As one of the world leaders in energy financing, Societe Generale has been involved in the energy transition for several years, and has adopted a proactive climate policy consistent with the 2 ° C scenario of the International Energy Agency (IEA). Our climate policy, ranked 93/100 by Robecosam positions us in the leading group of non-financial rating agency rankings.
End of 2017, the bank has announced that it has set itself the objective to contribute to raising €100 billion in financing for the energy transition between 2016 and 2020, and we have confirmed our acceleration in the renewable energy sector, where we are among the leaders, with more than 10 years of experience. We already have contributed by raising €39 bn on this objective, including €30 bn of green bonds and €9 bn through advisory and financing to the renewable energy sector.
We have been a pioneer in launching last year a consolidated “Sustainable and Positive Impact Finance” offering within the global banking & investor solutions* activities which incorporates the bank’s Environmental & Social (E&S) expertise into a wide range of innovative financial solutions that satisfy the E&S requirements and challenges of its issuer and investor clients.
We strengthen our environmental and social commitments on a regular basis in a progress-driven and responsible energy transition approach. Thus, we recently published an updated Oil & Gas sector policy to reflect our commitments at the end of 2017 to support our clients of the sector in a responsible way and minimize climate and environmental impacts.
Click here to read the sector policy oil and gas
Reply letter to the Les Amis de la Terre association
26/02/2018 - Following our meeting with Les Amis de la Terre France on January 22nd, 2018 and the letter you sent us on February 2nd, we would like to bring some clarifications to your attention.
Regarding the commitments made by Societe Generale in December 2017 on the Oil and Gas sector and in particular the exclusion of oil sands and Arctic oil, we are currently working on their integration in our Oil and Gas Sector Policy which will be made public in the coming weeks. As we have indicated, this commitment will go beyond the exclusion of dedicated transactions to also cover the financing of companies primarily involved in the extraction of oil sands and Arctic oil.
As for gas production and transportation and processing infrastructure (including LNG), we seek for our E&S commitments to integrate the issues related to climate change. The scenarios of the International Energy Agency are an important reference for Societe Generale. We noted the new "Sustainable development" scenario in the IEA report published last November, which seeks to reconcile environmental objectives (management of local pollution particularly in Asia), climate (the Paris Agreement) and development (access to energy).
The IEA report highlights the significant efforts that can be made to reduce methane leakages in the production and transportation chain of the entire Oil and Gas sector. As a consequence, Societe Generale has made commitments on this aspect in December. The forthcoming policy will specify the evaluation criteria for limiting methane leaks and flaring.
It will also reflect the new Group commitments regarding the respect of the rights of indigenous populations.
Regarding the Rio Grande LNG/Rio Bravo Pipeline project (the "Project"), there is an ongoing process of evaluation and approbation by the relevant US federal and state authorities. As such, the sponsor NextDecade filed an application with the Federal Energy Regulatory Commission to site, construct and operate the Project in May 2016. This request launched the formal regulatory “scoping period” by the National Environment Protection Agency. During this period, all local communities have the opportunity to voice their opinions and concerns about the Project. This process comes in addition to the outreach activities already conducted by NextDecade towards stakeholders including communities of indigenous tribes recognized by the state of Texas or federal authorities. The information we have received to date indicates that the Project has not identified any area under protection status, that no federally protected species were encountered during field surveys conducted by NextDecade, and that no archeological or culturally significant sites have been identified within the Project site.
We invite you to share with us any additional information you may have before we organise a meeting about the Project, together with your partners from the Save Rio Valley From LNG coalition and the Rainforest Action Network.
Concerning the Coal sector, the methodology for the monitoring of the Group's activity in the sector was presented to you last year, and has since been formalised. We have included the results to the elements that have been provided to EY, the third-party auditor of Societe Generale CSR information. The 2017 monitoring results will be integrated in the Group’s Registration Document to be published in a few weeks. The methodology is based on our knowledge of a client’s activity at group level, but also on information related to the specifically funded subsidiary, or underlying asset in the case of dedicated transactions. This additional level of detail means that a transaction for a renewable project, or to a subsidiary specialised in renewables will not be counted in our follow-up as having a coal component (conversely, a transaction at the corporate level will be assigned to the coal share of the client group in the monitoring). This approach brings in significant differences with regard to the results of the studies focused on a group characteristics, such as those that you publish. As we see it, our "real" exposure to coal is much less than what these studies reflect. It should be noted that we also analyse the climate strategies of the client groups as part of our environmental and social assessments, and that we take into consideration in this context the information that you and your partners address to us.
We organise meetings with representatives from the civil society, including Friends of the Earth and Banktrack, several times a year on the environmental and social impacts related to Societe General financing activities. This dialogue, together with the information brought to our attention are systematically taken into account in our E&S evaluation of the transactions and clients. In parallel, the Group’s E&S evaluation framework is regularly adapted based on our exchanges with civil society but also on our relationship with other stakeholders such as colleagues from the financial sector, extra-financial rating agencies, investors, and of course, our clients.
