The bank for a changing world

The fight against climate change: a source of economic growth

  • 26.09.2019

The fight against global warming involves transitioning to a new low-carbon economy, one of the spearheads of which is renewable energy development. For many researchers, this transition will positively impact the global economy, especially in terms of job creation. Read our analysis.

From the reduced use of fossil fuels to energy renovation for buildings and the development of clean transportation, the fight against climate change places new demands on individuals and businesses. And despite growing awareness, the efforts involved are still perceived as obstacles. Some people doubt their effectiveness and whether they will see the benefits any time soon.  

Yet the benefits of more climate-friendly human activities are real and demonstrate that collective action can have a positive and measurable impact in the short term. The success of the Montreal protocol, an international agreement adopted in 1987 to protect the ozone layer, is proof of this. By limiting the industrial use of ozone-depleting gases (freons) and replacing them with less harmful substances, we have been able to collectively halt the degradation of the ozone layer, which is no longer a cause for concern. 

The low-carbon economy: an opportunity for short-term growth

In addition to having a positive impact on the planet, climate measures would boost economic growth. In its 2018 report, the  United Nations Global Commission on the Economy and Climate showed that a climate-friendly economy would generate $26 trillion and create 65 million jobs by 2030 – particularly in areas such as renewable energy, electric transport and thermal renovation

In addition, the International Labour Organization (ILO) states that a low-carbon economy would create four times as many jobs  around the world than it would destroy. For example, in the electricity sector, the creation of 2.5 million renewable energy jobs would more than offset the loss of 400,000 jobs in fossil fuel-based production. According to the IRENA Annual Review, 11 million people were employed in the renewable energy sector in 2018, an increase of 10% over 2017.

a low-carbon economy would create four times as many jobs  around the world than it would destroy.

Given such encouraging prospects, initiatives geared towards the low-carbon economy are multiplying. In Indonesia, for example, BNP Paribas supports a partnership between Michelin, the government and the WWF to rehabilitate 90,000 hectares of degraded forest by planting rubber trees. Rubber extraction, entrusted to local populations, has led to the creation of 16,000 jobs.

In addition to having a positive impact on the planet, climate measures would boost economic growth.

BNP Paribas: accelerating the energy transition

As a pioneering bank in sustainable finance and investment, BNP Paribas has been working for many years to accelerate the transition to a low-carbon economy. Carbon-neutral since 2017 for its own activities, the Group is fully committed to the energy transition in accordance with the Paris Agreement. In addition, while taking measures to reduce its exposure to the most polluting energies, the Group has increased the amount of financing it devotes to renewable energy: in 2018 this amounted to €15.4 billion. At the same time, €100 million is being invested in ‘green techs’ – innovative startups of the green economy. In France, for example, BNP Paribas is supporting Deepki, a startup that is improving the energy performance of buildings by detecting opportunities to save costs through data collected in the field.

Lastly, through its digital platform for buying and selling carbon credits, ClimateSeed, BNP Paribas offers businesses a way to offset their CO₂ emissions by financing environmental projects that have a direct impact, such as reforestation. 

Photo ©gustavofrazao

A Group at the forefront of sustainable finance

BNP Paribas and its subsidiaries also offer a wide range of investment, loan and consumer services products. These include a 1% green car loan for the purchase of clean vehicles, the financing of energy renovation projects through Domofinance (an EDF and BNP Paribas Personal Finance joint venture), and green savings (BNP Paribas Aqua and Parvest Green Bonds). 

the results of these climate efforts will eventually be felt in ecosystems and economies.

In the green bond market, BNP Paribas is also one of the world leaders with more than €6 billion in green bonds invested in 2018. These bonds finance environmental projects, such as renewable energy development, the implementation of energy efficiency measures, and sustainable waste and water management. BNP Paribas Asset Management also offers investment professionals a number of low-carbon funds (Parvest Green Bonds, Global Environment and Climate Impact). 

It is hoped that the results of these climate efforts will eventually be felt in ecosystems and economies. With this in mind, BNP Paribas is positioning itself at the forefront of sustainable finance and wants to make the low-carbon economy a reality that will benefit the environment and create jobs.

Photo header: ©Darren

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