Several French banks have announced new commitments to the environment. French banks, which have a head start on these issues, are also hoping to capitalize on the financial opportunities offered by the ecological transition.
6 French banks make new environmental commitments
In an article published on October 18 in the French daily Les Echos, 6 major banks, all members of the French Banking Federation, announced that they would no longer be providing financing as of January 2022,
" dedicated projects and companies whose share of unconventional hydrocarbons in exploration and production would, in the case of shale oil, shale gas and oil sands, exceed 30% of their activity ".
The 6 signatory banks - BNP Paribas, La Banque Postale, Société Générale, BPCE, Crédit Mutuel and Crédit Agricole - will each set their own threshold, within the limit of this ceiling.
They state that they want to be " the first banks in the world to make a transition to unconventional hydrocarbons a reality ", and intend to " promote a reduction in the use of unconventional hydrocarbons ".
A few days earlier, on October 14, La Banque Postale pledged to stop financing activities linked to fossil fuels by 2030, whether gas, oil or coal. La Banque Postale, like Société Générale and BNP Paribas, is a member of the Net Zero Banking Alliance, which brings together 43 banks committed to achieving carbon neutrality by 2050.
A head start to seize financial opportunities
Since COP21 and the Paris Climate Agreement, adopted in 2015, French banks have taken a certain lead on environmental issues. A lead they intend to maintain, because as a report by consulting firm McKinsey reveals, the ecological transition is synonymous with substantial financial opportunities.
" Fossil fuels, power generation, real estate, automotive and agriculture present significant opportunities for green investment," reads the report, which estimates the total amount of investment in Europe by 2050 to achieve carbon neutrality at over 28,000 billion euros.
The transport sector leads the way, with around 12,000 billion euros of investment planned, followed by construction, with 8,000 billion euros, infrastructure, with 4,000 billion euros, and energy, with 2,500 billion euros.
" As some of their customers withdraw from fossil fuels, banks have a role to play in helping them reduce their level of risk in supply contracts or creating structured financing solutions for power purchase agreements," explain the report's authors.
Green transition financing consulting also represents a financial opportunity for French banks. In 2019, the global market represented 30 billion euros: with a growth rate of 20% per year, it should represent no less than 100 billion euros by 2025.
Whatever the case, if they want to take advantage of the financial opportunities offered by the ecological transition, French banks have no time to lose. According to Sébastien Lacroix, one of the authors of the McKinsey report, a majority share of the market will be held by the most responsive players within just one year.