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Xavier Musca gives speech at the French-Swedish Conference on green finance

Crédit Agricole S.A. Deputy CEO Xavier Musca gave an opening speech on May 29th, 2018, in Stockholm, Sweden, during a conference on green finance organized by Crédit Agricole CIB and SEB. In this speech, Xavier Musca assesses the current situation and underlines Crédit Agricole’s commitment to the development of green finance.

« We are now producing about 40GTCO2 a year and are on our way to double these levels if no action is taken by 2100 while we must shift towards net zero emissions as early as 2050. We must act quickly, as we can all already perceive the effects of climate change :
-    Temperatures are rising
-    Oceans are becoming more acid
-    And the impacts on people are increasingly breathtaking:
o    7 million people are dying from pollution each year
o    143 million people could have to move within their countries by 2050
o    63 % of the world population will suffer from water scarcity by 2025

The good news is that our two countries [France and Sweden] are leading by example in terms of mobilization to tackle this major challenge.

In terms of political leadership, Sweden was one of the first countries to introduce a carbon tax as early as 1991 - an absolute necessity to mobilize capital markets.

In parallel, France’s leadership in the organization of the COP21 sent the strong signal that countries were becoming serious, a commitment that was reiterated at the One Planet Summit (Paris, December 2017).

In terms of commitments, Sweden has signed a landmark agreement in 2016 pledging for 100 % renewable energy by 2040. In the last 10 years, the share of renewable energy in Sweden’s energy production increased by +14points.

Similarly, France pledged to increase the share of renewable to 32% of final energy consumption by 2030 and to 40 % of electricity production with the additional objective of halving its final energy consumption by 2050 compared with 2012.

What is slightly less known is our respective and joint leadership in Green Finance. And it matters, as we all know that the green financing needs are tremendous.

Our two countries are working on regulations to accelerate the mobilization of asset owners. Both countries encourage climate disclosure requirements and have endorsed the TCFD (Task Force on Climate-related Financial Disclosures) recommendations at the European and international level.
Beyond regulation, our two countries are leading players in the field of green finance, through the involvement of both private and public actors.
Together, France and Sweden have a pivotal influence on the Green Bond Market :
-    In terms of volume, the French Green Bond issuances represented more than 15 % of the global market, and the French Treasury issued the largest green Sovereign Bond
-    Sweden had one of the world’s largest number of issuers, public & private institutions together, present in the Green Bond Market.

France and Sweden’s respective leading banks, SEB and Crédit Agricole CIB (CACIB) are leading the Green Bond Market, and those competitors are keen to cooperate for the sake of the Sustainable Finance Market.
SEB and CACIB have already led a conference in Paris, during an OECD conference in 2017.  Together, they had taken this opportunity to present a practical guide on Green Bonds Impact Reporting to advise a group of public sector issuers on that topic.

On the investors’ side, IFC (International Finance Corporation) has decided in 2017 to launch a very innovative initiative aiming at financing the energy transition in emerging markets. And here again France and Sweden’s leadership have been crucial.

First, IFC selected Amundi, the largest European investor with a strong DNA on responsible investment, to launch the fund.

Second, Swedish investors represented more than 30% of the investors (excluding development banks). And this is now the largest Green Bond Fund ever, as Amundi will deploy more than $2bn in Green Bonds issued by financial institutions in Emerging Markets.

Similarly, AP4 and Amundi developed the first equity low carbon indexes technology as early as 2011. And the good news is that not only has these indexes’ performance lived up to our expectations, they also have exemplified that there might not be a tradeoff between being “green” and returns.  

What we can say to conclude, is that this unique joint-leadership in Green Finance is now being heard around the planet.

And beyond this, these different initiatives are sending a strong signal all around the planet : it is possible to work on sustainable finance. A sustainable capitalism that goes beyond the standard quarterly capitalism by taking into account long-term views and therefore externalities being eventually internalized.

This form of capitalism follows the rules of efficiency and works over the long-run, and so benefitting the planet and next generations.

We can be proud that our two countries are working together to convey such promising messages, and we must continue to work hard together in the right direction.

This is part of the of one of the four strategic development axis set by the French-Swedish partnership for innovation and green solution that was signed by French President Emmanuel Macron and Swedish Prime Minister Stefan Löfven in November 2017".

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