CREDIT AGRICOLE SA: Crédit Agricole accelerates its climate
commitments
Crédit Agricole accelerates its
climate commitments
Crédit Agricole group presents
today its measures to strengthen and accelerate its climate
strategy and announces its new decarbonisation trajectories of its
financing portfolios to achieve carbon neutrality by
2050.
Philippe Brassac, Chief Executive Officer of
Crédit Agricole S.A. said:« In a context of climate
emergency, we need to amplify our commitment towards measures
supporting the transformation of society. The strengthening of our
climate strategy means to focus and amplify our commitments towards
the energy sector, by focusing and strengthening our financial
resources towards renewable energies. Furthermore, we will not
finance any new fossil fuel extraction projects and we will adopt a
selective approach to support energy players engaged in this
transition, which will consequently reduce green-house gas
emissions of this sector twice as fast as the Net Zero 2050
scenario defined by the International Energy Agency.The
strengthening of our climate strategy will be monitored and
reviewed quarterly by the Group top management. »
Crédit Agricole’s climate strategy is
based on three complementary axes:
- Finance and invest massively in
renewable energy, low-carbon infrastructure, clean technologies and
energy-efficiency projects;
- Support all the customers in their
social and economic transitions;
- Stop financing any new fossil fuel
extraction projects and adopt a selective approach to support
energy players engaged in this transition, which will consequently
reduce green-house gas emissions of this sector twice as fast as
the Net Zero 2050 scenario defined by the International Energy
Agency
As highlighted by the debate taking
place during the COP28, accelerating investment in and financing of
low-carbon energy is imperative to effectively contribute
to the urgent energy transition. We need to massively invest in
renewable energy and the energy sobriety in order to decarbonise
the economy.
Over a hundred countries, led by the European
Union, expressed their intention to triple investments in renewable
energy by 2030, as well as to double their financial efforts to
improve energy efficiency by 2030. France, as well as some 20
other countries, signed a commitment to triple investments in
nuclear power by 2050. In France, preferred renewable energies are
solar power (multiply by 10 the generation capacity and exceed 100
GW by 2050) and offshore wind power with the creation about 50
offshore wind farms, with an objective of 40 GW in operation by
2050.
To support this dynamic, Crédit Agricole
is expanding its action:
1. Strengthening
commitments to the energy sector
- Focus
resources on renewable energies and low-carbon
infrastructure:
- triple our annual financing of
renewable energy between 2020 and 20301 following the European
Union’s recommendation,
- increase by 80% of Crédit Agricole
CIB’s exposure to low carbon energies between 2020 and 2025,
reaching €13.3bn in 2025,
- strengthen the financing capacity,
up to €1bn, to support energy suppliers in financing their
renewable energy production projects, low-carbon infrastructure and
clean technologies as well as those involving energy
efficiency.
- Decrease
financed emissions twice as fast as the Net Zero 2050 scenario,
i.e.:
- reduction of financed emissions
linked to the Oil & gas sector to -75% by 2030 (vs 2020) versus
-30% announced in 2022,
- no financing of any new fossil fuel
extraction project (publication in Q1 2024 of total exposure to
pre-existing fossil extraction projects in which the Group is still
committed),
-
Corporate financing of energy companies:
- no corporate financing of
independent producers, dedicated exclusively to the exploration or
production of oil and gas,
- review on a case-by-case basis
according to a regularly updated assessment, taking into account
their commitments in the transition.
2. New commitments in
five sectors to strengthen Crédit Agricole’s contribution to carbon
neutrality by 2050In 2022, Crédit Agricole identified
ten priority sectors to set Net Zero trajectories. These ten
sectors represent more than 75% of Crédit Agricole Group’s GHG
emissions and around 60% of its exposure. After the announcement in
December 2022 of the 2030 targets for first five sectors,
Crédit Agricole Group publishes today:
- First very significant results for the
trajectories announced in 2022 for the first five sectors
(Oil & Gas, Electricity, Automotive, Commercial real estate and
Cement),
In the Oil & Gas sector: at
the end of 2022, the decarbonisation target set for 2030 was
already reached, i.e. 8 years ahead of the schedule. More
specifically:
- -40% decrease in financed emissions
(14.6 MtCO2eq) at end 2022, well ahead of the 2030 target
of -30%. The baseline was also revised downwards due to the
improved quality of data (from 26.9 to
24.3 MtCO2eq),
- -17% reduction in Crédit Agricole
CIB’s exposure to oil extraction in 2022 vs 2020, including through
its customers ($6.1bn in 2022 vs $7.3bn in 2020), in line with the
-25% reduction target in 2025.
