Societe Generale joins the Aluminum Climate-Aligned Finance Working Group

Published on: 21 June 2022
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The Bank is a member of a group of international lenders that the RMI is collaborating with to create a climate-aligned finance framework to aid in lowering the emissions that the industry finds difficult to abate.

Societe Generale announces it is joining, as a founding member, the Aluminum Climate-Aligned Finance Working Group, along with top lenders to the aluminum sector, partnering with RMI’s Center for Climate-Aligned Finance to help decarbonize the aluminum sector. The Working Group will create a collective climate-aligned finance (CAF) framework that defines how lenders can support the decarbonization of the aluminum sector, which accounts for 2 percent of all planet-warming emissions per year, and measure progress toward that goal. By signing up to the CAF framework, participating financial institutions will commit to assessing and disclosing the degree to which the emissions associated with their aluminum portfolios are in line with 1.5°C climate targets — and to do so in accordance with the guidelines set forth by the UN-convened Net-Zero Banking Alliance

The Working Group comprises senior metals and mining leaders from each participating financial institution and will be facilitated by RMI’s Center for Climate-Aligned Finance. The Working Group aims to create a CAF framework in consultation with leading aluminum and climate organizations, such as the International Aluminium Institute and the Aluminium Stewardship Initiative. The framework will create consistency and transparency in both reporting and measuring progress against climate targets. Financial institutions that adopt the final CAF framework will be able to assess the emissions of their aluminum loan books and work with their clients to report their emissions, fund lower-carbon solutions, and support investments in new technologies. 

Aluminum is an essential building block of modern life, used in everything from space travel to cell phones, yet its production is highly emissions-intensive. Producing a ton of aluminum generates more than six times the CO2 emissions generated by producing a ton of steel, for example, and requires enormous amounts of electricity. If the aluminum sector were a country, it would be the sixth largest consumer of electricity in the world. Aluminum is key in industrial processes, and transitioning the sector to net-zero emissions will be critical to meeting global climate goals.  

Working with RMI, banks have already taken the lead in developing frameworks for decarbonizing other hard-to-abate sectors like steel and aviation. Supporting aluminum’s path to net zero represents yet another once-in-a-generation opportunity for global banks.  

Citi, ING, and Societe Generale – the three Working Group leads – are recruiting more financial institutions to join the Working Group. Additionally, any institutions interested in remaining up to date with the process and providing feedback during development are encouraged to join the Review Group. To join the Working Group or the Review Group, institutions are invited to submit an expression of interest

The Working Group will establish the measurement methodology, emissions benchmark, data and reporting framework, and governance structure for the CAF framework in collaboration with existing decarbonization initiatives. The Working Group will invite other financial institutions to adopt the CAF framework in early 2023 and help set global best practices on climate for aluminum finance.  

The Center for Climate-Aligned Finance will facilitate engagement between the Working Group, leading aluminum producers, and partner organizations focused on sustainable finance to ensure the objectives of firms in the aluminum sector and their financial partners are aligned and actionable.  

Lenaig Trenaux, Global Head of Metals, Mining and Industries at Societe Generale: “ESG and sustainability objectives are embedded in Societe Generale’s corporate purpose. Following previous partnerships with RMI’s Center for Climate-Aligned Finance, Societe Generale is pleased to partner again with RMI and act as a founding member of the Aluminum Climate-Aligned Finance Working Group. Our ambition is to assist in developing a framework to measure and disclose emissions related to financings in aluminum, and support decarbonization goals of stakeholders involved in this sector. We are proud to be part of the driving force to shape the future of a decarbonized aluminum industry.”

Source: Societe Generale

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