The Banque de France responsible investment policy: supplement to 2025 Sustainability Report

The Banque de France is committed to integrating global warming and nature and ecosystem preservation issues into its investment strategy for the portfolios under its full and complete responsibility¹.  It has set itself three objectives.
1.    Reducing the climate impact of its portfolios by aligning their equity component with a greenhouse gas emissions trajectory compatible with global warming of less than 1.5°C above pre‑industrial levels by 2025. This global warming alignment objective has now been extended to corporate bonds for the end of 2026 (Objective No. 1).
2.    Excluding issuers whose involvement in fossil fuels exceeds the thresholds chosen for the Paris-Aligned Benchmark (Objective No. 2).
3.    Contributing to financing the energy and ecological transition (EET) and to preserving nature by investing in thematic funds and green bonds (Objective No. 3).

To this end, the Banque de France monitors the impact and exposure of its portfolios more generally to climate‑related risks and pressures on nature. The results presented under Pillar 1 concern the period to 31 December 2025.

Aligning portfolios with 1.5°C

The Banque de France has committed to progressively aligning its portfolios with a global warming trajectory of well below 1.5°C. Consequently, it ensures that its investments comply with the commitments made by France under the 2015 Paris Agreement. After meeting an interim target in 2021 by aligning its portfolios’ equity components with a sub-2°C global warming trajectory, the Banque de France stepped up its aspirations by reaching a trajectory compatible with global warming of less than 1.5°C as soon as 2023. This target was achieved again at the end of 2025 for the equity components of all its own portfolios. In 2024, the target was extended to the corporate bond components of the pension liabilities and own funds portfolios with a timeframe for achievement set for the end of 2026. While the temperature trajectory of the corporate bond component of the pension liabilities portfolio was between 1.5°C and 2°C at the end of 2025, all the private asset components (equities and corporate bonds) combined have already been aligned with a global warming trajectory of less than 1.5 C.

The Banque de France assesses the alignment of its portfolios by considering the past and future annual greenhouse gas emissions trajectories of the companies in its investment universe. By comparing companies against a scenario trajectory, it is possible to assess each firm’s alignment with a target sub-1.5°C global warming trajectory. Portfolio alignment is then measured by aggregating and comparing past and future emissions on the one hand, and the scenario emissions of portfolio companies on the other hand, which are allocated on a proportional basis reflecting the share of the investment relative to the company’s value.
 

The Banque de France takes a two-stage approach to aligning its portfolios: (i) it applies a filter that excludes companies whose trajectories are least compatible with a 1.5°C target; and (ii) it favours companies in its investment choices that are most aligned with the target. By applying a climate filter, the Banque de France applies a best-in-universe approach to exclude approximately 5% of the worst-performing companies from its investment universe. Exceptionally, some of these companies may be retained in the portfolio if (i) they implement a strategy that contributes significantly to the energy transition²,  and (ii) the overall asset class of the portfolio remains aligned with the 1.5°C target. The climate filter is applied in addition to the ESG exclusions under Pillars 1 and 2 of the strategy, which notably leads the Banque de France to exclude certain companies involved in fossil fuels from all of its portfolios (see below).

Carbon alignment data are provided by S&P Global Sustainable1. Scope 1 and 2 greenhouse gas emissions (see. focus 1) are covered for the 2015-35 period. Over this period, S&P Global Sustainable1 calculates a carbon emissions trajectory for each company, which it compares against a theoretical emissions trajectory that would enable compliance with sub-1.5°C global warming. Company carbon emissions trajectories are obtained from historical data and the targets set by firms themselves, or, failing that, from estimates and projections. The theoretical emissions trajectory for 1.5°C alignment is calculated using the two methodologies recommended by the Science Based Targets initiative (SBTi)³:

-    In the case of companies that emit the most greenhouse gases and whose business activities are homogeneous, S&P Global Sustainable1 refers to the sector-by-sector carbon budgets established by the International Energy Agency (IEA)⁴,  then applies the “sectoral decarbonisation approach” (SDA): within each sector, every company is assigned a carbon sub-budget based on its carbon intensity, production and market share. A company whose carbon intensity trajectory is above its theoretical budget is therefore not 1.5°C aligned.
-    When considering other companies, S&P Global Sustainable1 uses the Intergovernmental Panel on Climate Change (IPCC)⁵  1.5°C scenario for global carbon emissions and then applies the greenhouse gas emissions per unit of value added (GEVA) approach: all companies must reduce their carbon intensity at the same pace (7% per year), irrespective of their sector. Consequently, companies that do not lower their carbon intensity at this pace are not 1.5°C aligned.

This methodology, developed by S&P Global Sustainable1, complies with the Task Force on Climate-related Financial Disclosures’ (TCFD) 2021 recommendations on portfolio alignment.⁶

Participating in the energy transition by excluding issuers engaged in fossil fuels

Since 2018, in accordance with its Responsible Investment (RI) Charter, the Banque de France has excluded companies from its portfolios that derive over 20% of their revenue from thermal coal (extraction or coal-based energy production). The Banque de France updated its RI Charter in 2021 to strengthen and broaden these exclusions. They came into force in 2024.

-    Thermal coal: since the end of 2024, the Banque de France has completely excluded the thermal coal sector (0% of revenue from extraction or coal-based energy production), after initially lowering its exclusion threshold to 2% of revenue at the end of 2021.
-    Oil and gas: since the end of 2024, the Banque de France has aligned with the exclusion thresholds set by European Regulation 2019/2089 on “climate transition” benchmarks, and more specifically with the thresholds applicable to a Paris-Aligned Benchmark (PAB). As set down in the European Commission Delegated Regulation of 17 July 2020, the Banque de France now excludes companies from its portfolios that derive over 10% of their revenue from oil or over 50% from gas.
-    Unconventional hydrocarbons: since the end of 2024, the Banque de France has completely excluded companies involved in unconventional hydrocarbon, be it shale oil, shale gas, oil sands or Arctic or deep water exploration and exploitation (the revenue threshold was lowered to 0%, from 10% previously).

Moreover, in 2024, the Banque de France further stepped up its commitment to the energy transition by deciding to exclude all companies developing new fossil fuel extraction projects. This requirement is intended to ensure alignment with the IPCC and IEA assumptions in order to achieve a sub‑1.5°C global warming trajectory by 2100. 

To effectively implement these exclusions, the Banque de France relies on data provided by its service providers, S&P Global Sustainable1 and Institutional Shareholder Services (ISS). At the end of 2025, the own funds portfolio no longer held any investments in companies involved in thermal coal, while the pension liabilities portfolio had only a very slight exposure (approximately 0.1% of the total assets of the equity component – stable year-on-year – and 0.2% of the corporate bond component, down from 0.6% at the end of 2024). These exposures result exclusively from Banque de France investments in external open-ended funds to which the Banque de France’s fossil fuel exclusion thresholds cannot be applied.

Contributing to financing the energy and ecological transition and to preserving nature 

Under Pillar 1 of its strategy, a further Banque de France objective is to contribute to financing the energy and ecological transition (EET) and to preserving nature. It measures this contribution through its purchases of green bonds and its investments in thematic funds that focus on EET and ecosystem preservation.

