European financial services leader Societe Generale announced today that it has published its updated thermal coal sector policy. The firm committed to publishing a new policy earlier this month, when it initially announced new commitments to significantly reduce coal sector exposure.
In the new publication, Societe Generale explains the purpose behind its expanded policy:
“Power generation from coal is the most CO2 intensive of power sources and significantly contributes to climate change. To be consistent with the objective set by the parties to the Paris Agreement in December 2015 of limiting global warming below 2°C, reliance on coal-fuelled power needs to be significantly reduced in the coming decades.”
“Societe Generale acknowledges it has a role to play in the transition to a low-carbon economy and supports governments and private-sector efforts towards diversification of the energy sources and wider use of renewable energy in the markets in which it operates. Therefore, the Group has committed to reduce the banking and financial services it provides to the thermal coal sector in consistency with the Paris Agreement and the Collective Commitment to Climate Action of the Principles for Responsible Banking.”
In 2019, Societe Generale committed to progressively reduce the Group’s exposure to the thermal coal sector to zero in 2030 for companies with mining or power thermal coal assets located in EU or OECD countries, and in 2040 for companies located elsewhere. In early July 2020, the firm expanded on these commitments, stating that effective immediately, it will no longer offer products and services, with the exception of those exclusively dedicated to the energy transition, to the following companies:
- Companies generating over 25% of their revenues in the thermal coal sector and which do not have a credible exit strategy from the coal sector;
- Companies developing new mining, power plant or infrastructure projects related to thermal coal.
Societe Generale has also stated that from the end of 2022, it will stop providing new financial products and services to any company with mining or power thermal coal assets or to any thermal coal developing company that does not have a communicated transition plan aligned with the bank’s 2030/2040 thermal coal phase out objectives.
Societe Generale stated that by the end of 2021 it will have reviewed its entire portfolio and will have engage with all client companies with mining or power production thermal coal assets about their transition plans and coal phase-out timeline.