Responsible finance from A to Z (Part 1/3)

Today, we're offering you a blog post that's a little different from the others. Why? Because it's a glossary that brings together vocabulary specific to the field of responsible finance. Therefore, think of it as a reference for responsible savings and green investments. You can use it to better understand this sometimes obscure sector. Discover the jargon of responsible finance with Enerfip!

Also read about responsible finance:

• Green finance from A to Z (Part 2/3)
• Ecological Finance from A to Z (Part 3/3)

Paris Agreement

Are you familiar with COP21? Are you familiar with this event? This is when international discussions led to the Paris Agreement. But what is it? It is a historic event dating back to 2015, during which 194 Parties (193 States and the European Union) committed to reducing their greenhouse gas emissions by setting their own targets. Why? To keep global warming between 2 and 1.5 degrees.

→ If you are interested in this topic, read our article on COP28 without further delay!

Why is the Paris Agreement important for sustainable finance?

You have probably already noticed that certain financial products, such as life insurance or funds, are marketed as "aligned with the Paris Agreement". But do you know why the Paris Agreement is crucial for responsible finance? It provides an international framework to combat climate change by reducing greenhouse gas emissions. By setting a target of 1.5°C for global warming, the Paris Agreement encourages increased transparency in environmental, social, and governance (ESG) performance, as well as the integration of the Paris Agreement's objectives into investment policies and decisions. This is what Enerfip is proposing through these impact products (reducing impact in terms of CO2 emissions) from the world of responsible finance!

ADEME

ADEME, the energy transition agency, aims to combat global warming and resource degradation. It is committed to accelerating the transition to a more sober and united society, creating jobs, and being more humane and harmonious. It mobilizes citizens, economic actors and territories in order to give them the means to progress. Faced with the environmental emergency, Ademe has set ambitious objectives to meet the challenges of the ecological transition, in order to build desirable futures in a low-carbon world.

→ Among the actions implemented by Ademe, we invite you to discover what the SERD is.

Ademe's “4 “typical” paths, coherent and contrasting, to lead France towards carbon neutrality”

Have you ever heard of the prospective transition scenarios proposed by Ademe? What does this exercise consist of? What is the objective? Enerfip synthesizes for you the 688-page “Transition 2050” report from Ademe.

Based on the same logic as the four IPCC scenarios presented in the 2018 1.5°C special report, they are designed for metropolitan France and based on the same macroeconomic, demographic and climate change data (+2.1°C in 2100). The ultimate goal, of course, is to build different scenario profiles that allow us to achieve carbon neutrality and explore the various implications.

The 4 “typical” paths, coherent and contrasting, to lead France towards carbon neutrality, from Ademe, highlight:

• a declining energy demand;
• more than 70% of renewable energy;
• a growing share of electricity;
• the virtual disappearance of fossil fuels;
• a gas vector that maintains a consumption base;
• a more or less significant use of carbon sinks;
• growing biological sinks in scenarios 1 and 2 thanks to forests and changes in agricultural practices;
• 2 scenarios limit the use of irrigation;
• less household and similar waste;
• at least doubling the use of biomass.

Agenda 30

A universal program for sustainable development, the 2030 Agenda aims to transform the world by eradicating poverty and inequality. To ensure the ecological and inclusive transition by 2030, 17 sustainable development goals and their 169 targets have been set. They encompass current and future sustainable development issues such as climate, biodiversity, gender equality, economic prosperity, agriculture, education, etc. In short, all countries must implement the entire agenda, with the same degree of ambition, while taking into account the variety of situations.

What are the Sustainable Development Goals (SDGs)?

Adopted in 2015 by the UN as part of the 2030 Agenda, the SDGs aim to address major global challenges such as poverty, hunger, education, gender equality, health, climate change, etc. Why were 17 SDGs created? Because each of them offers a universal framework, which helps guide the initiatives of governments, businesses, and society toward a fairer and more sustainable future, for example through responsible finance.

Autorité des Marchés Financiers (AMF)

This independent entity is responsible for protecting invested savings, informing investors, and ensuring the proper functioning of financial markets. Actions include providing information to savers via its website and hotline, mediation to resolve disputes, supervising financial operations to ensure transparency, and regulating financial products. savings and financial players, as well as market surveillance with powers of investigation and sanction in the event of non-compliance.

Did you know?
Enerfip is a responsible finance platform approved by the Autorité des Marchés Financiers as a European Crowdfunding Service Provider under No. FP-20222.

Article 29 of the Energy and Climate Law

Even if Article 29 of the Energy and Climate Law doesn't mean much to you, you probably know more about it than you think. Article 29 requires financial players whose assets under management exceed €500 million to publish, on the one hand, the impacts of their portfolio on climate change and biodiversity erosion and, on the other hand, the vulnerability of their portfolios to these two themes. Concretely, what does this mean?We need more transparency! Financial players must now explain the policies put in place to take this type of risk into account in their investment strategy.

Life Insurance

Did you know?
Life insurance is the number one savings method in France!

→ Life insurance contracts reached €1,842 billion at the end of December 2022.

What is life insurance? It is a contract through which the insurer undertakes, in return for the payment of premiums, to pay an annuity or capital sum to the insured or their beneficiaries. This medium- or long-term savings product allows to make payments, more or less regularly, with no amount limits.

Prudential Supervision and Resolution Authority (ACPR)

Reporting to the Banque de France, the ACPR supervises financial players (banks, insurance companies, crowdfunding platforms offering loans, etc.) in France. Its mission is to maintain financial stability, protect customers, and combat money laundering and terrorist financing.

Congratulations, you have just finished reading the first part of our dictionary of responsible finance! The rest is coming next week. In the meantime, we invite you to visit our crowdfunding platform dedicated to the energy transition. Without further ado, discover our committed projects for a greener world!