Green bonds: holdings have doubled

The Banque de France helps to finance the energy and ecological transition directly by buying green bonds for all its bond portfolios. These green bonds are sovereign and quasi‑sovereign bonds, such as green obligations assimilables du Trésor (OAT – French Treasury bonds) issued by the French government, as well as certain securities issued by companies. They finance green spending, such as investments in public transport, organic farming or waste recycling.

The total value of green bonds held in portfolio⁷ amounted to EUR 21.6 billion at 31 December 2025, which represents a significant increase compared with the end of 2024, when they amounted to EUR 10.2 billion. In 2025, the Banque de France made net purchases of green bonds worth the equivalent of EUR 11.4 billion. 

The proportion of green bonds in portfolios held against the monetary base stood at EUR 19.4 billion, or 12.7% of the portfolios (up from 7.8% in 2024). The increased weight of this asset class is the result of the Banque de France’s stated objective to increase investment in this type of bond as part of the portfolio’s expansion. 

The proportion of green bonds in the pension liabilities portfolios has also risen sharply, owing to a proactive policy to acquire these instruments. The policy was put into practice in 2025 through subscriptions to two funds dedicated to green bonds and through the introduction of a green bond holdings target of at least 10% in the sovereign bond component. At the end of 2025, this target had been met with green bonds accounting for 10.7% of the sovereign bond component of the pension liabilities portfolio. Within the broader bond portfolio, including corporate bonds, this proportion stood as high as 12.0%.

Environmental impact investment: a more-than 10% increase in value in one year
Through its responsible investment policy, the Banque de France is committed to making impact investments in the management of its own funds and pension liabilities portfolios. Its aim is to support environmentally innovative and eco-responsible initiatives while continuing to generate financial returns. The Banque de France has therefore invested in 27 alternative funds representing a commitment of EUR 876 million, EUR 84 million of which were subscribed in 2025. Of the funded projects, 92% are located in the European Union (including 34% in France).

The initiatives supported by these funds primarily concern the energy transition (installation of solar, wind farms or biofuel production), and also cover a wide range of sectors such as sustainable transportation and sustainable real estate projects (energy renovation of buildings).
 

The Banque de France prioritises funds that have been awarded the Greenfin label, which was created in 2015 by the Ministry for the Ecological Transition and Solidarity to certify the green credentials of activities financed by labelled funds, and also values the SRI, LuxFLAG, and Towards Sustainability labels, which are among the leading certification labels for sustainable investment funds.

Carbon footprint and intensity

In addition to the temperature trajectory of its assets, the Banque de France measures the carbon impact of its portfolios, i.e. the greenhouse gas emissions⁸ associated with the issuers it invests in directly or indirectly through funds. Since 2023, four indicators harmonised across the Eurosystem central banks (see. focus 2) have been used to calculate this carbon impact and to provide complementary insights: (i) total absolute carbon emissions; (ii) capital carbon footprint; (iii) carbon intensity per unit of revenue (or GDP for sovereign bond issuers); and (iv) weighted average carbon intensity. These metrics are calculated using common data for all Eurosystem central banks provided by the data provider ISS.⁹ For companies, Scope 1 and 2 emissions have always been covered (see. focus 1). Since 2024, a second exercise has covered Scope 1, 2 and 3 emissions,¹⁰ which results in significantly higher emission figures due to the broad coverage of Scope 3 emissions. For countries, each indicator is broken down according to two approaches based on different emission scopes: (i) emissions produced¹¹ and (ii) emissions consumed, by the country in question.¹²

The various statistics and charts presented below relate to Scope 1 and Scope 2 emissions and, in the case of countries, follow the consumption approach. A portfolio’s carbon footprint corresponds to the carbon emissions of issuers attributed to the portfolio. These emissions are allocated on a proportional basis according to the share of the investment relative to the value of the company (or, in the case of a sovereign issuer, on a proportional basis according to the share of the investment relative to the GDP of the corresponding country). 

The carbon footprint, carbon intensity and weighted average carbon intensity measures for each of the portfolios are presented in Charts 4, 5 and 6 below. They were calculated for each of the four portfolios covered by the Eurosystem disclosure exercise.

-    The capital carbon footprint compares a portfolio’s carbon footprint to the amount invested by the Banque de France. It measures tonnes of carbon equivalent emitted per EUR million invested. The inclusion of Scope 3 emissions has led to a sharp increase in all climate indicators compared with a coverage of Scopes 1 and 2 alone. This is notably due to certain industrial sector entities whose end-product emissions are particularly high.¹³ On a like-for-like basis, the reduction in the Scope 1 and Scope 2 carbon footprint of the equity component between 2024 and 2025 is primarily due to lower emissions from the companies in the portfolio, as well as divestment from certain companies with very high emissions. The carbon footprint measurement also improved for the sovereign bond components of the own funds and pension liabilities portfolios, due to reduced emissions in several European Union countries, particularly France, as well as in North America. The carbon footprint of the corporate bond component of the pension liabilities portfolio has increased due to the acquisition of corporate bonds from issuers that still have high emissions – notably in the cement sector – but are on a sound trajectory towards 1.5°C alignment. As for the corporate bond component of the own funds portfolio, whose carbon footprint has also increased compared with 2024, 99.4% of its carbon footprint is attributable to the holding of a green bond issued by a major emitter in the gas sector. However, this bond is by definition intended solely to finance projects with a positive environmental impact.

The carbon footprint of sovereign bond portfolios held against the monetary base has improved, both for foreign currency denominated holdings (down 10%) and euro-denominated holdings (down 16%). This trend is primarily due to a drop in gross emissions from the main sovereign exposures and the incorporation of carbon indicators into the Banque de France’s portfolio allocation strategies. 

The changes described above also affect the carbon intensity and weighted average carbon intensity metrics presented below.

-    The carbon intensity per unit of revenue (or GDP) compares a portfolio’s total carbon emissions to the revenue (or GDP) of all issuers allocated to the portfolio on a proportional basis according to ownership share. It gauges the carbon efficiency of the portfolio of companies and states, measured in tCO2eq per EUR million of revenue (or GDP).

-    The weighted average carbon intensity weights the carbon intensity of issuers (emissions per unit of revenue or GDP) according to their share in the portfolio. This indicator is recommended by the Task Force on Climate-related Financial Disclosures (TCFD).

Exposure to physical and transition risks

    
Climate‑related risks include physical risks and transition risks.

-    Physical risks can result from one‑off events such as droughts or floods, and also from gradual changes such as rising temperatures. Their effect is felt through property damage, drops in productivity, and even disruptions to the global supply chains of portfolio companies.

-    Transition risks are the financial risks that result from the regulatory and technological transformations and market developments associated with the process of shifting towards a low-carbon economy.

In order to analyse the physical risks to which its portfolios are exposed, the Banque de France tracks a composite indicator calculated by specialised provider S&P Sustainable1,¹⁴ which analyses the exposure of each issuer to this type of risk. The exposure is calculated via a score that ranges from 0 to 100, where 0 is the lowest risk and 100 is the highest, based on ten modelled hazards: coastal floods, pluvial floods, fluvial floods, extreme heat, extreme cold, tropical cyclones, wildfires, water stress, drought and landslides. 

