Ecological Transition Financing Action Plan
This report follows on from the recommendations of the Perrier report of March 2022, in response to the task entrusted by the Minister of the Economy in 2021 on mobilising the financial sector to help decarbonise the economy.
In this report, Yves Perrier explained the way forward: “the success of the climate transition will depend on the alignment of businesses, the financial system and the state. The transition is a long-term project that integrates a carbon target with industrial policy, social policy and sovereignty issues. To achieve this, it is essential to adopt a co-construction and co-steering approach.” It is with this in mind that the Institute of Sustainable Finance (IFD) was created within Paris Europlace. The objective of the IFD is to coordinate the actions of ecosystem players (financial institutions, manufacturers, consulting firms, rating agencies, think tanks, federations and professional associations, and government authorities) to help transform the economy.
In November 2022, the Minister of the Economy and Finance entrusted the President of the Institute for Sustainable Finance with a new task: to propose an action plan for financing the ecological transition and to create the Ecological Transition Financing Committee (CFTE). This market and strategic policy guidance body aims to align private sector financial resources and instruments with decarbonisation strategies defined by sector.
A multi-stakeholder taskforce (comprising economists, banks, insurance companies, asset management companies, professional federations and public authorities)[1] was set up to carry out an initial analysis of ecological transition financing, coordinated by the French Treasury and the IFD. The proposals were discussed with the financial sector’s main professional federations, namely the Fédération Bancaire Française, France Assureurs, the Association Française de la Gestion Financière and France Invest. The report focuses mainly on the energy transition and decarbonisation and does not address all ecological transition topics. In accordance with the engagement letter, this report aims to define an action plan for financing the ecological transition based on an analysis of investment needs. Its objective is to support the CFTE by sharing a common assessment of the additional investments needed to be made by both businesses and individuals in the sectors with the highest emissions, and proposing financing solutions to meet these needs. This report is therefore a first step in the development of a genuine collective strategy to ensure that the Paris financial centre can meet the challenges and set an example internationally.
[1] The composition of the taskforce is provided in the Appendix.