BNP Paribas, Accelerating a More Sustainable Economy
At a time when the world is still struggling with an unprecedented public health and economic crisis, BNP Paribas has mobilized in order to support its clients and guide them through the transition toward a sustainable economy. Alongside other institutions, economic actors and communities, the Group is driven by this mission to advance an economic model that is both more inclusive and respectful of the environment.
A Collective Goal: Preserving the Common Good
The events of recent months have brought about major modifications in everyday life, including enduring changes in working conditions worldwide. This being said, the Covid-19 crisis has not altered BNP Paribas’ company purpose: we remain at the service of our customers and the world in which we live.
In fact, the global impact of the pandemic highlights the importance of the common good and the collective imperative of preserving it. In today's world, that means accelerating the shift towards a society committed to solidarity and the environment.
Numerous companies have already begun moving in this direction, and a majority of citizens has expressed a strong desire for change in order to address issues stemming from the climate and social inequality. In the face of this challenge, actors in the banking sector have a major role to play supporting and assisting in this transformation.
THE GLOBAL IMPACT OF THE PANDEMIC HIGHLIGHTS THE IMPORTANCE OF THE COMMON GOOD AND THE COLLECTIVE IMPERATIVE OF PRESERVING IT.
Our clients – corporates, professionals and individuals – expect us to be a part of this change and to offer solutions and services that will support it. Even before the beginning of the Covid-19 crisis – which continues to severely disrupt the global economy – BNP Paribas made sustainable finance one of the strategic pillars for building the bank of tomorrow.
Mobilizing for a socially responsible recovery
We are currently navigating a period of uncertainty that has strengthened banks' role as a trusted partner. As soon as the crisis hit, BNP Paribas mobilized on a large scale to cope with the urgency of the situation and respond to clients’ needs. In addition to an emergency plan of nearly €55 million in direct support to medical sectors and vulnerable populations in more than 30 countries, the Group acted in its role as a key service provider for the economy. Several positive-impact financial instruments were deployed in response to the most pressing needs:
BNP Paribas was joint-lead manager for €12.5 billion in sustainable bonds issued in response to the Covid-19 crisis (end of June 2020), including:
- A €1 billion response bond issued by the Nordic Investment Bank to raise funds in support of healthcare systems and providers;
- A €1 billion bond issued by the European Investment Bank (EBI), to support the European economy through healthcare infrastructure improvements.
BNP Paribas has supported several clients in issuing over US eq. $59 billion of Covid-19 response bonds to help fund key actions in dealing with the crisis. Looking forward, BNP Paribas plans to contribute to a more sustainable economic model through its business lines. We believe that the solutions most likely to help economies recover and achieve enduring prosperity – while also respecting their human and environmental ecosystems – will arise from innovative financial products that support the energy transition and help build a more inclusive world.
BNP Paribas and the SDGs
The Group has integrated the UN 17 Sustainable Development Goals (SDGs) within its strategy, both as part of its CSR policy and in guiding commercial activity. By the end of 2019, the Group had already provided €180 billion in corporate financing for projects deemed to contribute directly to the achievement of the SDGs.
Energy transition, a key goal for a more sustainable economy
As president of the non-profit Entreprises pour l'Environnement (EpE), Jean-Laurent Bonnafé, Director and Chief Executive Officer of BNP Paribas, was responsible for the publication of a collective editorial in the daily Le Monde in May 2020. The article reiterated member commitments to protecting the environment and reaffirmed the conviction of more than 90 large French companies, including BNP Paribas: the environment must be central to post-Covid measures for economic recovery.
the environment must be central to post-Covid measures for economic recovery.
Playing its part, the Group has implemented a strategy to support energy transitions and continues to expand its line of sustainable finance offers. Solutions such as its green bonds or its sustainability linked loans (SLL), which are directly tied to environmental, social and governance (ESG) criteria help promote renewable energies, protect biodiversity more effectively and provide energy transition support to businesses.
The Group aims to further ecological transitions by strengthening its sector-specific policies, developing new measurement tools and reducing its own direct impacts on the environment:
Coal and hydrocarbons
In 2017, the Group decided to stop financing coal-fired power-plant projects and lending to customers specialized in non-conventional hydrocarbons. In 2019, BNP Paribas announced a timeframe for the imminent cessation of financing for companies that are developing new thermal coal capacities and/or have not adopted a clear strategy for a coal exit by 2030 in EU and OECD countries and in all other countries by 2040.
The Group is actively involved in implementing the Paris Agreement Capital Transition Assessment (PACTA) methodology, an open-source solution developed by BNP Paribas and the four other major European banks having signed the Katowice Agreement. PACTA aims to help banks align the greenhouse gas emissions produced by their lending portfolios with the objectives of the Paris agreement. Thanks to this tool, BNP Paribas will be able to evaluate the degree of commitment to energy transition by its corporate clients.
For several years now, the Group has also been committed to preserving biodiversity. In 2012, it added deforestation and biodiversity criteria to its sector-specific policies. To help protect the oceans, it made frameworks for financing sensitive activities and supporting initiatives that would be respectful of marine ecosystems, including €1 billion for the ecological transition of ships between now and 2025.
The Group has set an ambitious target – €18 billion by 2021 – for financing the development of renewable energies. At year-end 2019, €56 million were invested in various startups contributing directly to the energy transition.
BNP Paribas has been carbon neutral at its operational level since 2017 and has instituted Green Company for Employees, an internal program mobilizing personnel to work on issues such as sustainable mobility, green IT and single-use plastic.
BNP Paribas, a front-runner in sustainable finance
The Group has taken an array of SDG-compliant initiatives to promote financial inclusion. In France, for example, BNP Paribas has introduced innovative solutions like Nickel, an account service available to all, including low-income populations. The Group also helps promote the economic, social and cultural development of disadvantaged areas by providing guidance for more vulnerable clients or by mounting sponsorship programs (e.g. Projet Banlieues). At the international level, it has devoted €900 million to support microfinance institutions in 33 countries, providing vital support to over 2 million micro-entrepreneurs.
Whether in financing or investment, BNP Paribas ranks among the world leaders of sustainable finance:
- No. 1 in the world* on the sustainability-linked loan market (the SSL being a finance instrument directly tied to ESG criteria) with €2.6 billion signed as of end September 2020;
- No. 3 in the world* on the sustainable bonds market at end September 2020, with €8.7 billion in SLBs underwritten by BNP Paribas;
- No. 1 on the French market** for socially responsible investment (SRI) at year-end 2019 via its subsidiary BNP Paribas Asset Management, which handles €63 billion in SRI fund assets worldwide.
**Source: Study by Forum pour l’Investissement Responsable
The problems confronting the planet are multi-faceted. Finding solutions will require ambitious, coordinated effort on many fronts, and often through complex coalitions. To achieve a more sustainable economy, many sectors must be involved and multiple solutions found. The entire model must be revised in order to enact change for investment choices, operating procedures and everyday behaviors. For this reason, BNP Paribas launched "WeEngage", a training program dedicated to the importance of sustainable development and available to the 200,000 global employees of BNP Paribas.
The entire model must be revised in order to enact change for investment choices, operating procedures and everyday behaviors.
"Given the state of the world today, there would be harsh consequences for society if we were to ignore sustainable development and focus solely on profits. We must invest and make choices that will lead us toward a more sustainable economy. Sustainability is our collective way forward toward the future."
Antoine Sire, Head of Company Engagement, BNP Paribas
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