Climate change

As a demonstration of the strategic importance of climate change, in 2021 Intesa Sanpaolo set itself the goal of achieving net-zero emissions by 2050 in terms of own emissions and in terms of loan and investments portfolios, asset management and insurance business. The Group has joined the related initiatives launched by UNEP FI. More specifically, in October 2021 Intesa Sanpaolo joined the Net-Zero Banking Alliance (NZBA); in November 2021 Eurizon Capital SGR, Fideuram Asset Management SGR and Fideuram Asset Management Ireland joined the Net-Zero Asset Managers Initiative (NZAMI); and in December 2021 Intesa Sanpaolo Vita joined the Net-Zero Asset Owner Alliance (NZAOA) and the Net-Zero Insurance Alliance (NZIA).

As a further confirmation of the strong commitment to this objective, within the 2022-2025 Business Plan and more than a year ahead of the NZBA deadline, Intesa Sanpaolo presented its net-zero aligned emissions reduction targets for 2030 in the oil&gas, power generation, automotive and coal mining sectors, which represented over 60% of the non-financial corporates portfolio financed emissions in the sectors identified by the NZBA.

With regard to coal mining in particular, the exposure target is zero by 2025, in line with the phase-out present in the “Rules for lending operations in the coal sector”, updated in July 2021. 

Below is the first monitoring of the targets included in the Plan and related to NZBA (more details are available in the 2022 TCFD Report approved by the Board of Directors on March, 16 2023 (the "NZBA target setting: annual reporting of emissions" section of the Report was submitted to a limited assurance.) Among the first results of the activities implemented, at the end of 2022, we highlight an overall reduction of more than 60% of absolute emissions in the four sectors subject to the target.

The table below shows in detail, for each sector, the metrics applied, the baseline, the update as of 31/12/2022 and the target for 2030.

* Sectors consistent with Net-Zero Banking Alliance. Reference scenario: IEA Net-Zero 2050. The design choices, regarding the value chain, the perimeter of the emissions considered and any proxies, are in line with the SBTi and PCAF methodologies. The exposures considered (drawn amount; Hold-to-collect (HTC) bonds, Equity banking book) for the purposes of the target setting include Non Financial Corporates in the sectors considered net of SMEs. Oil&Gas - focus on "upstream operations" and "integrated players", with the exclusion of refining and distribution companies; Power Generation - Only included the "Generation" and "Integrated Power Generation" companies, with the exclusion of transport and distribution companies; Automotive - Only car manufacturers included, with the exclusion of component suppliers. 
** Portfolio composition as at 30/06/2021; latest available emissions data at the end of 2019. 
*** The targets could be updated over time based on the evolution of the emission calculation methodology, the updates required by NZBA, the SBTi refinement of data sources and consolidated market practices.
**** Portfolio composition at 12/31/2022; latest available emissions data at the end of 2020.  
***** The Group has already adopted a policy to phase out unconventional Oil&Gas by 2030. 
******Tank-to-Wheel (TTW) refers to a portion of a vehicle energy chain that extends from the point from which energy is absorbed (charging point; fuel pump) to discharge (exhaust)

¹ The physical intensity at 31.12.2022 of 253kgCO2 e/MWh (which is computed using 2020 emissions), is significantly lower than the sector curve. 2022 was an extraordinary year for price dynamics (the price of European gas in 2022 saw an increase of about three times compared to 2021) and investment volumes, attributable to the growth in capital and financial needs from power generation companies, drawing also on existing lines. It should be noted that some positions have already been repaid at the beginning of February, also thanks to a normalized price scenario, bringing the portfolio intensity emission in line with the baseline data. Green exposures as a proportion of the total power generation portfolio also increased at the end of 2022 vs the baseline data as a result of the important commercial effort in pursuing Intesa Sanpaolo supports to the energy transition and the focus on renewable project finance operations
 

The table below shows the details of the absolute emissions for each sector on target.

* Sectors and scope selection rationales as described in note * in the previous page
** Portfolio composition as at 30.06.2021; emissions data at 2019
*** Portfolio composition as at 31.12.2021; emissions data at 2019
****Portfolio composition as at 31.12.2022; emissions data at 2020
***** The Group has already adopted a policy to phase out unconventional Oil&Gas by 2030
****** Estimated top-down emissions based on average sectorial emission intensity per euro of exposure
1 The decrease is mainly attributable to the reduction in portfolio size
2 The decrease is mainly attributable to the reduction in portfolio size Data could be updated over time based on the evolution of the emission calculation methodology

The portfolio coverage for each sector in scope for Target Setting methodology with respect to the total drawn amount of consolidated balance sheet of the ISP Group is: Oil&Gas: 1.3%; Power Generation: 2.1%; Automotive: 0.5%; Coal mining: 0.02%.

Note: each value is calculated as the ratio between financed (lent and invested) emissions in scope (numerator) and total of lent and invested exposure (denominator) in scope (e.g., exclusion of SMEs, Value Chain refinements, etc.); Data and metrics could be updated over time based on the evolution of the emission calculation methodology, NZBA and SBTi update; refinement of data sources and consolidated market practices.

