2020 Universal registration document and annual financial report - BNP PARIBAS 553

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

The year 2020 was also marked by:

■ a methodological guide(1) on Social Impact Contracts, co-authored with Impact Invest Lab(2);

■ BNP Paribas Cardif s investment in the Blue Like an Orange Sustainable Capital fund, which finances companies in Latin America that contribute to social and inclusive growth;

■ the development of Tilia , the second social business incubated by the Group. It was designed by an employee within the People s Lab4Good, the internal incubator for intrapreneurial projects with positive impact, and then supported by the Grameen Creative Lab, as part of the partnership with the Nobel Peace Prize Prof. M. Yunus. Tilia offers multiple solutions for caregivers who care for a loved one in need of autonomy (more than 11 million people in France), and promotes lobbying and advocacy actions to raise awareness among companies and public authorities about caregiver difficulties (see Commitment 6: A learning company supporting dynamic professional path management).

Development of Social Impact Bonds

BNP Paribas continued to develop Social Impact Bonds (SIBs) (or Social Impact Contracts, CIS, in French), as a arranger and investor. The global health crisis has strongly impacted the majority of these projects, requiring significant local support work to adapt or restructure certain SIB, and sometimes resulting in early repayment, as was the case for the two SIBs co-structured by the Group in the United States.

In March, BNP Paribas launched its first structured SIB in Belgium, with the Oranjehuis association, to finance the project Back on Track .

This project, for which the Flemish Ministry of Welfare and Families is Outcome Payer, aims to reintegrate 133 vulnerable young adults between the ages of 17 and 25, who are about to become homeless or have just come out of prison. To achieve this objective, the Oranjehuis association is based on the principle of Housing First for Youth, a methodology that initially focuses on access to long-term housing, an essential prerequisite before starting intensive and personalised support for young people during one year, aiming to acheiving their social and professional (re)integration. EUR 1.7 million of private capital was mobilised from investors to pre-finance this project. Among them, the BNP Paribas European Social Impact Bond fund, BNP Paribas Fortis, BESIX Foundation and Boss Paints. The programme will run for three years and will generate at least EUR 3.8 million in savings for the society in the event of total success.

This is the 10th SIB (co)structured by BNP Paribas in the world between 2016 and 2020 on various themes such as child protection, professional integration, equal opportunities in education, etc.

Three of these SIBs are now completed and have been successful.

If the seven current SIBs achieve their social impact targets, then:

■ more than 500 vulnerable people will have access to a stable occupation;

■ more than 1,000 students will have benefited from specific support to continue their studies;

■ more than 130 children will have avoided foster care.

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 (Fondation d Auteuil Loire Atlantique and Gironde, Article 1 and Oranjehuis) for an amount of EUR 4.4 million. Numerous other SIBs are being studied, structured or invested in the Netherlands, Italy and France. This fund aims to:

■ contribute to generalising the impact of Social Impact Bonds and give them more visibility;

■ test societal innovations thanks to the leverage effect of this investment;

■ encourage a greater number of institutional investors to join BNP Paribas and the EIF.

In addition, after winning the call for tender, the Group supported the United Nations Development Programme (UNDP) in the design of a DIB (Development Impact Bond, i.e. a dedicated SIB for emerging countries) in Zambia. The first of its kind, this DIB aims to help smallholder tobacco growers in Zambia to make the transition to selected food crops to combat malnutrition in the country and against deforestation due to tobacco growing, and to improve the health of farmers and their working conditions.

DESIGN AND PROMOTION OF SUSTAINABLE INVESTMENT FUNDS BNP Paribas is a major player in sustainable finance through its various subsidiaries in asset management and distribution.

A leading player in sustainable investment, BNP Paribas Asset Management incorporates ESG criteria into its investment processes. For its clients who also want to generate a positive impact with their savings, BNP Paribas Asset Management offers Sustainable+(3) funds which represented as at 31 December 2020 more than EUR 92 billion in assets under management, i.e. nearly 19% of total assets under management by BNP Paribas Asset Management.

In 2020, BNP Paribas Asset Management consolidated its leading position in the French and Belgian markets in terms of SRI-labelled assets under management. In France, the subsidiary is the leader with EUR 46.5 billion labelled and in second place by number of labelled funds. BNP Paribas Asset Management also ranks first in Belgium in terms of labelled assets under management and funds, with a total of EUR 68.5 billion (some of which are also labelled in France).

Obtaining these SRI labels underlines BNP Paribas Asset Management s long-term commitment to developing and promoting this type of product to investors and savers.

(1) https://iilab.fr/publications-investissement-a-impact-social/

(2) Social impact investing experimentation and development platform (https://iilab.fr).

(3) Including SRI-certified funds.