How does green and digital align with Societe Generale’s ambitions in India?
Read the interview of Toby Lawson, Chief Country Officer and CEO Societe Generale India with TNP India who shared the Bank’s major initiatives, our major successes and opportunities he sees in these areas.
Why is green and digital important? How does it align with Societe Generale’s philosophy and values?
The importance of ESG (Environmental, Social and Governance) and digital transition has long been a key part of Societe Generale’s strategy. In line with our corporate purpose, we have placed sustainable development and energy transition at the heart of our strategy. Team spirit, innovation, responsibility, and commitment are the core values shared by our employees, and these values are central to our vision of a responsible bank committed to serving its customers.
As with ESG challenge, we are committed to digital trans- formation. While our customer’s use of digital tools is in full development, accelerated by the COVID-19 health crisis, the constant improvement of the customer relationship and experience is at the heart of Société Générale’s innovation and digital transformation strategy.
What are the major initiatives/strategic changes/projects of Societe Generale in this direction?
India’s renewable ambitions align well with our Group’s climate strategy, and we are committed to support the country’s energy transition. We aim to leverage the Group’s global project finance successes to support the Indian renewable energy sector, and to date we have closed seven deals onshore in the last 18 months. These deals have mobilized almost USD 3 billion of financing, adding close to 3.2 Gigawatt (GW) of renewable capacity as well as electricity transmission assets as part of the Green Energy Corridor Initiative. International banks and financial sponsors are investing with confidence in the knowledge that standards for project finance in India are in line with global practice.
We are leveraging data to enhance our efficiency of operations and our support to our clients. Keeping the same in mind, on the digital front, Societe Generale is implementing state-of-the-art global tools for cash management in India for local and global multinational companies. Moreover, we want to expand digitization by leveraging technology and data. We aim to work with the fintech ecosystem by building new and innovative products and solutions.
Societe Generale Forge, a fully integrated subsidiary of Societe Generale, is at the forefront of providing regulated Digital Assets Issuance solutions to financial institutions globally. It provides institutional solutions for new digital assets based on public blockchain, leveraging our expertise in infrastructure, regulatory frameworks, operations and blockchain standards. Given the recent announcements in the Union Budget on promoting digital, we are well positioned to bring our expertise to the sector in India.
Can you elaborate on a success story?
We have recently completed a project finance deal with Adani Transmission Limited, which was our first deal in the transmission sector and a positive diversification to the deals completed in renewable electricity generation. The deal won the “Indian Deal of the Year” award for 2021 announced by Project Finance International, one of the most respected publications dedicated to Project and Infrastructure Finance. The deal has further enhanced our knowledge of India’s renewable power ecosystem, thereby strengthening our capability in future financing opportunities.
What are the challenges that you face in your journey towards ESG and digital?
While there was slowdown in capacity addition in FY21 due to COVID-19, capacity addition witnessed a strong recovery in FY22 with 8.2 GW added in the first eight months of FY22 compared to 7.4 GW in FY21. Wind and solar projects conti- nue to face challenges in land acquisition. However, the issue has been well managed by our clients who have obtained the necessary approval before the drawdowns. Even though the renewable capacity has grown considerably over the last few years, the intermittent nature of generation remains a key challenge. But the pleasing thing for us is the progress made on regulatory and government policy ensures that more deals can be completed and help accelerate the energy transition for India.
On digital, it is still early days locally as we are only now seeing the government announce plans to seriously develop the digital economy. It’s the key first step in building a consistent, transparent, and robust regulatory framework. There will be many challenges ahead but knowing the government is committed to digital transformation gives us great confidence.
What are the transformations/ opportunities you foresee in this domain in the coming decade? How will this impact your organization’s vision for the future?
As evident from the recent Economic Survey and the Union Budget, the government is focusing on promoting sustainable finance, energy transition, climate action, digital economy, and fintech. These key drivers will help India achieve long-term growth, thus leading the way for the nation to become the fastest-growing large economy in the world.
On the renewable space, the government has set itself an ambitious target of achieving 500GW (including hydro) of renewable capacity by 2030. India has some distinct advantages in terms of climate conditions for generating solar energy and the cost is one of the lowest in the world.
On the digital front, the last Budget is a booster. The financial support for the digital payment ecosystem announced in the previous Budget will continue in 2022-23. This will encourage further adoption of digital payments. There will also be a focus to promote use of payment platforms that are economical and user friendly. In addition, the government will also introduce Digital Rupee, using blockchain and other technologies. This will give a further boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system.
In India Societe Generale is already a leader in sustainable finance, and we continue to promote our long-standing commitment to finance solutions that prioritize positive impact within the ESG framework. We will bring our expertise in the digital space in the coming years to help India transition its economy to become not only one of the largest in the world but also one that is built for the digital age.