Management of extra-financial performance with the FReD system

Implemented in 2012, FReD is the Crédit Agricole S.A. internal system for disseminating ESG culture and its measurement. Since 2019, with the definition of the Group’s Raison d’Être(1) and the integration of societal and environmental challenges in the “Ambitions 2025” Medium Term Plan, FReD has been positioned as a tool for the appropriation and operational application of the Group’s ESG issues. For those entities that choose to participate, the approach allows each one to define a set of projects consistent with the Group Project that are then assigned to one of three types of respect: for the customer, for the employee and for the planet.

Each of the 17 entities of Crédit Agricole S.A. participating in the FReD(2) scheme must carry out six actions (i.e. two for each type of respect): 

• three of these six actions (one for each type of respect) are “Group” actions: they are defined by Crédit Agricole S.A. with the contribution of the entities and validated by the tool’s Steering Committee. They are then assigned to categories by each entity;
• the other three of these six actions (one for each type of respect) are actions unique to each entity. 

 

 

The progress of each project is measured by an index:

 

projects start with a rating of 1 and achieve a rating of 4 when completed. Every year, the FReD index measures the progress made, project by project, by calculating the change in rating between years Y and Y-1 for each entity. The indices achieved are then consolidated to arrive at the Group index. In order to ensure constant and sustained progress each year, the system provides for a target index to be achieved through the implementation of an action plan balanced between short-term (one year), medium-term (two years) and long-term (three years) actions. Each year, an audit is carried out by an independent firm to ensure the robustness of the action plans and the reliability of the assessment. The results are then presented to the Compensation Committee of the Board of Directors and determine the payment of one-third of the deferred variable compensation of Crédit Agricole S.A.’s executive managers. FReD is also used by several entities to calculate incentives and therefore affects the variable compensation of more than 27,000 employees. In 2022, 17 entities participated in this system and, for the ninth consecutive year, Crédit Agricole S.A. is publishing its FReD index, which was 1.40 in 2022 i.e. 108% of the 1.30 target.

 

FReD is a great tool for mobilizing employees around the Group's project.