Forty years in China: Finance that is clean, green and still realistic

In China too, the adoption of Environmental, Social & Governance (ESG) standards by corporations and their investors is accelerating – with a strong initial focus on the “E”. This is being matched by public policy initiatives, such as the recent launch of a national carbon trading market. 

As one of the founding banks of the Principles for Responsible Banking, Societe Generale helped to pioneer what we call Sustainable & Positive Impact Finance (SPIF) – turning the United Nations’ Sustainable Development Goals into business opportunities for our clients by developing new financing solutions to bring about the sound and sustainable development of societies. 

We can offer strategic advice to companies embarking on a transformation to a more sustainable future: helping them to design a realistic step-by-step roadmap and to choose the right set of ESG metrics to measure themselves against. As financiers our role is very much to encourage changes in behavior. We have a prudential role to ensure that any projects our clients embark on are based on sensible commercial arrangements and with creditworthy counterparties. But we can go further by advising local and multinational companies (and the public sector as well) of the need for a clear action plan to reduce their environmental footprint if they want to increase – or, increasingly, just maintain – their access to finance.

Our track record bears this out: Societe Generale was one of the joint global coordinators and bookrunners for the first ever green bond in China back in 2015 and in 2020 we helped  to launch the first blue bond in Asia, raising money for marine-related projects including additional sewage treatment capacity and a major increase in offshore wind power. So far this year, we have helped finance hydropower facilities in South America for a Chinese client while helping another one diversify into renewables in the domestic market. 

Another facet of being a socially responsible partner is to support the local communities where we operate. In China, Societe Generale has been sponsoring educational programs for the children of migrant workers and for disadvantaged children generally, financing teacher training and better teaching facilities. More than 10,000 children have benefited from this program so far as the bank has funded the building of 21 training centers and helped to train around 800 teachers. 

Separately, Societe Generale has been supporting  the supply of preschool facilities since 2016 and helped local teachers in Hangzhou receive training in France regarding new ways to treat autism, while our staff across the region has raised more than CNY700,000 through charitable activities like sponsored cycle rides. In all these ways, we try to demonstrate our commitment to the community since finance will only prove truly sustainable if it benefits people.