Energy Transition: succeeding together
Séverin Cabannes, Deputy Chief Executive Officer, explains the importance of energy transition and the Bank's key role in funding renewable energies.
Societe Generale is one of the 39 French companies that recently signed a "climate manifesto", and so far, 90 international Chairmen/CEOs have signed the Business Proposals for COP21. Furthermore, according to Novethic, 960 investors representing almost €30 trillion have made climate commitments in 2015, with some announcing plans to "decarbonise" their portfolios, i.e. divest from fossil fuel sectors. Beyond these signs of collective awareness, these factors demonstrate how climate issues have become an integral part of long-term development strategies. For banks, there is a special responsibility to support our customers in the economic and energy transition towards a low-carbon economy.
Societe Generale, which has long played a pioneering role in financing renewable energies, is currently one of the seventh biggest players in renewable energy financing and it intends to continue along this path supporting the needs of its customers and local economies.
At Societe Generale we have fully grasped this responsibility and have supported the financing of renewable energies sector when it first emerged over ten years ago and for many years, we have had in place social and environmental principles that guide our financing decisions in a number of sectors of the economy. Today, the 21st United Nations Climate Change Conference opens in Paris, Societe Generale has fixed the objective, in accordance with its new climate change policy, of setting itself on a path in compliance with limiting global warming to 2°C. Adopting a global policy to benefit the climate marks a new phase in our commitment.
We have decided to double our financing of renewable energy projects to €10 billion by 2020 and renewable energies already accounted for 70% of new Group financing for the energy generation sector in 2014. Societe Generale, which has long played a pioneering role in financing renewable energies, from supporting innovative start-ups to funding large-scale projects, is currently one of the seventh biggest players in renewable energy financing and it intends to continue along this path supporting the needs of its customers and local economies.
We are also one of the banks that helped set up the Positive Impact finance initiative, led by the UN Environment Programme Finance Initiative (UNEP-FI). Societe Generale has successfully completed the first Positive Impact Bond issuance raising €500 million to be used to finance projects aimed at combating climate change. This transaction attracted strong demand from investors, who are showing a new appetite for structured finance and a sustainable bond market that favour sustainable development.
The Group has also decided to reduce its carbon-related activities. From now on, Societe Generale will no longer participate in the financing of coal-fired power plants in high-revenue OECD countries, or in the financing of coal mine development projects. Deforestation is responsible for 20% of global greenhouse gas emissions and we are strengthening our commitment to the fight against this, by adopting the Soft Commodities Compact, which aims to help our customers in the agricultural commodities sector to achieve a target of zero net deforestation before 2020.
The response to the major challenge presented by energy transition and transformation towards low-carbon economies require all stakeholders, political authorities, international institutions and the private sector to work together to propose common objectives and solutions. Societe Generale is one of the main partners of international financial institutions for the financing of energy transition. I'm convinced that with all stakeholders pulling together we will be able to make necessary changes to achieve the successful energy transition that is urgently required for humanity.