UniCredit

Unicredit

SECTIONS :  Sustainability •  Targets   Evaluation  •  Key Points  •  Overview

Company Activity

Founded in 1998 in Milan, UniCredit is a European public bank with BlackRock being its largest share owner with ~5.1% ownership of UniCredit and as of 2019, UniCredit’s revenue was €28.8 billion.

The completely free float bank provides services in retail, private, corporate and investment banking, finance leasing and insurance services.

Traded as UniCredit Group, the bank’s core markets are in Italy, Austria, Bosnia and Herzegovina,  Bulgaria, Croatia, Czech Republic, Germany, Hungary, Romania, Russia, Serbia, Slovakia and Slovenia.

Alongside brands such as Heineken and Adidas, UniCredit was an official partner of the UEFA Champions League from 2015-2018. UniCredit says that their actions are aligned with and always done in consideration of their five fundamental values, these being: their customers coming first, staff development, cooperation throughout the banks, practical risk management and all while aiming for structured and exact results.

Company Sustainability Activity

UniCredit was awarded ‘Most Active Confirming Bank’ by the EBRD for the highest participation in the Green Trade Facilitation Programme where UniCredit used existing trades to import green technologies.

In 2013, during the European CSR awards UniCredit was specially mentioned for their ‘Your Choice, Your Project’ initiative which was designed to encourage social and cultural inclusivity within the bank.

In 2004, UniCredit became a signatory of the United Nations Global Compact.

In 2012, UniCredit endorsed the National Capital Declaration, launched by the UN to better the merging of ‘natural capital considerations’ with ‘financial decision-making’.

In 2019, UniCredit set up their own Sustainable Finance Advisory Team’, to better integrate sustainability within all sectors of corporate and investment banking. With an end goal of streamlining the process of prioritising sustainable financing. In tandem with this, the bank created a sub-team within the risk management division to focus on the adaptation and integration of ESG factors into UniCredit banking.

Highlights

Targets

Low-Carbon Economy

  • To fully phase out partnerships with and use of the Coal Sector by 2028
    • Stop investments into Coal-Fired Power Plants
    • Stop investments into Thermal Coal Mines
    • Increase lending to the renewable energy sector by 25% by 2023
      • (Over €9 billion)

Broader Goals

  • 80% reduction of greenhouse gasses by 2030
  • All Electricity usage and consumption from bank buildings to come from totally renewable energy sources by 2023
  • To be completely plastic-free by 2023

Social Impact Banking

 

Progress

From 2019 – 2020

  • Revised their coal policy
  • Increased their energy efficiency loans to small and medium-sized businesses by 20%
  • Reduced their output of greenhouse gasses from 55% reduction to 60%

Overall Progress

  • Currently, all electricity usage and consumption from the bank buildings in Italy and Germany come from totally renewable energy sources and UniCredit are looking to expand this to their buildings in Austria too.
  • Cut their greenhouse gas emissions by over 50% since 2008
  • Reducing their use of paper and transitioning to a ‘paperless branch programme’

Social Impact Banking

  • Created a scheme in 2017 to help those less privileged in local communities by addressing various social issues, while working towards meeting the 2030 SDGs

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 5: Gender Equality

SDG 7: Affordable and Clean Energy

SDG 8: Decent Work and Economic Growth

  • Ensures there are more than 30 training hours per capita
  • Creation of ‘Diversity and Inclusion Week’
  • Ensures flexible working solution

SDG 10: Reduced Inequalities 

SDG 17: Partnerships for the Goals

 

Evaluation

UniCredit has proven that sustainability and specifically ESG factors are increasingly becoming intertwined with their core business model. This proves beneficial to the bank itself but also their shareholders, and the people and companies they provide services for.

UniCredit appears to pay close attention to large and physical changes, specifically those considering renewable energies and divestments from the coal sector.

Similarly, their PEFC certification highlights UniCredit’s attention to sustainable forest management.

UniCredit also notes their recent sustainability report was assessed and revised by the third-party standard ISAE 3000. The bank is aligned with and holds decent partnerships for sustainable change and is very clear about which SDGs they are working towards achieving and which naturally align with their own business model.

Contrary to UniCredit’s sustainability initiatives, the bank has invested $31.418 B in the fossil fuel industry since the Paris Agreement. Even more shockingly, UniCredit has been increasing its investments since 2018. Its increasing contribution cannot be ignored

Therefore, the company has been rated a C.

Analyst Outlook: Neutral

While UniCredit does lay out achievable and clear goals, the bank could do with more elaboration on their ‘positive social impacts’.

Additionally, to increase their sustainability rating, UniCredit should be striving to achieve larger known sustainability awards such as CDP, especially considering their sustainable forest management strategies and consistency in the execution of their awarded green certificates.

 

Key Points

  • Clear alignment with specific SDGs (SDGs 5, 7, 8, 10, 17)
  • Featured by Bloomberg for their contributions to gender equality in the workplace
  • Partnerships with UNGC, NCD and TCFD
  • ISO 14001 for two of their European Banks
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