The Institut de la Finance Durable publishes the Panorama of the energy transition strategies of financial players in the Paris marketplace

This report is part of the work carried out over the past two years by the Institut de la finance durable on the climate-energy transition and its financing. It is based on the voluntary presentation by 15 financial players in the marketplace (banking groups, insurance companies and asset management firms) of their energy transition strategy, tools and associated actions. The Institut de la Finance Durable has identified 10 practices for the efficient use of climate scenarios, which can help accelerate the energy transition dynamic and facilitate action by other international financial centers.

A Place group to share knowledge and facilitate the energy transition

More than a year ago, IFD launched a working group to share the market’s knowledge of 1.5°C-compatible climate scenarios tailored to the needs of financial players. This work led to the first publication in June 2024 of the report, “Fossil energies: analysis of trajectories compatible with a 1.5°C scenario”, which presents the main lessons of climate scenarios aligned with the Paris Agreement.

Three key principles emerge from this panorama: scientific rigor, consistency in the choice of scenarios, particularly where there is a need to supplement them with sector-specific elements, and the reflection of technological and economic developments through regular updating.

This work provides a repository of tools and practices that individual companies can draw on to fuel their energy transition strategy.

Place’s best practices for integrating energy-climate scenarios into players’ strategies, and ways to integrate transition dynamics.

The reference climate scenarios recognized by the scientific community are essential tools for implementing an energy transition strategy. The climate scenarios aligned with a 1.5°C trajectory are all based on three main pillars: massive development of low-carbon energies, electrification of uses and significant gains in energy efficiency.

The panorama highlights a number of best practices implemented by players in the Paris marketplace. In particular, the vast majority of players rely on scenarios aligned with the recognized Paris Agreement trajectory, such as those of the International Energy Agency (IEA) or the IPCC, to build their climate strategy, with a significant preponderance (80% of choices) for the IEA’s “Net Zero Emission” scenario.

In line with the scientific consensus, players are using scenarios aligned with a 1.5°C trajectory, with zero or limited overshoot, limited use of negative-emission technologies (as these are not yet mature), and realistic mobilization of the decarbonization levers available today. On this basis, players in the marketplace are developing budgeted, quantified strategies that include medium- and long-term milestones.

Some scenarios, notably those of the IEA, now track the deployment of financing and investment for decarbonized energies in relation to those deployed for fossil fuels. This opens up a more dynamic vision of the transition and its financing, and offers new prospects for players to strengthen their ability to steer their energy transition strategy.

Collective mobilization to meet the climate challenge

This panorama, a milestone for the Paris marketplace, underlines the need for a dynamic vision of the transition, and for coordination between financial institutions, political decision-makers and businesses to achieve the climate change mitigation targets set out in the Paris Agreement, which celebrates its 10th anniversary this year.