How is ESG Reporting changing and what are the driving forces?

To ensure the bank can meet customers’ evolving needs while continuing to honour its own commitment to ESG principles and reporting standards in a consistent manner, Societe Generale has embedded ESG as a guiding principle in all its strategy, governance, and business practices. We have a number of commitments to keep in alignment.

In 2001, Societe Generale become the first listed French bank to sign the Statement of Commitment by Financial Institutions on the Environment and Sustainable Development coordinated by the United Nations Environment Programme (UNEP), an initiative to mobilise private sector finance for sustainable development. In 2003, we joined the United Nations Global Compact (UNGC), the world’s largest corporate sustainability initiative, in which companies commit to put sustainability, social responsibility and governance at the heart of their business practices.

We are also aligning our strategies and activities to various Corporate Social Responsibility (CSR) charters and principles, including the UN Global Compact’s ten principles covering human rights, labour, environment and opposing corruption. This in turn led the Bank to sign the Principles for Responsible Investments (UN PRI), as well as being one of the founding signatories of the Principles for Responsible Banking.

Alignment with these initiatives helps us better understand and direct our sustainability efforts, progressing toward our targets in a more coordinated way.

Our business development goals also reflect our commitment – we are one of the five Katowice Banks to collaborate on ensuring their lending activities are aligned to the UN Paris Agreement. And Société Générale was a co-founder of the Poseidon Principles, which enables us to apply a clear framework that takes climate considerations into account when financing maritime transport – for example by using accepted standards for decarbonisation.

We are starting to see encouraging results: RobecoSAM’s (now S&P SAM) annual sustainability ranking placed Societe Generale first worldwide on environmental topics in 2019. Financial research firm Autonomous ranks the bank second in the climate risk management category, citing the quality of information in our TCFD report as ‘best in class’.

Singapore’s leadership

In Singapore, a significant number of firms have signed up to the UN Global Compact. These are a combination of large companies and small and medium-sized enterprises. A further two local companies participate in the UN Environment Programme Statement by Financial Institutions.

The Singapore Stock Exchange (SGX) requires all listed companies to issue an annual sustainability report, reflecting the international consensus on the importance of reporting on companies’ ESG progress. Societe Generale no longer considers these disclosures to be ‘non-financials.’ Instead, we classify them as ‘extra-financial performance’ in our Integrated Report – a significant step toward standardising reporting requirements across our divisions.

ESG reporting challenges

While there are clear principles and goals for ESG alignment, worldwide standardisation of ESG metrics and reporting needs to improve. Among many others, two main obstacles to clear and consistent reporting of ESG metrics still need to be overcome.

Ongoing consolidation

As a bank, we take direction from our regulators, both at home and in the countries where we operate, so regulatory requirements tend to drive harmonisation of our ESG reporting standards. The EU commission is moving fast to consolidate reporting standards, and these are increasingly reflected in Asia. Singapore’s MAS has implemented a taskforce to gather banks, insurance companies and asset managers to address this same issue, referencing TCFD in their latest report. Ultimately, we see greater consolidation of reporting standards in the near future, with the majority of companies adopting a handful of the key global standards.