UniCredit was also the first company in Italy to sign up to the Finance for Biodiversity Pledge during COP15 last December and is the only bank in the CEO Alliance in Europe, the action tank focused on driving the continent's decarbonisation and digitalisation through targeted collective initiatives.
Milan, 31 January 2023
Enquiries: mediarelations@unicredit.eu
[1] MtCO2e: millions of tons of carbon dioxide equivalent
[2] NPEs - non-performing exposures
[3] Green financing is allowed beyond 2028 only for non coal developers (no increase in coal business since Sep. 2020) and if they have a phase out plan in line with their National Energy & Climate Plan
[4] gCO2e/kWh - grams of carbon dioxide equivalent per kilowatt-hour of electricity generated
[5] Tank To Wheel - greenhouse gas emissions from internal combustion engine tailpipes
[6] gCO2/vkm: grams of carbon dioxide per kilometre driven by a vehicle