“The savings represent a significant resource to finance environmentally positive projects and accelerate the transition”

and Maxine Sabater, Head of the ADEME’s Impact CO2 rollout, a free toolkit designed to raise awareness among professionals about carbon impact.

In this discussion, Maxine Sabater particularly focuses on the tools developed by ADEME and the methodological challenges related to integrating a “financial” dimension into the calculation of individual carbon footprints.

Why participate in the working group “My Climate Trajectory Boosted by My Savings”?

The ambition of this working group is significant. The environment is an increasing concern for many citizens. To limit GHG emissions, eco-friendly actions are a necessary response, but they are not sufficient. The economic and financial world plays a crucial role in the ecological transition: on one hand, by financing low-carbon activities and companies in transition; on the other hand, by stopping the financing of those who are not transitioning and continue to engage in harmful climate activities.

According to the Institute for Climate Economics, France would need to increase its climate investment by €30 billion per year by 2030 to stay on track for carbon neutrality. Currently, French private savings are estimated at €6 trillion, making this a considerable lever for engaging in investments that will effectively reduce global emissions. This is the core issue of this working group: shedding light on existing data, identifying gaps, surrounding ourselves with sustainable finance experts to address them, and ultimately equipping financial advisors to optimize their clients’ savings in line with climate commitments.

Could you introduce the “Impact CO2” platform and its main tools?

Impact CO2 is a free toolkit designed to help professionals calculate and raise awareness about their community’s carbon impact. Based on ADEME’s environmental data, these tools allow users to easily measure impacts and identify everyday actions or objects that “weigh” the most, enabling more informed choices.

We offer several calculators categorized by themes such as transport, food, digital services, heating, and parcel deliveries. Users can visualize the impact of different scenarios, break down emissions related to production or usage, and better understand key metrics, which is our main focus!

For example, the Impact Transport calculator is highly appreciated by cultural venues to raise participants’ awareness of the carbon impact of their travel to museums, theaters, or football stadiums. It can now be found on hundreds of practical information pages across the web or on certain real estate listing sites.

To bring carbon data to life, our Carbon Comparator serves as a “CO2e calculator”: converting a quantity of CO2e in kilograms into the number of beef meals versus vegetarian meals, or the kilometers traveled by thermal car versus electric vehicle. It is used by companies to illustrate an impact report and communicate meaningful data to their employees or customers.

More recently, we have leveraged nearly 200 carbon equivalences from the Impact CO2 site to develop a new tool: the Carbon Quiz, a series of 10 questions designed to test knowledge and learn while playing!

What are the main differences between “Impact CO2” and the “Nos Gestes Climat” platform, also offered by ADEME?

These two tools are often confused because they were originally part of the same platform: Datagir, ADEME’s first government startup! Today, these services are distinct but highly complementary.

Nos Gestes Climat is a public tool for measuring individual carbon footprints. In less than ten minutes, the user answers a series of questions about their consumption habits and receives an estimate of their annual carbon footprint. The interface is smart: based on responses, it suggests concrete actions to reduce impact, item by item, to reach 2 tons annually by 2050. Recently, the tool has also included the option to calculate one’s water footprint, encompassing all the water used to produce and distribute the goods and services we use daily.

Impact CO2, on the other hand, is a resource catalog (calculators, infographics, APIs, etc.) aimed at businesses, media, associations, or local authorities who wish to raise awareness in their communities. Our users are professionals who then provide educational information to their clients or audiences based on our tools. The two sites complement each other well!

Why develop these tools?

Initially, the main goal was to make ADEME’s environmental data on carbon accessible and understandable. With so many information sources available, it can be difficult to obtain open, up-to-date, free, and scientifically validated data from a recognized body. Furthermore, the “CO2” metric is not always easy to grasp, which is why it needs to be simplified.

Thus, there are two key challenges: on one hand, the scientific challenge of ensuring data quality, and on the other, the educational challenge of making it easier to take action. For citizens, it’s important to better visualize what a kilogram of CO2 represents to raise awareness of scale. For professionals, having accessible, credible, and engaging resources is key to driving collective mobilization!

Is it possible to calculate the carbon footprint of one’s savings?

Today, when thinking about carbon footprints, we typically refer to the “direct” footprint from consumption (transport, housing, food, etc.). This is the methodology behind the Nos Gestes Climat test, ADEME’s flagship simulator. However, there is another way to calculate the carbon footprint: based on our bank accounts, and more specifically, our savings, part of which is used to fund polluting fossil projects both in France and internationally.

