The ACPR and the AMF, the two finance gendarmes, have observed the increase in public announcements by financial institutions in favor of the climate, but underline a lack of transparency regarding their exposure to fossil fuels and their objectives to meet their commitments.
Financial institutions must intensify their work in order to take into account in a more robust, more transparent and more homogeneous way their exposures to fossil fuels, called the supervisors in a joint report published on Tuesday.
Nine of the 17 insurance companies and six of the nine banking establishments studied by the supervisors published new commitments in 2020, assure the two authorities. It remains (…) difficult to identify, compare and evaluate these commitments which have different doors and can be implemented in a more or less ambitious manner by the establishments, they argue.
The ACPR, responsible for banks and insurance, and the AMF, which supervises financial markets, also note that many institutions have long-term commitments, for example 2030 2040 for the exit of coal financing, or 2050 for the portfolios’ carbon neutral objective. These deadlines must however be accompanied by precise milestones and a binding chancier in time.
Real collective mobilization on coal
With regard to collective commitments through national or international initiatives, the two authorities welcome their growing role. However, progress remains to be made in order to communicate clearly and transparently on the objectives and modalities of action within the framework of these commitments.
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Concerning charcoal, the supervisors welcome real collective mobilization but note approaches and levels of ambition that are still inherent from one actor to another. All banks and insurers as well as most of the big managers of the financial market now post a coal sector exit date of generally 2030 for the OECD countries and 2040 for the rest of the world.
The recommendations formulated in 2020 still little applied
On the other hand, the recommendations formulated in 2020 by the authorities in the matter are still little applied, underline the AMF and the ACPR. Exit strategies as well as possible steps to meet the stated objectives are rarely described, they add.
Regarding oil and gas, policies are still little developed among non-banking players and generally focus on certain unconventional energies (such as shale gas), the authorities note. They too often remain imprecise.
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