COP 21: FRENCH BANKS STEP UP INITIATIVES TO COMBAT

CLIMATE CHANGE

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THE FRENCH BANKING FEDERATION (FBF) IS AN OFFICIAL PARTNER OF COP21 – UNITED NATIONS

CONFERENCE ON CLIMATE CHANGE

INTRODUCTION

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The FBF has signed the Paris Financial Marketplace Operators' Statement on Climate Change in the name of French banks (Finance Climate Day - Paris, May 2015)

Most French banks have adhered to the Financial Initiative aimed at supporting the United Nations Environment Programme (UNEP FI,

2001), the Equator Principles (EP, 2007), or the United Nations Global Compact (Global Compact, 2000).

INTRODUCTION

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• Initiating an open and constructive dialogue between the financial community, companies, and governments as part of the organisation of COP21.

• Steering investments, financing, and insurance towards low-carbon solutions.

• Boosting R&D, innovation and the development of cutting-edge technologies in order to gain a better understanding of the consequences of climate change, especially in terms of risk and solutions.

• Boosting collaboration with companies, in order to reduce the threat and the effects of climate change, including measuring and reducing greenhouse gas emissions.

• Boosting collaboration with government and regulatory authorities in order to create a favourable regulatory framework for combating climate change.

The commitments of the Paris Financial Marketplace Operators' Statement on Climate Change – May 2015

INTRODUCTION

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International commitments: Statement by the Union of French-Speaking Banks (Nov 2015)

• To mark the occasion of COP21 the banks belonging to the federations and organisations that are members of the French-Speaking Banking Union (UBF) are getting involved, in order to increase the cooperation on Climate Financing between French-speaking developed countries and emerging countries.

• They are committing to collaborating with international bodies, government authorities, non-governmental organisations, companies, and private individuals in order to develop solutions that meet the environmental and economic challenges posed by the transition to a low-carbon economy.

INTRODUCTION

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Financing the transition to a low-carbon economy throughout the world

• The French banking sector, which operates abroad, is helping emerging and developing countries, and local companies, with their transition to a low-carbon economy.

• French institutions are particularly involved in Africa, where they have formed partnerships with development agencies (like the French Development Agency, or AFD), and with multi-lateral organisations and agencies.

• The projects cover a wide variety of sectors and enable both the structuring of local banking networks and the creation of "climate-related" offers, as well as the financing of sustainable projects (access to water and energy).

INTRODUCTION

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Combating climate change is a financing issue...

INTRODUCTION

€6 billion This is the amount by which investments aimed at protecting the climate increased in France between 2011 et 2013 (Institute for Climate Economics)

€36 billion This is the amount invested in order to protect the climate in France in 2013 (Institute for Climate Economics)

Other

Sustainable infrastructures

Renewable energy (5)

Energy efficiency (18)

Investment expediture to protect the climate

In bn €, in 2013

36 €bn In 2013

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INTRODUCTION

…a need for corporate responsibility, and an economic challenge

• CORPORATE RESPONSIBILITY: French banks have been committed to combating global warming for a

long time. As large companies, they have developed environmentally responsible

policies that involve their employees.

• AN ECONOMIC CHALLENGE, AS WELL AS AN OPPORTUNITY: Decisions to support the transition to a low-carbon economy will have a

significant influence on investment and financing methods. French banks, which are experts in financing, were among the first banks

in the world to design new techniques aimed at supporting both companies and private individuals.

Measures aimed at protecting the climate are also an opportunity for the banks, thanks to the diversity of their business lines.

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INTRODUCTION

Universal banking is suited to the challenges posed by the transition to a low-carbon economy

The financing of the transition to a low-carbon economy calls upon all the expertise of French banks

I. STRUCTURED FINANCING: financing of infrastructure projects that have a positive impact on the environment in France and abroad.

II. MARKET SOLUTIONS: Innovation on the capital markets via the development of "green bonds".

III. DAY-TO-DAY BANKING: Supporting private individuals and companies' projects aimed at promoting a lower-carbon economy, e.g. loans for insulation renovation works, purchases of green vehicles, and savings, etc.

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I THE ROLE OF CORPORATE AND INVESTMENT BANKS

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THE FULL RANGE OF A CORPORATE AND INVESTMENT BANK'S EXPERTISE

Financing solutions aimed at promoting “low-carbon” projects and renewable energy

French banks are actively involved in large-scale "Climate-related" projects in many countries. Their know-how as corporate and investment banks, including their expertise in the electricity and liquefied natural gas sectors, enables them to provide innovative solutions, including

• Financing long-term and infrastructure projects (electricity or gas production plants, or energy transmission, etc.) that improve energy-efficiency, and contribute to the reduction of carbon emissions.

• Financing the electricity mix by prioritising renewable energy

• Financing that has a positive impact: adoption of a methodology shared by the entire financial sector, which enables the identification of projects that have a positive impact on at least one of the three cornerstones of sustainable development, e.g. the environment, society, and economic development.

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Ambitious sector-based policies

• All large French banks have introduced sector-based policies that reflect their refusal to commit to financing that poses a high risk of affecting the environment.

• These policies specifically apply to financing projects in the energy and mining sectors.

• They provide for the publication of estimates regarding the level of greenhouse gas emissions resulting from the transactions financed,

• …and the setting up of teams dedicated to seeking financial solutions that encourage new technologies aimed at protecting the climate.

THE FULL RANGE OF A CORPORATE AND INVESTMENT BANK'S EXPERTISE

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• Green bonds are bonds issued by companies, local authorities, or international organisations. They are intended to finance projects or activities that generate a direct environmental benefit.

• Banks will be involved in the structuring of the bonds, supporting the issuer and in the distribution of the bonds.

