French finance groups move en masse to back government’s ESG reporting and climate/SRI labels

Lobby groups call for mobilisation on financing for low carbon energy transition.

France’s financial lobby groups for bankers, insurers, asset managers, private equity firms, financial analysts and Paris as a financial centre (Paris Europlace), have jointly backed the French government’s moves to promote ESG reporting and green/SRI finance labels, in a major show of support by the country’s financial services sector.
The lobby groups have joined forces with the French SIF (FIR) and ORSE, France’s corporate responsibility group, to row in behind the three major voluntary ESG reporting regulations the government has introduced recently.
These are:

  • Article 173 of the Energy Transition for Green Growth act. This requires annual reports from this year onwards by institutional investors and fund managers on how ESG issues are incorporated into investment and their contribution to the fight against climate change. The law also commits the French government to establishing climate scenarios on which to test the resilience of credit establishments.
  • The TEEC label (energy and ecological transition for climate) is overseen by the Environment, Energy and Sea Ministry. It gives kite-marks to assets held via investment funds based on a framework referencing the Energy Transition for Green Growth act.
  • The SRI label – overseen by the French Treasury – labels funds invested in companies that take into account ESG criteria.

In a joint memorandum, the French groups urged their members to step up support for the government’s action, notably in pushing for the implementation of the COP21 Paris Agreement at COP22 in Marrakesh later this year. The memo calls for the French finance sector to accelerate funding for green infrastructure internationally and green bond issuances.It also backs the promotion of low-carbon investment strategies and says investors should report on their positive contributions to climate change and risk issues in their financing decisions. It says they should also engage with companies in which they invest or finance to encourage a reduction in their carbon footprint and improve the quality of data on greenhouse gas emissions.
The groups say they will work together on carbon risk measurement methodologies and collaborate more closely with public authorities and regulators to encourage low carbon capital flows via incentives such as carbon pricing and preferential prudential treatment.
The French finance lobby groups are Association Française de la Gestion financière (fund management), L’Association Française de l’Assurance (insurance), Association Française des Investisseurs Institutionnels (institutional investors), L’Association Française des Investisseurs pour la Croissance (AFIC: private equity), La Fédération Bancaire Française (FBF: banking), La Société Française des Analystes Financiers (SFAF: financial analysts)
Separately, ORSE, in association with l’ADEME (The French Environment and Energy Management Agency), l’Association Bilan Carbone (ABC) (Association for carbon assessment) and La Caisse des Dépôts, the French sovereign wealth fund, with the technical expertise of Carbone 4, the data firm, have published an English version of their methodological guide to GHG emissions in the financial sector. It was put together with the participation of twenty financial institutions, NGOs and experts. Link