BNP Paribas aligns with SDGs and Paris Agreement in new sustainability strategy

BNP Paribas has created a range of targets and KPIs to put in place a sustainable finance strategy.

The strategy includes four components: integration of Environmental, Social and Governance (ESG) factors, stewardship, sector-specific exclusions, and its “forward looking” perspective.

The firm has set targets for measuring sustainable investments with key performance indicators on energy transition, environment sustainability, equality and inclusive growth. It has developed a specific 25 employee-strong sustainability centre to assist in the delivery of its objectives.

Specific goals include investments related to carbon intensity and the green share of assets under management, including energy transition and Sustainable Development Goals (SDG) 7,9 and 13. It also includes the water footprints of its portfolio and company policies on deforestation and exploitation, relating to SDG 6 and 15, as well as the percentage of female board members and engagement in sustainable corporate capital allocation decisions, outlined in SDG 5, 8 and 10.

The move is its first company-wide strategy and aims to raise awareness of how finance can play a role in sustainability while also committing to the sector for the long term and creating best practice. It has three key sustainability themes: energy transition, the environment and equality – what the company is dubbing the ‘3Es’.

Specifically, ESG integration will be achieved by looking at investment processes, including portfolio construction, risk management, engagement, disclosure, voting and reporting with an ESG ‘validation committee’ reviewing and approving each investment process.

Stewardship will be achieved through engaging with investee companies to ensure active involvement with policymakers, regulators and industry groups around issues such as climate and natural capital. Additionally, it sits on various European Commission expert groups on sustainable finance.

The company will also make sector-based exclusions, such as its recently announced tighter exclusion policy on companies engaged in mining thermal coal and generating electricity from coal.

It currently plans to put the commitments in place across a three-year timeline with measurement and reporting coming into force in 2020. Additional targets will be added over time linking to its “3Es” as well as the SDGs.

Previous commitments

BNP Paribas has previously committed to a number of schemes regarding sustainability and sustainable investment. Most recently, it launched a green mortgage scheme with E.ON energy aimed at providing an “affordable source of finance” to make energy efficiency makeovers more accessible to millions of people.

The Principles for Responsible Investment (PRI) has assigned BNP Paribas an A+ rating for the past three years in its annual assessment report, and the bank has also said it “wants to be a major contributor to the UN SDGs”.

BNP Paribas Asset Management’s chief executive Frédéric Janbon said we are “at a crossroads” and “now is the time for decisive action by the financial community” to achieve a sustainable future in line with the Paris Agreement and SDGs.

“We believe it is in the interest of our clients and is central to our fiduciary responsibility. The Global Sustainability Strategy and related investments in our team and our systems reflects our increased ambition and outlines a blueprint to mainstream sustainability in all that we do – through our investment processes, but also engagement with our staff, companies, policymakers and wider society.”

Global head of sustainability at the bank, Jane Ambachtsheer, said it had the potential to take on the role of “future maker”.

“Beyond helping us to articulate and communicate our sustainable investment approach and ambition, we are defining clear objectives and targets against which we can measure success and our impact for clients and the economy.” She said.

James Evison

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