The Rio Grande project in the USA
23/10/2017 - Societe Generale has an active policy of listening to all of its stakeholders, and pays the greatest attention to the queries it receives, including from NGOs that alert about E&S issues in its sphere of influence.
The bank is committed to continuing this dialogue in a constructive and progress-driven approach.
Therefore, following the queries related to the Rio Grande project, Societe Generale can clarify some points regarding the current situation.
Located in the United States in the state of Texas, this project involves the construction of a natural gas pipeline, a natural gas liquefaction plant and a liquefied gas export terminal. This project is developed by NextDecade, a company specialising in the development and management of land based and floating LNG projects.
Societe Generale, jointly with Macquarie, has been mandated by NextDecade as financial advisor for the development of the Rio Grande project.
Societe Generale does not provide any financing. As an advisor bank, Societe Generale's role is to provide financial services to its client to support them with the best possible development of their project.
As for all of its activities, Societe Generale only participates in projects that comply with the laws and regulations in force within the geographies where the bank operates, as well as the bank's own framework.
As a responsible actor, the bank has also made numerous voluntary commitments set out in the Group's General Environmental & Social Principles. Also, since 2007 the bank has been a member of the Equator Principles (EP), the association of reference for the banking sector, adopted by 90 financial institutions to identify, assess and manage environmental and social risks.
Regarding human rights, the bank is committed to respecting several initiatives and standards such as the UN Global Compact, the OECD Guidelines for Multinational Enterprise and the UN Principles on Business and Human Rights. Societe Generale has also teamed up with other members of the EP Association to ask for an evolution of the current risk assessment framework in line with international best practices.
"Azerbadjiani Laundromat" & Trans Adriatic Pipeline - Reply to BankTrack
15/09/2017 – Societe Generale would like to clarify its position following the publication of BankTrack’s article.
Societe Generale Corporate & Investment Banking has been mandated as financial advisor for the Trans Adriatic Pipeline (TAP), a 850km gas pipeline, recognised as a Project of Common Interest by the European Commission. As of today, the bank does not provide any financing to TAP.
We would like to reiterate that TAP is developed in compliance with all the laws and regulations and aims to be compliant with the environmental and social commitments of its potential lenders, including the Equator Principles. An Environmental & Social review by an independent and well known consultant is currently underway, and the bank is kept updated regarding any further development.
Regarding the payments mentioned by BankTrack, Societe Generale has conducted investigations and formally denies the alleged link between these payments and its advisory role in the TAP project.
We would also like to point out that Societe Generale is not the beneficiary of these payments which resulted in payments to the benefit of its clients in the normal course of its banking activities.
Dirty Diesel report - Reply to BankTrack
23/05/2017 - Societe Generale’s role in financing the real economy makes it aware of the environmental, social and economic convergence issues at play within its sphere of influence and makes it intent to factor them into its business. At a minimum, Societe Generale requests its clients to comply with the E&S laws and regulations of each relevant country. Beyond, all environmental and social (E&S) commitments of the Bank are set out in the E&S General Guidelines that constitute the global reference framework for applying evaluation procedures. Regarding human rights, the General Guidelines list the initiatives that Societe Generale is committed to respect as the UN Global Compact, the OECD Guidelines for Multinational Enterprise and the UN Principles on Business and Human Rights.
Societe Generale serves the global natural resources and energy markets. As part of this large business activity, trade finance teams provide short and medium term financing to clients underpinned by commodity trade flows.
The bank implements E&S (including human rights) due diligence through procedures enabling identification, evaluation, and, where relevant, prevention of risks, both at transaction and client relationship levels. This E&S due diligence is commensurate to the clients’ activities, their location and their positioning in the value chain. Information from the civil society plays an important role at the identification stage.
As Societe Generale clients, Trafigura and Vitol have gone through the above described process. Information of the last few months regarding the quality of car fuels in African countries and debates around the role of the different actors of the value chain have been factored in our reviews.
The involvement of Societe Generale with these companies is global and the credit amounts the report is referring to are general purpose lines which globally finance Trafigura and Vitol. Their trading of diesel in Africa is only a fraction of a much wider activity.
Nevertheless, the issue of high-sulphur diesel in Africa has been an important part of the on-going dialogue with these companies in the last few months. Societe Generale shares the view that strengthening the fuel standards in the African countries where such evolution has not yet started, will be the most effective way to tackle the issue and will be part of the solution to raising air quality in Africa. At this stage, the Bank intends to continue the dialogue with its clients and better engage with them and institutions and organizations such as the African Refinery Association, the Climate and Clean Air Coalition or the UNEP Partnership for Clean Fuels and Vehicles, that are already active on this matter, and more broadly on access to energy in Africa.
