{"id":31280,"date":"2023-12-20T10:37:27","date_gmt":"2023-12-20T09:37:27","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=31280"},"modified":"2023-12-20T10:38:11","modified_gmt":"2023-12-20T09:38:11","slug":"credit-agricole-commitments-still-too-vague-to-be-credible","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2023\/12\/20\/credit-agricole-commitments-still-too-vague-to-be-credible\/","title":{"rendered":"Cr\u00e9dit Agricole: commitments (still) too vague to be credible"},"content":{"rendered":"

Cr\u00e9dit Agricole recently announced with great fanfare its new climate objectives, including specific commitments to support the energy transition. While such commitments are laudable, the measures announced are difficult to interpret and it is hard to see how they fit with existing commitments made by the Group this year. Reclaim Finance has serious reservations about the sincerity of Cr\u00e9dit Agricole\u2019s announcement, especially\u00a0 whether it is in line with what is needed to achieve a rapid and just energy transition which limits global warming to 1.5\u00b0C.<\/b><\/p>\n<\/div>

Cr\u00e9dit Agricole made several commitments related to the energy transition following COP 28, on December 14, 2023. The Group announced its intention to contribute to accelerating investment and financing for this transition by increasing the allocation of \u00ab\u00a0financial resources for support of renewable energies and low-carbon infrastructure<\/i>\u00a0\u00bb [1].<\/p>\n

Three commitments were presented:<\/p>\n

    \n
  1. A \u00ab\u00a0tripling of annual funding in France by Cr\u00e9dit Agricole Transitions & Energies [CAT&E] for renewable energies between 2020 and 2030, following the recommendation of the European Union<\/i>,\u00a0\u00bb aiming to reach 3 billion euros by 2030.<\/li>\n
  2. An \u00ab\u00a080% increase in Cr\u00e9dit Agricole CIB’s exposure to low-carbon energies between 2020 and 2025 to reach 13.3 billion euros in 2025.<\/i>\u00ab\u00a0<\/li>\n
  3. A \u00ab\u00a0strengthening of financing capacity, amounting to 1 billion euros, to support energy companies in financing their renewable energy production projects, low-carbon infrastructures, clean technologies, and energy efficiency projects.<\/i>\u00ab\u00a0<\/li>\n<\/ol>\n

    While these measures may at first glance appear inadequate to meet the financing needs of the transition, particularly for power supply, they are also challenging to understand, and no clear timeframe is given for the final one of the three.<\/p>\n<\/div>

    An unclear scope<\/h2><\/span>
    <\/div><\/div><\/div>

    Questions about\u00a0 definition have previously been raised in relation to Cr\u00e9dit Agricole’s earlier commitments to transition financing. Once again, Cr\u00e9dit Agricole is playing with vague concepts without defining them. Commitments range from \u00ab\u00a0renewable energies\u00a0\u00bb to \u00ab\u00a0low-carbon energies\u201d, and \u00ab\u00a0low-carbon infrastructure\u00a0\u00bb coexists with \u00ab\u00a0clean technologies\u00a0\u00bb and \u00ab\u00a0energy efficiency\u201d. None of these terms are explained, the energy sources and technologies involved are not detailed, and it is not clear which sectors are included in energy efficiency.<\/p>\n

    The use of these vague terms leaves the door wide open to false solutions. While the concept of \u00ab\u00a0low-carbon\u00a0\u00bb raises concerns about the integration of Carbon Capture, Utilization and\/or Storage (CCUS) [2] on fossil installations or biomass [3], the notion of \u00ab\u00a0clean technology\u00a0\u00bb is simply impossible to interpret without further explanations.<\/p>\n

    Beyond the lack of precise definitions, Reclaim Finance finds it hard to see how the various commitments fit together.<\/p>\n<\/div>

    Opacity in articulation with previous announcements<\/h2><\/span>
    <\/div><\/div><\/div>

    Cr\u00e9dit Agricole has previously announced commitments [4], including that \u00ab\u00a0the annual financing of renewable energies will be globally tripled by 2030<\/i>,\u00a0\u00bb and \u00ab\u00a0[Unifergie,] a specialized subsidiary of Cr\u00e9dit Agricole Leasing & Factoring [CAL&F] in the financing of renewable energies across territories, aims to double its renewable energy financing by 2025<\/i>,\u00a0\u00bb increasing from 1 billion euros in 2022 to 2 billion euros in France [5].<\/p>\n

