2020 Universal registration document and annual financial report - BNP PARIBAS550

7 a Committed Bank: information ConCerninG the eConomiC, soCial, CiviC and environmental resPonsiBility of BnP PariBas

7

Our economic responsibility: financing the economy in an ethical manner

7.2 Our economic responsibility: financing the economy in an ethical manner

BNP Paribas primary mission is to meet its clients needs, in particular by financing the projects of individual clients and businesses in an ethical manner, in order to drive economic development and create jobs. Given its leading positions in financial services in the 68 countries in which it operates, the Group s financing capacity and the way it conducts its business can have a direct impact on local economies. Aware of this economic responsibility, BNP Paribas bases its actions on it s three commitments:

■ Commitment 1: Investments and financing with a positive impact;

■ Commitment 2: Ethics of the highest standard;

■ Commitment 3: Systematic integration and management of Environmental, Social and Governance risks (ESG).

In 2020, the Bank continued to develop its actions aimed at offering financing and investments that have a positive impact on society:

■ in 2020, the total amount of Group support for Social Enterprises (financing, investments on its own behalf and on behalf of third parties) worldwide exceeded EUR 2 billion;

■ the BNP Paribas European Social Impact Bond fund of EUR 10 million launched in January 2020 by BNP Paribas Asset Management for the European Investment Fund (EIF) and BNP Paribas, has already invested in four Social Impact Bonds (SIB), 3 in France and 1 in Belgium. Contributing to the development of social innovation and

the support of social enterprises, the two players are able to invest, together and for the same amounts, in the SIBs of the European Union;

■ in 2020, the Group structured and launched its very first SIB in Belgium, bringing the number of SIB structured by BNP Paribas to 10, three of which have already been repaid. In addition, the Group obtained a mandate from UNDP to support the design of a Development Impact Bond in Zambia.

2020 was also marked by many concrete contributions to BNP Paribas economic responsibility, in particular as part of its ESG risk management policy:

■ in line with its strategy of speeding up the energy transition, in 2020, BNP Paribas decided to completely stop its financing of the coal industry by 2030 in European Union and OECD countries and by 2040 for the rest of the world. In 2017, BNP Paribas was also the first bank to announce that it was suspending its financing of companies which generate most of their income from unconventional oil and gas, a measure which today is still amongst the most advanced in the sector;

■ BNP Paribas strengthened its ESG system by deploying a multi-year programme the ESG Action Plan under the joint responsibility of the Head of Corporate Commitment and Head of Risk. This programme aims to both define the Group s ESG standards and to develop tools to analyse the Group s performance at customer and loan portfolio level.

COMMITMENT 1: INVESTMENTS AND FINANCING WITH A POSITIVE IMPACT

SUPPORTING SMES DURING THE COVID-19 CRISIS BNP Paribas has developed the necessary organisational system and has the solid expertise required to contribute to the development of companies, SMEs in particular, which the Bank supports in an effective and efficient manner in its domestic markets and on the international stage. As an investor, BNP Paribas Cardif has strengthened its role in the financing of SMEs by investing in funds intended to support them in France (LAC1 funds of the Public Investment Bank) and internationally.

In 2020, the Retail Banking network was particularly mobilised to support SMEs and help them better navigate the difficult period of the Covid-19 pandemic. Whenever possible, BNP Paribas has opted for digital tools to enable its clients to stay informed while limiting travel. Measures have been implemented to offer flexible and exceptional solutions:

■ in Italy, BNP Paribas announced a six-month deferral on corporate loans. Artigiancassa, a BNP Paribas subsidiary dedicated to artisans,

granted additional credit lines to support companies, while setting up an information and assistance centre for its customers;

■ in France, several major measures are currently being used to support companies: processing financing requests within a maximum of five days, regular contacts between SMEs and their advisors to assess the consequences of the crisis and determine action plans, developing treasury solutions and deferring loan repayments for up to six months.

In addition, the synthetic securitisation transaction carried out with the European Investment Bank and the European Investment Fund enables a part of the regulatory capital allocated to a portfolio of loans to SMEs and midcaps to be freed up and EUR 515 million to be deployed in new loans to Retail Banking customers in France over the next two years. This financing may take the form of bank loans or leases.