Mobility
2023-01-25
Sustainable Mobility
Around the world, there is growing awareness of the need to reduce the use of cars, especially in urban areas, in order to reduce our greenhouse gas emissions. In this context, it is up to us to rethink our habits, to invent new uses and accordingly, to encourage sustainable mobilitiy. As a major international company and banking group that is fully committed to the ecological transition, BNP Paribas intends to use the human, technological and financial resources at our disposal to be part of the solution and to help shift the lines. Being the bank for new forms of mobility means helping to finance the transition of players in the automotive sector and accelerating the deployment of alternative forms of mobility solutions for our customers and employees.
New mobility at the heart of the BNP Paribas Group's strategy
€1 billion: this is the Group’s target for additional revenues by 2025 through its cross-functional mobility initiatives, announced in October 2022.
The Group is proactively making this transition to more sustainable mobility through several of its subsidiaries, operating throughout the entire value chain, depending on the type of customer. For B2B customers, BNP Paribas is supporting its automotive customers in their transition, both in terms of fleet financing and the associated infrastructure. For its retail customers and its employees, the Group is getting ready to offer alternative mobility solutions, micro-mobility offers to change usage or "green" vehicles. Lastly, BNP Paribas is taking concrete action to accelerate these changes by participating in numerous initiatives and forging strategic partnerships with key players in the mobility sector.
“Mobility is being thoroughly reinvented and is becoming a major lever to reduce CO2 emissions and to contribute to a sustainable society. Alongside more traditional mobility players, there already exist many ways to switch to more sustainable mobility. Examples range from green hydrogen to CO2 capturing, sequestering and recycling, and from synthetic fuels to the search for alternative technologies to make batteries and to recycle them. These are all promising paths to progress!”
A regulatory environment that encourages more sustainable mobility
Supporting our automotive customers in their transition
Through its subsidiaries Arval and BNP Paribas Leasing Solutions, BNP Paribas already supports companies wishing to start the energy transition of their fleet with more sustainable vehicles and equipment (tractors, construction equipment and trucks).
The role of finance in sustainable mobility
BNP Paribas' ambition is to become the leading partner in mobility consulting and financing. Our unique position and our dedicated subsidiary, Arval, enable us to bridge the gap between stakeholders involved in mobility infrastructure: automotive manufacturer, companies and public authorities seeking to finance mobility infrastructure projects, banks and institutional investors.
Encouraging and accelerating zero-emission mobility will be possible through partnerships between research, business and finance. This synergy will enable innovative investments and financing solutions to be found for a massive scale-up and deployment of green technologies. Decarbonised mobility could soon become a reality, but this will necessarily require an adaptation of the financing ecosystem. The amount of capital needed to achieve sustainable mobility is considerable. BNEF (Bloomberg New Energy Finance) estimates the cost of the Clean Electricity and Hydrogen Roadmap to be between $78 billion and $130 trillion in new investment by 2050 to cover increased electricity generation and the electricity grid, as well as hydrogen manufacturing, storage and transportation.
The automotive sector was not initially seen as the most promising sector for issuing green bonds. Yet things are changing, particularly under the impetus of the 2020 European regulation, which requires newly manufactured vehicles to emit no more than 95g of CO2/km, on pain of substantial fines for manufacturers. Technological advances have enabled them to align with the Paris Agreement, and thus access the green bond market. For Volvo Cars, for example, BNP Paribas acted as advisor in setting up a green bond framework to finance investments to achieve 50% of its sales of fully electric vehicles by 2025, with the remainder coming from hybrids.
In January 2020, the creation of the Hydrogen Council Investor Group, comprising several banks and investment firms, including BNP Paribas, aims to mobilise investors from around the world around large-scale financial investments in infrastructure and renewable energy.
How does BNP Paribas support its clients in their transition to sustainable mobility?
BNP Paribas was able to support Hyundai's strategy and provide the world's first hydrogen mobility financing to Hyundai Motor Group in Switzerland. More than 150,000 vehicles manufactured by Hyundai Motor Group were financed by BNP Paribas in 2020 as part of this global partnership.
In 2021, BNP Paribas participated in one of the three largest spin-offs* in Europe to enable Daimler Truck, one of the world's largest commercial vehicle manufacturers with more than 40 production facilities, to step up the pace of its shift to CO2-neutral transport. The transaction is intended to enable Daimler Truck to finance technological developments, driven by electrification and digitalisation, which require substantial investments in research and development, with a focus on fuel cell electric engines as well as hydrogen electric engines, with software-controlled autonomous trucks and buses.
*What is a spin-off?
In the field of finance, a spin-off is a way of splitting a company in two. To spin off a company means to create a new company from a branch of an already existing one.
Source
Commitment to our customers in the appropriation of new mobilities
From ownership to flexible use and micro mobility
Understanding our customers' concerns about anything that has a financial impact on their lives - whether it's banking or not - is one of BNP Paribas' key missions. If the car is at the centre of these concerns, it is up to us to help our customers anticipate and appropriate new modes of travel that meet the objectives of a more sustainable society. Soft mobility, carpooling, carsharing, green energy: eco-mobility solutions are appealing even if the weight of habits is the main obstacle to their deployment. The health crisis has unintentionally been one of the most effective triggers for the development of the use of soft mobility, such as bicycles and scooters.
Among the strong trends observed in recent months, renting rather than owning is also on the rise, and car rental is no exception. Electric vehicle purchases and leases are also growing rapidly under government pressure for greener energy, opening up new financing and service opportunities.
This movement towards hybrid or electric vehicles is happening in tangent with the digitalisation of distribution, often driven by new major players in this market. Customers need to be reassured about these new modes of consumption and are asking for new associated services such as car + charging solution packages, home delivery or used car certification.
Many financing tools, such as consumer credit, leasing and insurance solutions come into play. The Group offers individual customers a full range of financing solutions with BNP Paribas Personal Finance, as well as a loan insurance solution in partnership with BNP Paribas Cardif. In Belgium, Cetelem has launched a mobility loan for new sustainable modes of transport.
84% of European companies already have or plan to implement mobility solutions for their employees in the next 3 years. In line with the offers made to its customers to reduce their carbon footprint, the Group is also acting internally to reduce that of its teams.
Arval
Created in 1989 and present in 30 countries, Arval is a subsidiary of BNP Paribas. In 2004, it was the first car rental company to sign the United Nations Global Compact. Since December 2019, a new brand signature "For The Many Journeys In Life*" embodies ARVAL's desire to support its customers in the deployment of mobility solutions that are fluid, simple and adapted to their needs.
The Arval Mobility Observatory is a research and information platform that has become a key reference in the analysis and forecasting of mobility trends within companies. In the field, Arval is already revolutionising mobility in cities, and is experimenting with an innovative 100% electric autonomous shuttle project in Rueil-Malmaison, for example. It offers its client companies to install Mobility Hubs in which their employees have access to a set of shared mobility solutions (bicycles, cars, scooters, scooters) that can be booked through a dedicated application, Arval Mobility App.
Arval aims for the position of "European leader in sustainable mobility by 2025". Arval currently rents more than 1.5 million vehicles and is rolling out its operational leasing offer in sustainable mobility. It plans to manage a fleet of 700,000 electric vehicles by 2025.