By reasoning in terms of “carbon intensity,” that is, emissions generated by each euro invested by a bank into the economy, Oxfam France developed a calculator to estimate the carbon footprint of our bank accounts in six French groups. This is a very enlightening tool to raise awareness and remind us how much our money contributes to CO2 emissions, even though it shouldn’t be valued in the same way as emissions associated with real economic activities.

Does Impact CO2 currently account for this dimension in its calculations?

At present, this dimension has not yet been integrated into Impact CO2 because we exclusively rely on ADEME’s data and studies to enrich the site, and this topic presents conceptual challenges. Indeed, it doesn’t seem relevant to compare the emissions from finance to those from other sectors, except in a highly cautious and awareness-raising context. So, if we were to incorporate finance into our CO2 tools, we would need to consider different indicators than carbon accounting, particularly those based on the “green shares” of portfolios and how savings are managed by the bank or account manager (evaluation framework for companies in transition or not, exclusion policies for non-virtuous actors, etc.).

We are closely following new ADEME publications that might provide us with actionable data on this topic. There are already several articles, videos, and guides for the public (“Saving for the Future: Sustainable Finance in 7 Questions”) on the Agir pour la transition website, which is a goldmine for many stakeholders!

What are the main challenges in integrating this dimension into the overall calculation of an individual’s carbon footprint?

I would say the main challenge is methodological: if we combine our direct carbon footprint (Nos Gestes Climat approach) with that from the savings available in our bank account (Oxfam approach), it creates a “double count.” Indeed, our savings logically fund these real consumption activities: accounting for both flows would create redundancy, multiplied if we consider subsidiaries.

If the banking dimension is not included in the Nos Gestes Climat calculation model for the reasons mentioned above, there is still an “Action card” for “Placing Your Money Well” at the end of the test. To “decarbonize” one’s money, it is recommended to choose an ethical bank for your current account and/or savings account, become a shareholder of an engaged cooperative, or invest in ecological transition projects (renewable energies, agricultural land preservation, positive-impact companies, etc.), though the last option may carry risks.

Finally, some eco-banks strive to assign a “carbon score” to each transaction line on a current account. This approach is interesting for providing a sense of scale behind every euro spent, even though it is still difficult to obtain a comprehensive view of what is behind a supermarket or travel agency receipt. And if we are less concerned with the product purchased than with the company producing it, then what should we base our calculations on: emissions from the company’s activities at the national or global level? The carbon footprint of its executives, shareholders, employees?

Company data often proves fragmented and questionable, just as it depends on market fluctuations. Furthermore, carbon accounting is inherently “backward-looking,” as the financial institution must wait for the company to release its data before calculating its carbon footprint. These are all barriers to effectively combining financial data with individual carbon footprint data!

What else stands out from this first workshop?

From this first meeting, I note that it is useful and necessary to bring together different stakeholders (banking, institutional, media). Whether they are “traditional,” like La Banque Postale, ADEME, and L’Agefi, or newer, like ID, L’Info Durable, and Helios, this allowed everyone to share their ideas and ongoing projects in their sector. There are many puzzles to solve, especially from a methodological point of view, in order to build a tool capable of assigning a precise impact to financial products.

Indeed, since 2022, new regulations require financial advisors to consider savers’ sustainability preferences when offering them suitable products. This is a crucial step to redirecting flows toward less carbon-intensive investment and savings solutions, at a time when less than 10% of European activities are considered “green” today. Therefore, it is essential to collectively work towards a more ecological economy, capable of effectively combating global warming, and our working group is one way to contribute to the effort!

Today, several labels already exist to inform savers about the “sustainable” nature of the products they invest in. Why are they not always sufficient?

Labels play a crucial role in identifying funds that meet environmental and/or social criteria. In the French market, there are five main labels: ISR, Greenfin, Finansol, CIES, and Crowdfunding for Green Growth. These labels have been independently audited and continuously evolve to improve the integration of these criteria.

However, to date, there is no regulatory definition of what constitutes a “sustainable” investment. As a result, behind this characteristic, there can be financial products of very uneven quality, even for funds classified under Article 8 and 9 of the European Sustainable Finance Disclosure Regulation (SFDR).

It is therefore not always easy to navigate, depending on the national or European scope of the labels, the range of activities covered or excluded, or even the jargon used (such as the alert raised in 2022 by Reclaim France about the issuance of a “green bond” by various international banks to finance the expansion of Hong Kong’s airport).

At the European level, ADEME coordinates the “Finance ClimAct” project, aimed at improving the tools and methodologies available to savers, financial institutions, and businesses to integrate environmental objectives into their investment and placement decisions, with clear and comparable information.

Content written by Max Morgene.