A leader in green financing, the French banking industry aims to act as a catalyst. This is why the FBF is calling for the roll-out of a Green Supporting Factor (GSF), an incentive mechanism for incorporating climate risk into their lending and investment decisions.
By reducing the capital charge on “green” funding, it will speed up the channelling of climate investments and reduce climate risk on bank balance sheets, consistent with the objectives of the Financial Stability Board. The GSF will apply to “green” bank loans for all economic stakeholders, private individuals, SMEs, corporations and governments. Eligible green assets would be based on uniform criteria at the European level, which could be built on existing initiatives or labels, such as the Climate Bond Initiative or the French TEEC certification.
Simultaneously, French banks will continue to firmly commit themselves to the climate. The “Banks and Climate” Reference Document, which FBF is making public today, lists the most praiseworthy achievements in favour of combating climate change. French banks are the leaders in green bonds: 25% of global green bond issues are arranged by French banks; in other words, a percentage well above their global market share. They offer innovative solutions for all climate projects or environmentally friendly savings products. They draw up quality environmental reports and have set up ambitious in-house policies, etc.
For Marie-Anne Barbat-Layani, Chief Executive Officer of the FBF:“The call we are launching for the adoption of the Green Supporting Factor is aimed at strengthening the driving and proactive role of banks in the face of the major challenge that climate change represents. I am convinced that the private sector can and must play a pivotal role. The banking industry remains deeply committed in more ways than one. First, as a business, since banks put in place ambitious environmentally friendly policies. Second, as financiers, because they provide large–scale financing for transition to the economy of the future, both at the global level and at the local level. Lastly, they participate in financial literacy efforts focused on banking solutions to help guide French citizens through energy transition.“
FBF Press release – The French banking industry launches a call to accelerate the funding of energy transition