These various hazards will have material repercussions of varying severity depending on the climate change scenario considered, and will have different impacts depending on the location of the company’s assets (direct damage, increased operating costs, potential business disruptions, etc.). The Banque de France has chosen to exercise prudence and to calculate the maximum risk to its portfolio. It has therefore adopted the most pessimistic scenario: substantial global warming, of the SSP5-8.5 type as defined by the IPCC. This scenario projects a rise in global temperatures of between 3.3°C and 5.7°C above pre-industrial levels by 2100, implying a threefold increase in greenhouse gas emissions by 2075. The time horizon adopted for the portfolios’ assessment is set at 2050.
 

In 2025, the performance in terms of physical risks of the equity component of the own funds and pension liabilities portfolios was very close to that of the benchmark indices (a difference of 0 to +0.3 point). The same applies to the corporate bond component of the pension liabilities portfolio (-0.1 point). The main hazards that these components are exposed to are water stress, extreme heat, drought and, to a lesser extent, pluvial floods. The physical risk most likely to have the greatest financial impact would be extreme heat, while the potential financial impact of the other hazards would be limited. Lastly, the corporate bond component of the own funds portfolio benefits from a composition effect, leaving its score well below the benchmark index (-4.4 points). One issuer, which accounts for a significant proportion of the portfolio, is rated well below the benchmark index average. 

The sovereign bond component of the pension liabilities portfolio is less exposed to physical risks than its benchmark index by 2 points. This positive performance is largely due to the underweighting of Spain and Italy in the portfolio (relative to the index) in favour of France. Finally, the performance of the sovereign bond component of the own funds portfolio was in line with the benchmark index. The main hazards affecting these two components are drought and water stress. 

The change of provider in 2025 means that results cannot be compared with the previous year. Consequently, the 2024 data are not included in this analysis.

Impact on nature

Accelerated biodiversity loss today poses a major risk to the integrity of natural ecosystems and the survival of human societies. Although COP 15 (the Fifteenth Meeting of the Conference of the Parties to the United Nations Convention on Biological Diversity), which was held in Montreal in December 2022, paved the way to an initial agreement on a global framework for the preservation of nature, the subsequent efforts made continue to be largely inadequate. Yet pressures on nature have a direct impact on services that are critical to well‑functioning societies. These so-called “ecosystem services” include the provision of essential resources such as food, wood and water. They also play a crucial role in regulating the climate, purifying water, fertilising soil and pollinating plants. 

Given the dependencies and risks for the financial system, the Banque de France looks to embrace nature-related issues, placing them at the heart of its priorities. It continues to contribute to efforts to develop an impact measurement framework that will help set credible targets for these issues. Since 2023, the Banque de France has published indicators that assess the biodiversity footprint of the portfolios covered by its social and responsible investment (SRI) policy. These disclosures cover the equity, corporate bond and sovereign bond components of its own fund and pension liabilities portfolios, and its euro and foreign currency denominated sovereign bond portfolios held against the monetary base.

Corporate Biodiversity Footprint (CBF) methodology

The biodiversity-impact indicators for the Banque de France’s financial portfolios are based on the Corporate Biodiversity Footprint (CBF) developed by the French data provider, Iceberg DataLab. 

The CBF is based on a methodology that makes it possible to (i) harness data on corporate value chains and (ii) model different environmental pressures due to inputs and outputs of the company’s production process. It is, to our knowledge, the most robust methodology currently available to estimate the impact of a company’s activity on species diversity, given that this impact is neither directly observable nor measurable. The CBF thus makes it possible to quantify an activity’s footprint on the five pressures on nature identified by IPBES:¹⁵ (i) changes in land and sea-use and the resulting loss of natural habitats, (ii) the overexploitation of resources, (iii) climate change, (iv) pollution and (v) invasive alien species. 

By aggregating these pressures and converting them¹⁶ into a common measure of pressure on species diversity, we can calculate a negative impact expressed in MSA.km² (Mean Species Abundance/km²). This result can then be used to convert the estimated negative impact on biodiversity into an equivalent metric that expresses total loss of species diversity over a given area. For example, a company whose activity results in a CBF score of -1,000 MSA.km² is responsible for an annual impact equivalent to the complete loss of biodiversity over an area covering 1,000 km² of undisturbed ecosystem. In other words, the company’s activity over the year would have been equivalent to the artificialisation¹⁷ of 1,000 km² of originally undisturbed ecosystem. Rolling this methodology out to the sovereign universe transposes this approach by assessing the impact on the basis of gross domestic product (GDP) and the value chains associated with each sector of activity. This method also takes into account the impacts linked to imports and exports of products consumed or sold outside a national territory. 

In 2025, the calculation methodology of the Corporate Biodiversity Footprint (CBF) was updated. It now offers greater granularity, including a breakdown of pressures by type of ecosystem and the incorporation of new biodiversity pressure factors. 

The Banque de France sought to establish an aggregate measure of the impact of its equity and bond portfolios on species diversity. Consequently, it has adopted aggregation methodologies and metrics that were consistent with the carbon footprint indicators calculated for its portfolios. Three indicators are therefore presented in this report: (i) total absolute biodiversity impact; (ii) biodiversity footprint; and (iii) weighted average biodiversity intensity (cf. focus 6). Following the same philosophy as that used for greenhouse gas emissions, the CBF metric can be divided into three scopes, covering the issuer’s direct impact (Scope 1), the impact linked to its energy consumption (Scope 2) and the impact linked to its upstream and downstream value chain (Scope 3). The CBF metric used here integrates the sum of the three scopes, enabling it to capture the key role played by value chains in companies’ impact on nature. The decision to include all three scopes creates an overestimation bias due to the potential for double counting within a portfolio: when a portfolio contains several issuers from the same value chain, footprints are counted twice, both upstream and downstream.
 

• The portfolio’s total absolute biodiversity impact¹⁸ aggregates the total biodiversity footprint (CBF) that may be attributed to the Banque de France’s investments: it thus measures the negative impact on species diversity of the companies in the portfolio in MSA.km². The total absolute biodiversity impact for almost all the portfolios considered in 2025 decreased compared with the previous year, mainly as a result of a reduction in the footprint per EUR million invested (see below). However, the total absolute impact of the equity portfolios exceeded the benchmark index due mainly to overexposure to the banking sector, which has a high Scope 3 impact. Conversely, the sovereign bond components of the pension liabilities and own funds portfolios have a lower absolute impact than their benchmark index, due to a concentration of exposure to euro area sovereign issuers. Lastly, with regard to portfolios held against the monetary base, the increase in the size of euro-denominated portfolios mechanically increases their absolute impact.

•    The biodiversity footprint compares total absolute biodiversity impact to the total value of the portfolio, expressed per EUR million of value in the portfolio. It thus enables comparisons between different sized portfolios. The biodiversity impact in relation to the volume of investments performed better in 2025 than in the previous year across most of the portfolios under consideration, particularly the equity components. The sharp rise observed in the corporate bond component of the own funds portfolio is due to the significant reduction in the portfolio’s size and its limited residual diversification. The biodiversity footprint of the sovereign bond components is relatively stable across all portfolios. The footprint of the foreign currency denominated portfolios held against the monetary base is slightly higher than for the other portfolios, due to their diversified geographical exposure to non‑euro area issuers, which perform more poorly than the major euro area sovereign issuers.

