**France’s Climate Finance Leadership and Empowering Local Development Banks**
France’s President Emmanuel Macron, despite unveiling inadequate climate policies domestically, has been focusing on shaping the global conversation on achieving net zero emissions. France’s development bank and its minister of state for development are both actively working towards establishing French leadership in climate finance. They are highlighting the importance of empowering local actors and ensuring that climate investments from major Chinese lenders continue. This effort aligns with Macron’s goal of distancing France from US-China tensions. Read on for more details.
**France’s Commitment to Empower Local Development Banks**
Rémy Rioux, CEO of the Agence Française de Développement (AFD), France’s main development-focused lender, argues that despite the lack of progress at the World Bank, smaller players in development finance have been able to innovate on climate issues. Rioux explains that the AFD took action on climate before the World Bank due to its agility and the fact that it only needs to convince one decision-maker. While the AFD is solely owned by the French government, the World Bank must consider the interests of its 189 member countries when making decisions. Rioux believes that national development banks, which hold a significant portion of global development banks’ total capital, are often overlooked when discussing global financial architecture reform. He plans to urge the IMF and the World Bank to incorporate climate finance obligations into the mandates of national banks during their upcoming meetings.
Rioux asserts that locally-rooted banks are better positioned to assess risk and are more protected from currency risk compared to multilateral development banks and the private sector. He emphasizes the need for investment bankers in the Global South to identify bankable projects and mobilize national and international resources.
**France’s Political Strategy and Foreign Presence**
The AFD’s increased focus on financing national development banks abroad, rather than implementing its own projects, can be seen as a political tactic to reduce tension surrounding France’s military presence in North Africa, following recent coups in Mali, Burkina Faso, and Niger. Rioux emphasizes that the AFD is not an instrument of the French colonial empire, and wants to dispel the perception that it serves solely French interests. The AFD’s displays at its Paris headquarters showcase its connection to francophone Africa, particularly during the decolonization period in the 1950s.
**France’s Global Engagement Strategy**
Chrysoula Zacharopoulou, French minister of state for development, Francophonie, and international partnerships, highlighted France’s commitment to accelerating reform of international financial institutions during the United Nations General Assembly’s week of meetings. France aims to engage developing nations and promote a new vision of multilateralism. Zacharopoulou makes it clear that France does not prioritize Europe above all else, in stark contrast to the “America first” rhetoric during the Covid pandemic. France seeks to emphasize that China, as a major holder of African debt, is a crucial player in this new multilateralism and can play a cooperative role.
**UK Regulator Issues First Climate Disclosure Fine to ExxonMobil Pension Scheme**
The Pensions Regulator in the UK has imposed a £5,000 penalty on the pension scheme managed by oil major ExxonMobil for failing to meet new climate disclosure requirements. Since 2021, trustees of major UK pension schemes have been obligated to identify, assess, manage, and disclose climate-related risks and opportunities. The ExxonMobil scheme, with assets of around £7 billion and 20,000 members, failed to publish its report on time due to a faulty URL. This is the first penalty issued by The Pensions Regulator for breaches of climate reporting duties.
However, an external analysis of pension funds’ climate reports revealed flaws in the reporting of climate change risks. Climate reports from 17 large pension master trusts overseeing combined assets of £131 billion were found to contain inconsistent and incomplete reporting of climate change risks.
The effectiveness of UK officials in enforcing climate reporting obligations remains uncertain, particularly after Prime Minister Rishi Sunak’s decision to weaken national clean energy measures.
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