Blue finance: protecting our oceans
Marine biodiversity is critical to the health of human beings and the planet as oceans are the source of a significant proportion of the animal proteins that end up on our plates.
Our oceans are also the foundation for much of the global economy, supporting sectors such as tourism, fishing and international shipping. The OECD has estimated that the value derived from the blue economy is expected to double between 2010 and 2030 to reach more than $3,000 billion owing to the rapid growth of certain maritime activities.
But our oceans are facing unprecedented threats caused by human activity. Climate change is harming coral reefs and other key ecosystems, coastal waters are continuously deteriorating as a result of pollution, and overfishing is threatening the stability of fish stocks.
Saving our oceans must therefore remain a priority. The finance sector has a part to play in this effort and the sustainable marine economy – or blue economy – is taking on increasing importance in the field of responsible finance.
A number of practical initiatives are being carried out at the Group. Let’s take a closer look at a few of them.
Oceans now contribute 14% of France’s gross domestic product, i.e. €270 billion (Fondation de la Mer). Some 500,000 jobs depend on the sea in France, more than the banking and automotive sectors combined (Cluster Maritime Français).
A long-standing Group commitment
Crédit Agricole is one of the world’s top five banks in shipping finance.
To help a fast-expanding market transition responsibly, the Bank drew up a shipping sector policy as long ago as 2013. This policy details social and environmental criteria that must be taken into account by Group entities in their financing and investment policies.
The scope encompasses construction, repair and dismantling of commercial vessels* as well as their purchase and operation by customers of the Bank.
The Group’s reference framework builds on the strictest international standards to assess the social impact of its customers’ financing and investment plans.
Click here to access the sector policy.
*Vessels used to transport passengers or goods as well as those used in civil or industrial activities.
The Poseidon Principles for a lower-carbon maritime industry
Crédit Agricole CIB took another step forward in 2019 by signing the Poseidon Principles, launched by a group of industrial companies and 13 banks, only three of them French.
The principles are part of a strategy set out by the International Maritime Organization to shrink the maritime sector’s carbon footprint by at least 50% between now and 2050.
In concrete terms, each signatory bank commits to report their portfolio’s carbon footprint annually.
In 2020, 15 financial institutions, including Crédit Agricole CIB, unveiled the climate alignment of their shipping finance portfolios in the first ever climate finance report.
This mapping exercise will enable the Group to project the carbon intensity of its shipping finance portfolios so it can work to align them as closely as possible with the target. On this basis, CACIB is helping its clients to secure the financing needed to refresh their fleets with low- or zero-emissions vessels as technologies evolve, including LNG and biomethane, biofuel and hydrogen.
The movement is already under way. For example :
- CACIB structured the financing of the first new LNG-powered ship of Corsica Linea, a major player in maritime transport between Corsica and the continent. The ship, which will be delivered in 2022, will be the first LNG ferry flying the French flag and operating in the Mediterranean. LCL contributed €10 million alongside 19 Regional Banks led by the Corsica Regional Bank (cumulative interests of €93m) in a tax lease of €103m via an ad hoc structure.
Partnering with Fondation de la Mer to measure our impact on the oceans
Consistent with its environmental commitments, Amundi has initiated a close cooperation with Fondation de la Mer (FDLM). With the French Ministry of Ecological and Solidarity Transition, the FDLM has developed a reporting framework based on UN Sustainable Development Goal 14 (“Life below water”) with a view to helping companies better assess their impact on the oceans. FDLM has worked with scientists and experts to create a comprehensive methodology, which is available on an open access basis to businesses.
One of the first contributors to the development of the Ocean Framework, and in line with the Crédit Agricole Group's commitment to protecting oceans and biodiversity, Amundi last year used this tool to engage an initial circle of companies in four key areas, fishing and aquaculture, hotel energy, maritime freight and cruises.
Although the framework is not specifically designed for investors, the easy-to-use tool is the first of its kind and has been developed by experts and tested by companies.
The aim was to encourage the latter to :
- Assess the impact of their activities on the oceans using the Ocean Framework analysis grid ;
- Document specific impacts on oceans based on Ocean Framework indicators ;
- Develop ocean strategies and policies including ocean preservation in biodiversity strategies.
Going forward, Amundi aims to double the number of companies it engages on the topic of oceans to encourage them to reduce their negative impacts using specific performance indicators. Amundi also aims to allocate more capital to the protection of oceans.