•    Weighted average biodiversity intensity is calculated by weighting the intensity of issuers’ biodiversity impacts (CBF divided by company assets¹⁹ or GDP²⁰) and applying it to their share of the portfolio. This indicator therefore provides a measure of the portfolios’ exposure to companies with a high biodiversity impact relative to the capital that they employ. Almost all the portfolios performed more favourably in 2025 than in 2024. However, part of the improvement can be attributed to a change in an allocation factor in the CBF indicator calculation methodology, with “total assets minus cash” replacing “capital employed”, which was used in 2023 and 2024. The portfolios’ weighted average biodiversity intensities are almost systematically lower than those of the benchmark indices as the exclusions applied under the responsible investment policy result in favourable sectoral biases. For sovereign bond components, the effects are identical to those described for the biodiversity footprint (see above).

The Banque de France presents a measure of the contribution to its biodiversity footprint indicator of each of the three CBF scopes and from each of the five pressures on nature. The aim is to gain a better understanding of the sources of the environmental impact of its equity and corporate bond components of the pension liabilities and own funds portfolios. Scope 3 (94% of the score) – and particularly Scope 3 upstream (55%) – accounts for a large share of the footprint, while the weight of the Scope 3 downstream emissions increased as a result of the methodological changes implemented in 2025. The main pressure on nature driving the biodiversity impact of the equity and corporate bond portfolios is land use (51%).

Focus on priority sectors

In line with the recommendations set out by the Taskforce on Nature-related Financial Disclosures (TNFD), this year the Banque de France is publishing an indicator on the exposure of its portfolios to sectors that have material nature-related dependencies and/or impacts, as defined by the TNFD.²¹ It also identifies the three sectors to which the portfolios are most exposed. 

This new indicator concerns the equity and corporate bond components of the pension liabilities and own funds portfolios. It provides an overview of potential – not actual – nature-related dependencies and impacts. Companies operating in these sectors are more likely to show dependencies and impacts, but they are influenced by numerous factors, such as the location of assets, the measures implemented to mitigate them, and the robustness of supply chains. 

At the end of 2025, 33% of the value of the equity and corporate bond components of the pension liabilities and own funds portfolios was exposed to sectors with potentially significant nature-related dependencies and impacts, according to the TNFD definition. This exposure is consequently below the benchmark index (38%). This is also true for each portfolio taken individually, due to sectoral biases resulting from the exclusions applied under the Banque de France’s responsible investment policy.

Portfolio exposure to water-related issues

The Banque de France has identified water-related issues as a priority for its analyses, given that they intersect climate and nature issues, have a direct impact on key sectors of the French economy, and demonstrate potential for systemic spillover. As such, for the first time, the Banque de France is publishing two indicators that feature among the Principal Adverse Impacts (PAI) defined by the Sustainable Finance Disclosure Regulation (SFDR)²² on information on sustainability factors in the financial services sector. These indicators cover the equity and corporate bond components of the pension liabilities and own funds portfolios.²³

The first indicator, which corresponds to PAI 8, relates to the discharge of pollutants into water, as approximated by chemical oxygen demand (COD). This measures the amount of oxygen required to break down the pollutants present in the water. The indicator measures the water discharges of issuers that may be attributable to the portfolios, applying a ratio of total investment relative to the company’s value. It is calculated across the scope of sector for which this issue is considered material (such as the industrial, chemical and agricultural sector, for example). 

The amount of discharges into water is well below the benchmark level for all the portfolios covered. This is notably due to the exclusion of certain companies in the chemicals industry from the portfolios.

The second indicator, which is one of the optional Principal Adverse Impacts (PAI), corresponds to the proportion of a portfolio invested in companies whose water management policies are deemed inadequate. The scope of this indicator covers sectors in which water management is considered a material issue, such as industry, energy and consumer goods. In order to calculate it, a qualitative assessment of water management policies is carried out for each issuer, taking a number of criteria into account, including water consumption in regions experiencing water stress, freshwater use, and companies’ water consumption reduction targets. 

Overall, the portfolios’ performance is comparable to the benchmark index. However, the equity portfolios are overexposed to companies deemed to inadequately address their water management issues, largely due to lower diversification compared with the benchmark index.

Investment that positively impact nature and biodiversity

The Banque de France is committed to encouraging initiatives that promote the preservation of nature, and has thus adopted a proactive policy for managing its own funds and pension liabilities portfolios. It has committed EUR 81 million to thematic funds specifically dedicated to the preservation of nature. In 2025, the Banque de France stepped up its commitment by investing EUR 19 million in a new impact fund dedicated to marine biodiversity, adding to an initial investment in the same field made in 2022. Furthermore, the Banque de France is pursuing its commitment through a listed biodiversity-dedicated fund launched in 2024 in partnership with the Caisse des Dépôts group (see. focus 7). Other projects in support of nature are also financed through unlisted funds subscribed by the Banque de France. These investments contribute to the development of projects covering initiatives such as the treatment of marine litter, the reduction of pollutant emissions, less intensive resource use, forest regeneration and more sustainable food production, notably through regenerative agriculture projects.

1 Scope 1, 2 and 3 greenhouse gas emissions according to the GHG Protocol

The 2001 Greenhouse Gas (GHG) Protocol on measuring company GHG emissions distinguishes between three levels or “scopes” of emissions: 

-    Scope 1 corresponds to a company’s direct emissions from sources that it owns or controls, such as GHG emitted by vehicles owned by the company. 
-    Scope 2 corresponds to indirect emissions linked to the consumption of energy provided by other companies, such as GHG emitted during the generation of electricity consumed by the company. 
-    Scope 3 corresponds to indirect emissions linked to the (i) upstream (supplier emissions) and (ii) downstream (emissions linked to the use of goods sold) portions of the company’s value chain: for example, in the case of an auto manufacturer, this would include GHG emitted not only (i) by suppliers but also (ii) by the vehicles produced and sold by the company.

2 The Eurosystem’s harmonised climate-related disclosure exercise

In 2021, the 19 euro area central banks that made up the Eurosystem, established a general framework with a view to initiating a common approach to climate transparency. This framework applies to non-monetary policy portfolios held individually and for which the central bank has full and complete responsibility. The Eurosystem also organised a joint call for tender to select climate impact data providers, in order to ensure harmonised disclosures on the basis of identical data. Institutional Shareholder Services (ISS) and Carbon4 Finance were selected as climate data providers until 2024, and Institutional Shareholder Services (ISS) was then chosen for 2025. The Eurosystem then initiated an ongoing process to develop and continually refine shared indicators, based on a single methodology. The scope of this common disclosure exercise, carried out for the fourth consecutive year, extends to all euro and foreign currency denominated non-monetary policy portfolios as well as the monetary policy purchase programmes of the Eurosystem central banks.²⁴ Each national central bank is responsible for calculating and publishing indicators for portfolios managed for own account, while the European Central Bank (ECB) manages the indicators for monetary policy portfolios. Accordingly, the Banque de France includes the common Eurosystem indicators in its responsible investment report for euro and foreign currency denominated own portfolios held against the monetary base as well as its own funds and pension liabilities portfolios (see 2025 Sustainability Report, Section 4, Table 1). Since 2024, the scope of the calculated indicators has included Scope 3 emissions (see the definition in focus 1) for private issuers. Furthermore, the proportion of social and sustainability bonds held in portfolios is also published in addition to the proportion of green bonds. This harmonised disclosure exercise, reported annually, will be gradually expanded in order to improve understanding of the social and climate impact of central banking activities.

