Responsible savings and investments
In choosing to invest their money responsibly, citizens and economic actors help to finance projects and companies that are working toward preserving the environment and reducing social inequalities.
What are responsible savings and investments?
Saving and investing responsibly means putting your money in investment vehicles that will support companies working towards concrete solutions in addressing environmental and social challenges, or, which at least, take environmental, social and governance (ESG) criteria into account.
A growing need for societal utility
While BNP Paribas customers pursue their own goals – putting their money to work for them, preparing for retirement, starting up or expanding a company – a growing number feel the need to save and invest in a sustainable future.
Speeding up our projects in favour of responsible investment
BNP Paribas has been a pioneer in this area since 2006. In recent years it has picked up the pace in its development of responsible savings and investment solutions.
The Group reorganised in 2021 to speed up its responsible approach, pooling its business lines and experts in protection, savings and investment within a single division, called “Investment & Protection Services”. Its goal is to strengthen the development of innovative solutions around savings and responsible investments and to enhance services provided to its customers.
A wide range of sustainable thematic funds
BNP Paribas Asset Management offers investors (both individuals and institutionals) sustainable thematic funds, such as BNP Paribas Aqua, BNP Paribas Climate Impact, BNP Paribas Human Development and BNP Paribas Ecosystem Restoration.
BNP Paribas Real Estate Investment Management offers a range of responsible real-estate funds such as BNP Paribas Diversipierre for individual customers. In November 2020, this became the first OPCI (REIT) fund to be awarded the official French SRI label. Each building is evaluated on the basis of 13 themes and 94 criteria, including energy use, CO2 footprint, and pollution. For European institutional clients, the Group’s real-estate investment experts offer the European Property Impact Fund (EIPF), the first environmental impact real estate fund investing in Europe and compliant with the Paris Agreement.
450 million euros in own-account investments for ecological transition and social inclusion
As part of its own-account investments, the Group has allocated a total of 450 million euros by 2025 to invest in startups and companies that put in place innovative solutions for the ecological transition, natural capital, local development and social impact.
- 200 million euros allocated in startups and impact companies that implement innovative solutions in three areas - local development and climate; social and solidarity activities; and natural capital.
- 175 million eurpos allocated in startups of the energy and ecological transition
- €75 million euros committed in the BNP Paribas Solar Impulse Venture Fund, created in 2021 with the Solar Impulse Foundation to finance startups of the ecological transition in Europe and North America, in order to accelerate their development and scale change; open to professional investors - institutional investors, large companies and family offices, this fund aims at a size of 150 million euros (half of which is invested by BNP Paribas on its own behalf).
Read an example of impact investing
Invest an additional 1 billion euros on average per year by 2025 in positive impact assets: this is the goal that BNP Paribas Cardif has set itself since 2019.
Supporting corporate customers and institutional investors
BNP Paribas’ Investment & Protection Services and Corporate & Institutional Banking teams offer responsible investment and financing solutions for institutional investors and large corporate clients. CIB is at the heart of transforming the global economy through its responsible financing and investment solutions, such as Bonds and Loans incorporating sustainability criteria: Green, Social and Sustainable bonds or loans; and sustainability-linked bonds (SLB) or sustainability-linked loans (SLL).
Two CIB 2022 landmark deals:
- BNP Paribas acted as Co-Structuring Advisor for L’Oréal inaugural issuance of EUR 1.25bn Sustainability-Linked Bond (SLB) over 4.25 years; it aims in particular to reduce emissions in the L'Oréal supply chain and make packaging more sustainable (recycled plastic and bio based).
- BNP Paribas acted as sole Sustainability Coordinator for Lundbeck’s EUR 1.5bn four-year inaugural Sustainability-Linked Loan (SLL) in its mission to pioneering treatments for brain diseases.
Manaos, an open-servicing ESG marketplace for institutional investors and asset managers
The Manaos platform, which was designed and incubated by the Securities Services business of BNP Paribas, helps investors and asset managers source reliable ESG data and report on the sustainability of their investments. Manaos offers a data-exchange interface, where investors and asset managers can get a comprehensive view of their portfolios and dive deep into all aspects of their investments in just a few clicks and secure way.
Manaos also provides an open-architecture ESG marketplace, where investors can plug their portfolio data to leading ESG data and service providers, offering scoring capabilities both at portfolio-level and asset-level across a broad range of complimentary apps.
How can we know funds are truly responsible?
About a dozen official European labels certifying that funds are invested sustainably have been established in the past 15 years. They are sanctioned by public authorities in various countries and are awarded to funds that meet precise specifications, based on strict inspections conducted by independent bodies.
