Societe Generale Launches a Sustainable Global Transaction Banking Framework

Published: May 30, 2024

Societe Generale paves the way for responsible global transaction banking (GTB), supporting its clients in their move toward a more sustainable and inclusive economy.

In the face of changing market expectations and the absence of established market standards for sustainable GTB solutions, corporates have increasingly been looking to quantify the impact of their transactions and fulfil corresponding reporting requirements. Societe Generale has thus developed a Sustainable GTB Framework to help its clients assess and monitor the environmental and social impacts of their day-to-day working capital, trade, and liquidity management.

Societe Generale’s Framework, one of the first dedicated to asset based GTB solutions, helps corporate treasurers to support their company’s transition by identifying:

• Activities considered to have positive environmental and/or social impact,
• Approaches for reporting the impact of these transactions,
• And methods through which transaction banking can support these activities.

This Framework is based on an efficient and transparent ESG¹ qualification process. This methodology has been established in the spirit of best market practices, such as the Green or Social Loan Principles², while considering the specificities of global transaction banking. To ensure a robust framework, Societe Generale enlisted ISS-Corporate as an independent reviewer, to evaluate the qualification system’s core elements for identifying sustainable GTB solutions and assessing the eligibility criteria.

David Abitbol, Head of Global Transaction and Payment Services at Societe Generale, says:

“The Sustainable GTB Framework is a key milestone in Societe Generale’s ambition to be a leading bank in ESG and a trusted partner for its clients. We are building on the Bank’s expertise in the environmental transition and its capacity to develop innovative pathways.”

“The Sustainable GTB Framework adopted by Societe Generale represents an important innovation in the finance sector and it is consistent with our sustainability strategy,” says Federico Pezzolato, Executive Director, Global Sustainable Finance Manager at ISS-Corporate. “The Framework provides a structured approach to classifying transaction banking products based on their sustainability impact. It supports the advancement of services with clear environmental and social features and offers a detailed explanation of the process for identifying qualifying transactions.”

The Framework focuses on sustainable GTB solutions offered by Societe Generale to large corporates. This includes cash management (such as working capital loans), trade finance (such as trade facilities, guarantees, letters of credit, stand-by letters of credit), and factoring services (such as receivable finance and forfaiting).

Societe Generale is a member of several international alliances working on benchmark economic and financial standards. The Group has been at the forefront of the UNEP‑FI’s Positive Impact Initiative, which brings together financial institutions to work on laying down the principles and methods to augment the positive impacts and mitigate the negative impacts, thus contributing to the 17 Sustainable Development Goals.

_{(1) ESG: Environmental, Social and Governance criteria}

_{(2)  This also includes (but does not limit to) the “Technical Screening Criteria” (TSC) defined by the European Union’s taxonomy on green activities, the guidelines for the United Nations’ Sustainable Development Goals (SDGs), the Green and Social Bond Principles.}