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Climate Finance Day: the financial sector commits to the climate
Paris, December 2015. At COP 21 in 2015, 195 countries and the European Union committed to reducing greenhouse gas emissions with a view to limiting global warming to a maximum 1.5°C by 2050.
The general population and businesses were also to contribute to the fight.
In the same year, the financial sector, including banks, insurers, investors and fund managers, organised the first Climate Finance Day to respond to the challenge of the fight against global warming. With the sector now meeting up for the sixth Climate Finance Day, we review the reality of the commitments in an environment disrupted by the health crisis.
History of Climate Finance Day
Organised for the first time in May 2015 at the UNESCO headquarters in Paris, Climate Finance Day lent greater momentum to the financial sector’s climate commitments. The movement, culminating in COP 21, took on considerable scale following the adoption of the Paris Agreement. The first Climate Finance Day focused on redirecting capital flows towards a low-carbon economy.
The spotlight at the second event, organised by the Casablanca financial centre to coincide with COP 22, was on the shift to action, notably in Africa.
Since 2017, Climate Finance Day has continued to concentrate on stepping up efforts and pursuing commitments. The decision was also made to hold the event every year in Paris, as the financial centre of the French capital plays a driving role in international efforts.
The sixth Climate Finance Day
With the global economy subject to an unprecedented situation owing to the health crisis, the Green New Deal presented by the European Commission in late 2019 could, if correctly implemented and financed, stand as a post-crisis recovery plan leading the European economy towards a low-carbon and resilient model.
Which is why the sixth Climate Finance Day, organised in a hybrid format – at Palais Brongniart and online – on 29 October, is focused on the following theme: “Sustainable finance: how to reboot the European real economy?”.
As a spearhead of financial innovation for the green transition, the European financial industry will be rallying to support the implementation of the Green Deal and meet the needs of the real economy.
The European Union’s Green Deal
The Green Deal for Europe was announced in late 2019 by European Commission President Ursula von der Leyen, who referred to it a “Europe’s new growth strategy”. The objective is to make Europe climate-neutral by 2050, stimulate the economy through green technologies, create sustainable industry and transport, and reduce pollution. Jobs, a cleaner environment and a better quality of life are expected in return. To that end, the EU has devised an investment plan worth a colossal €1 trillion.
The commitments of the Paris financial centre
IOne year ago, the main professional organisations and federations of the Paris financial centre (Association Française des Sociétés Financières (ASF), Association Française de la Gestion Financière (AFG), Fédération Bancaire Française (FBF), Fédération Française de l’Assurance (FFA), France Invest-Association des Investisseurs pour la Croissance, Paris Europlace, and Finance for Tomorrow) announced new commitments in favour of the fight against climate change and in support of the 2050 carbon-neutral objective.
The players of the Paris financial centre are on the leading edge of the development of green and sustainable financing at international level.
In 2019, four French banks placed in the global top ten on green and sustainable loans. They rank equally high on green, social and sustainable bonds, with a market share of over 27%.
At end-2019, responsible-finance assets under management in France totalled nearly €1.9 trillion, compared with under €1.5 trillion at end-2018. SRI certification continues to make headway, with 455 certified funds (vs. 222 in 2019) for €166bn in AuM. The same upwards trend applies to the Greenfin certification of the French Ministry for the Ecological Transition, with 45 certified funds (30 in 2019) for €14bn in AuM.
At end-June 2019, 43% of the assets of French SRI-certified funds were held by French insurers.
By end-2020, all the major players of the Paris financial centre will have established a carbon-exit strategy.
Lastly, a Sustainable Finance Observatory tasked with monitoring commitments in full transparency will go online for the sixth Climate Finance Day. The aim of this body is to contribute to the understanding, monitoring and assessment of the financial sector’s gradual transition to sustainable financing.
Crédit Agricole’s commitments
Fully engaged in addressing the climate emergency, Crédit Agricole adopted a climate strategy - as part of its Group project, in particular its societal pillar integrating environmental and social inclusion dimensions - as early as June 2019 aimed at making green finance a growth driver for the Group, at the service of local and regional areas and clients.
The key issue for the Group is to support the energy transition through its financing and investment policy, which entails two things:
- financing the considerable investments that need to be made to achieve an energy offering consistent with COP 21 objectives on the pace of global warming;
- reducing the financing of energies that emit substantial CO2 emissions, first and foremost coal.
Initial review of the Climate Strategy
Nearly 18 months after the launch of Crédit Agricole’s Climate Strategy, here is an initial (and non-exhaustive) review of the achievements.
- The Steering Committee for the Societal Project, the Scientific Committee and the Monitoring Committee have been implemented and the initial steering tools delivered.
Strengthening the commitment to the energy transition:
- Total withdrawal from thermal coal
- Leader in renewable energies
- Development of green loans
- Global leader as a bookrunner for green bonds
- Development of green products and services for retail and wealth clients
- Environmental support for SMEs and mid-tier enterprises
- Support for the energy transition of businesses
Promotion of sustainable investment policies:
- Acting as a responsible investor
- Boom in impact investment
- Investment of our cash in SRI products
Crédit Agricole announcements at Climate Finance Day on October 29
Dominique Lefebvre, Chairman of Crédit Agricole S.A. and Fédération Nationale du Crédit Agricole, is scheduled to speak at 11:15 a.m.