In October 2022, Intesa Sanpaolo’s wealth management companies, Eurizon Capital SGR, Fideuram Asset Management SGR, Fideuram Asset Management Ireland dac and the Intesa Sanpaolo Vita Insurance Group, have set their respective targets as part of the Net Zero Asset Managers Initiative (NZAMI) and the Net Zero Asset Owner Alliance (NZAOA).  
The commitments made by joining the NZAMI fall into four action areas:

1.    Asset Level Alignment Target, whereby the asset managers undertake to identify the portfolio of assets, i.e., the In-Scope Portfolio ¹, that will be managed with the goal of achieving climate neutrality by 2050. Based on its research, Eurizon reported an In-Scope Portfolio of €67.5 billion, equal to 15.39% of its AUM at 31 December 2021. In the same period, Fideuram Asset Management’s In-Scope Portfolio¹ was €7.9 billion, equal to 13.86% of its AUM, while Fideuram Asset Management Ireland’s totalled €13.1 billion, equal to 29.79% of its AUM. 

2.    Portfolio Level Reference Target, which reflects the intermediate targets for the In-Scope Portfolio to be achieved by 2030. The asset management companies Eurizon ², Fideuram Asset Management and Fideuram Asset Management Ireland³ have announced their goal of halving financed emissions - expressed in terms of intensity - by 2030 compared to the baseline year (2019), as required by the IPCC (Intergovernmental Panel on Climate Change), through actions that include investing in climate solutions in addition to stewardship & engagement activities. 

3.    Stewardship and Engagement Target, which is a commitment to establish solid engagement plans with investee companies that incentivise them to implement effective decarbonisation pathways. In this context, Eurizon has set the goal of engaging 48 companies (covering 70% of the In-Scope Portfolio’s financed emissions) by 2025 and another 107 companies by 2029 (to reach 90% of financed emissions) focusing on issuers in sectors that are considered “material” for decarbonisation. Fideuram Asset Management has estimated that it will need to engage 53 companies by 2025 in order to reach its target of covering 70% of financed emissions, and 165 companies by 2030 (to reach 90% of financed emissions). In turn, Fideuram Asset Management Ireland must reach out to 66 companies by 2025 (70% of financed emissions) and 195 by 2030 (to cover 90% of financed emissions). 

4.    Investment in Climate Solutions, whose signatories commit to increasing their investments in environmentally sustainable activities. In setting this target, Eurizon considered projects that can be financed with green bonds, estimating that around 4% (versus 1.53% at the end of 2021) of all AUM could be invested in green bonds by 2025. Fideuram Asset Management and Fideuram Asset Management Ireland estimate that, by 2025, approximately 1% and 4% of their AUM, respectively, will be invested in projects financed by green bonds. 

For the Intesa Sanpaolo Vita Insurance Group, the intermediate targets for the NZAOA fall into the following three action areas: 

1)    Sub-Portfolio: cutting the emissions of “Direct Investments” - for the Listed Equity and Publicly Traded Corporate Bond asset classes - equal to 50% of the Carbon Intensity by EVIC by 2030, considering 2021 as the baseline year. At 31 December 2021, AUM of €19.6 billion are subject to the target.

2)    Engagement: two-way discussions with the top 20 issuers, which account for about 70% of the emissions in the Insurance Group’s In-Scope Portfolio - with the end aim of evaluating, discussing and enabling their respective decarbonisation pathways and strategies. The Group will also cooperate with the NZAOA by sharing input for collaborative position papers on related topics.

3)    Financing the Transition: commitment to report annually to the NZAOA on the amount of investments supporting the green transition (Climate Solution Reporting).  At 31 December 2021, the investments supporting the transition accounted for roughly 5% of the Group’s In-Scope Portfolio (Direct and Indirect Investments). Additionally, the Group will contribute to one of the Financing the Transition working groups to promote the development and awareness of new green investment solutions, reporting standards and possible new methodologies for similar issues.

¹ Portfolio referring to specific asset classes - listed equity and corporate fixed income - envisaged by NZAMI.

² Target calculated as the intensity of Scope 1 greenhouse gas emissions (from sources that are controlled or owned by the company) and Scope 2 greenhouse gas emissions (generated by the energy purchased and consumed by the company) compared to the issuer’s EVIC (Enterprise Value Including Cash).

³ Target calculated as the intensity of greenhouse gas emissions of "Scope 1" (deriving from sources owned or controlled by the company) and "Scope 2" (generated by the energy purchased and consumed by the company) compared to the EVIC (Enterprise Value Including Cash, i.e. the market value of the issuer including cash).

Since October 2018, Intesa Sanpaolo has decided to support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and to commit itself on a voluntary basis to the dissemination of transparent reporting on climate change risks and opportunities, so to include, within the framework of the financial information for stakeholders, the main climate-related communications.
Since the adhesion Intesa Sanpaolo provides its climate change disclosure as part of the Consolidated Non-Financial Statement.

In 2021, the Group prepared its first TCFD Report and in 2023 it published, concurrently with the Consolidated Non-Financial Statement (DCNF), the 2022 TCFD Report which also includes the transition plan (drafted in compliance with the requirements of the NZBA and following the indications of the GFANZ -Glasgow Financial Alliance for Net Zero) and the first monitoring of the targets included in the Plan and related to the NZBA.

Furthermore, since 2007 Intesa Sanpaolo has been responding to the climate change questionnaire of the CDP, a non-profit organization that annually carries out an assessment aimed at evaluating the approach to mitigating climate change. The analysis is based on data and information provided by the companies, evaluated on 4 levels on a scale from A to D-.

In 2022 Intesa Sanpaolo achieved the A score and was included, only Italian Bank, in the “A List” which includes 297 companies worldwide.

CDP Questionnaire Archive