Alongside five other top lenders, we have today announced our signing of the Sustainable STEEL Principles, a climate-aligned finance agreement for the steel sector.
Steel is used in everything from cars and fridges to buildings and planes.
Due to the sector's reliance on coal, it is the largest source of industrial carbon emissions globally (7%).
Designed by a working group comprised of UniCredit, Citi, ING, Société Générale and Standard Chartered, the Sustainable STEEL Principles have been drawn up to tackle this problem head on and significantly reduce carbon emissions from steel production.
This agreement amongst lenders, provides a framework for assessing and disclosing the degree to which the emissions associated with their steel loan portfolios are in line with 1.5°C climate targets - providing the necessary tools for client engagement and advocacy.
Signatories represent a combined bank loan portfolio of approximately $23 billion in lending commitments to the steel sector, for a market share of over 11% of total private sector steel lending, according to RMI research.
Moreover, for banks like ours with net-zero commitments, the SSP provide ready-made implementation guidance to achieve these targets.
Frank Biburger, UniCredit's Global Head of Producer Finance, Natural Resources, said: "UniCredit is strongly committed to supporting its clients in achieving their ESG targets as a core part of our efforts to drive a just and fair transition to a low carbon and more inclusive world economy. With steel production representing the largest source of industrial carbon emissions globally, the Sustainable STEEL Principles are a key step in the journey towards Net-Zero. As a founding signatory, we look forward to deepening our dialogue with clients and industry peers to promote a greener future."
The agreement itself is modelled on the Poseidon Principles, the first sector-specific climate-aligned finance agreement for maritime shipping.
The Poseidon Principles were launched in July 2019 with eleven banking signatories representing $100 billion — or 20% — of senior shipping debt and have since more than doubled to 28 signatories representing over 50% of global shipping finance, setting the stage for similar frameworks in other sectors.
ESG remains a key pillar of our Strategic Plan, UniCredit Unlocked, with ambitious targets for all areas of the business, including a total of €150 billion in new cumulative ESG volumes by 2024.
Furthermore, we continue to work on reducing our own environmental footprint with a commitment to reach net-zero on the bank's own emissions by 2030 and on our financed emissions by 2050.