ESG statement

At BNP Paribas Asset Management, our aim is to achieve long-term sustainable investment returns for our clients. This means that we integrate sustainable investment practices into the heart of what we do. We want the investments we make to be a driving force for change: for our clients, their beneficiaries and the world we live in.

Because investing means the world to us, we choose to:
• clearly articulate our approach to sustainability investment, with precise targets and commitments;
• focus on key sustainability issues: the energy transition, the environment, equality and inclusive growth;
• invest for the long term, engaging with companies and regulators to promote best practices;
• Promote awareness about the role finance can play in achieving a sustainable world.

We know that we cannot achieve this alone. And we also know that sustainable investment is no longer an option, but a necessity. The greater number of investors that adopt this perspective, the faster positive change will happen.

In order to create a robust framework around our ESG philosophy, we launched our Global Sustainability Strategy in 2019. It details our approach to sustainable investment, setting clear objectives and commitments and focusses on three key sustainability themes: Energy transition, Environment and Equality (the ‘3Es’).

It reinforces our commitment to invest for the long-term and to engage with companies and regulators in order to promote best practice, as well as raise awareness about the role that finance can play in achieving a sustainable world.

 The investments are subject to market fluctuations and the risks inherent in investments in securities. 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, the Fund described being in risk of capital loss.

 

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ESG DDQ

Does BNP Paribas Asset Management have a policy addressing its approach to the incorporation of ESG factors within the investment process?

At the core of all our investment processes, analysts and portfolio managers integrate a consideration of relevant ESG factors into their company, asset and sovereign evaluation and investment decision-making processes. As reflected in our investment beliefs, this process allows them to identify and assess areas of risk or opportunity which may not be understood by all market participants, and which provide them with a relative advantage. The process to integrate and embed ESG factors is guided by formal ESG Integration Guidelines and overseen by an ESG Validation Committee. Our goal is that by 2020, every investment process – and by definition, every investment strategy – will have been reviewed and approved by this Committee.

Our ESG Integration Guidelines and Policy apply to all of our investment processes (and therefore funds, mandates and thematic funds). However, they are not applicable to index funds and exchange-traded funds (ETFs).

Please explain what steps have been taken to ensure ESG specialists have authority in the portfolio management process?

BNP Paribas Asset Management’s Sustainability Centre, created in 2017, drives our approach to sustainable investment. It provides investment teams with research, analysis and data at company and sectoral levels, and it also supports teams in their efforts to fully integrate sustainability-related risks and opportunities into investment strategies. This is achieved by our ESG research analysts, whose insights are informed by a variety of external data and research sources, and who provide a range of educational opportunities to colleagues across the organisation.

We take the governance of sustainability seriously in the companies in which we invest, and hold ourselves to the same standard. Sustainable investment is at the core of what we do, and our approach. Our Sustainability Committee oversees policies, targets and reporting, and is a key component of our Investment Committee, chaired by our CEO.

How are the Sustainable Development Goals (SDGs) integrated in BNP Paribas Asset Management’s investment policy and decisions?

Our Global Sustainability Strategy outlines our sustainable investment roadmap with specific KPIs around energy transition, environmental sustainability and equality and inclusive growth. In particular, we have taken into consideration the 2030 Agenda and its 17 Sustainable Development Goals in establishing our core objectives, targets and KPIs. Our Global Sustainability Strategy also provides an overview of our key objectives and links them to the Sustainable Development Goals.

How do you collaborate with other investors to achieve successful engagement outcomes?

Recognising that there is a real opportunity to make a difference by sharing knowledge and resources, BNP Paribas Asset Management participates with the wider investment community in a number of ways. For instance, we have worked alongside other global investors and publicly supported a series of statements and pledges. BNP Paribas Asset Management also actively promotes the efficient management of environmental issues, proposing innovative ideas to leading policy makers and contributing to the development of impact investing.

We are committed to promoting ESG on an industry-wide scale through the organisation of, or participation in, sustainable investment forums worldwide, and the publication of articles and dedicated newsletters. In terms of ESG initiatives, we currently participate in over 40 collective engagement initiatives, mainly focusing on climate change.

Please describe what ESG data, research, third-party consultants and other resources the fund manager uses, and how these are incorporated in the investment and risk management processes.

The ESG Research team at BNP Paribas Asset Management make use of a number of external sources to collect the material needed to undertake effective research, however, all research is carried out internally. External specialised providers are used for raw data and detailed information on company controversies. Multi-stakeholder expert groups, academics, institutional and civil society research are used to enrich our qualitative analysis.

Our ESG research findings are:

  • Independent
  • Based on several sources of information, and not limited to ESG data suppliers
  • Completed by regular direct contact with issuers

Applying this research, an ESG analysis is carried out using an in-depth company scoring methodology that uses quantitative and qualitative elements.

Using ESG indicators, the Sustainability Research team first calculates a quantitative ESG scoring for each company, which measures how they assess various ESG risks and opportunities. ESG analysts then perform qualitative analysis that reflects a more in-depth study of core sector issues, which may follow a meeting with the issuer’s management team, or in some cases take place after a controversy involving the issuer. Companies are then given an ESG score which is converted into a company ranking. This is used to generate a buy-list, sent to all portfolio managers, the Risk department, our Quantitative Research Group and to our network of ESG champions firm-wide. All companies are continuously monitored and assessed using our proprietary ESG scoring methodology.

 

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