Players committed to sustainable finance
Several types of player coexist within the sustainable finance ecosystem.
Conventional players
The main players in finance (even the classic ones)
The main players in the financial ecosystem are banks, insurance companies, investment funds and asset management companies. These are the players around whom the entire financial sector ecosystem revolves. Their vital role in the smooth running of the economy makes their support for the transition essential to achieving the objectives of Agenda 2030. This is why they are taking steps, with the help of all the players in the ecosystem, to lead this transition towards a sustainable economic model.
Place Federations
It is primarily within federations that they come together to align their practices. In France, there are several federations for different types of financial players:
- AF2i for institutional investors
- AFG for asset management companies
- ASF for finance companies
- ASPIM for real estate funds
- FBF for the banking sector
- France Assureurs for the insurance industry
- France Invest for private equity players
Place Associations
There are also industry associations dedicated to certain sustainable finance practices:
- FIR (Forum for Responsible Investment) to develop SRI
- FAIR (for impact finance players) to strengthen the role of impact finance
- FINANSOL (for solidarity finance) to support solidarity finance players
- Paris EUROPLACE, which brings together the entire Paris financial center.
International collective commitments
Financial players can also set up collective commitments to harmonize their practices with the rest of the sector on an international scale, in order to limit the risk of the ‘prisoner’s dilemma’, i.e. to limit the risk associated with a lack of cooperation based on the pursuit of their own interests actually serving the collective interest.
- PRI (Principles for Responsible Investment) under the aegis of the United Nations to promote best practices in responsible investment. The recently launched Spring PRI initiative aims to enable investors to help halt and reverse biodiversity loss by 2030. Spring focuses in particular on deforestation and land degradation in sensitive areas.
- FC4S (Financial centers for sustainability) under the aegis of the UNDP to strengthen the action of financial centers to develop sustainable finance.
- NGFS (Network for Greening the Financial System) to help strengthen the role of financial players worldwide in meeting the Paris Agreement, notably by promoting the best practices of their members.
- GIIN (Global Impact Investing Network) to develop impact finance worldwide
Collective commitments to nature
- Finance for Biodiversity to support all financial sector leaders in their commitment to protecting and restoring biodiversity through their financial activities and investments.
- FSDA (Finance Sector Deforestation Action) supports voluntary financial players in eliminating the deforestation risks associated with agricultural products (livestock, soy, palm oil, pulp and paper) from investment and loan portfolios by 2025.
- Nature Action 100 is an initiative that mobilizes institutional investors to establish a common agenda for commitments and a clear set of expectations to drive companies to be more ambitious and take action to halt the loss of nature and biodiversity.
- The IPDD ( Investors Policy Dialogue on Deforestation ) aims to coordinate a dialogue on public policies to halt deforestation. IPDD is supported by 78 global institutional investors from 19 countries, representing some $10,000 billion in assets under management.
- The IAPB (International Advisory Panel on Biodiversity Certificate) is a Franco-British taskforce set up as an independent, global initiative to help unlock significant financial flows for nature through the development of high-integrity biodiversity credit markets.
The new players in sustainable finance
New players have emerged to support traditional players in their sustainable finance initiatives.
Rating agencies
Rating agencies assess assets according to ESG criteria to encourage sustainable investments by investment funds, banks, asset management companies and insurance companiesSome examples: MSCI ; ISS ; Moody’s ; EthiFinance
Certifiers & labels
Labels or other certifications are used to guarantee a financial player’s compliance with pre-defined, publicly accessible criteria. Three types of label are predominant in France: SRI, Greenfin and Finansol.
- The SRI label, supported by public authorities, is internationally recognized and aims to raise the profile of SRI management among investors. The main label in France, it is gaining in importance each year, both in terms of the number of funds awarded the label and in terms of assets under management.
- The Greenfin label guarantees the green quality of investment funds, and is aimed at financial players who act in the service of the common good through transparent and sustainable practices. It operates on the basis of stricter exclusion mechanisms.
- The Finansol label was created in 1997 to distinguish solidarity savings investments from other savings products. As such, it is limited to this perimeter, and does not in any way label an association or company as a whole.
