Intesa Sanpaolo, one of the 30 largest banks in the world and Italy’s worst fossil bank, has just announced new measures on coal, and “unconventional” oil and gas. Too weak and too vague, the new policy does not signal a real (and much needed) change in direction and will not spare Intesa SanPaolo from being one of the key targets of civil society ahead of the major climate conference COP26.

Intesa Sanpaolo is lagging behind on coal…

Intesa Sanpaolo is lagging behind the 51 financial players that have now committed to fully phase out all financial services to the coal industry by 2030 in Europe/OECD and 2040 everywhere else. The policy seems (this is also subject to clarification!) to phase out coal mining by 2025 but does not say anything about phasing out coal power.

Although Intesa now commits to restrict financing to coal power plant developers, the rest of the policy has shifted in the wrong direction. It now allows Intesa Sanpaolo to service more coal companies in Europe and the OECD and for longer (1). Also, Intesa Sanpaolo now encourages coal companies to shift to fossil gas, presented as clean despite the impact of methane emissions (generated throughout the value chain and too often unaccounted for) on the climat, more harmful than C02 in the short term.

Intesa Sanpaolo can still support oil and gas expansion, including in the Arctic

On oil & gas, the bank’s policy only applies to some of the sub-sectors: tar sands, shale/tight oil & gas and/or operations in sensitive regions like the Arctic. The Arctic restriction policy on project financing is sorely lacking: the policy does not specify the exact boundaries of the Arctic exclusion zone and allows Intesa Sanpaolo to finance onshore gas projects. This is not surprising given that even before publishing its policy, Intesa Sanpaolo has made clear several times its support for Arctic LNG-2, the XXL gas project that Total, Novatek, CNOOC, CNPC and Mitsui-Jogmec, Japan Arctic LNG are currently developing in the Arctic region. Last but not least, Intesa’s oil & gas policy only excludes further project financing. In other words, Intesa can still provide corporate financing to companies developing new oil and gas projects – including tar sands, shale/tight oil & gas and/or operations in sensitive regions like the Amazon sacred headwaters or Arctic.

A potential unconventional oil and gas policy includes a 2030 phase out date. This would be good news if (and only if) it applies to ALL companies involved with these sub-sectors. Currently, the language seems to indicate that Intesa would only stop supporting companies generating a significant share of revenues from these activities, hence giving a free pass to the more diversified oil and gas giants.

High greenwashing potential

The devil lies in the details and there is high potential for greenwashing. Currently, the policies only apply to a portion of the bank’s financial activities. The policy does not cover Intesa’s investment activities despite its high exposure to fossil fuels (close to 1 billion euros invested in coal). Even more concerning, it’s unclear whether the policy applies to underwriting, a core banking service to the fossil industry. The new lending policy only commits the bank to not increase exposure. This means for example that the bank could provide new loans to coal developers as long as this does not result in an increase of the total loan volume.

Another worrying sign: it seems that the bank’s exclusion policies will only apply to companies “that do not have a documented plan/strategy for the progressive reduction of greenhouse gas emissions”. This means that the policy’s robustness heavily depends on what the bank will require from companies and how strict it intends to be. Given the current policy guidelines don’t lay out any criteria or pre-requirements, this could mean any coal, oil and gas company with a climate target could still be supported by Intesa SanPaolo.

If Intesa Sanpaolo is serious about its coal, oil and gas standards, the bank must clarify the rules to ensure they effectively stop supporting fossil fuel expansion. Italy’s number 1 bank can set the right example COP26 in time for the Glasgow Climate conference.

Notes :

  1.  In the previous policy, the bank no longer serviced companies generating more than 30% of their revenue from coal. In the new policy, Intesa SanPaolo can support these companies until 2030 and even extends the support to coal companies generating up to 35% of their revenue from coal.