Where does the Societe Generale Group and its private bank stand with respect to the environment?
The introduction of new regulations brings a lot of new developments for sustainable finance. It is also an opportunity to take stock of the actions of the Societe Generale Group and its private bank in favour of the environment. Claire Douchy, Head of Corporate Commitments and Responsible Projects for SGPB France, met with Hacina Py, Societe Generale Group Chief Sustainability Officer, and Brendan Robin, Head of Sustainable Development at Societe Generale Private Banking.
Claire Douchy: How does the environment fit into the Group’s sustainable development priorities?
Hacina Py: The Group’s CSR ambition with regards to society and the environment is fourfold: the ecological transition, developing the regions, employer responsibility, and developing a culture of accountability. The environment is the basis of two of these, namely the ecological transition and developing the regions.
Claire Douchy: What do we mean when we when we talk about the “ecological transition”?
Hacina Py: The ecological transition covers topics including the energy transition, the protection of biodiversity, and the shift to a less resource-intensive circular economy. The energy transition in particular is a key concern for us. We have a strong franchise in renewable energy financing, as it is an activity we started over 20 years ago. To this day, we remain actively involved in setting stands for sustainable finance, through the United Nations Environment Programme Finance Initiative, for instance. We also participate in various international coalitions aimed at accelerating the shift to low-carbon models. Our international coverage means we’re able to finance the biggest players in all economic sectors. And as part of our banking relationship, we must encourage and assist these players as they shift to new business models, which now involve value chains across multiple sectors. This has great strategic importance for our small and medium-sized professional clients, who require bespoke advice and solutions in order to make this transition in their businesses.
Claire Douchy: In what way is Societe Generale’s membership of international coalitions important to its commitment to the environment?
Hacina Py: It’s very important: the climate is a matter of great urgency and it requires making swift decisions at a time when there aren’t clear technological solutions to achieve the different “decarbonisation pathways”. That’s why we work in coalitions with our peers, clients, and with stakeholders in the broader sense. Using collective intelligence, we can share risks, standardise approaches, and come up with new solutions together. We became the first European bank to join the Hydrogen Council with our industrial clients, and contributed to structuring a significant hydrogen fund. This collective work is essential for aligning French banks’ loan portfolios to these decarbonisation pathways. We are especially active in the Net Zero Banking Alliance — the NZBA. It comprises over a hundred banks and promotes the alignment of lending portfolios to pathways compatible with a 1.5-degree global warming scenario. As part of this commitment, we analyse our lending portfolio in critical sectors with respect to greenhouse gas emissions, such as the energy, steel, and transport sectors, and define a timeline to reach net-zero emissions by 2050. The NZBA requires setting targets for 2030 (or before) as a starting point, which means making real changes in our policy vis-à-vis the sectors with especially high emissions.
Claire Douchy: Public commitments like these are very constructive for bringing about change in our practices. How about the private bank?
Brendan Robin: For Private Banking, the climate is also one of the priorities of our investment and wealth management business. We have in fact been running a far-reaching action plan for several years, and it has been gathering pace over the last 12 months.
Claire Douchy: Could you give us an overview of Private Banking’s climate action plan?
Brendan Robin: One action was to become a member of the Net Zero Asset Managers (NZAM) through our asset management businesses, SG 29 Haussmann and Societe Generale Private Wealth Management. Essentially, we are steadily aligning the investments of our management portfolios and funds in order to achieve carbon neutrality by 2050. Our strategy covers all sectors — including those with a high climate impact, such as energy, transport, industry and construction, because we believe they will be the game-changers, in part through the transformation of their model. Through our commitment and our voting rights at shareholder meeting, we support the companies in our portfolio, paying close attention to the transparency of their climate pathway — or transformational process — and the challenges of a just transition. To give an example, from 2025 we will exclude all companies that fail to disclose detailed and transparent information on their social and environmental impacts. We favour a transitional approach for the companies we work with, since they don’t all have the same starting point in terms of climate impact. After an observation period, we decide whether we maintain our investments or withdraw certain stocks from our portfolio. This is part of our intermediary goal, which is to halve the total emissions of our portfolios by 2030. Another example is our positive environmental impact fund “Moorea Fund Sustainable Climate Action” which favours companies that play a decisive role in the fight against climate change. Then there is our partnership with the LUMO platform — an innovative way to invest in assets that support the ecological transition, and to manage investments in a way that is 100% digital. It is also a solution for investing directly into renewable energy projects.
Claire Douchy: Clients are increasingly sensitive to climate issues and want to reflect this in their investment choices. What measures have been to give staff the appropriate training?
Hacina Py: At Group level, my goal is to set in motion a large-scale transformation of the Bank, to embed CSR at all levels — from the business strategy of our different entities, to all our decision processes, to our information systems. CSR is no longer just for the specialists; as employees, we are all concerned. It requires an extensive training, clear individual targets, clear commitments, and so on. And I am delighted that our management team approved this ambitious road map! We started with a number of initiatives to raise awareness throughout the organisation. One initiative is the Climate Fresk serious game on climate change, which has been very effective. Like other major corporations, last year we trained employees who volunteered to run these powerful workshops that help participants understand the causes and consequences of climate change. I'm happy to see how enthusiastic our internal facilitators are, and every day more and more people are taking part in the Fresk. For now, participation is on a voluntary basis, and is an excellent way of making our staff in France and the rest of the world actors of change. We are also coming up with a training model to allow everyone to learn skills in different areas linked to the climate, biodiversity and the management of our own carbon footprint. Our courses add to the core knowledge that our teams will have to acquire on E&S risks, sustainable finance and its regulation, the Bank’s CSR strategy and its application in the different business lines.
Brendan Robin: We all have a role to play: governments, consumers, businesses, investors, and savers. According to the latest report by the International Panel on Climate Change, the IPCC, between 2020 and 2030, annual investment needs to increase three- to sixfold. Everyone will need to make a commitment to achieve this. This is why at Private Banking we are also running, as Hacina highlighted, a solid training and certification programme for our teams so that they can effectively assist and raise awareness with our clients. For example, from early 2022 we will run four CSR courses for all Private Banking employees. In fact, 30% of employees have already participated in the Climate Fresk, and we’ve even started a pilot with 25 clients.
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