Financing and investment policies
How we coordinate our financing and investment actions in sensitive sectors including palm oil, defense and agriculture.
As a bank, we are led to finance a number of industries, some of which present major environmental, social and governance (ESG) challenges. This is the case in the defense, palm oil and nuclear energy industries, for example. For these sectors, we have outlined policies which take into account ESG standards, in addition to economic performance criteria, when making financing and investment decisions.
Developed in cooperation with independent experts, these public policies apply to all of the Group’s business lines and countries where we are present. In 2015, the CSR branch of BNP Paribas reviewed 658 transactions to ensure their compliance with these policies.
Our policies apply to nine sectors
While recognizing each country’s right to defend its interests and protect its national security, the Group remains aware of the specific ESG risks posed by the defense sector, including the status of certain weapons, their potential use, as well as the risk of corruption.
This activity provides a source of revenue and ensures subsistence for millions of people living in developing countries. However, operating palm oil plantations can have a range of negative effects on local communities, climate change and ecosystems.
Wood pulp is a major source of revenue that ensures a standard of living for millions of people in developed and emerging countries. However, as the demand for paper-based products grows over the next decade, this development will have a major impact on our planet’s environment.
Countries that have chosen to develop their nuclear industries emphasize the positive impact of nuclear, especially on economic development, energy security and reducing greenhouse gas emissions. By publishing this policy, BNP Paribas aims to ensure that the projects it helps to finance comply with all principles for monitoring and reducing the environmental and social impacts of the nuclear energy sector.
Coal-fired power generation
Coal can contribute to the economic development of certain countries by providing access to affordable and reliable electricity and supporting energy independence. For this reason, these countries must strike a balance between the growing demand for access to electricity and economic development, as well as the need to reduce CO2 emissions resulting from human activities – an essential step in limiting climate change.
Representing 6% of global GDP and 30% of jobs, agriculture is a key sector in the world economy. However, without proper management, this sector’s development can have many damaging effects on local communities, ecosystems and climate change.
Developing oil sands can deliver many socio-economic benefits, from generating revenue and jobs to providing a secure energy supply. However, this activity can also have damaging environmental and social effects that we must mitigate, including fragmenting natural habitats, water use and pollution, rights of indigenous populations, etc.
The mining industry extracts mineral resources that provide essential raw materials for most sectors of the economy. It also accounts for a large share of the gross domestic product in many countries. However, these considerations must be weighed against the environmental, social and governance risks associated with the mining industry.
Smoking has been recognized as one of the greatest causes of preventable death in the world according to the WHO. BNP Paribas believes that tobacco companies have a role to play to minimize the inherent risks of tobacco production and consumption, and encourages them to operate in line with international good practices.