CREDIT AGRICOLE SA: Crédit Agricole S.A. details its intermediary targets and action

Crédit Agricole S.A. details its intermediary targets and action plans
to reach carbon neutrality by 2050 on 5 sectors

Crédit Agricole S.A. presents today its vision as regards to energy transition, which relies on the following global equation:

• Accelerating the advent of renewable energy…

• … to replace fossil fuels

• And making this transition accessible to all our clients.

Accelerating investment and financing in green energy, rather than to fossil fuels, is necessary to effectively contribute to the urgent energy transition. Stopping fossil fuel funding alone would make it possible to quickly “green” the balance sheet of the bank, but would penalize all populations still dependent on these energies, without accompanying them in their own transition. Thus, Crédit Agricole is making the demanding choice to use the strength of its universal banking model to support transitions for as many people as possible. By equipping all its clients, from large global corporates to the most modest households, with products and services based on green energy, and by constantly committing to an innovative and progressive approach, Crédit Agricole continues its role as a player committed to major societal transitions.

To amplify and improve Crédit Agricole’s actions, a new business line Crédit Agricole Transitions & Énergies has been launched. It is organized around three main missions:

• Coordinate the Group’s energy transition ecosystem;

• Support our customers in their energy transition and create value for Crédit Agricole through the internalization of the whole advisory value chain, from diagnostic to performance follow-up for professionals, SMEs and farmers.   It’s against this backdrop that Crédit Agricole has developed the offer «j’écorénove mon logement », the transition hub¹ and the « livret engagé sociétaire »

• Identify renewable energy assets to help Crédit Agricole Group become a renewable energy producer, leading it to contribute to accelerate the transition. Based on its longstanding commitment and experience and its deeply rooted network across regions, Crédit Agricole will develop renewable energy by scaling up local initiatives.

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Philippe Brassac, CEO of Crédit Agricole S.A. declares: “Crédit Agricole has always supported societal transformations. We face a climate emergency that leads us to accelerate the advent of green financing, replacing fossil fuels, and to rise to the huge task of making energy transition accessible to all our clients, from large corporates to the most modest households. The trajectory we have chosen is both responsible and demanding.”

CASA is defining ambitious targets to accelerate the transition carbon neutrality in 2050. After having disclosed Net Zero Asset Owner (CA Assurances) and Net Zero Asset Managers (Amundi) commitments, it publishes today 2030 targets on five sectors (Oil & Gas, Automotive, Power, Commercial Real Estate & Cement) for Crédit Agricole S.A. and its subsidiaries within the Net Zero Banking Alliance.

Going forward, Crédit Agricole Group will disclose the targets for five additional sectors (Shipping, Aviation, Steel, Residential Real Estate and Agriculture) in 2023. These commitments are very ambitious, as these ten sectors represent over 75% of global GHG emissions and around 60% of Crédit Agricole Group’s credit exposure. Crédit Agricole has also committed to decrease its own direct carbon footprint by -50% by 2030².
The Group’s climate action is in line with its commitment to contribute to global carbon neutrality by 2050, and the Group’s climate strategy fully contributes to its MTP revenue generation targets.

MAIN TARGETS³

In Oil & gas, Crédit Agricole takes the following action plan:

• Reduction of its financed emissions by 30% by 2030²² across the whole value chain,

• Increase of its reduction target of exposure to oil exploration and production from -20% to -25% by 2025²³; this target announced in October 2021 has already led to the exit from several client relationships in 2022,

• No more financing of new oil extraction projects,

• Integration within annual analysis of a review of its clients’ transition plans. This review will be mainly based on the choice of reference scenario (vs NZ 2050 IAE) and their carbon energy divestment and decarbonization investments strategy. This analysis will be based mainly on i) the quality of the reference scenario in particular compared to the 2050 Net Zero scenario, the determination conveyed and means adopted, and ii) the divestment strategy for carbon energy and investment in decarbonization (production infrastructure, stocking and distribution of decarbonized energy, carbon capture, etc.)

