To respond to the climate and social emergency, Crédit Mutuel Alliance Fédérale continues to make change in banking and insurance through the Institut Mutualiste pour l’Environnement et la Solidarité
The cost of global warming for the French economy surpassed €50 billion in 2023 (2 points of GDP)1. As an illustration, droughts, floods, hail and storms cost insurers €74.1 billion between 1989 and 2019. With climate change accelerating, this figure could jump to €143 billion (+93%) by 20502. At Assurances du Crédit Mutuel alone, the cost of weather events has reached €807 million over the last two years.
No insurer and no bank can thrive in a world that is not flourishing. As the planet moves towards a warming level of 3 degrees centigrade, it is vital that everyone plays their part. Insurance can do this by pooling risks to provide protection today and the bank by financing the changes needed for a decarbonized future.
As the ninth largest bank in the eurozone, the tenth largest insurer in France and the bank used by one in every three companies, Crédit Mutuel Alliance Fédérale is fully committed to meeting these major challenges in a society that is already experiencing rising inequality. The Institut Mutualiste pour l’Environnement et la Solidarité, under the direction of Laurent Berger, will be the center piece in achieving the objectives of the 2024-2027 Togetherness, Performance, Solidarity strategic plan. Its role is to reduce the mutualist group’s carbon footprint by 20% and to support all our business lines in their environmental and societal transformation, for the benefit of our 31 million customers.
The Institut Mutualiste pour l’Environnement et la Solidarité is concrete proof that companies – like public authorities – can implement powerful levers to support the transition to a low-carbon economy. In this capacity, it intends to bring together experts that can devise financial solutions that serve the environment and solidarity objectives.
This ambition follows on from the major transformations already carried out by the mutual insurance group, one such action being the removal of the requirement for health information in order to gain access to home ownership or the Societal Dividend. The Societal Dividend is an unprecedented value-sharing mechanism that has already mobilized more than half a billion euros to build a more sustainable and inclusive world.
Climate data, the compass steering finance for the climate
Crédit Mutuel Alliance Fédérale was the first bank to adopt the status of a benefit corporation in 2020. As part of this, It adopted five goals, broken down into 5 commitments. By contributing to the United Nations Sustainable Development Goals and adopting a trajectory compatible with the Paris Agreement, these commitments have helped to significantly reduce the direct footprint of the group and its financing3.
The bulk of the group’s carbon footprint is due to its customers’ emissions. The Institute will provide the tools and expertise needed for all of the banking and insurance activities to gradually improve how they take the environmental issues of their customers’ projects into account and thus reduce their impacts. For companies, this dimension will eventually be supplemented by an assessment of their social performance and the quality of their governance.
To achieve this, the finance business lines need viable information because ESG data is the cornerstone of this transformation. The Institute and the networks are responsible for collecting this data and for making sure it is reliable so that relevant measures can be developed, including for the individual and small business markets.
In-depth knowledge is necessary to be able to prioritize virtuous projects and design tailored offers that will encourage customers to commit to transition projects. This is vital given that two-thirds of corporate financing comes from banks.
Concrete priorities to transform business models
The Institute will focus on financing and supporting environmental transformation. ESG criteria will be integrated into the group’s business models, which will gradually contribute to a fairer and more sustainable society.
Eco-renovation will be a key component. With more than one million homes to be renovated per year in France until 2050, the group will mobilize the expertise, financing and digital tools needed to support its customers, focusing on the elimination of fossil fuel sources and on energy efficiency measures. A dedicated function will be created in 2024.
As the second largest agricultural bank, Crédit Mutuel Alliance Fédérale is strengthening its commitment to the agricultural sector by working to provide innovative solutions to support farmers in their transition and help them deal with the consequences of climate change. February 2024 saw the introduction of an exclusive financing solution for new farm facilities committed to a sustainable approach.
With regard to social issues, the mutual insurance group will continue to fight social divide and inequality by stepping up the development of adapted banking offers and directing patronage towards projects with a strong societal impact.
The strength of the mutualist model mobilized for the benefit of all
Crédit Mutuel Alliance Fédérale believes that in order to respond to the environmental and social emergency, banking and insurance must take a broad approach that benefits many rather than selecting the “right” customers at the expense of the “wrong” ones. This is the mutual exception that will underpin the Institute’s approach, in particular by defending the insurability of customers in all regions.
Because the mutual group belongs solely to its members, it prioritizes the common good. In 2020, Crédit Mutuel Alliance Fédérale began a process to fully disengage from the coal sector and has stopped financing new oil and gas projects.
Crédit Mutuel Alliance Fédérale intends to expand its environmental commitments beyond its carbon goals by having a positive impact on its ecosystem. The Institute will be responsible for developing a policy to combat deforestation and to assess and reduce the biodiversity footprint of its financial activities.
As a mutual group, Crédit Mutuel Alliance Fédérale reiterates its conviction that true wealth lies in people power. This transformation cannot take place without the commitment of all: 100% of employees and elected members committed to environmental and societal transformation. The Institute’s mission is to provide the resources for this commitment, through training, awareness-raising and expertise.
Since its inception, Crédit Mutuel has stood out for its pioneering spirit. In the 19th century, it dealt with usury practices, in the 20th century it chose to pool large numbers to bring about social progress with the invention of bancassurance. In the 21st century, as a benefit corporation, we continue to transform banking and insurance to serve the climate emergency and solidarity.
As the 9th largest bank in the eurozone and the 10th largest insurer in France, we are not shying away from our responsibilities. On the contrary, our strategic plan is clear: capture and innovate in such a way that we are a bank that finances adaptation to climate change and an insurer that promotes the insurability of as many people as possible.
Banking and insurance can’t do everything, but they have a role to play. On a planet with limited resources, we are at a crossroads. Either accept the idea that the world will be an even harder and more chaotic place to live in, or reinvent ourselves to ensure progress. The Institut Mutualiste pour l’Environnement et la Solidarité, which I am proud to lead alongside recognized experts, is a formidable tool for directing this necessary environmental and societal revolution.
