Societe Generale

Challenge

While banks themselves may have a relatively marginal direct impact on nature, they can exert substantial influence through their financing activities. As key enablers of the real economy, banks play a pivotal role in steering financial flows towards nature-supportive outcomes and helping their clients in their environmental transition, while sharing in nature-related risks. Increasingly, banks are encouraged by regulators, civil society, and markets to understand and address nature-related issues within their portfolios. Against this backdrop, Societe Generale sought to take forward-looking action on this complex and emerging topic for the market. 

To enhance its understanding of the pressures of its financed activities on nature, Societe Generale engaged Quantis to refine its existing qualitative nature impact and dependency assessment (conducted using the ENCORE tool). Aiming to delve deeper and quantify key dimensions of the nature impact of its portfolio — such as the impact of its clients through both direct and indirect operations, as well as the geographical nuances of these impacts — the assessment provides a comprehensive view necessary for meaningful action. 

Solutions

Using our innovative, tailored methodology, we integrated various market-leading datasets – including client asset locations, company production data, nature pressure emission factors and geospatial nature datasets – to provide granular and accurate quantitative insights into nature impacts at the portfolio, company and even asset level. These insights were captured in a dashboard of indicators, inspired by the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) and the Science Based Targets for Nature (SBTN). 

Enabling the Societe Generale team to take action on nature was a essential for the lasting success of the project. To this end, we developed a comprehensive methodology document, and our teams collaborated closely to ensure effective knowledge transfer. 

In addition, we conducted engagement workshops with Societe Generale and one of its largest clients. These workshops aimed to build credibility for the approach, strengthen client relationships and explore collaborative opportunities to achieve their shared nature ambitions. 

Seeking a partner with leading expertise in both nature strategy and sustainable finance, Societe Generale selected Quantis to develop a more granular and refined methodology for assessing the nature impacts of its portfolio at the individual sector level. This began with a pilot in the power utilities sector, with the perspective of to replicate to other sectors.

Results

The first-of-its-kind nature impact assessment not only delivered insights into Societe Generale’s indirect pressures on nature but also demonstrated its commitment to addressing this complex issue. By understanding the nature impact of its power utilities credit portfolio, the collaboration has equipped Societe Generale with a deeper knowledge of the current science and available data in this sector, as well as a blueprint methodology that could be applied across other sectors. Building on Societe Generale’s internal capabilities around nature and empowering its internal teams, the work resulted in an in-depth analysis that considered the specific business profiles of its clients, particularly addressing the highly challenging issue of asset localization. 

At a more granular level, the partnership has positioned Societe Generale to take action in the following areas: 

Portfolio steering 

• Identify and manage critical nature pressures 
• Inform sectoral policies 
• Benchmark portfolio, monitor KPIs and set targets for strategic decision-making 

Client engagement 

• Prioritize clients and inform engagement strategy
• Integrate nature-related questions into engagement discussions 
• Identify potential business opportunities 

Reporting + compliance 

• Establish groundwork for upcoming reporting requirements. 

• Nature impact + dependency assessment
• Methodology + dashboard development
• Supplier engagement + training

• Nature Solutions

• Finance