Societe Generale speeds up the integration of sustainable & positive impact finance and ESG across its market activities
In this interview, Pascale Moreau, Global Markets Chief Operating Officer, and Yann Garnier, Head of Sales and Research for Global Markets, discuss how 2021 will be a pivotal year in the acceleration of the integration of “sustainable and positive impact finance” (SPIF) and “environmental, social and governance” (ESG) criteria across all areas of Societe Generale’s markets activities, be it with the bank’s clients, partners within the Group or employees. They share with us their strategic priorities for Societe Generale to be a true ESG Global Markets House.
• Why are SPIF and ESG so important for Societe Generale’s market activities?
Pascale Moreau: “Societe Generale has set numerous corporate social responsibility (CSR) commitments to clearly position itself as a leader in sustainable development fields such as climate change, energy transition and societal innovation. Societe Generale is also a founding bank for the United Nations’ Principles for Responsible Banking. Among recent key initiatives that illustrate the Bank’s willingness to contribute to the achievements of the UN’s Sustainable Development Goals (SDGs) and the Paris Agreement targets are its commitments to help raise €120 billion to support the energy transition between 2019 and 2023, or to exit the coal sector by 2030 for its EU and OECD countries activities and by 2040 for the rest of the world. Our Global Markets business also developed many initiatives in these fields, which are encountering significant success with clients.”
Yann Garnier: “Within Societe Generale’s market activities, we clearly support the Group’s purpose: building together, with our clients, a better and sustainable future, through responsible and innovative financial solutions, meeting the SPIF and ESG expectations of our clients, both corporate and financial institutions.
On the content and advisory front, our competitive advantage relies on a leading ESG research platform. Launched in 2006 by Yannick Ouaknine, Head of Sustainability Research, and ranked in the top 5 of the Extel/Institutional Investors Survey for more than a decade, our ESG research team brings unique insights to our clients in their sustainability transition. When it comes to equity sector research, 2020 marked a strategic shift with the decision to make ESG an integral part of our equity valuation framework. This was a landmark accomplishment which was delivered in the summer. This made Societe Generale the very first bank to integrate, on a systematic basis, ESG criteria into equity valuations and recommendations. Societe Generale is therefore among the first institutions to provide both tangible impact and credibility on ESG related investment decisions.
In addition, delivering innovative ESG solutions has become an important piece of our product offer. This allows our clients to turn their ESG commitments into reality. Our solutions include ESG indexes launched on the Societe Generale Index (SGI) platform, and thematic baskets powered by our research, such as the European Green Deal basket. These baskets and indices are accessible via ETFs, funds, swaps, certificates or structured products, whose total volume tripled over the past two years, to reach 6 billion euros.
We have also grown our sustainable & positive investment solutions offer, with positive impact notes and positive products (charitable notes, reforestation notes), the repackaging of sustainable bonds or socially responsible deposits. Since 2017, we sold a record of 2.5 billion euros of such custom sustainable and positive investment products.
On the Corporate side, jointly with our colleagues from the bank’s Global Banking and Advisory business line, we offer market risk advisory services to our clients and have pioneered rates and FX sustainability-linked derivatives.”
• Why should the Bank’s market activities accelerate the momentum on its SPIF and ESG approach?
Yann Garnier: “Sustainability and ESG criteria are the challenges of our times and everybody has a role to play. The pandemic crisis has been a strong catalyst for more investors to put ESG at the top of their agenda. Our clients, both corporate and institutional, take these challenges very seriously: ESG is no longer an option, it is a must. As a trusted partner, we see our role as key facilitators and accelerators of their transitions.”
Pascale Moreau: “As a bank we need to support the need of the real economy which is quickly changing and adapting. We act as a link between investors and corporations. What’s more, in 2021 and beyond, new regulations will come into force (such as ESG Benchmark Regulation, ESG MiFID II Directive and ESG Sustainable Finance Disclosure Regulation) and there is a sense of urgency for all players, including our clients, to get onboard. It is up to us to transform these constraints into opportunities. It is up to us to maintain our leadership!
In this context, we want to leverage on our strong, relevant and differentiated positioning to accelerate the ESG integration everywhere within our market activities a and become the leading ESG Market Activities House, for the benefit of our clients.”
• How can Societe Generale become the leading ESG Market Activities House?
Yann Garnier: “To make it a success we will need to position our market activities as the reference when it comes to ESG advisory and solutions and become our clients’ first call when they are looking for ESG expertise.
This is how we will become the leading ESG Market Activities House, aligned with the developing needs of our clients. To achieve this, we need to continue to strengthen our ESG knowledge to support our clients in their transition by speeding up the training of our sales force on ESG matters and making ESG an essential part of the job requirement toolkit. We also need to leverage our existing ESG advisory and innovation strengths, which are backed by a strong cross asset culture and Isabelle Millat (Head of Sustainable Investment Solutions) whose leadership has been instrumental over the years to embed ESG in our business.”
• Concretely, what are your ambitions?
Pascale Moreau: “Our method is quite new and innovative and relies on three pillars: Clients - Partners – Employees. As mentioned by Yann, the client pillar is based on advisory, content and cooperation with our origination partners within the Bank to launch more initiatives and ensure that we do not miss any opportunities help clients in their transitions. Internally, we also want to engage with our partners, from back to front office, to further integrate ESG standards in all aspects of our way of doing business. The third pillar, employees, is centered on our market activities and its people. We are deeply convinced that we must apply to ourselves the changes and principles that we advocate to our clients. We already talked about training, to create awareness and foster the appropriate mind shift. We consider that onboarding people will create more momentum and value. Hence, we will launch inclusive thematic workshops in which colleagues will be invited to bring in their own ideas. We definitely count on the positive aspect that this momentum will bring to unleash productive innovation on for the benefit of our clients.”
Societe Generale: Financing a better future
Leading the way to a sustainable future means putting the sustainable finance at the heart of our strategy. This starts by developing innovative solutions, exploring new business models, contributing actively to various alliance and partnerships. Every day, our experts are working alongside our clients to implement new projects and thus contributing to a fairer & greener economy.
Societe Generale is part of the 50 Sustainability Climate Leaders initiative, a response from the International Business Community which demonstrates the desire, the leadership, and the will to take effective action in the fight against Climate Change.