    Does this new goal of tripling renewable energy financing by 2030 in France via CAT&E extend the previous goal of doubling by 2025. If this is the case, Cr\u00e9dit Agricole should be commended for projecting to 2030 when many financial actors stick to very short-term objectives. However, it is also necessary to deplore the low ambition of the target and its deceleration between 2025 and 2030.<\/p>\n

    How this target fits with its previous commitment to triple global financing for renewable energies also remains to be clarified. Reclaim Finance expects Cr\u00e9dit Agricole to commit to maintaining its global target, in addition to the one adopted at the national level. Indeed, while it is commendable to increase financing for renewable energy in France \u2014 especially considering France’s significant lag on this issue [6] \u2014 it should be noted that Cr\u00e9dit Agricole is among the top 10 largest global banking groups and has a role in supporting the development of sustainable energy worldwide. In the International Energy Agency (IEA)\u2019s Net Zero Emission by 2050<\/i> (NZE) scenario, the majority of the increased investment needed by 2030 for the transition is for emerging markets and developing economies (excluding China) [7].<\/p>\n

    Despite their opacity, the current commitments also appear insufficient to align Cr\u00e9dit Agricole’s financing with the IEA’s NZE scenario.<\/p>\n<\/div>

    Lack of ambition in the face of substantial needs<\/h2><\/span>
    <\/div><\/div><\/div>

    On electricity supply, the linchpin of the energy transition, this scenario indicates that a ratio of annual energy financing of 6:1 must be achieved by 2030. This means that for every dollar allocated to fossil fuels, 6 dollars are dedicated to sustainable electricity supply.<\/p>\n

    Financial institutions have a crucial role to play in the energy transition. It is essential that leading banks such as Cr\u00e9dit Agricole set an example. This involves commitments that are transparent and consistent with climate science and scenarios such as the IEA’s NZE scenario, which Cr\u00e9dit Agricole extensively cites as a framework for its climate commitments.<\/p>\n

    Reclaim Finance encourages Cr\u00e9dit Agricole to reconsider and strengthen its commitments regarding electricity supply, ensuring that they meet the needs for a rapid and just energy transition and to limit global warming to 1.5\u00b0C. The group must adopt a comprehensive financing target consistent with the 6:1 ratio, as well as a target for new installed capacities at the group level. Finally, only the publication of a dedicated sector policy on electricity supply financing, encompassing all of Cr\u00e9dit Agricole’s commitments, would provide the necessary clarity to the group’s commitment in this regard. This policy should clarify the scope of the sources and technologies covered by its financing for the energy transition and ensure the exclusion of false solutions.<\/strong><\/p>\n<\/div>

    <\/div><\/div><\/div>

    Notes:<\/h3><\/span>
    <\/div><\/div><\/div>
      \n
    1. See the Cr\u00e9dit Agricole press release from December 14, 2023 (link<\/a><\/span>)<\/li>\n
    2. See Reclaim Finance\u2019s factsheet on CCUS in power (link<\/a><\/span>)<\/li>\n
    3. See Reclaim Finance\u2019s factsheet on bioenergy (link<\/a><\/span>)<\/li>\n
    4. Cr\u00e9dit Agricole Assurance’s commitment to \u00ab\u00a0strengthen its investments in renewable energies between 2020 and 2025 to finance the development of 14 GW of installed capacity by 2025\u00a0\u00bb is also not reaffirmed in this new announcement.<\/li>\n
    5. Cr\u00e9dit Agricole’s Climate Strategy published in May 2023 (link<\/a><\/span>)<\/li>\n
    6. According to a report by the French Cour des Comptes published on October 16, \u00ab\u00a0the targets for wind-generated electricity have not been met\u00a0\u00bb. In it, it points out that France is the \u00ab\u00a0only European country not to have achieved the objectives of the 2018 directive\u00a0\u00bb, the European reference document for renewable energy. (link<\/a><\/span>)<\/li>\n
    7. See the IEA report \u00ab\u00a0Net Zero Roadmap\u00a0\u00bb published in September 2023. (link<\/a><\/span>)<\/li>\n<\/ol>\n<\/div>
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