In the Power sector, a -16%
decrease in the carbon intensity compared to the 2020 baseline, in
line with the target. More specifically:
- -16% decrease in the carbon
intensity of our financings (188 gCO2eq/KWh) at end 2022
compared to the 2020 baseline, slightly ahead of the ambitious
target of 58% in 2030. The financed energy mix increased from 50%
low-carbon energy in 2020 to 60% at end 2022 (renewable and
nuclear energy). A 35% rise in the financed renewable energy
production;
- significant increase of Crédit
Agricole CIB’s exposure to low-carbon energy, incl. through its
clients (€10.5 billion at end 2022 vs €7.4 billion in 2020), in
line with the +60% by 2025 target announced in 2022, and upward
revision of this target to +80% in exposure to low-carbon energies
by 2025 compared to 2020, i.e. an exposure of €13.3 billion in
2025;
- continued decrease in Crédit
Agricole CIB’s exposure to thermal coal, including through its
clients, at €557 million in 2022 versus €623 million in 2020, in
line with the commitment to a full exit by 2030 in the OECD and
European Union and 2040 in the rest of the world.
- with its subsidiary
Crédit Agricole Transitions & Énergies
launched in September 2022, Crédit Agricole becomes a local
energy player with a low-carbon energy supply offer initially
intended for local authorities. This offer, which will open to
other markets in a second time, promotes as much as possible direct
distribution channels and self-consumption.
Crédit Agricole Transitions & Énergies also
develops a Corporate Power Purchase Agreement offer.
In the Automotive sector, a -8%
decrease in the carbon intensity of financed emissions in 2022
compared to 2020, in line with the 2030 target.
In the Commercial real estate
sector:
- stability of the carbon intensity
of financed emissions in 2022 vs 2020 ;
- following the announcement of the
trajectory in 2022, a decrease in the baseline from 46 to
36 kgCO2eq/m2/year due to inclusion in the scope of the
Regional Banks’ portfolios, which are structurally less
carbon-intensive and, more marginally, due to data quality
improvement work that led to adjustments of the baselines of
Crédit Agricole S.A. entities. Target to reduce carbon
intensity by -40% in 2030 is maintained (compared to 2020) i.e. a
2030 target of 22 kgCO2eq/m2/year (versus
27.7 previously).
In the Cement sector:
- slight increase of +3% in the
carbon intensity of financed emissions in 2022 compared to 2020.
For this small portfolio (less than 10 customers), the
departure of several relatively less carbon-intensive customers
triggered an automatic increase of the portfolio intensity which
does not reflect the reality of the sector or that of Crédit
Agricole’s action.
- Crédit Agricole’s
ambitions in five new sectors (Residential real estate,
Agriculture, Aviation, Shipping, Steel).
In the Residential real estate
sector:
- Crédit Agricole’s
current positioning:
- Crédit Agricole is a leader in
its domestic markets; it finances one out of three acquisition
projects in France, i.e. approximately 250,000 acquisition projects
financed in 2023.
- Beyond financing,
Crédit Agricole is also a major player in the real estate
sector and is among the top 4 in the institutional property
management in France and among the top 5 in property services to
individual customers.
- Commitments:
- Crédit Agricole is committed
to supporting property owners and contributing to the achievement
of France’s target of 12.4 kgCO2e/m²/year by 2030.
Decarbonisation will depend on the mobilization of all stakeholders
(homeowners, public policy, construction sector) while reflecting
the heterogenous nature of French regions.
- Action plan:
- Crédit Agricole’s action plan
aims to:
- Systematise dialogue with customer
regarding global and energy-efficient renovation, particularly for
transfers of properties with energy performance ratings (DPE) of E,
F and G,
- Develop
innovative customer solutions, while involving its financial
engineering. This is, for example, the purpose of J’écorénove mon
logement, a platform launched in May 2023 which has so far received
more than 650,000 visits over the year.
- Adapt its credit
and pricing policies to incentivise renovation work
- Capitalise on its strong regional
presence to strengthen its local actions specifically through
partnerships and greater customer awareness.
