Point of view Nicole Notat on raison d’être
Chair of the Vigeo Eiris environmental, social and governance (ESG) ratings agency and co-author of the “Entreprise, objet d’intérêt collectif” report on the collective-interest role of businesses commissioned by the French Economy Minister Bruno LE MAIRE.2019/10/18
Currently world leader in green bonds, Credit Agricole has been a pioneer for climate finance for nearly 10 years (estimating the carbon footprint of its loan book since 2011, implementing sectoral policies that exclude offshore drilling in the Arctic since 2012 and excluding project finance in the mining and coal-fired power industries since 2015). The Group believes that it is imperative to decarbonise our economies, while maintaining value creation.
A long-standing commitment applied across all business lines
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A Group Climate Strategy adopted in June 2019
In order to strengthen its action and commitments, Credit Agricole adopts a Group Climate Strategy fully aligned with the Paris Agreement. The goal of this strategy, which will be rolled out by all its entities and subsidiaries, is to make green finance a growth driver for the Group.
This Group Climate Strategy comprises three main pillars
A commitment to greater transparency, entrenched at the highest governance levels:
- An innovative governance of the Climate Strategy based on scientific expertise and operational assessment, led by 3 new high-level steering committees.
- Certification of the Climate Strategy’s implementation by an independent third party body.
- Climate reporting published in full accordance with the TCFD recommendations by 2020.
Incorporating energy transition issues into customer relationship:
- A “transition scoring” to measure the clients’ ability to adapt their business model to the challenges of achieving the energy transition and combating climate change.
- A support mechanism for start-ups and SMEs innovating in the environmental field.
- A range of green financing solutions for corporate clients and retail customers.
The gradual reallocation of our loan, investments and Assets under Management portfolios, in line with the Paris Agreement:
- Strengthening our commitment to finance energy transition.
- Promoting sustainable investment policies.
- Planning a total phase-out from thermal coal in accordance with a Paris Agreement aligned timetable.
Focus on coal : Planning a total phase-out from thermal coal
› The exposure of our portfolios to coal industry will be in line with a full-fledged coal phase-out by: 2030 for EU and OECD countries; 2040 for China; 2050 for the rest of the world.
As of 2019, we will:
- Disclose our coal exposure on an annual basis.
- Ask companies to provide us by 2021 with a detailed phasing out plan of their coal-sector mining and production assets.
- No longer develop business relations with corporations generating more than 25% of their turnover in the thermal coal sector.
- Stop working with corporations currently developing or planning to develop new thermal coal capacities along the entire value chain.
› Companies failing to subscribe to this approach will be automatically placed in a “transition watch list” portfolio and subject to the reduction or even the freezing of our financial support.
A global leadership
Crédit Agricole confirms its ranking as a world leader in green bonds with an inaugural issue of €1 billion to finance its energy transition commitments
This inaugural issue will be used to refinance the green assets booked by Crédit Agricole Regional Banks, Crédit Agricole CIB, LCL and UNIFERGIE in the following sectors: renewable energies, green buildings, energy efficiency, green transport, waste and water management, sustainable farming and forestry management.
According to Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A.: “The economy and finance can and should become powerful allies in order to achieve the objective of carbon neutrality by 2050 as set out in France’s Climate Plan. This green bond issuance will enable us to forge ahead with our commitments. The size, nature and granularity of the bond is likely to make it a benchmark operation in the banking landscape.”
The proceeds will be used to fund in all our territories energy and ecological transition projects of Crédit Agricole's financing entities: the Crédit Agricole Regional Banks, Crédit Agricole CIB, LCL and UNIFERGIE.
Through this first issue Crédit Agricole S.A. confirms his ranking as the energy transition bank and intends to become a regular issuer in the green bond market.