French government to oblige investors to publish portfolio carbon footprint

Announcement from today’s Climate Finance Day in Paris.

Michel Sapin, the French Minister of Finance and Public Accounts, has announced that all French institutional investors will be obliged to publish the carbon footprint of their portfolios.
Speaking this morning (May 22) at Climate Finance Day in Paris, Sapin announced that the data should be published as part of the investment policy by French financial services companies. He did not lay out a time-frame for adherence.
Sapin also announced that the G20 had asked its Financial Stability Board (FSB) to start looking at how financial actors take climate risk into account.

Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) heralded the climate footprint announcement as an “amazing achievement that deserved special applause.”

She added: “Something major is afoot when the G20 asks the FSB to look at climate risk for the finance sector; it’s a sign things are reaching scale and importance. This is very positive because we need new standards for the financial system.”Mats Andersson, CEO of AP4, the Swedish pensions buffer fund, said: “We admire the French government for taking the step to make carbon reporting mandatory.”

Philippe Zaouati, CEO at Mirova, the sustainability fund manager, noted that the decision taken by the French National Assembly was not just about measuring investor carbon footprints, but also reporting on ESG criteria into investment decisions, and how much investors will invest in a positive green transition.

Opening today’s conference, Gerard Mestrallet, Chairman and CEO of ENGIE (formerly GDF Suez), and Chairman of Paris Europlace, the organization for the promotion of Paris as a financial centre, said the financial sector was not yet sufficiently focused on low carbon assets because of regulatory barriers.

These, he said included European directives like Solvency II, which he said put strong constraints on institutional investors to allocate to long-term projects. He said another key priority was the implementation of a carbon price, which needed to be developed to address emissions reductions costs effectively: “This is in our view the most urgent task.”

Will investors be part of the solution to climate change, or part of the problem?
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