Pan-European bank aims to achieve reductions of 30% in the physical intensity of its shipping portfolio, and 44% to 55% in its commercial real estate portfolio
UniCredit has today announced its 2030 targets for the shipping and commercial real estate sectors, which contribute to the bank's ambition to reach a Net Zero lending and investment portfolio by 2050.
The targets are in line with the Net Zero commitment the bank signed in October 2021 with the industry-led and UN-convened Net-Zero Banking Alliance.
Fiona Melrose, Head of Group Strategy & ESG at UniCredit, said:
"Today's announcement marks another important step as our Group progresses towards Net Zero and continues to contribute to a just and fair transition for all our stakeholders. Our new target for commercial real estate, a key segment of a critical sector that presents unique challenges, will see us redouble our efforts to support clients in improving the energy profile of their buildings, both existing and new. At the same time, our new target for shipping seeks to contribute to the decarbonisation of international maritime trade and passenger transport. With today's disclosure, we have now outlined our ambitions for seven of the most carbon-intensive sectors, including an industry-leading phase-out policy for coal, a clear sign of how we are embedding ESG in our financing activities."
The real estate sector is estimated to account for 30% of global final energy consumption and 26% of global energy-related emissions - underlining its criticality to the Net Zero pathway.1
To support the sector's decarbonisation, UniCredit will focus on commercial real estate in its three largest and most material geographies: Italy, Germany and Austria, with a collective exposure of €31.1 billion.2
The bank will pursue a reduction in the physical intensity of the operational emissions of these buildings of 44% to 55% from a 2022 emissions baseline of 44.2kgCO2e/m2.3 This range, with the -55% in line with the reduction trend of the CRREM decarbonisation trajectory,4 is ambitious and considers the uncertainty of the market and required regulatory developments at the same time.
To achieve this target, UniCredit will continue to support its corporate clients through the financing of new energy-efficient buildings, as well as the retrofitting of less efficient premises.
In tandem, the bank also analysed its €72.8 billion5 residential real estate portfolio across the same three geographies, with a 2022 baseline on operational emissions equal to 36.3kgCO2e/m26.
UniCredit will continue to monitor its progress from this baseline, track the ongoing evolution of the regulatory landscape, and support its clients in reducing the carbon footprint of their homes.
At the same time, the bank acknowledges that government intervention and adequate incentive schemes will be essential enablers for the overall decarbonisation path of both the commercial and residential real estate segments.
For the global shipping sector, the bank will pursue a 30% reduction in the physical intensity7 of Scope 1 and 38 emissions derived from its €3.1 billion9 shipping portfolio, from a 2022 baseline of 14.1 gCO2e/GT-nm10 for passenger ships and 9.5 gCO2e/DWT-nm for merchant vessels.
UniCredit's emissions scope (Well to Wake)11 is in line with the latest International Maritime Organisation guidelines, while the reduction target follows the IEA's 1.5°C decarbonisation trajectory.
To achieve its goal, UniCredit will continue to proactively engage with its clients, by providing financing for next-generation vessels, and the retrofitting of existing ships.
Milan, 17 July 2024
Contacts
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1 2023 IEA Tracking Clean Energy Progress, 2024 UNEP Global Status Report for Building and Construction.
2 Figure refers to on-balance sheet exposure (drawn amount) related to building financing to real estate operators.
3 Emissions intensity available in Italy as kgCO2/m2 vs kgCO2e/m2 in Germany and Austria.
4 Trajectory tailored to UniCredit portfolio.
5 On-balance sheet exposure (drawn amount)
6 Emissions intensity is available in kgCO2/m2 for Italy and in kgCO2e/m2 for Germany and Austria.
7 Physical intensity (i.e. emissions per unit of transport work) is exposure-weighted, meaning that it is calculated weighting the client / vessel physical intensity with the lending provided.
8 Category 3.
9 On-balance sheet exposure (drawn amount)
10The metric used is the Annual Efficiency Ratio, which calculates the carbon intensity of each vessel by dividing the amount of CO2e emissions by cargo carrying capacity and distance sailed.
11 Emissions stemming from the entire process of fuel production, distribution and use onboard ships.