The Dakota Access Pipeline project in the USA
22/05/2017 - Societe Generale is one of the 17 banks initially involved in the financing of the Dakota Access Pipeline (DAPL) project located in the United States of America.
In the framework of its business activities, Societe Generale only supports projects that are in compliance with all the rules and regulations in the jurisdiction in which it operates and in accordance with the Group’s Environmental and Social General Guidelines and the Equator Principles adopted by 90 financial institutions for determining, assessing and managing environmental and social risk. In all of its business activities, Societe Generale condemns violence and violation of human rights.
The decision to support the DAPL project was made on the basis of a comprehensive due diligence process that included independent reviews from various counsels, and that legal, technical, environmental, social and regulatory matters were and continue to be in compliance with all applicable laws and regulations. In light of protests following the project financing, Societe Generale carried out discussions with a representative of the Standing Rock Sioux Tribe to better understand their concerns. Alongside the other lending banks, we also supported the commissioning of an independent human rights expert, Foley Hoag LLP, to conduct a further social impact study on the project, advise the lenders in their understanding of the complexities of the DAPL situation and provide recommendations to sponsors to consider in the future.
A summary of these recommendations was made public. Societe Generale will take them into account in the future when reviewing projects with similar issues.
In February 2017, the US Administration confirmed the project’s satisfaction of all regulatory requirements and granted the final easement to the project. The Standing Rock Sioux Tribe has since exercised the recourse afforded to it by the US judicial system. We continue to closely monitor the situation and urge all parties to reach a peaceful resolution.
In line with its business practices, Societe Generale explores ways to positively influence the projects it is involved in and help the industry evolve. Our bank believes it is important that lessons learned by all stakeholders in the Dakota Access Pipeline are considered in projects and project financings going forward.
As a result, Societe Generale has teamed up with other members of the Equator Principles Association to ask the association to rapidly adapt the current risk assessment framework with regard to the rights of indigenous peoples, in line with international best practices.
22/02/2017 - Societe Generale is one of several banks involved in the financing of the Dakota Access Pipeline project located in the United States of America.
In the framework of its business activities, Societe Generale only supports projects that are in compliance with all the rules and regulations in the jurisdiction in which it operates, and in accordance with the Group’s Environmental and Social General Guidelines and with the Equator Principles adopted by financial institutions for determining, assessing and managing environmental and social risk.
The Bank is however concerned by the protests this project has generated, and has raised theses views with the client and the other lenders. Furthermore, Societe Generale is one of the banks that had discussions with a representative of the Standing Rock Sioux tribe.
Societe Generale took note of the recent US government decision to issue all necessary easements which give the green light to complete the construction of the project.
The Bank cannot withdraw from the project due to its contractual commitment to the financing alongside other French and international banks. It is therefore not legally possible to step away at this stage.
Societe Generale will continue to closely monitor the situation. The Bank urges all parties to reach a peaceful resolution within respect of the rule of law, through processes afforded by the Court system.
02/12/2016 - Financing of the Dakota Access Pipeline project in the USA
Societe Generale is one of several banks involved in the financing of the Dakota Access Pipeline project located in the United States of America.
In the framework of its business activities, Societe Generale only supports projects that are in compliance with all the rules and regulations in the jurisdiction in which it operates and in accordance with the Group’s Environmental and Social (E&S) General Guidelines and with the risk management framework of the Equator Principles adopted by financial institutions for determining, assessing and managing environmental and social risk. These principles include respect of human rights, and in particular of the rights of indigenous people.
In light of the protests against the construction of the project, and in particular the Standing Rock Sioux Tribe’s views that their rights have not been respected, Societe Generale has raised these views with the project’s sponsors. The bank will continue to closely monitor the situation with the project’s sponsors and the other lenders.
On 4th December , US federal administration decided to halt construction, calling for a full environmental review and re-evaluation of whether the pipeline’s route should be altered. (Updated 12/04/2016)
In order to assist and seek a resolution, Foley Hoag LLP, an independent human rights expert, has been retained to advise the lenders to the Dakota Access Pipeline and to review various matters related to the permitting process, including compliance with applicable law related to consultations with Native Americans. This review will include the evaluation of policies and procedures employed by the project’s sponsors, in the areas of security, human rights, community engagement and cultural heritage. Following this review, the independent expert will develop recommendations for improvements in line with international standards with respect to the sponsors’ social policies and procedures going forward. The lenders understand that the sponsors will review and consider all of the recommendations.
The Bank plays an active short- and long-term role in supporting the economy and remains attentive to stakeholders with influence on the banking sector. Shareholders, customers, investors or suppliers, the consideration of our stakeholders is at the heart of our responsible approach.