For the Agriculture sector:
- Crédit Agricole’s
current positioning:
Crédit Agricole is a long-standing partner
to the agricultural world: eight out of 10 French farmers are
customers of the Group, which serves approximately 300,000 farms in
France, for €45 billion in outstandings.
- Commitments:
- Crédit Agricole is committed
to supporting the agricultural world in its decarbonisation efforts
while strengthening food sovereignty:
- by providing support in relation to
the roadmaps set by the industry and its sectors (work in
progress),
- by supporting the decarbonisation
levers already identified by the sectors,
- by adapting its support while
respecting ecosystems, regions and stakeholders,
- throughout France and at farm
level.
- Action plan:
- At national level,
Crédit Agricole has the ambition to serve the Ferme France2 by
structuring the voluntary carbon credit market (launch in Q1-24 of
a platform cooperated with France Carbon Agri, connecting farmers
with virtuous practices with corporates or collectivities wishing
to contribute to carbon neutrality through the purchase of carbon
credit in addition to the reduction of their own emissions),
supporting innovation, and supporting the transition of the
sector’s upstream and downstream players (launch of transition
funds for €500m with a €1bn target to finance the transition
strategy of the sectors).
- At regional level,
Crédit Agricole will strengthen the support it provides to
farmers in their transition process: by maintaining a dialogue with
them to assess their maturity in transition-related matters,
assisting them in their processes with dedicated tools and
solutions, developing new offerings promoting renewable energy at
farm level (methanation, solar energy, etc.).
For the Aviation sector:
- Crédit Agricole’s
current positioning:
- Crédit Agricole is a leader in
aeronautics financing with a book of more than 800 aircraft
financed and loans outstanding of $10 billion at end
2022.
- Crédit Agricole is one of the
founding members of ACAF3.
- Commitments:
- Crédit Agricole has set itself
an ambitious target: a -25% reduction by 2030 of CO2eq emissions
per RTK (“paying” transported tonne/kilometre) compared to 2019, in
line with the ‘Prudent’ scenario developed by Mission Possible
Partnership and ACAF, i.e. 750 gCO2eq/RTK by 2030 (Well to
Wake scope, i.e. including the upstream emissions related to
kerosene production).
- Reference year 2019 was chosen to
neutralise the effect of Covid on traffic.
- Action plan:
- Crédit Agricole will
prioritise the financing of fourth generation aircraft, the most
fuel efficient, and aims for a portfolio with more than 90% of such
aircraft in its composition in 2030 (vs 33% in 2019).
- Crédit Agricole will become
involved in the sustainable aviation fuel value chain.
- In addition, the ongoing dialogue
with customers in terms of sustainability will continue.
For the Shipping sector:
- Crédit Agricole’s
current positioning:
- Crédit Agricole is a leader in
shipping financing with a book of more than 1,100 ships
financed and loan outstanding of €12 billion in 2022.
- Crédit Agricole is a signatory
to the Poseidon Principles4 and a member of the 1.5° Initiative for
Shipping5.
- Commitments:
- Crédit Agricole intends to
reduce by -36% its gCO2/DWT.nm6 financed emissions by 2030
compared to 2020 (Well to Wake scope, i.e. including upstream
emissions linked to fuel production). This first decrease is part
of decarbonisation trajectory of the shipping sector under given
assumptions of « 1,5° or low overshoot ».
- Crédit Agricole thus is aiming
for an intensity of 3.98 gCO2/DWT.nm in 2030 for cargo
shipping.
- The scope excludes passenger
transport for the time being until the CII carbon intensity
indicator of the International Maritime Organization is corrected
to take into account the specificities of passenger ships (expected
by 2025).
- Action plan:
- Crédit Agricole will work with its
clients to assess the carbon score of each vessel in the portfolio
or proposed for financing, and implement measures to finance the
necessary investments (retrofit financing) aligning with the bank’s
Net Zero policy for ships allowing it.
- Crédit Agricole will develop an
active policy for financing the construction of new vessels using
green fuel, in collaboration with export credit agencies, in order
to:
- support its customers in their new
generation vessels orders,
- accelerate the scrapping of the
most polluting vessels.
- Crédit Agricole will continuously
improve its methodology in line with regulatory and industry
requirements.
For the Steel sector:
- Crédit Agricole’s
current positioning
- The steel sector represents a
€1.5 billion loan book at CACIB level in 2022.
