Investing sustainably or nothing: BNP Paribas Asset Management teams at the heart of the action
16.11.2021 | Sustainable finance
BNP Paribas Asset Management is a leading player in sustainable investments. The work of an asset manager consists of managing assets entrusted to them by investors, whether they are individuals, companies or institutions. And BNP Paribas Asset Management has a clear approach to their work: The value of assets under management (AUM) is now closely linked to the responsible commitment of companies. Environment, Social and Corporate Governance: These criteria are now inseparable from efficient asset management. Why? How? What are the main trends? We take a look at a business that has made in-depth transformations in the service of sustainability.
‘The sustainable investor for a changing world’
This is BNP Paribas Asset Management's new strapline. It is a promise that says a lot about this BNP Paribas entity’s DNA. Today, all its funds open to the general public systematically take into account ESG (environmental, social and governance) criteria and exclude companies that do not meet conduct criteria, which includes child labour, suspicion of corruption, poor environmental practices, etc. Assets under management by the subsidiary that integrate ESG criteria represent a total value of €360 bn as of 30 September 2021. Consistent with these commitments, BNP Paribas Asset Management has €32 bn of assets in sustainable thematic funds and more than €110 bn of labelled assets in France and Belgium. These amounts position BNP Paribas as the leader in medium and long-term socially and responsible investments (SRI) in the European market.
The world of tomorrow can only be made by companies taking a responsible approach with a positive impact
Sustainable... at every step!
At BNP Paribas Asset Management, sustainable investment is built and is delivered at all levels of the business:
Upstream, through the selection of companies
Asset management teams focus on companies that have the best financial outlook and adopt the best ESG practices. Having set some of the strictest rules in the market, BNP Paribas Asset Management has adopted sector policies that direct its investments in sensitive sectors. The subsidiary has developed its own ESG scoring methodology. To do this, it uses technology to reference and model data with the help of its Sustainability Centre. This team brings together 30 ESG experts specialised by business sector and geographical area and carries out an in-depth analysis of companies on behalf of the managers. The result is a rigorous and efficient selection of the most committed companies.
Through the design of sustainable funds, including thematic funds
BNP Paribas Asset Management then creates sustainable funds, including thematic funds: climate, biodiversity, oceans, inclusive growth... The business has chosen to focus its sustainable investment efforts on three key issues, the “3Es”: Energy transition, Environmental protection, Equality and inclusive growth.
By educating clients and internal teamsOne
of the major challenges of sustainable investments is the need to educate
savers, who are in demand. Indeed, if they are still struggling to move from
intention to action in terms of responsible investments, it is because the
information available is sometimes too complex, or too rare. To address this,
BNP Paribas Asset Management has trained
[In a nutshell]
The BNP Paribas Asset Management businessBNP Paribas Asset Management provides investment solutions for individual, corporate and institutional investors worldwide (Europe, Asia, Americas).
The investment portfolios created are marketed to these end clients through BNP Paribas' retail network, both digital and physical (bank branches worldwide, business centres dedicated to companies, wealth or wealth managers of BNP Paribas Wealth Management, etc.). But not only: 80% of its assets are managed for clients outside the Group.
BNP Paribas Asset Management is
Interview with Béatrice Verger: Sustainable investments today and tomorrow
Key developments and prospects for sustainable investment according to Béatrice Verger, ESG/SRI Product Specialist at BNP Paribas Asset Management.
How and when did the offer of sustainable investment funds develop?
The sustainable investment market gradually expanded from the 2000's, but for a long time it has remained a ‘niche’ market, prized by a few sophisticated and rather institutional clients (pension funds, etc.). The COP21 in 2015 gave it a real boost, both in France and around the world.BNP Paribas Asset Management was one of the first financial players to offer ESG-targeted thematic funds, creating an environment fund as early as 2006. In 2012, we also applied the principle of excluding companies in controversial sectors. By integrating ESG criteria into all our funds open to the general public in 2018, we have increased this momentum.
Thematic funds, targeted funds E, S or G? Which are to the most appreciated and which still need to develop?
Thematic environmental funds are the most successful: their impact is more easily measurable and this topic is very concrete for investors as well as the general public. The social side (‘S 'of ESG), which is less prominent but has been highlighted by the health crisis, is one of the challenges of sustainable investment for industry players. BNP Paribas Asset Management offers investment strategies focused on this social component and particularly around the themes of human development and inclusive growth. As for the ‘G’ of governance, this is often a transversal and non-exclusive criterion, which must be taken into account regardless of the theme targeted by the investment. For BNP Paribas asset managers, the issue of governance is addressed notably through our stewardship policy, i.e. an ongoing dialogue with the executives of the companies in which BNP Paribas Asset Management invests and a vote at a general meeting of shareholders to encourage them to accelerate their responsible practices. BNP Paribas Asset Management systematically assumes this role in all the companies it invests in, and it is a powerful lever for change in the real economy.
On what topics are you working to further accelerate the position of sustainable investment?
We work on a lot of topics: the compliance of our products with new regulations, product innovation requested by highly demanding clients, the integration of emerging markets and unlisted markets, the improvement of the environmental and/or social impact measurement of funds or the optimisation of technological tools to achieve this... Sustainable investment is expanding and with it the issues inherent to its growth, it is intense, exciting and... sustainable!
What hurdles do you face?
Even though Europe defined in March 2021 a new regulation on sustainable finance, called SFDR, which will be an obvious factor for acceleration, each country still retains its own vision of sustainable finance. Achieving even more precise agreement on standards for measuring impact, for example, will mark a new turning point towards responsible financing of the economy.
What are the short, medium and long-term objectives for BNP Paribas Asset Management?
Our priority over the next year is to ensure that all of our products comply with future European requirements, so that we can both respond to client demands and continue to democratise sustainable investment. The industry must also quickly ensure greater transparency and work towards standardising corporate ESG data. Indeed, to be able to measure the impact of investments and provide accurate reporting to clients, access to reliable and standardised data is essential. We are therefore very active in this field to co-define standards with financial players and public authorities in Europe! We must continue to work to ensure that finance is recognised as an integral part of a sustainable world. And this is thanks to evidence and actions; just good intentions in this matter are insufficient! And soon, will we perhaps experience an ‘all ESG’ and ‘all inclusive’ financial market?