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Launch of the Sustainable Finance Observatory, the first-ever tool for monitoring Paris Financial Centre players’ shift towards carbon neutrality by 2050

29/10/2020

Unveiled on the occasion of Climate Finance Day, the Sustainable Finance Observatory is a world premiere. It seeks to enhance transparency, monitoring and evaluation of the financial sector’s gradual transformation.

On 2 July 2019, the Paris Financial Centre’s main participants, namely insurers, banks, private equity firms, management companies and specialist financial companies represented by their primary professional federations, and Finance for Tomorrow, a branch of Paris EUROPLACE, made commitments to green and sustainable finance, including the creation of an Observatory to record the commitments and achievements of financial players in the area of green and sustainable finance.

UNPUBLISHED SECTORAL DATA

The Observatory brings together sectoral data and individual commitments, now presented on the website: www.observatoiredelafinancedurable.com.  For more transparency, all the data on the Observatory's website are open-data.

Unpublished data, on the one hand, reporting on the actions of the different financial sectors are classified into four themes

  • Responsible management
  • Transition to a low-carbon economy
    • Sustainable savings and investments
    • Climate analysis of assets under management
    • Amounts of energy renovation loans for individuals
  • Exit from Coal 
    • Assets under management subject to coal strategy
    • Statistics on coal strategies: exit date, thresholds adopted
    • Exposure of banks and insurance companies to thermal coal
  • Responsible product offerings

On the other hand, the Observatory also lists the public commitments in terms of sustainable finance of 355 voluntary actors. These commitments will be updated on an ongoing basis. We furthermore call on those financial actors not currently participating to make a commitment and join this initiative.

This first edition is a working basis for achieving the 5-year objectives of the project: monitoring individual commitments, calculating the alignment of the investment portfolios of market players with the objectives of the Paris Agreement, and, as far as possible, enriching the data with measures of the impact on the real economy.

A COMMITTEE ENSURING SCIENTIFIC RIGOUR

A scientific and expert committee of 12 qualified figures from civil society and academia, chaired by Pierre-Louis Lions, winner of the 1994 Fields Medal and professor at the Collège de France, will regularly assess the relevance and quality of the Observatory's methods and data. The goal is for these to evolve over the years, incorporating the committee’s opinions and other methodological improvements, always with the aim of better assessing the impact of initiatives undertaken by stakeholders in the field of sustainable finance.

A PILOT PROJECT FOR THE WORLD AT LARGE

The Sustainable Finance Observatory seeks to incite other financial centres in Europe and beyond to launch similar initiatives. Finance For Tomorrow will share feedback and lessons learned from the project with other financial centres, particularly through the Financial Centres for Sustainability. Methodologies implemented by the Observatory will also be made available in open-source form.

 

Thierry Déau, Chairman of Finance For Tomorrow, said: ‘We are convinced that transparency has an essential and virtuous impact, accelerating the collective momentum that has gathered since COP21 and for this reason, we are proud to now be launching the Sustainable Finance Observatory. Our shared objective, alongside professional bodies and public authorities, is to monitor and further encourage commitments and actions that support the struggle against climate change and foster implementation of the UN’s Sustainable Development Goals and those of the Paris Agreement globally.’ 

Arnaud Leroy, Chairman and CEO of ADEME (Agency for Ecological Transition), stated that: ‘By contributing to greater transparency and more accurate consideration for the long term, the Sustainable Finance Observatory constitutes a new tool for dialogue between the financial sector and society. The Observatory makes it possible to monitor the translation of commitments into action, while fostering emulation among actors. At a time when we need to accelerate our mobilisation to achieve the objectives of the Paris Agreement, it will be an essential tool for encouraging the Paris Financial Centre to further ramp up its ambitions.’

Augustin de Romanet, Chairman of Paris EUROPLACE observed: ‘The launch of this world premiere, the  Sustainable Finance Observatory, supported by European funding, bears witness yet again to the pioneering spirit that drives the Paris Financial Centre on these issues. This initiative is part of the Paris Financial Centre’s vigorous effort to accelerate contributions by the financial sector, in all its various forms, to ensuring the economic recovery and transformation of our post-crisis economic model.’

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