• Over the 2023-2025 period, 80% of its asset related financing and advisory²⁴ services with clients of the oil & gas sector will be in green assets²⁵ or natural gas.

In addition, Crédit Agricole action plan involves:

• Supporting and financing customers that engage in energy transition and support their investments in greener technologies, such as Renewable energies, Carbon Capture and Storage technologies, Hydrogen production

• Continuing its progressive exit from upstream oil financing. The sector has already decreased its CO2e by -11% in 2021²⁶, due to proactive action following the previous commitment, including disengagement from unaligned customers

• Prioritizing clients strongly committed to reducing their carbon footprint and acting as catalysts for the development of decarbonization solutions. This also means disengaging from unaligned customers. This has notably materialized through the exit from the US Reserve Based lending activity finalized in 2022.

• Commitments

  • CACIB committed to reduce by -20% by 2030, on its CO₂ gross intensity (Scope 1&2)

  • In 2030, gross emissions Scope 1&2 will represent 537 kgCO₂e/T of cement

  • Commitment to review the target in 2025 based on sector evolution

  • CACIB is one of the only banks to set a target in gross emissions and covering scope 1&2, as recommended by standards (SBTi) and scenarios (IEA NZE 2050)

• Action plan

  • CACIB will engage in a strong dialogue with its clients to encourage the adoption of CO₂ intensity targets below 500 kgCO₂e/T of cement, for gross emissions Scope 1&2.

  • CACIB will continue to support clients to sustain the massive financing needs to deliver their decarbonization targets (new infrastructures, development of CCUS³⁸, electrification)

  • In parallel, CACIB will steer its cement portfolio according to the CO_2e intensity targets set by clients, reallocating in favor of cement producers with the most ambitious decarbonization strategies.

Targets for five other sectors will be announced in 2023, but actions have already been engaged and Crédit Agricole actively participates in several sector initiatives to try and define pathways together with its peers and its clients.

• SHIPPING:

  • Long-time precursor in the push for a more sustainable shipping industry, CACIB joined in 2020 the Poseidon Principles. As such, CACIB actively contributes to the initiative that gathers 30 major banks and represents 65% of the shipping finance market, with the objective of measuring and setting Net Zero targets on the CO₂e intensity of shipping portfolio.

• AVIATION:

  • Long-time precursor in the push for a more sustainable aviation industry, CACIB joined in 2022 the initiative launched by the Rocky Mountain Institute’s Center for Climate-Aligned Finance, to help decarbonize the aviation sector and develop collective tools to reduce the CO₂e intensity of the sector.

• STEEL:

  • In 2022, CACIB joined the Sustainable STEEL Principles. Frequent workshops are held with 5 other top global banks and in cooperation with NZBA, with the objective of monitoring and setting targets on the CO₂e intensity of steel production.

Methodology:
Baselines and targets are:

• Set using International Energy Agency-Net Zero 1,5 C scenario³⁹ as a reference for our trajectories

• Taking into account all greenhouse gas emissions (metrics in CO₂ equivalent), calculated in absolute emission or physiqual intensity

• Submitted to the Science Based Target Initiative on October 28^th, 2022, in accordance with our 2016 commitment

• Using PCAF methodology. As a consequence, our absolute emissions on listed corporate customers are subject to volatility, due to the use of EVIC in the calculation method

• Using internal (when available) and external data

• Fully aligned with our 2025 MTP generation revenues targets

Our methodologies rely on a common core, based on public methodologies with punctual reinforcement compared to standards. For example, our baselines and targets include off balance financing to better reflect reality, going beyond standards⁴⁰
Slight adjustments were made when necessary to improve calculations on specific sectors:

• Oil & Gas: targets in absolute emissions

• Commercial Real estate: targets based on CRREM scenario, which provides more detail on national and sectoral pathways (by country and type of building) than IEA NZE

• Automotive and Oil & Gas: Inclusion of scope 3 emissions, as they represent the majority of emissions (resp. ~70% and ~85%)

• Automotive: Inclusion of Retail, beyond standards⁴¹ to better reflect our…