3 Data providers selected by the Banque de France

Climate indicators and environmental, social and governance (ESG) indicators are based on data published by the issuers (such as their carbon emissions) and on calculation methodologies and models (such as the allocation of carbon emissions to a portfolio of financial assets). These data are thus conditioned by methodological and modelling choices. They are provided to investors by specialist providers. 

The Banque de France uses several data providers, which were carefully chosen after reviewing the quality of their data and methodologies in particular. Following a public tender process carried out in 2025, it selected new suppliers for certain extra-financial data, while renewing its contract for temperature alignment calculations with S&P Global Sustainable1. The Banque de France also uses the data provider Institutional Shareholder Services (ISS), selected following a Eurosystem call for tender aimed at promoting harmonised disclosure across all Eurosystem central banks.
 

Lastly, the Banque de France arranged for its Statutory Auditors, Forvis Mazars and Deloitte, to sign off on the main climate metrics disclosed for the 2025 reporting period. Forvis Mazars and Deloitte thus attest to the reliability of the metrics reported as part of the Eurosystem’s harmonised disclosure exercise,²⁵ as well as the global warming trajectory of the own funds and pension liabilities portfolios, which is one of the Banque de France’s key commitments having set a 1.5°C alignment target.

4 Benchmark indices

The Banque de France’s asset managers compare portfolio results against benchmark indices, which are representative of the markets in which the portfolios are invested and are established on the basis of the composition of the main stock market indices. 

Benchmark indices are conventionally used to assess the financial over or underperformance of a portfolio relative to a comparable investment universe. However, they can also be used to analyse a portfolio’s extra-financial positioning. 

With the surge in responsible investment strategies, new indices have emerged in recent years that incorporate an expanded ESG dimension. In 2020, the European Commission defined two categories of indices incorporating climate criteria: the Climate Transition Benchmarks (CTBs) and the Paris-Aligned Benchmarks (PABs). Their aim is to steer investment towards companies whose decarbonisation trajectory is compatible with the commitments made in the Paris Agreement. The Commission set out the criteria for classifying an index as PAB or CTB in its delegated act²⁶ and the Banque de France chooses the external funds in which it invests on the basis of this framework and in line with its responsible investment policy. The Banque de France has also updated the strategic benchmark indices for its non-monetary policy portfolios to ensure that they mirror its aspirations in terms of ESG actions.

5 A new indicator to measure the climate impact of sovereign portfolios 

In 2023, at the request of its Assets-Liabilities Committee and in line with its responsible investment strategy, the Banque de France undertook to green its euro and foreign currency denominated sovereign bond portfolios held against the monetary base (foreign exchange reserves and euro-denominated portfolios managed for own account). It carried out research to develop an internal indicator for rating sovereign states on their climate performance. Since the beginning of 2024, this indicator has been included in the asset allocation model used for part of the foreign exchange reserves. It also provides an aggregate measure of the carbon impact of all the Banque de France’s euro and foreign currency denominated non-monetary policy sovereign bond portfolios. 

In order to avoid penalising industrial countries with high greenhouse gas emissions alone, another indicator has been developed based on the relevant literature.²⁷ It combines the carbon intensity of production (domestic emissions) and consumption (domestic emissions + imported emissions - exported emissions). This indicator takes the form of a z score, which measures the position of a value (in this case, a country's carbon intensity) within a population (here, a group of countries). The z score represents the number of standard deviations from the population average, making it possible to standardise, and therefore compare, data, even if they come from different distributions with different scales. The data sources are those recommended by ASCOR (Assessing Sovereign Climate-related Opportunities and Risks) and are based on reliable public information, with a historical horizon long enough to enable the discernment of trends. These trends are also taken into consideration in the final indicator: in addition to the static carbon intensity data for production and consumption, their evolution over time is also assessed. This additional factor means that the impact of national climate strategies on greenhouse gas emissions can be taken into account. As a result, the discriminating indicator currently used is a composite z-score that half-reflects the production view and half-reflects the consumption view. It also half-reflects the static values and half-reflects their trends, so as to take a sufficiently broad and balanced range of methodologies and indicators into consideration. In 2024, a component measuring countries' medium-term climate ambition was added to the z-score calculation. This component takes into account the gap between national targets for 2030 and a global warming emissions trajectory limited to 1.5°C above average global pre-industrial temperatures from the Intergovernmental Panel on Climate Change (IPCC). 

A z-score of 0 corresponds to an average country, while a negative z score indicates a country with an above average climate performance and a positive z score indicates that a country is below average. Since 2024, decisions for the strategic allocation of foreign exchange reserves have incorporated this indicator alongside the usual risk‑return ratios. For the sovereign portfolios managed by the Banque de France, the aggregate z score²⁸ of -0.37 at the end of 2025 compared with +0.10 in 2022 demonstrates a trend towards greener performances.
 

6 Calculating the carbon and biodiversity footprints

7 Launch of a biodiversity-dedicated fund in partnership with the Caisse des Dépôts group

In December 2024, the Banque de France and the Caisse des Dépôts group launched a fund dedicated to developing a new methodology for analysing corporate biodiversity impacts. The fund is managed by BDF Gestion, the Banque de France's asset management subsidiary, and implements a thematic management strategy for equities by incorporating biodiversity analyses developed by CDC Biodiversité, a Caisse des Dépôts subsidiary. 

Inspired by the “LEAP” (Locate, Evaluate, Assess, Prepare) approach promoted by the Taskforce on Nature‑related Financial Disclosures (TNFD), the methodology developed by CDC Biodiversité aims to qualitatively assess the extent to which companies take account of issues related to species diversity preservation. Its overall philosophy, for each company, is first to identify a company's key nature-related issues based on its business activities and value chain, and then assess the extent to which those issues are properly addressed in the company's action plans. Its aim is to complement quantitative approaches to biodiversity footprints, which measure a company's absolute impact on nature, by determining whether a company is more committed and exemplary in reducing its impact on nature compared to peer companies. The assessment of each company is based on a four-step qualitative analysis approach: (i) materiality of biodiversity issues for the sector; (ii) company transparency; (iii) actions already implemented; and (iv) long-term strategy. 

This partnership with the Caisse des Dépôts group builds on the Banque de France's ongoing efforts to encourage the integration of nature-related risks. The fund was designed as an experiment in integrating environmental objectives into an investment portfolio. It is intended to contribute to improving the integration of biodiversity criteria into investment strategies by financing the development of a methodology that complements existing biodiversity metrics. The analyses undertaken also provide an in‑depth overview of the maturity level of major French companies’ integration of nature‑related issues. 

