For an electricity producer for example, the mix of different technologies (renewables, gas, coal, etc.) defined in its production plan for 2025, makes it possible to estimate its alignment with the Paris Agreement trajectory.
As shown in the previous graph, the electricity producers financed by Groupe BPCE use a mix of different technologies (renewables, gas, coal, etc.) well aligned with the mix recommended by the OECD SDS scenario, notably regarding the share of renewables in the electricity mix (measured in terms of capacity).
This banking-industry work covers only part of the sectors financed by the Group whereas the aim is to cover all the portfolios and align their trajectories with environmentally sustainable climate objectives.
The work presented below explains the construction of the Group’s ‘Green Evaluation Models’ approach, designed to be applied to all its financial portfolios.
1.2 - Work on measuring the carbon footprint of lending portfolios
Work began in 2020 to estimate the greenhouse gas (GHG) emissions from projects financed by Groupe BPCE. These estimates have been carried out on direct emissions (scopes 1 and 2) and indirect emissions (scope 3 emissions generated by the entire value chain involved in the manufacture and use of products). Housing loans, which account for nearly one-third of Groupe BPCE’s outstandings, have benefited from initial measurements thanks to the establishment of a partnership with the Centre Scientifique et Technique du Bâtiment (CSTB, or Scientific and Technical Centre for the Building Industry)2
Scientific and Technical Centre for the Building Industry (CSTB)
Measurements
Develop the most advanced methods to measure housing energy performance
Research
Fund research on adapting cities and housing to global warming
Studies
Conduct joint socio-economic studies
The aim of carbon footprint measurements of companies, projects and assets financed by the portfolio is to:
- Rank the portfolios in order of carbon impact, from the most to least carbon-intensive in proportion to the size of their outstandings (in order to establish a scale for the carbon intensity of lending portfolios),
- Identify the portfolios to be prioritized for alignment with the Net Zero trajectory.
For example, in the case of Groupe BPCE, the outstandings of the oil & gas industry are twenty times smaller than housing loans but responsible for ten times the carbon emissions.
Oil & gas: outstandings twenty times smaller than housing loans but responsible for ten times the carbon emissions
This graph represents the materiality of climate change on our portfolios.
Oil and Gas: 36 Mt CO2 emitted
Carbon intensity of portfolios (carbon emissions per €m financed) : between 800 and 400 tonnes/€m
Home loans for individual customers: 4 Mt CO2 emitted 2
Carbon intensity of portfolios (carbon emissions per €m financed) : more than 100 tonnes/€m
1. Details of the principles underlying this methodology may be obtained here: https://www.transitionmonitor.com/wp-content/uploads/2020/09/PACTA-for-Banks- Methodology-Document.pdf
2. Amount of the initial scope 1 and 2 carbon estimates related to housing loans.