For François Marchal, the Green Value Chain program has made it possible to accelerate investment decisions by business leaders
Societe Generale Bank (SG) Morocco received, on May 10 in Marrakesh, the “Golden Sustainability Award for Financial Intermediaries” issued by the European Bank for Reconstruction and Development (EBRD). For François Marchal, managing director of the bank, financing for sustainable development has risen to the status of a strategic priority within the Moroccan bank. It is also of great concern to its clients, who have expressed a strong need for support and financing in this area, in order to strengthen their position in global value chains.
Le Matin: Société Générale Morocco just won the “Golden Award for Sustainability for Financial Intermediaries” from the European Bank for Reconstruction and Development. What does this distinction mean to you?
Francois Marchal: This distinction is a recognition of our commitment to supporting our clients in their transition to a sustainable and green economy. A commitment based on civic values as well as on the prevailing partnership logic with our clients and the expertise of our resources in every aspect of our banking business.
Société Générale Morocco is one of the main partner banks of the European Bank for Reconstruction and Development to promote green finance in Morocco. What are the objectives of this partnership?
Financing for sustainable development, particularly in the component related to the energy transition, has been raised to the position of strategic priority at Societe Generale Maroc. This is also a major concern of our clients, who have expressed a strong need for support both in terms of the technical design of the projects and in terms of funding. The main objective of our partnership with the European Bank for Reconstruction and Development is to accelerate investment decisions and implement projects with a positive environmental impact by Moroccan companies. This innovative partnership, which stands out from the traditional financing approach, leads to a support system as well as a set of incentives aimed at enhancing the competitiveness of Moroccan companies in a sustainable way.
Indeed, in the logic of the long-term partnership that we build with our customers, it is necessary from our point of view to enhance their adaptation to future challenges in order to ensure their competitiveness and flexibility, which continues to depend on cost optimization as well as secure access to key global markets – whose requirements are increasing Environmental stringent. The climate challenge is critical, and the Kingdom has made strong commitments in this field, as part of a global dynamic. It is also a real opportunity for Moroccan companies to strengthen their position in global value chains. Recent events and the outcome of the war in Ukraine strongly testify to the need to reduce our dependence on hydrocarbons, by developing frugal approaches in terms of raw material consumption.
So far the two institutions have collaborated on two programmes: the Green Value Chain (GVC) and more recently GEFF. What solutions does SG Maroc offer to customers through these two mechanisms?
Our business sales teams are trained in energy transition issues and solutions, giving them the ability to identify their needs in the field and the opportunities they can seize, as well as their eligibility for the programs we publish with the European Bank for Reconstruction and Development. In order to best meet the technical and financial support needs of Moroccan companies, SG Maroc and the European Bank for Reconstruction and Development offer comprehensive solutions including technical assistance on these environmental issues, provided by expert consultants in their sector, as well as an investment grant of great importance. Reduces the cost of financing. Thus, this financing is structured by our teams based on verified assumptions and investments, in the form of bank credit or leasing via our affiliate Sogelease. Thus, this approach makes it possible to better calibrate the investment while facilitating its financing and its profitability.
What is your assessment of global value chains, already in the market?
As part of the Green Value Chain Program, with a budget of 200 million dirhams, we have supported dozens of Moroccan small and medium-sized companies in their investments aimed at modernizing their facilities or increasing their production, while reducing the environmental impact of their activities. All sectors of the economy are involved, from the food industry to the chemical and pharmaceutical industries, including furniture. This program has made it possible to expedite the investment decision-making process by business leaders, assuring them of the sustainability of their project and the sustainable nature of the accompanying financing. The environmental benefits are very significant, with the implementation of each project making it possible to avoid several tens of tons of carbon dioxide emissions. The importance of this support model has also led to the continuation of the partnership with the EBRD through the Green Energy Financing Facility Line (the Bank signed a new financial agreement with the EBRD in early 2022 worth €25 million, in relation to the GEFF line of interest Moroccan companies, editor’s note).
Overall, how does Société Générale Maroc align its credit and investment portfolios with the goals of a green and sustainable transformation?
Société Générale has been committed for many years to reducing the environmental footprint of the projects it funds, particularly through the application of the principles of neutrality. It is also committed to adapting its portfolio of activities and financing for inclusion in the path to limit global warming to 1.5 degrees. The group is also a founding member of the UN Environment Programme’s “Net Zero Banking Alliance”, which plans to achieve carbon neutral portfolios by 2050. The group’s commitments are mainly reflected in two ways at Societe Generale Morocco. On the other hand, the systematic analysis of the environmental and social impacts of all project financing, with the gradual withdrawal of some activities – such as coal, within the framework of sectoral policies. On the other hand, Société Générale Maroc is increasingly promoting the financing of projects with a strong positive environmental impact, while developing strong expertise in these topics for the benefit of our clients.
How is taking ESG standards into account a challenge for the banking sector?
Banks’ consideration of social and environmental standards is essential for two reasons. First of all, it is a major steering lever for economic players, complementing increasingly stringent regulations. It is also a strong expectation expressed by both citizens and governments around the world. Taking into account environmental, social and corporate governance standards requires banks to radically modify some methods, innovate to facilitate the acceptance of our customers and adopt the means of production that are more suitable for the environment and the interests of the population. Getting ready for the future with our clients is the essence of banking.
What are your plans for green finance in Morocco?
As part of the follow-up to the “Grow with Africa” strategic programme, we have set ourselves a target for 2025 to double positive impact funding, as set by the United Nations. To do this, we will continue to deploy partnerships and support financing of renewable energy projects. This translates into designing customized offerings for certain priority sectors as well as easily replicable technology solutions, which will further enhance our leadership in this field.
The interview was conducted by Moncef Ben Hayoun