The adoption of a global climate policy marks a new stage in Societe Generale’s commitment to fight against global warming. As one of the world leaders in energy funding, Societe Generale is committed to reducing its own carbon footprint and to supporting its clients’ projects to minimise their impact on the climate. Societe Generale also contributes to responsibly financing the global economy and intends to be one of the key players in financing the energy transition.
Séverin Cabannes, Deputy Chief Executive Officer
Societe Generale has made commitments favouring the climate
In November 2015, Societe Generale adopted a range of new climate commitments aimed at ensuring that the bank’s actions by 2020 are in phase with the scenario of a 2 °C limit on warming defined by the International Energy Agency (IEA), thus making the fight against climate change a major focus of its environmental policy.
Notably, the Group is striving for a twofold increase in the funding of renewable energy projects and the capacity to access up to EUR 10 billion of funding for projects in the renewable energy sector by 2020. Furthermore, Societe Generale has set a new objective to reduce its CO2 emissions by 20% by 2020, compared to 2014. In order to achieve this objective the Group is extending its “internal carbon tax” incentive scheme based on the emissions made by each Group entity, which are then redistributed to finance internal environmental efficiency initiatives
Actor for a low-carbon economy
Societe Generale, aware that all economic players have a role to play in the transition to a low-carbon economy, supports the governments and private sector efforts in its numerous markets to diversify the energy sources and raise the use of renewable energies.
See Societe Generale, conscious of the climate change issues facing our planet
The Group wishes to position itself as a key actor in financing the energy transition, targeting the following priorities:
- The diversification of sources of energy production with increased financing in the renewable energies sector;
- The reduction of its clients' energy consumption;
- The increase in its energy transition efforts in developing countries, in particular in Africa, where Societe Generale has a strong presence, and the attraction of investors for these projects.
In 2015, in terms of funding activities of private or public sector companies, Societe Generale's environmentally-friendly funding amounts to nearly EUR 2 billion, and 66 % of the global portfolio of the Corporate and Investment Banking division's power generation sector consists of renewable energy assets (compared to 60% in 2014).
The bank has been particularly active in the funding of renewable energy projects and is major player in the funding of energy infrastructures. In 2015 76% of new project funding in electricity production sector was dedicated to renewable energy assets for the Group (compared to 70% in 2014).
In its French banking networks, Societe Generale also promotes funding to improve energy efficiency, and offers a range of specific services through its subsidiaries, including property development and car leasing.
Sensitive to the importance of the E&S risks and impacts related to extractive activities and to the use of coal, and premier among them the climate change impacts, in 2011 the Bank developed an E&S Policy on the Coal-fired Power Sector. An E&S Policy on the Mining Sector completes the package.
Finally, since 2012 Societe Generale has had a Biodiversity Policy, applicable to all Group banking and financial operations. The bank ensures that it will assess the impacts of projects it may fund on biodiversity, with the search for mitigation measures, if needed, or withdrawal from the bank if necessary.
Furthermore, the Group which has been responding to the CDP Climate questionnaire since 2005, wanted to reinforce its commitment to fighting for the climate in 2015, the year of the COP21. It officially committed to the CDP, by becoming a signatory of the CDP Climate, the CDP Water, the CDP Forest and the CDP Coal, joining more than 822 financial institutions throughout the world.
Innovative solutions to rise to the challenges of energy transition
Societe Generale uses its structuring and distribution expertise to provide innovative solutions responding to risk/profitability concerns and integrating the ESG criteria required by investors, notably through Positive Impact Financing under the auspices of UNEPFI. In response to the needs of low carbon investors, the Group issued a EUR 500 million bond with a double environmental and positive impact component.
To support its “Corporate” clients, the Group intends to contribute to the development of a Green Bonds market with a view to financing projects and acquisitions in the renewable energy and energy efficiency domains. In 2015, Societe Generale contributed to the issue of 6 Green Bonds for a total of EUR 2 billion.
Félix ORSINI, Global Co-Head DCM Corporate Origination
The Group has also allocated teams to the search for financial solutions that foster new climate-friendly technologies, such as Carbon Capture & Storage (CCS). It advises several of these essential projects on the reduction of climate change.
In keeping with its global strategy, Societe Generale strives to forge and develop partnerships, in the other countries where it operates, with International Financial Institutions (AFD, EBRD, EIB, World Bank, etc.) to propose financing solutions that respond to the needs of the local businesses and stakeholders it works with, with a particular focus on energy transition projects.
Reducing our environmental footprint
The 2012-2015 carbon reduction programme came to an end in late 2015. At COP 21, Societe Generale set a new target to reduce its CO2 emissions by 20% compared with 2014, per occupant by 2020.
Concerning greenhouse gases emissions reduction, Societe Generale implemented an incentive scheme which explicitly relies on the creativity of its teams. Indeed, the Group is one of the first banks to have implemented, in 2011, an “internal carbon tax”, currently EUR 10 per ton of CO2 emitted. The proceeds raised in the business units are used to fund internal environmental efficiency initiatives.
The goal of this scheme is to show that environmental measures are also opportunities to create value and innovation for the bank.
See the Press Release from the 3rd edition of the "Environmental Efficiency Prize" (not available in English).
Our commitment to reduce our energy consumption is a day-to-day work. There is no conflict between our strategic objectives and our environmental objectives. Not only there is no conflict, but we can even use environmental initiatives to reach our objectives faster.
Séverin Cabannes, Deputy Chief Executive Officer
Internal Carbon Tax: 3 years after its launch, a scheme that continues to foster employees’ enthusiasm
Since their inception, the Environmental Efficiency Prizes have awarded 119 projects for a global annual average of EUR 3.1 million and have yielded an annual recurring savings of EUR 13 million on average.
The internal carbon tax presented by Emmanuel Martinez
The bank's environmental policy also led to the implementation of initiatives supporting reduced use of water and transportation (either professional commuting from work to home or freight transportation) as well as paper consumption optimization and waste recovery.
IT infrastructures account for nearly 50% of the Group’s energy consumption. In light of this fact the IT Division has adopted an environmental strategy that gives greater consideration to environmental aspects when managing its IT stock.
For its part, the Real Estate Deportment, with over 4 million square meters of area in 2015, committed to the implementation of an environmental strategy for real estate, to continuously improve the energy performance of buildings.