In order to comply with the Paris Climate Agreement and align its activities with a carbon-neutral trajectory by 2050, Groupe BPCE is:
- Developing a method to assess the climate impact of its lending portfolios with its ‘Green Evaluation Models’ approach.
- Prioritizing the most greenhouse gas emitting sectors in its drive to align its portfolios with a carbon-neutral trajectory, and demonstrating this commitment by joining the Net Zero Banking Alliance.
- Implementing climate measurement methodologies for investment portfolios in its asset management and insurance businesses.
- Continuing to reduce its own environmental footprint.
Because commitment to a Net Zero trajectory requires a capacity to measure and monitor the carbon profile of its portfolios, Groupe BPCE is developing methods known as ‘Green Evaluation Models’ to assess the climate impact of its lending portfolios. These models take a dual approach to this evaluation by:
- Assessing the carbon footprint of portfolios with a view to ranking them in order of their climate materiality, and prioritizing the Group’s alignment work (starting with the sectors emitting most greenhouse gases),
- Using granular models to rate the climate impact of the assets, projects and customers financed.
These assessments make it possible, firstly, to identify customers needing help to confront their own transition challenges and, secondly, to give the Group the means to guide its alignment with a Net Zero trajectory in a manner consistent with the proportionality of the carbon emissions of the assets financed.
Groupe BPCE fully appreciates that these impact measurement efforts are exploratory in nature, all the more so as certain climate assessment tools are still in their research & development stages. However, this work on developing measurements and defining ‘green’ benchmarks is essential to take full ownership of the issues and make climate objectives an integral part of our financing activities.
This work is also relevant to questions related to the transparency, traceability and comparability of the commitments made. This chapter presents the approach adopted by Groupe BPCE, backed up by an initial set of figures and the results of industry-wide research.
Member of the Executive Management Committee, Head of Finance and Strategy, Groupe BPCE
“The inclusion of environmental impacts in the classic ‘profitability/risk’ equation represents a new approach in the way financial departments are managed. The integration of this now essential third dimension calls for a veritable transformation of our business activities. The greater focus of both civil society and the regulatory authorities on the area of sustainable finance is hastening the need for non-financial reporting. We must manage data related to the climate-change component - and data related, more broadly, to environmental and societal issues - with the same demand for quality, traceability and transparency as in other areas. This calls for considerable expertise and represents a vital challenge if we are to meet the commitments laid down in our new strategic plan.”
Groupe BPCE is one of the sixteen pilot banks taking part in the assessment of its financial portfolios using the PACTA methodology.