Drawing on qualitative analyses carried out by CDC Biodiversité, BDF Gestion carries out engagement initiatives targeted at those companies in its portfolio that are deemed to insufficiently address nature-related issues compared with their peers and considering the specific characteristics of their value chains. The dialogue conducted with these companies focuses on the areas for improvement proposed by CDC Biodiversité and aims to encourage them to take greater account of nature-related issues.
 

¹  Own funds and pension liabilities portfolios and euro and foreign currency denominated own portfolios held against the monetary base.
²  This criterion is assessed using several data sources, including Carbon4 Finance and Carbon Disclosure Project (CDP) sources, as well as through interviews with broker analysts specialised in the relevant sectors.
³  SBTi is a partnership between the United Nations Global Compact, the Carbon Disclosure Project (CDP), the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It aims to help companies to lower their greenhouse gas emissions and thus target sub-1.5°C global warming, based on scientific data.
⁴  Net zero scenarios from Energy Technology Perspectives 2017, and above-2°C scenarios from Beyond 2°C Scenario from the IEA.
⁵  Scenario from the Intergovernmental Panel on Climate Change (IPCC) Shared Socioeconomic Pathway (SSP) 1-1.9. This scenario is the most optimistic of the five scenarios defined by the IPCC and is aligned with the Paris Agreement: a very low emissions scenario peaking before 2050.
⁶  TCFD (2021), Measuring Portfolio Alignment: Technical Considerations.
⁷  The portfolios taken into consideration are own funds and pension liabilities portfolios and euro and foreign currency denominated portfolios held against the monetary base.

⁸  The calculated indicators include GHGs besides carbon dioxide (CO2), such as methane (CH4) and nitrous oxide (N2O). These are aggregated and expressed in tonnes of carbon dioxide equivalent (tCO2eq).

⁹  ISS data in 2025, ISS and Carbon4 Finance data in 2024.
¹⁰  This approach is in line with the Eurosystem's intention to adhere to best climate reporting practice. However, it is important to note that the inclusion of Scope 3 emissions can sometimes lead to overestimates of emissions at the portfolio level, particularly due to the risk of double counting, for companies operating in the same value chain for example.
¹¹  Produced emissions include all emissions generated within the country’s borders, both for domestic consumption and for exports.
¹²  This approach includes all emissions consumed within the framework of the country’s domestic demand, including imported emissions.
¹³  Primarily the machine tools, refining, automotive and aviation sectors.
¹⁴  Following a tender process for the renewal of contracts with extra-financial data providers, the provider of the physical risk exposure score was changed (Moody’s in 2024 and S&P Global Sustainable1 data in 2025).

¹⁵  The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) is, like the IPCC with regard to climate change, the leading authority on assessing the state of global biodiversity.
¹⁶  The conversion is performed using Globio (Global biodiversity model for policy support). Globio’s goal is to model the impacts of human activity on biodiversity and ecosystems.
¹⁷  The artificialisation of land refers to the loss of its natural qualities.
¹⁸  see focus 6 for the calculation formulae for the portfolio biodiversity metrics.
¹⁹  Since 2025, the financial indicator used to calculate the weighted average biodiversity intensity of private issuer portfolios has been total assets minus cash.
²⁰  In the sovereign universe, the weighted average biodiversity intensity indicator is by construction the same as the biodiversity footprint indicator.
²¹  Taskforce on Nature-related Financial Disclosures (2024), Sector guidance – Additional guidance for financial institutions, June.

²²  Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019.
²³  With the exception of the corporate bond component of the own funds portfolio, whose results are immaterial for these indicators as they are insufficiently diversified.
²⁴  Purchases of public bonds (from sovereign issuers, agencies and supranational issuers), corporate bonds and covered bonds as part of the asset purchase programme (APP) and pandemic emergency purchase programme (PEPP).
²⁵  Total emissions, carbon footprint, carbon intensity, WACI (weighted average carbon intensity) and share of green, sustainable and social bonds.

²⁶  Particularly, the rate of decarbonisation of the index from one year to the next, exclusion thresholds for companies involved in fossil fuels, etc.

²⁷  Network for Greening the Financial System (NGFS), Considering climate-related risks and transition impact in the sovereign investments of central banks – Data, metrics and implementation issues, May 2024, and ASCOR (Assessing Sovereign Climate-related Opportunities and Risks), ASCOR framework: methodology note, November 2023 (first publication of the Transition Pathway Initiative).
²⁸  Average weighted by each country's z scores.

Under Pillar 2 of its policy, the Banque de France is committed to incorporating environmental, social and governance (ESG) criteria into its asset management. 

At the upstream stage of its investments, the Banque de France excludes at least 30% of companies from its corporate universe based on ESG criteria and in so doing falls into alignment with the requirements of the French SRI label. At the downstream stage of its investments, the Banque de France pursues its transparency approach by disclosing a series of Pillar 2 indicators on its portfolios’ ESG performance each year. And since 2021, integrating ESG issues into its asset management has also led to impact investing through thematic funds and social bonds.

ESG filter

Historically, the Banque de France incorporated ESG criteria into its asset management by choosing to apply one of the requirements of the Socially Responsible Investment (SRI) label supported by the French Ministry for the Economy and Finance. In practice, this choice means reducing its corporate investment universe (equities and bonds) by at least 30% (20% prior to the 2023 SRI label reform), by excluding the worst-performing companies on the basis of ESG criteria and scores. By complying with the label's requirements, the Banque de France ensures that ESG factors have a real impact on its asset management, in line with current responsible investment standards. 

The ESG filter applies three types of exclusion: (i) norm-based; (ii) sector-based; and (iii) ESG score-based. 

(i) Norm-based exclusions feature in the Banque de France’s Responsible Investment (RI) Charter. They cover not only equity components but the entire investment universe. Consequently, the Banque de France does not invest in:
-    controversial weapons, i.e. companies involved in the production, use, storage, sale and transfer of anti-personnel mines and cluster bombs, which are banned under the Ottawa Convention (1999) and the Oslo Convention (2010); 
-    companies and states that do not comply with anti-money laundering and counter-terrorist financing (AML/CTF) regulations, states under embargoes, non-cooperative states and regions with regard to tax information exchange according to the Financial Action Task Force (FATF), and companies involved in AML/CTF controversies; 
-    companies that do not comply with the principles of the International Labour Organization, including respect for freedom of association and the right to collective bargaining, and the elimination of forced labour, child labour and employment discrimination.

(ii) Sector-based exclusions concern fossil fuels – both conventional and unconventional – and tobacco. To effectively implement these exclusions, the Banque de France relies on data provided by S&P Global Sustainable1 and ISS and on data provided to its asset management subsidiary, BDF Gestion. 

(iii) With ESG score‑based exclusions,²⁹ the Banque de France supplements its norm‑based and sector-based exclusions by applying a best-in-class approach to exclude companies with the lowest ESG scores on a sector-by-sector basis. The threshold for exclusion was raised in 2024 from 20% to 30% of issuers with the lowest ESG scores from its investment universe. The ESG scores are a composite prepared by ISS for each company see focus 8 for the methodology.