The launch of an equity fund to support the marine ecosystem
Through CPR AM, an Amundi subsidiary specialising in thematic and impact investment funds, the Group is also active in asset management. CPR AM is preparing to launch an international equity fund in June to support the marine economic ecosystem by investing in listed companies linked to the sustainable economy of the oceans (aquaculture, fishing, tourism, infrastructure, offshore wind, etc.) or resource preservation (waste management, carbon sequestration, etc.). The fund's investment universe will be strictly screened against relevant ESG criteria to eliminate bad practices. Portfolio construction will take into account impact indicators whose monitoring and improvement over time will be published on a monthly basis.
The Sea Division and Regional Banks : supporting blue growth
Twenty of the Group’s Regional Banks cover areas that include coastal regions. Some of them have created a structured Sea Division to support the growth of local maritime activities related to fishing, sailing, renewable maritime energies, aquaculture and biotechnology. The Group’s first Sea Division was developed by the four Regional Banks in Brittany starting in 2013. The Aquitaine Regional Bank launched its Sea Division in 2015, followed by the Charente-Maritime Deux-Sèvres RB in 2018 and the Normandy RB in 2019. Each one has set up a special team providing bespoke support to maritime professionals.
This cooperation has already resulted in risk-sharing on some projects as well as the creation of shared offerings in cooperation with the Group’s specialist subsidiaries: Crédit Agricole Leasing & Factoring, CA Assurances and Crédit Agricole CIB.
At the same time, Crédit Agricole S.A. will be developing its expertise in fishing and aquaculture in response to the various development challenges facing these sectors in France.
To find out more about the Bank’s marine specialism in Brittany, click here.
The Crédit Agricole Group also provides local sponsorship in support of research projects and the preservation of sites belonging to Muséum National d’Histoire Naturelle (National Museum of Natural History), organising awareness-raising talks, supporting festivals dedicated to the sea, etc. Here we focus on just one of the projects supported by the Group: Plastic Odyssey.
Plastic Odyssey: putting a stop to plastic pollution at source
Nineteen metric tons of plastic enter our oceans every minute and 80% of marine pollution comes from coastal towns and cities in the world’s poorest countries. Plastic Odyssey aims to make recycling plastic waste into a profitable business that creates new jobs.
The project revolves around a round-the-world voyage aboard a boat that acts as an ambassador for open-source recycling technologies. The boat will be making stops in emerging countries where these solutions will be used to recycle available waste to help create and grow plastic recycling microbusinesses. The expedition is due to set sail at the end of September 2022.
Crédit Agricole S.A. supported the project back in 2018 by financing the construction of a prototype boat. It maintained this commitment in 2019 in keeping with the Group’s Societal Project. Several entities have provided a total of €1.2m to support the project over five years: eight Regional Banks located along the French coast (Alpes Provence, Aquitaine, Atlantique Vendée, Charente-Maritime Deux-Sèvres, Finistère, Nord de France, Normandie-Seine and Provence Côte d’Azur), Crédit Agricole S.A. and its subsidiaries Crédit Agricole Assurances, CACEIS, CACIB, Crédit Agricole Immobilier, BforBank, CAMCA Mutuelle, Crédit Agricole Poland and Crédit Agricole Italy.
The Grameen Crédit Agricole Foundation is also committed to the initiative by leading POLAB in France (a programme to support innovations around plastic recycling initiated by PO) and by sharing its knowledge of the field thanks to its presence in nearly 40 countries. It will help to put the Plastic Odyssey team in touch with local recyclers and entrepreneurs to foster the emergence of social business models.
Crédit Agricole CIB is also supporting Plastic Odyssey in its commitment to reducing the pollution of oceans by plastics. Through its Taipei branch, CACIB has innovated on the sustainable bond market with the issuance of a solidarity-based green bond. This 7-year bond issue of TWD 1.7bn (€50m) is the first of this type for which investors, co-lead managers and the issuer cooperated to contribute financially to an environmental and social project. The proceeds of the issue will be used to finance Crédit Agricole CIB Taipei’s green loan portfolio, and in particular its exposures in the renewable energy field such as offshore wind farms. In addition, a financial contribution was made to Plastic Odyssey through a solidarity mechanism.
Find out more about Plastic Odyssey here.
For a review of Crédit Agricole's support for the marine environment, click here.