ESG and Sustainability in French Banking: From Ambition to Action

The Rise of ESG in French Banking

Environmental, Social, and Governance (ESG) priorities have rapidly ascended to the top of the agenda for French banks. According to recent research, 50% of French banking leaders now cite ESG and sustainability as their number one priority for the next three years. This marks a significant shift, reflecting not only regulatory pressures but also evolving customer and stakeholder expectations. As banks navigate the digital transformation journey, ESG is no longer a peripheral concern—it is central to strategy, risk management, and long-term competitiveness.

What’s Driving the ESG Imperative?

Several forces are converging to make ESG a strategic imperative for French banks:

Regulatory Pressure: French and European regulators are raising the bar on ESG disclosures, risk assessments, and sustainable finance targets. Banks are expected to demonstrate measurable progress, not just ambition.
Customer and Societal Expectations: Customers, especially younger generations, increasingly demand that their banks take a proactive stance on climate change, social responsibility, and ethical governance. Community engagement and financial inclusion are now seen as essential to customer experience.
Competitive Differentiation: ESG is emerging as a key point of differentiation. Banks that can credibly demonstrate leadership in sustainability are better positioned to attract customers, talent, and investment.

The ESG ‘Say-Do’ Gap: From Strategy to Execution

Despite the clear prioritization of ESG, many French banks face a persistent gap between ambition and action. Survey data reveals that while 62% of French banks identify ESG as a key driver of digital transformation, only 18% have ESG oversight at the board level—well below the global average. Furthermore, 58% have set sustainability financing targets, but challenges remain in measuring and reporting progress.

Key Challenges in Operationalizing ESG

Data and Measurement:
- 39% of French banks cite lack of access to data as a major barrier to transformation. ESG initiatives require robust, high-quality data to track emissions, assess social impact, and ensure compliance. Many banks struggle with siloed systems, inconsistent taxonomies, and incomplete data sets.
- Only a minority have the capabilities or processes to evaluate ESG performance comprehensively, making it difficult to move from reporting to real impact.
Unified Strategy and Governance:
- 37% of French banks point to a lack of unified strategy across business units as a significant challenge. ESG goals often span multiple departments, requiring cross-functional collaboration and clear accountability.
- Board-level sponsorship is limited, which can slow decision-making and dilute focus.
Regulatory and Technology Complexity:
- 36% of banks highlight regulatory and technology challenges. The evolving landscape of ESG regulation demands agility, while legacy systems can hinder the integration of new data sources and reporting tools.
Talent and Culture:
- Attracting and developing talent with ESG expertise is critical. Only 37% of French banks have made commitments to diversity, equity, and inclusion, indicating room for growth in the social dimension of ESG.

Emerging Best Practices: Closing the ESG Execution Gap

Leading French banks are taking concrete steps to move from ambition to measurable action:

Investing in Data and Analytics:
- 44% are focusing operational transformation on building technology and data platforms. Modern data architectures enable banks to break down silos, access real-time insights, and support ESG reporting and decision-making.
Setting Clear Sustainability Targets:
- Over half of French banks have set sustainability financing targets, aligning lending and investment portfolios with climate and social objectives.
Embedding ESG in Governance:
- While board-level oversight is still emerging, there is a growing recognition of the need for executive sponsorship and cross-functional ESG teams. This ensures accountability and accelerates progress.
Community Engagement and Financial Inclusion:
- 40% of French banks are prioritizing community engagement, such as financial literacy programs and digital access for underserved populations. These initiatives support the social pillar of ESG and enhance customer trust.
Leveraging Technology for Agility:
- Cloud migration and AI adoption are helping banks modernize their infrastructure, making it easier to integrate ESG data and respond to regulatory changes. 34% of French banks cite cloud infrastructure as a top operational priority.

Practical Steps for French Banks

To close the ESG ‘say-do’ gap, French banks should consider the following actions:

Strengthen Data Foundations: Invest in unified data platforms and analytics to enable accurate ESG measurement and reporting.
Elevate ESG Governance: Establish board-level oversight and cross-functional teams to drive accountability and execution.
Align Products and Services: Develop sustainable finance offerings and embed ESG criteria into lending and investment decisions.
Engage Stakeholders: Foster transparency with customers, employees, and regulators through clear communication and community initiatives.
Build Talent and Culture: Prioritize diversity, equity, and inclusion, and upskill teams in ESG competencies.

The Path Forward

French banks are at a pivotal moment. With ESG and sustainability now at the heart of digital transformation, the challenge is to turn ambition into action. By investing in data, governance, and culture—and by embracing technology as an enabler—banks can deliver on their ESG commitments, meet rising stakeholder expectations, and secure a sustainable future for themselves and the communities they serve.

Publicis Sapient partners with leading financial institutions to accelerate ESG transformation, helping banks move from intent to impact. The journey from ambition to action is complex, but with the right strategy and execution, French banks can lead the way in sustainable finance.