France's key finanical services representative bodies, particularly with links to the Paris Financial Center, have announced that they will take further action to combat climate change and contribute to the goal of carbon neutrality by 2050.
In a joint statement, the ASF - French Association of Financial Societies, AFG - French Asset Management Association, FBF- French Banking Federation, FFA - French Insurance Federation, France Invest - French association of private equity actors, Paris EUROPLACE and Finance for Tomorrow announced their commitment to the target.
At COP 21 in 2015, Paris was the first financial centre to collectively declare its membership consensus on the impact of greenhouse gas emissions and commit to take action necessary for the financial industry to contribute to accelerating the transformation towards a low-carbon economy.
The joint statement notes that local players have since multiplied individual and collective initiatives such as sector-wide policies regarding fossil fuels, integration of environmental, social and governance (ESG) criteria in investment strategies and the creation of Finance for Tomorrow which, as a branch of Paris EUROPLACE, serves as a driving force behind the mobilisation of the Paris Financial Center
In the first 'semester' of this year, France has been a leading source of green bonds with more than €13bn issued. The country's ISR (SRI) and GreenFin labels have continued to grow; respectively covering 222 labelled funds representing €57bn of AUM and and 30 labelled funds representing €7bn.
Aware of the urgency of the challenges of the climate crisis, the associations have outlined new commitments in light of the urgency of meeting the carbon target:
- Incentives for members to adopt a coal strategy, with a global timetable for disengagement and accounting for it in their extra-financial reporting as early as fiscal year 2020.
- Continued collaboration with supervisory authorities to develop methodologies and open source standardisation of such methodologies for assessing portfolio exposure to climate risks and aligning portfolios with climate risks investment portfolios with a 2°C scenario.
- The monitoring of commitments through the creation of an observatory to track the achievements and actions of the Paris Financial Center in green and sustainable finance. With a committee, the observatory will be under the joint governance of the main federations (AFG, FBF, FFA, France Invest) and Finance For Tomorrow, and include a scientific committee.
Together, they believe that the success of the ecological transition envisaged can only be done through ensuring a successful mix of energy transformation and business models. This requires the financial services sector to support a sustainable economic growth model.
To read the full joint declaration click here: