Metrics and targets

A first set of indicators designed to measure the risks both to our balance sheet and tasks

A list of metrics and targets that is under construction

A stringent risk assessment and management approach relies on metrics that may be used to objectively measure the change in risks and to determine whether these developments are aligned with the institution's governance, strategy, risk management policy and any targets adopted. In accordance with their holistic approach to climate-related risks, the Banque de France and the ACPR plan to develop a set of metrics to assess not just the risks to their balance sheet but also the impact of climate-related risk on their tasks.

 

Reflecting a climate risk management approach that is designed to get better year on year, the list of metrics to follow is itself set to evolve. In particular, it is important to recognise the current limitations inherent in climate data, including data gaps, data that are still being standardised, the involvement of external service providers, and ongoing harmonisation of the methodologies used by different indicators.

 

Building in the European dimension

The Banque de France is contributing actively to the Eurosystem’s work on integrating climate issues in monetary policy; metrics relating to these efforts will be published at the level of the Eurosystem and are therefore not included in this report.

 

Regarding euro-denominated non-monetary policy portfolios, methodological work is currently being conducted within the Eurosystem to make the climate reports published by central banks more comparable. This work is expected to result in an initial publication of climate metrics for these portfolios in 2023.  

 

The following list of metrics therefore represents a first stage, which is set to be expanded based on internal and external work and developments in climate data. With these metrics, and the targets adopted for its own carbon emissions and activities, the Banque de France and the ACPR intend to play a full part in the climate transition, both through their own activities and in the discharge of their tasks.

 

Find out more…

… about the limits of climate data and ways forward: https://www.ngfs.net/sites/default/files/medias/documents/final_report_on_bridging_data_gaps.pdf

 

… about the stance of Eurosystem central banks on climate reporting for non-monetary policy portfolios: https://www.ecb.europa.eu/press/pr/date/2021/html/ecb.pr210204_1~a720bc4f03.en.html

Financial stability

Level of exposure of French financial institutions to climate-related risks

 2021

Exposure of French financial institutions to sectors with the greatest exposure to climate transition risks, as a % of total assets (1)

11% for the banking sector

 

9% for the insurance sector

 

French institutions’ degree of readiness

 2021

Institutions that took part in the last round of stress tests organised by the ACPR, as a % of the sector

85% of the banking market



75% of the insurance market

 

Climate commitments of French institutions

 2021

Institutions publishing a fossil fuel policy, including a coal exit date, as a % of total assets

85% for the banking sector



90% for the insurance sector

 

(1) Based on a scope comprising sectors identified as sensitive (names and codes as per the European Community's statistical classification of economic activities (NACE)): Crop and animal production, hunting and related service activities A01; Mining and quarrying B; Manufacture of coke and refined petroleum products C19; Manufacture of chemicals and chemical products C20; Manufacture of other non-metallic mineral products C23; Manufacture of basic metals C24; Sewerage, Waste collection, treatment and disposal activities, Remediation activities and other waste management services E37-39.

Services provided to the economy

Financial literacy

 20212022 Q1-Q3Target
Number of consultations of short economic guides (ABC de l’économie) connected with the fight against climate change

 

7,512

 

11,000

 
Number of climate risk presentations to student groups

 

20

 

21

 

 

Financial analysis of companies

 20212022 Q1-Q3Target
Assess the feasibility of integrating a climate risk indicator into the company ratings system       Prototype tested on a sample of 50 or so companies from three different sectors

 

Prototype end-2022

Sustainability

Responsible investment policy: goal of aligning the equity components of own funds and pension liabilities portfolios with a 2°C trajectory, to be progressively lowered to 1.5°C

 

Pillar 1: Align investments with France’s climate commitments

Objective No. 1: Align equity components with a 2°C trajectory. Horizon set at end‑2020 for the own funds portfolio and end‑2022 at the latest for the pension liabilities portfolio

