First Retail Social Bond advancing welfare and social support services in the country
UniCredit S.p.A. has published its first Sustainability Bond Report, following the successful issuance of the Bank's inaugural Senior Preferred Green Bond for EUR 1 billion in June 2021 and the issuance of its first Retail Social Bond for EUR 155 million in September 2021.
The full Green Bond proceeds have been dedicated to fund renewable energy, specifically photovoltaic (EUR 408m), wind (EUR 293m) and biomass (EUR 44m) energy sources, as well as green buildings, including the Top 15% of Mortgages (rated for energy performance) across all regions (EUR 228m) and Real Estate (EUR 27m) in Italy.
The Social Bond proceeds have been allocated to finance projects with a positive social impact. The focus so far has been on welfare and social support services (75.1% of allocations). Other projects supported include education and training, health and medical assistance and additional social services. The indirect impacts generated through the bond proceeds include a total of 1.52 million beneficiaries (149% of 2021 target); the delivery of 2.62m training hours, 482 training courses, 193 professional internships, 108 social integration activities; and the provision of 1,322 beds in elderly homes, 1.21m medical services and 555 social houses (mainly in social tourism).
One example of the social assets financed is the Anffas Sibillini Onlus in Macerata, which carries out activities to protect the rights of people with intellectual and / or relational disabilities and to support their families. UniCredit has supported the organisation in the construction of "La Casa del Cuore", a place where it can run its initiatives and provide independent housing to people with severe disabilities.
Andrea Orcel, CEO of UniCredit, commented: "At UniCredit, we are committed not only to the green energy transition, but also to ensuring that this is a fair and just transition for all of society. Sustainability is central to how we do business: it underpins our corporate culture and ensures we are always acting in the best interests of all our stakeholders. We will continue to build on the success of our inaugural Green and Social Bonds and work to create a more sustainable and equitable future for both businesses and individuals. As a bank, it is our responsibility to fulfil our purpose of empowering communities to progress, and also to deliver a positive social and environmental impact as we do so."
Both issuances took place under the Group's Sustainability Bond Framework, based on the principles and guidelines of the 2021 version of the Green and Social Bond Principles and the Sustainability Bond Guidelines of the International Capital Market Association (ICMA), ensuring the transparent allocation and tracking of proceeds. The framework further allows all the Group's main issuers (in particular, UniCredit S.p.A., UniCredit Bank AG and UniCredit Bank Austria) to issue green, social and sustainability bonds, as a recurring part of UniCredit's funding activity.
100% of the Green Bond proceeds have been allocated with 75% targeting renewable energy and 25% allocated to green buildings. Most of the portfolio (44%) is based in Centre-South Italy and the remaining part is split between North-West (21%), North-East (4%) and across the country (31%). 77% of the portfolio has been allocated to the Corporate segment, including renewable energy and commercial building projects, while 23% is allocated to the Top 15% of Mortgages (rated for energy performance across all regions in Italy). The overall annual CO2 saving so far amounts to 718,009 tons, reducing carbon impact intensity by 718 tonnes of CO2 saving per year per each million allocated (tCO2/€m.y).
Example assets include the Galileo photovoltaic plants portfolio, covering the needs of circa 70,000 households in Italy with a significant CO2 saving of around 83,750 tons per year[1]. Another example is the refurbishment of the Hotel Britannique in Naples, which improved the energy efficiency class of the building from "F" to "A1" with a CO2 saving of 68 tonnes per year.
The Retail Social Bond has so far financed 51 social impact initiatives in Italy with 98% of the beneficiary organisations having either almost achieved, fully achieved or exceeded their social objectives. 100% have strengthened their skills and improved the ability to measure their social impact, and 96% have increased their economic and financial sustainability.
In addition to UniCredit S.p.A., also UniCredit Bank AG issued its first Green Mortgage Covered Bond worth EUR 500 million in September 2021 and UniCredit Bank Austria successfully placed its first Green Covered Bond on the capital market in May 2022 with a total volume of EUR 500 million.
Sustainability is a critical part of UniCredit's 2022-2024 Strategic Plan. The Bank's ESG Strategy includes targets for all areas of the business with an overall goal of reaching EUR 150 billion in new cumulative ESG volumes over the three-year period. In 1Q22, significant progress was already made on Environmental Lending (EUR 2.4 billion), Social Lending (EUR 1.1 billion) and ESG Investment Products (EUR 28 billion of fund conversion in line with the Sustainable Finance Disclosure Regulation (SFDR), article 8). Furthermore, UniCredit has reduced its own CO2 emissions by 32% between 2017 and 2021, continues to support Youth and Education with around 330,000 beneficiaries of its financial education and awareness initiatives last year, and is investing EUR 100 million to ensure equal pay for equal work across the Group.
The allocations described in the Report received ISAE 3000 Assurance from Deloitte.
For more information, please refer to our Sustainability Bond Report 2022, Sustainability Bonds page and our 2021 Integrated Report.
Milan, 12 July 2022
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