• Issuers of green bonds must:

Provide evidence that the funds are intended for a “green project” in the documentation intended for investors

Assess the projects' environmental profile and their environmental impact goals

Prepare information on the implementation of the projects financed at least on a yearly basis.

THE FULL RANGE OF A CORPORATE AND INVESTMENT BANK'S EXPERTISE

An innovative solution: “green bonds”

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• A rapidly expanding international market: issues have tripled in one year, and reached US$37 billion in 2014.

• French banks enjoy a leading position on this market thanks to issuing US$17.5 billion in green bonds in 2014, over half of which was issued for French companies.

THE FULL RANGE OF A CORPORATE AND INVESTMENT BANK'S EXPERTISE

“Green bond” issues

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II DAY-TO-DAY BANKING

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DAY-TO-DAY BANKING

Networks involved on a day-to-day basis: financing • French banks have developed an extensive range of financing solutions

that are suited to the requirements of private individuals, in order to steer them towards a lower-carbon economy. For instance:

Zero-rated environmental loans, which enabled over €4.8 billion in insulation renovation works to be financed in 2014;

Loans for insulation renovation works in old homes: insulation works, renovation of electrical systems, and changing the boiler, etc.

“Green” loans earmarked for the purchase of new or second-hand clean electric or hybrid cars.

• Banks in France financed €7 billion in energy-efficiency works in 2014 (French National Housing Council).

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DAY-TO-DAY BANKING

Networks involved on a day-to-day basis: green savings • Savings solutions such as savings accounts (sustainable development

account) and term deposit accounts where the amounts invested support initiatives focusing on protecting the environment, or combating global warming.

• The banks design investment solutions with their asset management subsidiaries, and ensure the distribution (UCITS, life insurance, employee savings) of SRI- (Socially Responsible Investment ), themed funds via their network; the management of these funds systematically takes ESG (environmental, social and governance) criteria into account.

in 2014, assets in SRI funds on the French market increased by 31% compared with 2013

21,8 29,9

50,768,3

115,3

149,0

169,7

222,9

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013 2014

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DAY-TO-DAY BANKING

Networks involved on a day-to-day basis: innovative services with a low carbon impact • Payments by bank card reduce CO2 emissions:

they now account for almost 50% of the payments made in France (compared with 43% in 2010, or an increase of 8% per year since 2000). The development of mobile payments will also contribute to reducing the carbon impact of means of payment. Banks have extended their cards' life, which

has usually been increased from two to three years, and encourage their recycling.

• Online banking services, remote transfer transactions (17% of payments in France, a constant increase of 5% per year since 2010) and electronic signatures are enabling a reduction in both travel and the consumption of paper. The online services offered by banks reduce paper consumption by up

to 25%.

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Initiatives aimed at informing and raising the awareness of customers As part of its financial education remit, the French Banking Federation makes information tools available to the general public and to its members. A new collection of eight mini-handbooks on the climate has been published to mark COP21, including

DAY-TO-DAY BANKING

• Green savings and investments • Choosing a green vehicle • Travelling in a greener way

for professionals • Saving energy for professionals

• Zero-rated environmental loans for condominium properties

• The zero-rated environmental loan (Eco PHZ)

• Renovating my home in an environmentally-friendly manner

• Building my home in accordance with climate standards

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The seven environmentally-friendly behaviours of day-to-day banking

• PRIORITISE remote consultation processes (via the Internet or smartphone).

• CHOOSE electronic bank statements.

• ONLY PRINT essential documents, preferably on both sides.

• ONLY ASK for a receipt at the cash machine if you need one.

• PRIORITISE electronic payments (via bank card or transfer, etc.) rather than cheques or cash.

• KEEP the documents that you need (contracts and statements, etc.) in an electronic rather than a hard-copy format.

• PRIORITISE correspondence via email rather than by letter.

DAY-TO-DAY BANKING

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III ENVIRONMENTALLY RESPONSIBLE BANKS

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ENVIRONMENTALLY RESPONSIBLE BANKS

Environmental policies at banks 1/2

Three French banks feature in the Euronext Vigeo World 120 Index of the 120 listed global companies that are the most advanced in terms of corporate responsibility.

• French banks have set an ambitious target of reducing their

greenhouse gas emissions (GHGs) by up to 20% by entity and by employee.

• Renewable energy procurement policies

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ENVIRONMENTALLY RESPONSIBLE BANKS

Environmental policies at banks 2/2

• Introduction of tools for accurately measuring and monitoring results on a yearly basis which are commented in CSR reports every year.

• "Clean" and less energy-intensive buildings: the High Environmental Quality (HEQ) label is systematically applied to new buildings

• Performance management tools are gradually being applied to all the banks' premises, in order to ensure the monitoring of, and the ongoing improvement in energy consumption.

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ENVIRONMENTALLY RESPONSIBLE BANKS

370,000 employees involved in protecting the climate

• Responsible travel incentives: reducing business travel, and making video-conferencing widespread.

• Incentives for using public transport, and car-pooling services.

• Reducing paper consumption: paperless documents, double-sided printing… and using recycled paper.

• Recycling paper and waste sorting systems.

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IV CONCLUSION

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• French banks have been committed to the green economy for a long time, on both their domestic market and abroad.

• Their universal banking model enables them to design and provide the full solutions that companies and private individuals need to finance their projects aimed at promoting the transition to a low-carbon economy.

• As companies, they contribute to the collective effort to combat global warming.

CONCLUSION

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banqueetclimat.com

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CONTACTS

Pascal Henisse: 01 48 00 50 07- phenisse@fbf.fr

Céline Castex: 01 48 00 52 66 - ccastex@fbf.fr

Terence de Cruz: 01 48 00 50 70 - tdecruz@fbf.fr

FBFservicedepresse@fbf.fr

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