The environmental indicators cover aspects such as carbon intensity, the existence of an environmental strategy, the prevention of risks to biodiversity, and environmental management of the supply chain. The social indicators consider, among others, occupational health and safety, the absence of discrimination, and employee training. Lastly, the governance indicators cover areas such as the composition of boards of directors, board member independence and executive remuneration arrangements.

ESG scores

In addition to filtering securities based on the ESG scores calculated by ISS, the Banque de France monitors the average ESG score for each portfolio³⁰ by asset class. Issuers’ individual scores are aggregated (weighted by total assets) to arrive at the portfolios’ average score.
 

In 2025,³¹ the ESG scores of the own funds and pension liabilities portfolios all exceeded the ESG quality threshold (or “prime” threshold set by ISS). 

The ESG scores of the equity and corporate bond components are superior to the benchmark indices (ranging from +0.2 to +6.9 points), with the exception of the equity component of the own funds portfolio (–1.5 points). As was the case in the previous year, the corporate bond component of the own funds portfolio has a very significantly higher score than the benchmark index, largely due to the substantial weighting of an issuer with a strong ESG performance. 

The ESG scores of the sovereign bond components, meanwhile, are slightly below benchmark, at -0.5 points and -1.3 points, respectively, for the own funds portfolio and the pension liabilities portfolio. 

In line with the previous year, the ESG scores published for euro and foreign currency denominated portfolios held against the monetary base take into account exposures to sovereign and quasi-sovereign bonds. This approach aligns with the objective of transparency and harmonisation of disclosures, even though the Banque de France has not yet set any quantified ESG targets for its sovereign portfolios. At the end of 2025, the ESG performance of its euro-denominated portfolios was good, with a score of 56/100. However, the score for its foreign currency-denominated portfolios was weaker (47/100), as they were mainly exposed to US sovereign debt.

Social indicators

The Banque de France is progressively strengthening the social aspect of its responsible investment strategy. Consequently, its use of ESG scores (see above) is complemented by a focus on certain sub-scores relevant to the social performance of its equity and corporate bond portfolios. Following the change of data provider from Moody’s to ISS, the Banque de France has selected the following three new indicators, which are thematically similar to the previous ones. 
-    Occupational health and safety rating. This indicator provides a performance score on the health and safety of companies’ staff (health and safety management, accident rates, incidence of fatal accidents, mental health management, on-site health and safety, measures to protect staff in high-risk areas, protection of workers exposed to hazardous substances, and health-related controversies). 
-    Equal opportunities and non-discrimination rating. This indicator assesses performance in areas such as the company’s non-discrimination policy, measures to promote equal opportunities and diversity, gender distribution, and disputes relating to discrimination. 
-    Customer and product responsibility rating. This indicator assesses product responsibility vis-à-vis its customers. It covers two main aspects: the social impact of the products and services, and social considerations along the entire production chain.
 

At 31 December 2025, the various sub-scores for the equity and corporate bond components of the own funds and pension liabilities portfolios were broadly in line with the benchmark indices. 

Regardless of the component, the “non-discrimination” category scores the highest, reaching nearly 75 in the corporate bond component of the pension liabilities portfolio. This performance is in line with the exacting standards set by the benchmark index. However, the non-discrimination score for the corporate bond component of the own funds portfolio is 20 points below the benchmark index, mainly due to the portfolio’s high concentration on a single issuer. 

In the “health and safety” category, the portfolios’ social performance is robust (above 50) and slightly higher than benchmark across all components (ranging from +0.41 to +1.38). 

Lastly, with regard to “product responsibility”, the scores are lower than for the other indicators but remain close to the benchmark index (variances ranging from -1.6 to +1.42 points for the pension liabilities portfolio and from -3.7 to -7.7 points for the own funds portfolios). In the equity component of the own funds portfolio, the variance is non-negligible (-3.7 points) and is mainly the result of sectoral biases. In the corporate bond component of the own funds portfolio, the variance is exacerbated by the portfolio’s high concentration on a single issuer.

Social impact investment

The Banque de France has also diversified the thematics covered by its impact investments to strengthen the social aspect of its responsible investment strategy. Accordingly, since 2021 it has expanded its purchases to include social and sustainability bonds  as well as green bonds.³² At 31 December 2025, EUR 7.5 billion was invested in social and sustainability bonds in addition to EUR 21.6 billion invested in green bonds.³³ Holdings of social and sustainability bonds rose sharply once again in 2025 (up EUR 2 billion), in the context of growth in the size of the euro-denominated portfolio held against the monetary base that allowed the Banque de France to step up its efforts to build a base of social and sustainable assets. These types of bonds now account for 5% and 3.8%, respectively, of sovereign and quasi-sovereign bonds in euro and foreign currency denominated portfolios held against the monetary base. All portfolios combined, the volume of social bonds rose to EUR 3.9 billion equivalent in 2025, accounting for 12% of the total volume of impact bonds. 

The Banque de France also supports the growth of thematic funds whose investment strategy includes achieving significant social and societal impacts. As such, it has committed EUR 59 million to thematic funds with a social dimension, which notably includes a EUR 45 million investment in an externally managed listed fund that invests in the equity or debt of companies operating in the social and solidarity sector. Other projects are also funded by impact funds in the real estate sector, including, for example, the provision of emergency accommodation to associations working to tackle poor housing conditions (Samusocial de Paris and Habitat et Humanisme). 

The Banque de France prioritises certified funds to guarantee the social and solidarity aspect of these investments and particularly counts on the Finansol label, set up by the association FAIR (“Finance – Accompany – Impact – Reunite”) in 1997, and on the SRI label, created by the Ministry of the Economy and Finance in 2016.
 

8 Construction methodology for ESG scores

For sovereign bond issuers, the ESG score aggregates several sub-scores weighted according to their degree of materiality (this assessment is notably based on the 17 “Sustainable Development Goals” (SDGs) drawn up by the United Nations). The input data are sourced from government institutions and international bodies and even non-governmental organisations. Each country is then rated on its absolute performance relative to the target ESG profile. The scores are then standardised to 100 based on an ESG prime performance threshold. The sub-scores relate to the scope of countries’ ESG responsibilities (resource use, energy mix, access to healthcare, access to education, the rule of law, state accountability, free elections, etc.). 

For private issuers, for each sector of activity, the ESG score aggregates around 100 relevant raw data points selected from a library of over 700 indicators. These data enable the calculation of thematic scores at various levels of aggregation, covering everything from an environmental score, a social score and a governance score, right up to an overall ESG performance score. 

To ensure a minimum ESG requirement for all sectors, the score weighting leans more heavily towards indicators that deal with the most material risks in each sector. Consequently, the input data and available sub-scores are not always the same from one company to another, but each score level provides a basis for comparison between rated companies on a given theme. The overall ESG score – the highest level of aggregation – thus offers the broadest coverage and the greatest comparability across all sectors, notably thanks to the scores’ standardisation to 100 based on the ESG prime performance threshold, which is adjusted for each industry.

