Investment portfolio decarbonisation
In June 2021, the Generali Group Strategy on Climate Change was revised and updated through the Technical Note; following this resolution, we have defined measures detailing how the strategy is to be implemented in the core business activities of the Group.
As part of its global commitment on climate change, the Group is gradually integrating the carbon footprint in its investment’s choices.
The carbon footprint of a portfolio can be measured by using several metrics with different calculation methodologies, therefore we are monitoring the following metrics to have a comprehensive view on the implementation of our strategy to manage climate change.
Perimeter and metrics
Direct investments in listed equity and corporate bonds (€ bln)
Carbon intensity (EVIC) (tCO2e/€ mln invested)
Absolute emissions (mln tCO2e)
Carbon intensity (sales) tCO2e/€ mln of sales)
- 2020 indicators have been recalculated following a change in the methodology and data provider.
- the coverage presented in the table refers to the metrics Carbon intensity (per EVIC) and Absolute emissions: the coverage for the metric Carbon intensity (per sales) is 85% for the year 2019 and 2021 and 87% for the year 2020.
The Group ambition is a progressive decarbonization of the direct investment portfolio in order to reach climate neutrality by 2050, in line with the objectives of the Paris Agreement and the Net-Zero Asset Owner Alliance commitments. To reach this long terms target, the Group defined also short term targets; in particular, the 2019-2024 target calls for:
- reducing the carbon footprint for the corporate portfolio (corporate bonds, listed equity) by 25%;
- aligning the real estate portfolio to a decarbonization pathway consistent with limiting global warming to 1.5°.
Regarding the first target, the metric selected to monitor the implementation of our strategy is the Carbon Intensity (per EVIC).
The carbon intensity (per EVIC) decreased by 29,6%, between year-end 2019 and year end 2021, moving from 182 tCO2/€ mln invested in 2019 to 128 at year end 2021.
This important reduction comes mainly from:
- an investment allocation that has favored companies more virtuous in the energy transition, by reducing at the same time the exposure to high carbon intensive companies.
- a decrease in the CO2 emission of the companies in the portfolio, due also to the COVID 19 pandemic effects on the global economy starting from 2020, which led to a drop in the productive activity of some sectors.
For what concerns the second target, the real estate assets managed by Generali Real Estate (GRE), we have committed to develop a strategy to decarbonize our assets by 2050, which envisages the gradual alignment of our real estate portfolio with the targets defined by the CRREM (Carbon Risk Real Estate Monitor) model.
To accurately measure the initial levels and the achievement of the decarbonisation objectives in 2019 GRE launched a Data Analytics project, which currently covers around 250 assets in 10 countries throughout Europe. For each asset, the consumption data of existing buildings are collected and centralized on a digital platform, which automatically calculates the emissions and monitors their development. Based on the data collected, each year an improvement plan for each building is submitted or updated, which considers the main ways to reduce emissions, such as renovations, upgrading systems, making changes to the energy mix and involving the tenants.
In addition to its commitment to the existing portfolio, GRE has also implemented a policy to invest in high energy efficiency buildings (with a particular focus on buildings with environmental certifications), integrating ESG criteria into its real estate development and investment policy, and has developed its own sustainable assessment method for real estate at the time of purchase.
For further information refer to Generali Real Estate website.