As the post-lockdown economic recovery comes into focus, ENGIE is once again asserting its commitment to a transition to carbon neutrality. Sustainable finance, also known as green finance, is one of the major drivers that the Group is relying on for financing and developing its activities on the road towards sustainability.
Sustainable finance or green finance refers both to the allocation of financial resources to projects with positive social and environmental impact and the tools that will accelerate their implementation. At ENGIE, sustainable finance is a tool for financing energy efficiency, renewable energy, energy storage, electricity infrastructure and green mobility projects. These projects contribute to reducing CO2 emissions. Through the concept of sustainable finance, the Group’s various actions can also be combined to maximize its positive impact: responsible taxation, ambitious CSR (Corporate Social Responsibility) objectives, investments in companies working to achieve the UN’s Sustainable Development Goals, etc.
ENGIE is now the leading corporate issuer of green bonds, representing a total amount of more than €11 billion issued since 2014. They are financial tools for financing the development of renewable energy or energy efficiency projects. ENGIE issues them on a bond market; financial players buy them against a fixed and guaranteed income over a specified period.
In 2020, more than one third of the bonds issued by the group are green. These tools contribute to ENGIE’s transformation towards carbon-free assets and energy services. The Group publishes an impact report whenever a green bond is issued, allowing it to calculate the CO2 emissions that have been avoided or reduced. The main projects financed by the Green Bond issue in January 2019 should help prevent the emission of at least 3.43 million tonnes of CO2eq per year.
Projects that can potentially be financed by green bonds are required to comply with the ethical, social and environmental criteria laid down in a framework devised by the extra-financial rating agency, Vigeo Eiris.
ENGIE now considers carbon impact a disqualifying factor in investment decisions. “The major trend is the increasing integration of CSR criteria and the internal price of CO2 into our investment decisions in the same way as financial criteria,” explains Judith Hartmann, ENGIE Group EVP and Chief Financial Officer. In concrete terms, applying an internal carbon price means ensuring that investments would still be profitable after the application of a carbon tariff by legislation.
Reflecting its leading role in the development of sustainable finance, ENGIE is a member of the board of the Finance For Tomorrow initiative run by Paris Europlace, an association of French companies and public players seeking to accelerate the commitment to green finance and strengthen synergies.
In June, ENGIE also joined the group of companies endorsing the B Team Responsible Tax Principles. This initiative, launched in 2018 at the UN by investors and representatives of international institutions, is working towards a fairer global tax regime. For ENGIE, this means paying its fair share of taxes in the countries where the Group operates.
“Our ambition is to be among the pioneers in the cooperation between businesses and tax authorities to design a sustainable tax environment. A fair application of tax law and a constructive cooperation with tax authorities is fully in line with ENGIE’s purpose statement,” says Judith Hartmann.
Guided by its purpose “to act to accelerate the transition to a carbon-neutral economy,” ENGIE continues to implement its strategy of becoming the leader in the carbon-neutral transition.
This purpose becomes a reason to act, which is expressed in particular in the 19 new concrete objectives of Social Responsibility and Environmental policies established for 2021 and 2030. These objectives, aligned with the UN's Sustainable Development Objectives (SDOs), enable the Group's financial and CSR performance to be monitored as closely as possible.
The Group’s Chief Sustainability Officer, Anne Chassagnette, says: “Driven by the growing involvement of its consumers and stakeholders, and also by the recommendations of financial players and the Task force on Climate-related Financial Disclosures (TCFD), the Group is now well on course to balancing financial performance and CSR performance.”
The Group also created the ENGIE Rassembleurs d’Energies investment fund back in 2014 to provide support for social entrepreneurs acting to promote the UN’s 17 SDGs. As at the end of 2019, this represented an investment of €34 million in businesses with social and environmental aims. Worldwide, 8.9 million people have benefited from the Group’s sustainable energy access programs.