²⁹  Following a tender process for the renewal of contracts with extra-financial data providers, the ESG score provider was changed (Moody’s in 2024, followed by ISS in 2025).
³⁰  The scope covers the own funds and pension liabilities portfolios and euro and foreign currency denominated portfolios held against the monetary base.
³¹  The change in data provider (Moody’s in 2024, followed by ISS in 2025) restricts score comparability with the previous year. The 2024 scores published in 2025 are not included in this report. 
³²  Sustainability bonds may finance green and/or social activities.
³³  This figure includes investments in the own funds and pension liabilities portfolios and in euro and foreign currency denominated portfolios held against the monetary base.
 

In order to fulfil its role as a responsible shareholder, the Banque de France applies a tailor-made policy in exercising its voting rights, encouraging better recognition of issues related to environmental, social and governance (ESG) risks by the companies in which it invests. It is through this lever in particular that the Banque de France intends to act on the “governance” dimension of ESG, by setting requirements for corporate best practice. The Banque de France aims to exercise its voting rights to the full at the general meetings of the companies in which it is a shareholder.

The Banque de France’s voting policy

In 2019, the Banque de France adopted a voting policy that included provisions for good governance and recognition of extra-financial objectives for the companies represented in its portfolios. These provisions deal, among other things, with transparency and gender balance in decision-making bodies, transparency on companies’ environmental impact, and the recognition of extra‑financial performances in executive remuneration. The Banque de France thus uses the exercise of its voting rights as a concrete means of leverage to encourage issuers to change their practices on ESG issues over the long term. The Banque de France’s voting policy, which is available to the public on the Responsible Investment page of its website, details the expectations demanded of companies in which it is a shareholder. 

In 2020, the Banque de France stepped up its extra‑financial requirements by adding provisions on fossil fuels to its voting policy. The Banque de France expects the companies involved in this sector to have a full exit plan from coal and unconventional hydrocarbon activities and is fully opposed to any new fossil fuel extraction projects. The provisions prevent the Banque de France from approving the financial statements of companies that do not meet these two requirements. 

Furthermore, with the remuneration of some senior executives reaching unprecedented levels across several industries, the Banque de France decided to adopt new provisions to limit excessive remuneration awards³⁴ as of the 2023 general meetings cycle. In addition to the cap on variable remuneration already in place, the Banque de France now opposes proposals relating to the fixed portion of remuneration if it deviates excessively from the median observed for comparable companies. 

The Banque de France’s expectations can be summed up by the following principles, which are organised according to the types of resolutions proposed to shareholders.

-    Approval of financial statements and management: integrity of management and financial and extra-financial information. The Banque de France expects companies to publish extra‑financial disclosures on their climate strategy, especially in sectors with a major environmental impact (energy, transportation, building and construction, agriculture, food products and forestry products). 
-    Profit distribution, management of own funds and capital transactions: a distribution policy geared towards long-term investment. For example, the Banque de France is in favour of paying bonus dividends as long as they reward long‑term shareholder loyalty. It also ensures that share buyback programmes remain exceptional and are not given priority over investment projects. 
-    Board of directors or supervisory board: independence of the board, diversity and separation of powers. In particular, the Banque de France pays close consideration to the diversity of the composition of the Board of Directors and its gender balance (at least 40% for either gender). Also, in addition to the usual committees (audit committee, appointments committee and remuneration committee), it recommends the creation of a committee dedicated to social and environmental issues. 
-    Executive remuneration and employee share ownership: transparency, consistency and moderation. The Banque de France insists on its reinforced requirements in favour of justified, equitable and non-excessive remuneration for executives, in particular by requiring that the fixed portion should not deviate excessively from the median observed for comparable companies. The payment of variable remuneration to executives must also take into account the extra-financial performance of companies, for example in terms of their sustainable development strategy. The Banque de France also supports employee share ownership. 
-    Amendments of company articles and shareholder rights: respecting shareholder rights. For example, the Banque de France opposes head office transfers to legal and tax havens. 
-    External resolutions:³⁵ improving environmental, social and governance practices. The Banque de France particularly supports external resolutions aimed at reducing the carbon intensity of activities and minimising the risks associated with climate change.

The Banque de France applied this voting policy for the first time during the general meetings that took place in 2020 with regard to the 2019 financial year. In 2020, the voting policy of BDF Gestion, the asset management subsidiary, was aligned with that of the Banque de France. 

Given its role as a supervisor and a guarantor of financial stability, the Banque de France refrains from directly owning equity in the banks or insurance companies that it supervises in order to avoid any risk of conflict of interest.

Voting statistics in 2025

In 2025, the Banque de France and BDF Gestion took part in 770 general meetings, representing an attendance rate of 95% for the funds managed by its asset management subsidiary, well above the target of 80%. Votes were cast on more than 10,500 resolutions. Of these, about 3,300 were votes against, representing an overall rate of opposition of 31%. The rate of opposition (see chart below) was particularly high for executive remuneration resolutions (48%) and share issue and buyback programmes (43%). Particular attention was also paid to external resolutions tabled by shareholders in favour of environmental protection and social issues (voting in favour for 74% of the resolutions). 

The rate of votes opposing company management was 31%.³⁶

For external funds (13.9% of total equity component assets), the voting policy of the management companies concerned applies.
 

An activist shareholder

The Banque de France acknowledges its role as an activist shareholder as a lever to influence companies to take greater account of sustainability issues. Therefore, in 2025 it formalised a shareholder engagement strategy aligned with regulatory recommendations³⁷ and industry best practice. The strategy is implemented by its asset management subsidiary, BDF Gestion, and aims to maintain a regular and structured dialogue with companies in its portfolio in order to encourage improvements in their environmental, social and governance practices. This dialogue can take various forms: sending targeted letters, holding meetings with the teams responsible for sustainability and the company’s management, voting at general meetings, etc. 

In 2025, the Banque de France’s shareholder engagement efforts focused on addressing nature-related issues, drawing particularly on qualitative analyses carried out by CDC Biodiversité within the framework of the biodiversity-dedicated fund launched by the Banque de France in partnership with the Caisse des Dépôts group (see Focus 7). The targeted companies, drawn from various sectors, meet the ESG criteria required by the Banque de France’s responsible investment policy but their integration of nature-related issues is weaker than that observed among their sector peers. Furthermore, in addition to its prescriptive engagement activities focused on biodiversity, BDF Gestion has carried out proactive engagement initiatives on various sustainability-related topics at ESG events.
 

Lastly, in 2025 the Banque de France stepped up its monitoring of engagement activities carried out by external asset management firms, notably by sending out ESG questionnaires. These questionnaires are designed to better assess the degree of integration of environmental, social and governance issues, as well as investment practices, and also help form a basis for oriented dialogue with asset management firms.

³⁴   These provisions do not apply to the financial sector because of the ACPR's specific status as a financial supervisor.
³⁵  Resolutions tabled by the shareholders themselves. In recent years, the climate has been a favoured theme of external resolutions.
³⁶  The overall rate of votes opposing management does not include external resolutions submitted by shareholders at the general meeting.
³⁷  Shareholder Rights Directive II (SRD II) and Article 29 of the Energy and Climate Act.