How Will Societe Generale Hit $525bn Green Finance Target?
Global bank Societe Generale has celebrated hitting its sustainable finance target early by raising the bar.
In the wake of COP29, the bank has confirmed its ambition to accelerate its contribution to the environmental transition by setting a new EUR 500bn (US$525bn) sustainable finance target by 2030.
The bank says the target is “in line with the proactive ESG policy defined in its strategic roadmap”.
Slawomir Krupa, CEO of Societe Generale, said: "Societe Generale continues to strengthen its contribution to sustainable development in the service of its clients, supported by our culture of innovation, our ESG leadership and our conviction of the crucial role that a responsible bank can play in the challenges of the environmental transition.”
Banking on continued progress
The bank announced that it has delivered ahead of schedule the EUR 300bn sustainable finance target set for 2022-2025.
Its new target for 2024-2030 breaks down as EUR 400bn in financing, including advisory, and EUR 100bn in sustainable bonds.
Societe Generale aims to split up, with approximately 80% in environmental activities and 20% in social activities.
It adds: “A major portion of financing will be for dedicated transactions in low-carbon energy, sustainable real estate, low-carbon mobility and other industry and environmental transition topics.”
The bank aims to align its portfolios with the goals of the Paris Agreement and joined the UNEP-FI Net Zero Banking Alliance as a founding member in 2021.
Its intentions include accelerating the reduction of fossil fuel exposure:
- The bank’s gradual withdrawal from the thermal coal sector has progressed significantly and at the end of 2023 the portfolio represented less than 0.1% of total book outstandings
- Reduction by more than 50% of the oil and gas upstream exposure at the end of Q2 24 compared to 2019 has been achieved. The target of -80% by 2030 vs 2019 is “one of the most proactive among global banking players”. It comes with an absolute reduction target for greenhouse gas across the entire oil and gas chain of -70% by 2030 vs 2019.
- Societe Generale has completed work on 12 of the most carbon-intensive sectors, as defined by the Net Zero Banking Alliance initiative, which led to alignment targets on 10 sectors, in accordance with the established timetable.
- Transparent communication on the Group's alignment process with the publication of dedicated progress reports.
Slawomir said: “This year, we have taken new steps in the execution of our strategic roadmap with concrete progress reflected in the progressive reduction of our fossil fuel exposure.
“We are also continuing to broaden our action by proactively supporting our clients in their own transitions with adapted solutions and an enhanced sustainable finance offering, while supporting the emergence of new players and new technologies.”
Investing in the future through innovation
Societe Generale recently acquired a majority stake in Reed Management, creating REED, a leading alternative investor in new players of the energy transition.
The bank said: “This deal supports Societe Generale’s ambition to be a leading player in the development of emerging leaders in the energy transition via equity investment.
“It also initiates the bank’s announced EUR 1bn energy transition envelope dedicated to emerging leaders, nature-based and impact-driven solutions.”
Previously announced investments in innovative structures and development of commercial partnerships include:
- Equity investment and strategic partnership with EIT InnoEnergy, the innovation engine dedicated to start-ups active in sustainable energy
- Investment in Polestar Capital Circular Debt Fund, the only private debt fund in Europe dedicated to the circular economy
- Partnership with Schneider Electric to support mid-sized companies in reducing their carbon footprint.
- Implementation of the collaboration agreement signed with IFC, a member of the World Bank Group.
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