On the occasion of its third SRI report, the institution also announced the creation of a Climate Change Centre (CCC) and a tightening of its fossil fuel exclusions.
Following last week's announcements on impact finance, the Banque de France is joining the market's drive for sustainable investment.
In the 2020 edition of its responsible investment report (the third since 2018), the institution analyses for the first time the impact on biodiversity of its portfolios, which total €23 billion in assets, using two indicators provided by the Vigeo Eiris agency.
The biodiversity scores for the equity portion of its equity and pension portfolios were 53.4 and 50.6 out of 100, respectively.
"For the year 2020, the performance of the equity pockets measured in terms of overall impact is qualified as "robust".
by the provider, and exposure to companies involved in the production of harmful substances is clearly
lower than the benchmarks", she comments.
The central bank also indicates that it will take into account, in its next report, the French and European regulatory changes currently being drafted, which will introduce new requirements in this area from March 2021.
Major issue
The Banque de France stresses that measuring the impact of financial flows on biodiversity is a major challenge for the financial sector, even though this issue is still relatively new.
In May 2020, some thirty investors representing more than 6,000 billion euros in assets under management, including AXA Investment Managers, BNP Paribas Asset Management, Sycomore Asset Management and Mirova, will have signed a joint communiquéhad called for a mobilization on these issues.
The subject is particularly in the news in France, where the World Conservation Congress organised by the International Union for Conservation of Nature (IUCN) will be held in Marseille from 3 to 11 September 2021.
Calls for mobilization and action are expected on several issues of global and national importance such as endangered species, ecosystems, biodiversity in overseas territories, deforestation and alternatives to pesticides....
It should also be noted that the protection of biodiversity is one of the four objectives of green bonds issued by Agence France Trésor (AFT) as defined in the framework document of January 2017.
Coordinating action
In addition to this commitment, the Banque de France announces the launch of its Climate Change Centre (CCC) to coordinate its action and improve its efficiency. It explains that the centre will act as a hub for all the actions undertaken by the various directorates in the field of the fight against climate change.
This centre will be operational from 1 April 2021 with the support of economists and under the chairmanship of Nathalie Aufauvre, Director General of the DGSO (Directorate General for Financial Stability and Operations).
Finally, in addition to strengthening the social component of its strategy, the institution confirms that it is tightening the exclusions on fossil fuels in its investment portfolios, notably with the announcement of a complete withdrawal from coal in 2024.
François Villeroy de Galhau, Governor of the Banque de France, made this commitment before the Finance Committee of the National Assembly in January. The institution will totally exclude all companies with a coal component, however small.
Convinced that monetary policy also has a role to play in the climate cause, the Banque de France is also calling for a "greening" of the ECB's (European Central Bank) asset purchases by favouring virtuous companies over polluting ones. François Villeroy de Galhau expressed himself in this sense in February.