ReCommon considers inadequate the new rules recently introduced by Intesa Sanpaolo forthe oil and gas sector.

The first Italian banking group in terms of market capitalization, listed among the 50 largest banks in the world, has revised its policy in the unconventional oil&gas sector – the last update of which dated back to 2021 – and introduced first commitments in the conventional oil&gas sector. Other requests, related to the oil&gas sector, seem to have been implemented. In particular, the bank finally extends the operation of the new rules to all segments of the oil&gas sector, including financing and investment sectors (albeit partially) – the latter being Intesa Sanpaolo’s true core business. Compared to the previous policy, the new commitments also bring forward the date of phase out of unconventional resources from 2030 to 2025. “These are certainly important signals, but they should not be misleading” comments Daniela Finamore, Finance and Climate Campaigner at ReCommon. “A detailed analysis of the new commitments, in fact, reveals a series of loopholes that allow the first Italian bank to continue to keep the tap open with the major companies in the fossil fuel industry”.

This is where the “good news” ends because it should be immediately pointed out that Intesa Sanpaolo did not update its rules related to the coal sector, the most polluting among fossil fuels and which Intesa Sanpaolo in 2023 alone has funded with $3.36 billion in financing. The request, made by Recommon and also urged by a group of investors at the last bank’s shareholders’ meeting to set a date for a complete phase out of coal sector therefore remained unheeded.

In the conventional oil&gas sector, the updated rules introduce new exclusion commitments for impactful oil&gas projects in areas such as the Arctic or the Amazon Basin, defined as “critical areas”. Outside of these, the bank’s exclusions only concern projects for the development of new extraction sites. The gas sector, which is of great interest to Intesa Sanpaolo, is therefore left out, and there is no exclusion for financing fossil fuel companies, especially those with expansion plans. Moreover, from the terminology used in the policy, it seems that the rules of the conventional oil and gas sector apply only to financing, as opposed to what is better explained in the exclusions related to unconventional resources.

In the latter segment, it is positive that the bank introduces exclusions at the company level – those that derive more than 15% of their production revenues from unconventional resources – but these steps forward are offset by important gaps, such as the lack of mention of the “corporate and investment banking” business segment, the reference to upstream-only projects (exploration and production) and the failure to include ultra-deep water extraction among the unconventional resources.

“The failure to include ultra-deep-water techniques would allow the bank to finance Eni’s new projects in Mozambique Coral North FLNG and Rovuma LNG, on which we have often sought an interlocution with the bank without having any feedback,” comments Finamore. “In the updated policy, however, there is an exclusion for companies and projects located in areas of active armed conflict. The hope is that Intesa Sanpaolo will therefore consider the bloody conflict that has been tearing apart the north of Mozambique since 2017, in the province of Cabo Delgado, also fueled by the presence of the fossil fuel industry in which Intesa Sanpaolo continues to see enormous profit potential”.