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FRONT OF MIND | – 3 Min

Pushing ahead in the age of sustainable transformation

In this article:

    In its 2021 Sustainability Report, BNP Paribas Asset Management stresses the undiminished – and increasingly urgent – need to mobilise capital for sustainable investment solutions that can support a net zero pathway, protect biodiversity and facilitate inclusive growth.  

    As the sustainable asset manager for a changing world, we believe we have an important role to play as we work to generate long-term sustainable investment returns for clients.

    Our purpose, strategy and culture are deeply focused on embedding the six pillars of our sustainable investment approach (Exhibit 1) into everything we do.

    Here we highlight some of the main achievements detailed in the full report.

    ESG integration across all investments  

    We embedded ESG across our investment processes using our ESG Integration Guidelines and expanded our proprietary ESG research from 3 000 entities to over 13 000. Using a comprehensive validation system, we now manage EUR 330.5 billion in ESG-integrated assets.

    We worked with index providers to shift 18 existing exchange-traded funds (ETFs) to ESG and Paris-aligned benchmarks to strengthen the sustainability characteristics of our flagship BNP Paribas Easy index strategy. As a result, 83% of the BNPP AM index range, or EUR 16.4 billion in assets under management (AUM), is now classified as Article 8 or Article 9 under Sustainable Finance Disclosure Regulation (SFDR) regulations.

    Stewardship (voting, engagement)  

    Using Proxy Voting & Governance Principles, we voted down management proposals about 33% of the time in 2021.

    We supported almost 90% of climate-related shareholder resolutions in the most recent voting period.

    We increased our opposition to the appointment of directors, mainly over diversity issues 

    Responsible Business Conduct

    We made our Responsible Business Conduct policy, which governs our exclusion lists, the standard for all new client mandates, and encouraged existing clients to adopt our policy.

    We strengthened our policy to systematically exclude any utilities that will still have coal capacity in their power generation mix in the EU and OECD countries by 2030 and the rest of the world by 2040.

    We introduced exclusions and mandatory criteria for companies with significant involvement in the exploration, production, and trading or pipeline distribution of shale oil or gas, oil sands, and oil and gas resources in the Arctic region.

    We updated our agricultural sector policy to tighten restrictions on deforestation and land clearance in the Amazon and Cerrado regions of Brazil, two of the most biodiverse regions on Earth.

    The ‘3 Es’ 

    1. Energy transition  

    In 2021, we strengthened our commitment to aligning our investment portfolios with the Paris Agreement goals by signing up to the Net Zero Asset Managers initiative(NZAM).

    Energy transition is integrated thoroughly into investments via our ESG scoring framework, and our exclusion policy covers the most sensitive sectors related to climate change.

    We use our leverage to encourage investee companies, countries and policymakers to align with the Paris goals. We supported many climate-related shareholder resolutions in the most recent voting period and we engage with companies on the energy transition both one-to-one and collaboratively through coalitions such as Climate Action 100+

    2. Environmental sustainability  

    In 2021, we published our Biodiversity Roadmap, which details our plan to embed biodiversity considerations in our sustainable investment approach.

    Our proxy voting, engagement and public policy supports our expectations of environmental sustainability with a focus on deforestation and water efficiency. In 2021, we signed the business statement for a Global Treaty on Plastic Pollution, which governments around the world endorsed. 

    3. Equality and inclusive growth  

    We increased our opposition to the appointment of directors from 20% in 2018 to 37% in 2021. We engaged in initiatives raising concern over worsening inequality during the Covid-19 crisis.

    We developed a data model to incorporate an inclusive growth assessment in our investment strategies. Our Inclusive Growth strategy focuses on investing in companies proactively reducing inequalities.

    Sustainable+: Enhanced ESG – thematic, impact

    Our focus on products that go further – meaning that they have enhanced ESG traits, be they thematic or impact – resulted in EUR 229 billion of total assets under management being classified as SFDR Article 8 and Article 9

    This includes 81% of our open-ended funds.

    Corporate Social Responsibility (CSR) – Walking the talk

    We implemented a corporate social responsibility approach with ambitious goals for a more gender-balanced business, encouraging employees to volunteer, reducing our emissions and waste.

    We tackled employee training and engagement on sustainability and linked sustainability to employee remuneration more closely.

    Disclaimer

    Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

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