Engagement with UniCredit on Fossil Fuels Projects
As part of our ongoing efforts to improve performance across key environmental, social, transparency and governance (E.S.T.) metrics, we have engaged with UniCredit, an Italian-listed bank, over a three-year period on its role in financing new fossil fuel projects.
Here, Head of Stewardship Ita McMahon outlines the progress made, ongoing challenges, and how this engagement has informed our voting decisions.
We took a decision three years ago to use our shareholder voting rights to express our dissatisfaction at financial services companies that continue to offer lending and insurance to new fossil fuel projects. We only hold a few such companies in our funds and one of these is UniCredit.
The UniCredit team is always willing to engage with us and we’re appreciative of that.
We have engaged annually with the company for the past three years in the run up to the company’s Annual General Meeting (AGM). The UniCredit team is always willing to engage with us and we’re appreciative of that. The company has improved its climate reporting over the engagement period and has set sector-level decarbonization targets for high emitting sectors in its lending portfolio. It now reports annually on its progress towards those targets and we welcome this level of accountability. In our recent meeting, UniCredit was able to confirm that the business had not provided finance to any new fossil fuel projects in the past 12 months.
In our recent meeting, UniCredit was able to confirm that the business had not provided finance to any new fossil fuel projects in the past 12 months.
However, the company stressed that due to the current geopolitical situation, the bank may need to consider financing such projects in the future, particularly gas which is seen as a transition fuel (i.e. a greener alternative to coal) within the EU. Although this is not ideal from our perspective as ethical investors, we do at least support this level of openness and transparency. It is some consolation to us that UniCredit operates a tiering system for its client base, offering more financial services to corporate clients that are committed to transitioning to a low carbon economy.
Outcome: As a result of our engagement with UniCredit, we were able to vote for the Annual Report and Accounts at the company’s AGM this year, having abstain or voted against this resolution for the previous three years. Given that its fossil fuel financing may increase in future years, we will continue to engage on this topic.
Written by Ita McMahon
This article was originally published as part of our Q1 2026 Investment Management Report (IMR).
Information is accurate as at 20.04.2026. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.