- In 2020, the financed
emissions amounted to 1.88 tonnes of CO2 per tonne of crude
steel financed by the Group.
- In September 2022,
Crédit Agricole CIB became a signatory to the Sustainable
STEEL Principles.
- Commitments
- Crédit Agricole has committed
to reducing the intensity of its CO2 emissions per tonne of steel
produced by -26% by 2030 compared to 2020.
- In 2030, financed emissions
will represent 1.4 tonnes of CO2 per tonne of crude
steel.
- Action plan:
- Ongoing dialogue with clients not
aligned on a 1.5°C trajectory to explore with them how Crédit
Agricole can support them in their decarbonization
- Development of project financing of
low-carbon steel production technologies.
- Steering of steel portfolio, with
reallocation in favor of the most ambitious customers
3. Steering and
governance of the implementation of commitments
Governance has been strengthened to place
climate commitments at the heart of the Group’s strategy with the
creation of two new committees:
- The Societal Commitment Committee,
comprising members of the Board of Directors,
- The ESG Strategy Committee, chaired
by the Chief Executive Officer of Crédit Agricole SA.
All the trajectories and commitments will be
monitored by these committees, and on quarterly basis at the
highest level of the entities concerned.
Training of all Crédit Agricole Group
employees, elected officials and executives in climate-related
matters has started with 43% of employees being trained at
end-November 2023, i.e. about 70 000 employees.
In addition, CSR performance criteria have been
included in the remuneration of executive officers, and account for
20% of their annual variable remuneration and 33% of their
long-term variable remuneration.
- Implementation of Group
commitments as close as possible to customers
Crédit Agricole Group has evolved its offerings
and developed its expertise. It thus takes on an advisory and
support role and acquires the necessary expertise (for example, the
250 coordinators within the Crédit Agricole CIB community of
experts, or the 50 energy transition advisors within the Regional
Banks).
Crédit Agricole Group takes into
account non-financial criteria in its financings. It thus, on the
one hand, includes non-financial criteria in the credit decisions,
with for example at Crédit Agricole CIB a simulation tool
to anticipate the impact of each case on the Net Zero trajectory
and, on the other hand, adopts incentive pricing, with for example
one out of four of LCL’s small-business and corporate loans being
indexed to the achievement of non-financial KPIs (and targeted
loans).
- Net zero commitments
integrated in the budgetary process
With a view to meeting the requirement to
monitor its decarbonisation trajectories, the steering of Net Zero
Commitments is integrated in the budgetary process. Indeed, carbon
is managed as a rare and reducing resource. The carbon dimension of
the financing will thus be monitored according to sector
trajectories, either in absolute value or in intensity, with annual
targets set per entity based on the 2030 targets announced by the
Group.
A team dedicated to carbon budget steering was
created within the Group’s Finance department and a budgetary
framework for carbon trajectories is now set annually for each
entity. The budgetary follow-up of these trajectories will be
carried out every six months. The Climate and Net Zero impact is
thus integrated into strategic decisions.
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BaratOlivier Tassain |
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43 |
mathilde.durand@credit-agricole-sa.fr |
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CRÉDIT AGRICOLE S.A. INVESTOR RELATIONS
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Equity investor relations: |
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1 Our ambition is to increase renewable financing structured by
CATE/Unifergie to €3bn by 2030 from €1bn today, to reach a
cumulative €19bn by 2030 2 Ferme France means the
French agricultural production ecosystem as a whole
3 Aviation Climate-Aligned Finance Working
Group. A working group with the Rocky Mountain Institute aiming to
create a collective aviation financing framework aligned with
climate targets and to objectively measure the progress made by
banks in reducing the emissions intensity of their loan books.4 The
Poseidon Principles are the first autonomous sectoral climate
alignment agreement in the world between financial institutions.
The Principles provide a global framework to assess and disclose
the climate alignment of financial portfolios in shipping. They are
consistent with the policies and ambitions of the International
Maritime Organization.5 A group of 10 shipping financing banks
formed the 1.5°C Initiative for shipping and tasked DNV Maritime
Advisory with creating ascending trajectories that are “ambitious
but realistic” while meeting, based on the assumptions provided, an
ambition of 1.5°C or slightly higher (< 1.6°)6 DWT.nm:
deadweight tonnage per nautical mile.
- EN_CP_Climate_Workshop 20231214
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