French auto group Valeo’s commits to gender equality in novel deposit solution
Published: Feb 2025
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Valeo China
Photo of Nicolas Boulay, Valeo China and Jolene Liu, Citi.
Hilda Hou
China Internal Bank Manager
Valeo is a French automotive company that has been operating in China since 1994 with 175 production sites around the world.
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The challenge
Valeo Group’s ESG targets include carbon neutrality by 2050. By 2030, as a mid-term objective, Valeo plans to have reduced its greenhouse gas emissions from multiple dimensions, including by 75% in its operations and a 15% target reduction in its upstream and downstream value chains.
In China, Valeo has enjoyed 30 years of continuous growth. It has 35 production sites, located in different provinces and cities across China. Due to the nature of the auto industry, the company deals with imports and exports with more than 1,000 overseas clients and suppliers around the globe.
Valeo’s core aims:
Contribution to ESG ambitions from dedicated projects. Valeo was looking for opportunities to utilise certain portions of their deposit interest income to support United Nations sustainable development goals (SDGs) related purposes. In addition, Valeo would prefer to provide support to activities and projects that are aligned with its broader corporate goals.
Contribution to carbon neutrality from operational flows, which is mainly related to cross-border payments and bank acceptance draft (BAD) handling.
For cross-border payments, the shared service centre (SSC) of Valeo China manages over 15,000 cross-border transactions, consisting of USD, EUR, JPY and CNY. This includes currency conversions, cross-border payments and collections, with much manual work executed by the local team to prepare and present supporting documents to the bank’s e-banking platform.
For BADs handling, the core target is to eliminate paper-handling and delivery work on BADs issuance. Valeo China SSC handles around 20,000 BADs annually, as BADs is a common payment instrument in the mobility industry. For BADs issuance, they must deliver hardcopies of supporting documents including sales contracts and invoices to its bank, Citi, to fulfil regulatory requirements.
The solution
In mid-2024 Citi China launched a solution called Contribution Deposit, which is a demand deposit account (DDA) whereby Valeo is given the option to choose a portion of its interest income to contribute towards SDG 5 – gender equality.
To enrol in such a product, Valeo only needs to have a DDA with Citi China and submit the application form to confirm contribution related elements. Contribution Deposit operates on existing Citi China’s capacity and the additional contribution feature will not change Valeo’s use of its demand deposit service. Valeo is provided with the flexibility to decide its preferred contribution period without exceeding the product timeframe. The contributed interest will be automatically calculated during Valeo’s confirmed contribution period and consolidated by Citi China for further payment to the United Nations Entity for Gender Equality and The Empowerment of Women (UN Women).
Best practice and innovation
The launch of Contribution Deposit, a first in China, involves the collaboration of Citi China – working as Valeo’s agent – and the UN Women targets that women and girls can benefit from equitable and gender-responsive laws, policies, budgets, services and accountable institutions that reduce gender inequality in China.
This solution facilitates the philanthropic actions of Valeo, without depending on Valeo’s ESG ratings or performance, as long as Valeo is not engaged or involved in industries or activities that are considered exclusionary criteria for partnership by UN Women.
Valeo is recognised as an ESG leader by rating agencies
The below is further evidence of Valeo’s participation in the ESG space.
Key benefits
Cost savings.
Process efficiency.
Increased automation.
Manual intervention reduced.
Increased system connectivity.
Exceptional implementation (budget/time).
Judy Gao
Solution Sales, Treasury and Trade Solutions, Citi China
As a world leading technology company in the automotive industry, Valeo has been operating in China since 1994. Valeo group has ESG targets that include carbon neutrality by 2050 and mid-term objectives in 2030. Citi is honoured to support Valeo China gaining achievements for its franchise goal through various solutions, including applying Citi China’s Contribution Deposit (Valeo chose a portion of deposit interest income to be contributed to projects designed to advance SDG 5 – Gender Equality and the Empowerment of Women), contributing to carbon neutrality by digitalised solutions for a large volume of cross-border payments and bank accepted drafts, plus Citi e-Trade platform support. Congratulations to the Valeo China team on the well-deserved award.
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The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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