NGO
As whistle-blowers, NGOs play an important role in raising public awareness of the practices of players in the financial sector, by highlighting their shortcomings/limitations (the amounts they invest in fossil fuels, renewable energies, etc.).Examples: Reclaim Finance, Finance Watch, Change Finance.These NGOs can also be important allies for financial players, providing them with tools to help them implement better practices.Examples include WWF, CDP, Global Canopy and Forest & Finance.
Fintechs
Thanks to their agility, fintechs are also playing a key role in developing new products and services to transform the world of finance. Examples include neobanks, regtechs, assurtech and support services for asset managers. To find out more: Discover the Panorama of Sustainable Fintechs produced by IFD and France Fintech in 2023.
Standardization players
Finally, all these players operate within a regulatory framework defined at national, European and international level.
At international level
The field of sustainable development has seen the emergence of standards emanating from public or private players, who acquire their legitimacy from the credit they are given by the various stakeholders (private players, governments).
Financial Stability Board (FSB)
The Financial Stability Board (FSB), an international body created in 2009 at the G20 summit, brings together national financial authorities, international organizations and financial standards groups to monitor and make recommendations concerning the global financial system.
International Sustainability Standards Board (ISSB)
The ISSB, a private-sector body set up in 2021 at the initiative of the IFRS Foundation (from which IFRS accounting standards emanate), aims to establish sustainability standards to facilitate extra-financial reporting by companies.
Taskforce on Climate-related Financial Disclosures (TCFD)
The TCFD, a private-sector working group set up in 2015 by the FSB, aims to push companies and organizations to communicate transparently on climate-related financial risks to enable investors to factor them into their decisions through a voluntary reporting framework structured around four guidelines (governance, strategy, risk management, indicators and targets).At the end of 2023, the TCFD was disbanded after considering that it had achieved its objectives (the publication of disclosure guidelines), and it is now up to the IFRS Foundation to monitor companies’ progress in these disclosures.
Task-force on Nature-related Financial Disclosures (TNFD)
The TNFD, a private sector working group set up in 2021 by the FSB, aims to encourage companies and investors to disclose financial risks and opportunities related to nature, biodiversity and the ecological crisis in a consistent and transparent way.
At European level
European Supervisory Authorities (ESAs)
The European Supervisory Authorities (ESAs) work to harmonize financial supervision within the EU and help ensure consistent application of the regulatory corpus. There are three ESAs: the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA).
European Financial Reporting Advisory Group (EFRAG)
The European Financial Reporting Advisory Group (EFRAG), a not-for-profit association created in 2001 with the support of the European Commission, is an advisory body to the European Council, making recommendations on IFRS. In 2021, EFRAG has been entrusted by the European Commission with the task of developing the European Sustainability Reporting Standards (ESRS).
In France
French Accounting Standards Authority (ANC)
Created in 2009, the ANC is responsible for setting French accounting rules and taking a position on international rules. It also issues opinions on all legislative and regulatory provisions containing accounting measures, and oversees the coordination and synthesis of theoretical and methodological work in the accounting field. The ANC plays an active role in the development of European corporate sustainability reporting standards.
Autorité des Marchés Financiers (AMF)
The AMF is a public authority responsible for protecting savings invested in financial products, informing investors and ensuring the smooth operation of markets. The AMF has made sustainable finance one of its priorities, creating the ‘Strategy and Sustainable Finance’ unit in 2018 and the ‘Climate and Sustainable Finance Commission’ in 2019.
Prudential Control and Resolution Authority (ACPR)
The ACPR, which operates under the aegis of the Banque de France, is responsible for supervising the banking and insurance sectors. It helps preserve financial stability and protects banking and insurance customers. The ACPR has a Climate and Sustainable Finance Advisory Commission, whose mission is to advise it on how to take sustainable finance objectives into account, and to monitor the commitments made by financial intermediaries falling within its remit.
Banque de France
The Banque de France is France’s central bank, a public service committed to ensuring the financing of the economy and price stability. The Banque de France has three missions: monetary strategy, financial stability and service to the economy and society. The Banque de France contributed to the launch of the global network of central banks and supervisors for the greening of the financial sector (NGFS), and integrates climate risk into its missions to serve the economy.