“Finance for Tomorrow is a showcase of what the French ecosystem is capable of in terms of responsible investment and green finance,” Philippe Zaouati, the initiative's chairman, explains at the launch, held 13 June at Paris Europlace. Its 40-odd members include the leading market organisations such as AFG (the French Asset Management Association), FBF (the French Banking Federation) and FFA (the French Insurance Federation). Novethic is a partner of the initiative.
The aim is to seize a rapidly-growing market by leveraging the assets of the French financial ecosystem. On offer is a full array of advantages, including “extra-financial” analysis, a range of SRI (socially responsible investing) funds, more than 400 theme funds and regulatory incentives. Specifically, the regulatory framework connects climate disclosures to SRI and green finance labels.
“The sustainable future begins in Paris” reads the slogan of the initiative, setting the course for a finance model dedicated to a sustainable future based on the Paris Agreement and the UN's Sustainable Development Goals, which have become the benchmarks of responsible investors in search of positive environmental and social impacts.
Redirect investment flows
Finance for Tomorrow is organised in the form of working groups tasked with coordinating the initiative and proposing ways to “shift the trillions”—that is, redirect massive investment flows toward a low-carbon, inclusive economic model. One of the most effective ways to do this is to invest in the green economy through various means such as green bonds, which are one of the market's most popular tools.
“Paris is the capital of the green bond market,” declared Tanguy Claquin, who heads sustainable banking at Crédit Agricole CIB and leads Finance for Tomorrow's green bond working group. “Twenty-four percent of the world's issuers are French companies, 25% of the issuances are arranged by French banks and 27% of green bonds are bought by French investors. We will bring forward projects to go even further,” he vows.
Ségolène Royal as standard-bearer
To carry the flag of French green finance, Paris Europlace, which is hosting the initiative, has chosen Ségolène Royal as ambassador. It was under her stewardship as environment minister that the Energy and Ecological Transition for Climate certification or “TEEC label”, of which Novethic is an auditor, was created. She also pushed for the French government to issue green bonds. Ségolène Royal now wants to use her stature to lend support to the Paris financial centre.
Faced with formidable competition, Finance for Tomorrow will need all the endorsements it can get. Today, sustainable finance is a key element in the fierce competition among financial centres. Tomorrow, it could become the trademark of European finance, contrasted with a City of London that is even more focused on short-term goals and complex market financing since Brexit.
Anne-Catherine Husson-Traore, CEO of Novethic, @AC_HT_