New climate indicator helps companies align with Paris Agreement
The Banque de France is rolling out a free climate indicator to help companies assess their greenhouse gas emissions trajectory and climate risk exposure. Launched in 2024 for key sectors, the tool supports alignment with the Paris Agreement and aids transition financing.
Assessing climate alignment and risk exposure
The Banque de France is deploying a comprehensive climate indicator to assist companies in navigating climate change challenges.
This free public service tool offers an assessment of both transition climate risk (TCI) and adaptation to climate change.
The TCI, launched in 2024 for high-emitting sectors like electricity generation, real estate, and transport, helps companies align their future greenhouse gas emissions trajectory with the Paris Agreement's 1.5°C target.
Over 1,500 indicators have already been assigned, providing a benchmark for transition financing.
The adaptation dimension, expanding from early 2026, will measure exposure to physical climate risks across geographical areas in France.
Robust methodology for forward-looking assessment
The climate indicator is built on robust methodological principles, developed with the French Agency for Ecological Transition (ADEME) and its ACT methodology.
It adopts a forward-looking approach, focusing on future greenhouse gas emissions and short-term investment planning.
The methodology incorporates a physical vision, calculating carbon intensity based on physical output, and emphasizes tangibility, only accounting for credible, documented decarbonisation actions.
It is sector-specific, adapting to diverse emission sources and decarbonisation levers.
Data collection aligns with CSRD and VSME standards, minimising company burden by leveraging existing non-financial information.
A crucial step for corporate climate action
The Banque de France's climate indicator offers a crucial public service, empowering companies with free, robust tools for climate transition and adaptation.
By providing a standardised assessment aligned with international frameworks, it addresses a significant market gap for non-listed SMEs.
Its ultimate effectiveness, however, hinges on widespread voluntary adoption and consistent engagement from companies across all sectors.