France has a strong enabling environment for green finance. The government provides support for green finance through comprehensive subsidy schemes (tax programs and financial instruments), a clear climate strategy for France to which all public investments should be aligned, and a leading position as issuer of green government bonds. France benefits from the EU Taxonomy. 

With Finance for Tomorrow, Paris is one of the most active and present green financial centres. As the first central bank in Europe, Banque de France has published a Responsible Investment Report based on the recommendations by the Task Force on Climate-related Financial Disclosures (TCFD).

Green finance efforts could be further amplified by providing education on the relationship between finance and climate change in universities, school, apprenticeship programmes, and executive education.

France will further benefit from the potential implementation of the green taxonomy by the European Commissions. The French government and its agencies are heavily involved in the de- velopment of the green taxonomy. Green finance efforts could be further amplified by providing education on the relationship between finance and climate change across the board.

France obtains a good score on Supervision, Risk Management and Financial Stability. This is mostly due to a strong positioning of the central bank and supervisory authorities, and to emerging practices of supervision of climate risks for banks and insurance companies. The recent awareness of regulators and supervisors of the importance of climate issues led to a strong deployment of resources internally and within the Network for Greening the Financial System (NGFS). This translated into implementing new supervisory practices for banks and insurance companies, including advances on banking supervision. Nevertheless, climate risks could still be reflected more strongly in current prudential regulations. Climate stress tests have not been yet used but they are actively discussed with the financial industry and seem to be close to implementation.

In July 2019, DG Trésor has put in place a framework to track the commitments taken by French financial actors in the past few years, in particular regarding divestment from fossil activities: Subsequently AMF and ACPR launched a Climate and Sustainable Finance Commission each, with professionals and independent experts to track commitments. ACPR is also assessing the exposure of the financial system to climate risks through a pilot project. 

Transparency on climate related risks is relatively good due to Article 173-VI of the 2015 Law of Energy Transition and Green Growth and the incoming article 29 of the 2019 Energy-Climate Law, which requires the disclosure of an extensive range of climate related information. The article requires French investors to disclose, inter alia, how ESG criteria are considered in decision-making processes and how the ESG policy is structured, how climate related risks are identified and managed or metrics on Scope 1-3 emissions. 

Transparency on green financial products is reinforced through the EU Sustainable Finance Disclosure Directive (SFDR) and two comprehensive green labels, the GreenFin Label by the Ministry of Ecological and Inclusive Transition and the Socially Responsible Investment Label (SRI) by the Ministry of Finance. While GreeFin caters to “dark green” projects, SRI is more broadly applicable for sustainable investments.

France has translated the Shareholder Rights Directive II beyond its minimum requirements in the domain of wage transparency. Thus, the PACTE Law makes compulsory for listed companies the yearly publication of a fairness ratio, which measures the gap between executive compensations and employees’ average and median wage.

The financial market supervisor (AMF) has enhanced its supervisory activities to ensure a better quality of information provided by investment funds on their SRI policy.

A further increase in transparency on climate related could be achieved in France by focusing on improving adapting accounting standards to reflect climate related risks and increase the transparency for the consumer throughout the portfolio of financial instruments.