Tackling the aluminium industry decarbonisation

20/06/2022

Societe Generale is partnering with RMI’s Center for Climate-Aligned Finance and two other leading lenders to develop a climate-aligned finance framework to help reduce the industry’s hard-to-abate emissions.


Aluminium is an essential building block of modern life, used in everything from space travel to cell phones, yet its production is highly emissions intensive. Producing a ton of aluminium generates more than six times the CO2 emissions generated by producing a ton of steel, for example, and requires enormous amounts of electricity. If the aluminium sector were a country, it would be the sixth largest consumer of electricity in the world. Aluminium is key in industrial processes and transitioning the sector to net-zero emissions will be critical to meeting global climate goals.  

Societe Generale is partnering with RMI’s Center for Climate-Aligned Finance and two other leading lenders to the aluminium sector to help decarbonise the aluminium sector by forming the Aluminium Climate-Aligned Finance Working Group.

The Working Group will create a collective climate-aligned finance (CAF) framework that defines how lenders can support the decarbonisation of the aluminium sector, which accounts for 2 percent of all planet-warming emissions per year, and measure progress toward that goal. By signing up to the CAF framework, participating financial institutions will commit to assessing and disclosing the degree to which the emissions associated with their aluminium portfolios are in line with 1.5°C climate targets — and to do so in accordance with the guidelines set forth by the UN-convened Net-Zero Banking Alliance

The Working Group comprises senior metals and mining leaders from each participating financial institution and will be facilitated by RMI’s Center for Climate-Aligned Finance. It aims to create a CAF framework in consultation with leading aluminium and climate organisations, such as the International Aluminium Institute and the Aluminium Stewardship Initiative. The framework will create consistency and transparency in both reporting and measuring progress against climate targets. Financial institutions that adopt the final CAF framework will be able to assess the emissions of their aluminium loan books and work with their clients to report their emissions, fund lower-carbon solutions, and support investments in new technologies. 

The Working Group will establish the measurement methodology, emissions benchmark, data and reporting framework, and governance structure for the CAF framework in collaboration with existing decarbonisation initiatives. It will invite other financial institutions to adopt the CAF framework in early 2023 and help set global best practices on climate for aluminium finance.  

The Center for Climate-Aligned Finance will facilitate engagement between the Working Group, leading aluminium producers, and partner organisations focused on sustainable finance to ensure the objectives of firms in the aluminium sector and their financial partners are aligned and actionable.  

Being a founding member of the UNEP-FI Net Zero Banking Alliance, Societe Generale is committed to working with its clients and partners across sectors to align its portfolios on trajectories aimed at global carbon neutrality by 2050. 

Also a founding member of the Poseidon Principles, as well as of the Steel and Aviation Climate-Aligned Finance Working Groups, Societe Generale, by joining this leading coalition, is reaffirming its long-term commitment towards energy transition and looks forward to supporting its clients in meeting their reduction emissions targets.
 

“ ESG and sustainability objectives are embedded in Societe Generale’s corporate purpose. Following previous partnerships with RMI’s Center for Climate-Aligned Finance, Societe Generale is pleased to partner again with RMI and act as a founding member of the Aluminum Climate-Aligned Finance Working Group. Our ambition is to assist in developing a framework to measure and disclose emissions related to financings in aluminum, and support decarbonization goals of stakeholders involved in this sector. We are proud to be part of the driving force to shape the future of a decarbonized aluminum industry. ”

Lenaig Trenaux
Global Head of Metals, Mining and Industries at Societe Generale