- Bank aims to achieve a physical intensity of 1.11 tCO2/tSteel by 2030, which would correspond to a 23% reduction from its 2022 baseline;
- Steel represents the backbone of the European economy but is also one of the primary contributors to CO2 emissions.
UniCredit has today announced its 2030 target for the steel sector, which forms part of the bank's commitment to reach its 2050 goal of a Net Zero lending and investment portfolio.
The target is in line with the Net Zero commitment the bank signed in October 2021 with the industry-led and UN-convened Net-Zero Banking Alliance, as well as its signing of the Sustainable STEEL Principles (SSP), which provide a framework for assessing and disclosing the degree to which emissions associated with lenders' steel loan portfolios are in line with 1.5°C climate targets.
Fiona Melrose, Head of Group Strategy & ESG at UniCredit, said: "Today's announcement marks the next step on our Net Zero journey, as we continue to do our part in contributing to a just and fair transition for all our stakeholders. Our new target for steel financing, aligned with the UN's Net Zero pathway for the sector, is designed to help this critical but high-emitting sector to make that transition smoothly."
UniCredit will pursue an exposure-weighted[1] physical intensity[2] of 1.11 tCO2/tSteel[3] by 2030 on Scope 1, 2 and 3 emissions according to a fixed boundary system approach, which enables a more direct comparison of emissions performance between steelmakers.
This target is fully aligned with the International Energy Agency's 1.5°C decarbonisation trajectory[4] and corresponds to a c. 23% reduction in emissions from a baseline of 1.45 tCO2/tSteel in 2022 pertaining to UniCredit's €2.2 billion steel lending portfolio.
The bank's portfolio alignment score for 2022, calculated according to SSP guidelines, stood at -0.69 - positioning its emissions baseline below that set by the IEA Net Zero trajectory.
To achieve its new target, UniCredit will continue to engage with its clients in the sector, supporting their decarbonisation plans via impactful ESG advisory and bespoke green and transition financing.
Richard Burton, UniCredit's Head of Client Solutions, added: "Steel will be critical to the success of European decarbonisation, and it is vital that we support existing producers as they transition to low-carbon and green technologies in pursuit of their Net Zero goals. Putting our clients at the centre, we are well positioned to provide tailored solutions that support them across the product suite."
For more information on our Group Net Zero targets regarding Oil & Gas, Power Generation and Automotive, please click here.
Milan, 18 January 2024
For further information, please contact: mediarelations@unicredit.eu
[1] 'Exposure-weighted' signifies that the physical intensity attributed to a bank is calculated weighting the physical intensity of each client with the lending provided by the bank.
[2] 'Physical intensity': emissions per unit of steel produced.
[3] Tons of CO2 per ton of crude steel produced.
[4] Trajectory tailored to UniCredit portfolio.