Italy’s Intesa Sanpaolo sets new guidelines to curb coal financing

Intesa Sanpaolo said on Tuesday it had introduced guidelines curbing lending to the coal sector, joining the ranks of other banks looking to improve their green credentials.

Italy’s biggest retail bank said in a statement that under the new guidelines it would not grant new loans for investments in coal-mining projects or the construction of coal-fired plants. It said the aim was to support customers phasing out the use of coal in energy production and help the transition to low carbon alternatives. Environmental campaigners say a commitment to ending funding for new coal-fired power projects is essential to meaningfully address the risk of climate change.

Many major banks have made such a pledge as they try to keep pace with growing demands also from activist investors for sustainability in their financing. Last November Italy’s biggest bank by assets UniCredit pledged to halt all lending for thermal coal projects by 2023. Italy’s ruling coalition has called for the phasing out of coal-fired plants by 2025. Intesa Sanpaolo said under the new guidelines the ban would not apply to credit line renewals and the extension of credit lines with a set maturity. It also said loans could be granted to companies producing energy from renewable sources even if they were part of a group generating energy from fossil fuels.

“Intesa Sanpaolo will continue funding companies with a medium/long-term strategy of gradually cutting their use of coal,” the bank said.