Equity component of the own funds portfolio 2°C aligned from end‑2019; same for the pension liabilities portfolio from end‑2021

Objective No. 2: Contribute to financing the energy and ecological transition (EET) by increasing investment in green and social bonds and in thematic funds with an EET focus from 2019

EUR 1.6 billion invested in green bonds

 

EUR 355 million invested in EET thematic funds

 

Pillar 2: Include environmental, social and governance (ESG) criteria in asset management

Objective No. 3: Equity components meeting the requirements of Pillar III of the French SRI label in 2019 

20% of equity issuers excluded on the basis of ESG criteria from end-2019

Objective No. 4: Step up exclusions of issuers involved in fossil fuels

From 2021, issuers that generate over 2% of revenue from thermal coal or 10% from unconventional hydrocarbons will be excluded

 

At end‑2024, the coal threshold will be lowered to 0%, and thresholds will kick in for oil (> 10% of revenue) and gas (> 50% of revenue)

 

Pillar 3: Exercise voting rights and engage with issuers 

Objective n° 5: Adopt a voting policy that includes extra financial provisions in 2019 Voting policy adopted in 2019 and adjusted in 2020 to reflect new fossil fuel exclusions
Objective n° 6: Achieve a general meeting attendance rate of at least 80% from 2021 onwards

Attendance rate of 90% at end-2021

 

 

All metrics are available in the Responsible Investment Report, which is posted online (see “Find out more”).

 

 

 

Social and environmental responsibility: aim to significantly reduce our GHG emissions in order to be on a carbon neutral pathway

 

Social and environmental responsibility

 20192021Variation 2021/2019Target
Total greenhouse gas (GHG) emissions within operational scope (energy, fugitive emissions, commuting, business travel, waste) (footnote: GHG emissions, in tonnes of CO2e, calculated using the regulatory BEGES methodology)

 

 

 

41,938

 

 

 

35,777

 

 

 

-14,7%

 

Reduction of GHG emissions by -10% in 2024, relative to 2019

Scope 1 (direct emissions of GHG) (footnote: GHG emissions, in tonnes of CO2e, calculated calculated using the regulatory BEGES methodology)13,79512,604-8,6% 
Scope 2 (indirect emissions linked to energy) (footnote: GHG emissions, in tonnes of CO2e, calculated calculated using the regulatory BEGES methodology)

6,541

5,983-8,5% 
Scope 3 (other indirect emissions of GHG – excluding financial investments) (footnote: GHG emissions, in tonnes of CO2e, calculated calculated using the regulatory BEGES methodology)

 

21,602

 

17,190

 

-20,4%

 
Carbon footprint of the information system (footnote : GHG emissions, in tonnes of CO2e, calculated using the Life Cycle Assessment methodology)

3,318

3,208-3,3% 
Decision to take account of extra-financial criteria when reviewing Banque de France investment projects, with implementation from 2022 and targeting 100% for “major projects”, 100% for new IT projects and at least 50% for other investment projects 

 

 

 

 

 

 

7 pilot projects

 

2022

Mise en œuvre pour 100 % pour la catégorie "grand projet", 100 % pour les nouveaux projets informatiques, et au moins 50 % pour les autres projets d'investissement

 

Find out more…

…about the methodology used to calculate the Banque de France's emissions: https://bilans-ges.ademe.fr/en/accueil/contenu/index/page/calculation_methods/siGras/0

Improve our understanding of climate issues

Research

 20212022 Q1-Q3Target
Contribution by Banque de France and ACPR researchers to climate and environmental topics

 

 

10%

 

 

15%

Research work on climate and environment to account for at least 15% of annual publications from 2022

 

Capacity building

 20212022 T1-T3Target
Number of Banque de France employees trained in climate-related questions 

 

29%

50% of employees trained in 2024

Number of participants in IBFI training, for foreign central banks, in connection with the fight against climate change

 

 

593

  

Check out the interactive table of contents

Updated on: 11/30/2022 10:41