Some examples include European certifications like SRI, Towards Sustainability, Nordic Swan, LuxFLAG ESG, FNG-Siegel, Umweltzeichen; and specialised certifications such as Finansol, which covers solidarity-based savings in France, and GREENFIN, which covers investment funds contributing actively to financing the energy and environmental transition.
at BNP Paribas Asset Management are certified with a European responsible label
representing almost 115 billion euros in assets under management as of the end of September 2022
BNP Paribas’ ESG ratings
ESG ratings assess companies on the basis of environmental, social and governance (ESG) criteria and allow asset managers to choose the most responsible of them in putting together their portfolios of investment funds. The ratings are done by specialised ratings agencies based on an analysis of public data and technical questionnaires. To go further, BNP Paribas Asset Management teams have developed their own, four-stage methodology, a more in-depth ESG process to quantify these data, with:
- Selection and weighting of each company’s ESG indicators;
- An ESG evaluation vs. peers;
- A qualitative evaluation;
- Final ESG ratings of companies in the investment funds.
The “Clover” sustainability analysis grid
Designed by BNP Paribas Wealth Management, the analysis grid in “clovers” aims to measure the sustainability level of all financial products offered to its clients, whether the products are responsible or not, created or only recommended by BNP Paribas. The resulting rating of 0 to 10 clovers aims to enable Private Banking clients to compare the sustainability level of the products offered, alongside risk level and return on investment. This provides the client with a comprehensive view of its investment options to match its intentions.
SFDR, the first European regulation covering sustainable finance
Since March 2021, the first European regulation covering sustainable finance, called the Sustainable Finance Disclosure Regulation (SFDR), has set transparency obligations for financial market actors.
It classifies investment funds into three categories:
- funds having no sustainability objective;
- funds that promote ESG characteristics (“Article 8” funds);
- funds having a sustainability objective (“Article 9” funds).
of Assets Under Management
in BNP Paribas Asset Management’s open-ended funds distributed in Europe are already classified as “Article 8” or “Article 9”, based on SFDR
How to verify the environmental or social impact of investments?
BNP Paribas measures and publishes the ESG scores of its funds, the CO2 footprint of its funds, the social impact of its solidarity-based funds, and the contribution of its solidarity-based partners to the UN’s Sustainable Development Goals (SDGs). Meanwhile, BNP Paribas Asset Management’s teams are working actively towards establishing new impact-measurement standards, particularly for its portfolio’s water and forest footprint.
BNP Paribas’ reports are as concrete as possible. For example, if an individual has invested in an energy transition fund, he or she will know at year-end what CO2 emissions savings her money helped achieve, expressed in easy-to-understand language.
What about the financial performance of responsible investments?
International sector surveys show that ESG investments achieve on average a good financial return over the long term.
A survey published by Morningstar in 2021 on 70 ESG indices on markets worldwide found that, between 2016 and 2020, incorporating ESG criteria enhanced their performances and mitigated their volatility.
- 75% of these ESG indices outperformed their market peers in 2020;
- 88% had outperformed in the five years to the end of 2020;
- 91% suffered fewer losses than their non-ESG peers during bear markets, in the past five years, including the bear market of the first quarter of 2020.
Dedicated experts and teams trained to better serve our customers
The Group is constantly developing and transforming itself in-depth in order to offer its customers the best responsible investment solutions and dedicated assistance.
Here are some examples of actions and resources it has implemented.
Expansion of expert teams dedicated to responsible and sustainable investment
BNP Paribas Asset Management’s ESG centre of expertise has been expanded each year since it was established in 2002. Called the Sustainability Centre, it had 30 ESG experts as of the end of 2021. It provides the investment teams with sector and geographical research, along with analyses and ESG data covering more than 13,000 issuers, to help them make the right investment decisions on behalf of their clients. It incorporates regulatory standards into its work and designs sustainable thematic investment strategies. It also implements our shareholder engagement policy (or stewardship policy), in order to have a positive influence on their sustainable and responsible practices.
The implementation of ESG champions to accompany customer advisors
A network of 130 ESG champions was set up in 2018 by BNP Paribas Asset Management. As a relay to the Sustainability Centre, they provide the sales teams with the necessary information and updates to assist their customers efficiently.
Cutting-edge training provided on a regular basis to employees in charge customer relations and developing our products
It includes our responsible investment solutions, our technological assistance tools and our ESG methodologies.
A dedicated teaching programme designed for the Group’s 200,000 employees
Called WE ENGAGE, the programme focuses on environement and social challenges and the role that each person can play. Its goal: to accelerate the incorporation of sustainable development into each person’s work on a daily basis.
“The need to introduce ESG criteria into the core of our business lines and our savings and responsible investment solutions is a major shift. We have been able to stay ahead of it by adjusting our know-how, our offerings and our activities. We have accelerated this transformation in recent years in order to address social imperatives and our clients’ needs efficiently and over the long term. Our ambition is to become a leader in savings and responsible investments, and to contribute to BNP Paribas Group’s goal of becoming a global leader in sustainable finance."
Photos: ©Erickson Stock, @Boonchuay1970, @Videophilia StockStocksy, @tina vlaskalicEyeEm, @Marti Sans/Stocksy, @Mouhamadou Ngom, @Hero Images