THE GROUPE BPCE CLIMATE REPORT OCTOBER 2021

2 - Identification and assessmentof climate risks

Groupe BPCE has consequently set itself four key objectives:

  • To measure the climate impact of its financing, proprietary investment, and insurance activities and manage their climate trajectory within the reference framework of the Paris Agreement in pursuit of the goal of achieving the 1.5°C target and by placing a priority focus on the most greenhouse gas-intensive sectors,
  • To extend its green refinancing strategy with the issue of ‘energy transition’ bonds,
  • To support the energy transition process in general, and help its customers to meet the challenges of their own transition by serving their needs related to financing, savings or insurance, by offering advisory services and a structured strategic dialogue, and by providing them with expertise, relevant solutions, and a long-term vision,
  • To speed up the reduction of its direct environmental footprint by aiming to reduce its carbon emissions by 15% (compared to 2019) between now and 2024.

2 - Identification and assessment of climate risks

The identification of climate risks, their management and supervision are key steps in the process of defining a climate strategy geared to the environmental transition.

For Groupe BPCE, climate risks correspond to the vulnerability of banking activities to climate change. A distinction can be drawn between physical climate risks, which are directly related to climate change, and transition climate risks, which are more related to the necessary adaptation of our activities and those of our customers to combatting. These risks now form an integral part of our sectoral risk policies (see Chapter 3 - Risk management).

The materiality of climate change-related risks is assessed in line with the most commonly used major risk classifications, namely: credit risks, market risks, and operational risks. Groupe BPCE has therefore set up a robust system for identifying climate risk factors liable to influence traditional risks, supported by a precise monitoring tool.

Groupe BPCE intends to commit to a long-term adjustment of its balance sheet in line with a strategy of mitigating the climate impact of the activities it pursues and the assets it finances, invests in, or insures.

 

3 - Making climate change a strategic priority for all its business lines and companies

In its new 2021-2024 strategic plan, Groupe BPCE has identified the environmental transition as one of its growth drivers capable of generating additional revenues of approximately €300m by 2024 (vs. 2020).

3.1 - Progressive greening of its financing, investment, and insurance activities

Groupe BPCE undertakes to modify the structure of its balance sheet to limit the climate impact of its financing, investment and insurance activities, and to gradually align its portfolios with a net-zero trajectory.

The Group is therefore continuing:

  • To develop mechanisms to measure carbon emissions and manage the climate trajectory of all the Group’s portfolios (see Chapter 4 - Metrics & targets),
  • To develop its system for identifying and managing the physical and transition climate risks to which its customers and its own activities are exposed, with a view to continuous improvement (see Chapter 3 - Climate risk management),
  • To withdraw from the most carbon-intensive activities through the adoption of appropriate sectoral policies.