Newsletter - EACB Monthly Interview - N.3 July 2017
Etienne Pflimlin is the Chairman of the EACB CSR working group and the EACB Task force on Green and Sustainable Finance. He is a graduate of Ecole Polytechnique and Ecole Nationale d’Administration. Since 1985, he was successively Chairman of Crédit Mutuel Center Est Europe, Banque Fédérative du Crédit Mutuel and Confédération Nationale du Crédit Mutuel. He is currently Honorary Chairman of Crédit Mutuel, a member of the EACB’s Executive Committee and of Cooperatives Europe’s Board of Directors.
Mr. Pflimlin, the debate and initiatives on sustainable finance are particularly relevant today, what is - in your view – the role of co-operative banks?
Sustainable growth, energy transition and the development of renewable energies concern everyone: citizens, political and economic players and of course banks. Co-operative banks are particularly concerned with sustainable finance because, since their creation, they have been financing local economies and have long been involved in the fight against global warming. As companies, they often have developed eco-responsible policies and are seeking to improve their buildings' energy efficiency. As expert financial partners, they have developed innovative techniques and products to support sustainable projects for individuals and enterprises.
They were among the first to develop and issue green bonds, which allow investors to finance projects or activities that generate direct environmental benefits.
As local banks and retail banks, co-operative banks whish above all to develop the taking into account of new behaviors and consumption. This is why social and environmental criterias are increasingly taken into account when financing important projects (protection of ecosystems and biodiversity, reduction of greenhouse gas emissions ...). True, the methodologies are still under development and reflexes are not always systematic, but co-operative banks are discussing, both at national and European level; the best measures to be implemented at all levels.
What are your expectations on the High Level Expert Goup on Sustainable Finance mandated by the EU Commission to put forward recommendations by end of 2017?
We expect HLEGSF to contribute to collective reflection and a common definition on these topics, on the methodologies for identifying and assessing green finance, whose outlines are sometimes still unclear. The crossing of expertise at European level can enable the EU to open up new forms of responsible financing that encourage the energy transition and the financing of renewable energies. We would like that the retail banking sector is strongly taken into account, despite being underrepresented in the HLEGSF, in the strategic thinking to scale up the financing of the energy transition because our co-operative banks can influence the behavior of the businesses behaviors and reduce the environmental impacts and the ecological footprint of regional economies. The EU can become the leader of green and sustainable growth if it pursues the search for industrial and financing solutions while weighting on energy consumption patterns.
What are the EACB initiatives in the context of sustainable finance and energy transition?
Many co-operative banks have adopted stringent sectoral policies and reoriented some of their funding and investments towards "low carbon" projects.
This strategy is used both to finance investments that improve energy efficiency and reduce carbon emissions and to build sustainable infrastructure: viability of drinking water, sewage, electricity, phone, public transport networks and waste management. Sustainable finance is a subject that is now being discussed at each European meeting, exchanges of good practices are organized ... It is essential to build common thinking and responsibility. Thus, the EACB was the only European banking organization to commit itself to the objectives of COP 21. And the only one to set up a dedicated task force. Most cooperative institutions have subscribed to the Ecuador Principles and the Financial Initiative to accompany the United Nations Environmental Protection Program (UNEP FI), of which the EACB is a supporting member. And we made concrete proposals to the HLEGSF. On the other hand, wouldn't it be the best way to promote sustainable finance, than by promoting and strengthening co-operative banks, given their resilience and long-term vision?
This strategy comes in also the in retail banking activities. This is why we support the idea of a "green supporting factor" that would ease the capital constraint on green financing in order to facilitate the mobilization of all local co-operative banks and, more broadly, all retail banks.