Universal registration document and annual financial report 2020

2020 Universal registration document and annual financial report - BNP PARIBAS 609

A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS

Climate-related issues management summary

STRATEGY: ACTUAL AND POTENTIAL IMPACTS OF CLIMATE-RELATED RISKS AND OPPORTUNITIES ON BUSINESS, STRATEGY AND FINANCIAL PROJECTIONS

For several years now, BNP Paribas has undertaken to identify, in increasingly greater detail, all the climate-related risks and opportunities with which the Group is faced. The Bank seeks to analyse and even quantify, where sufficiently robust methods allow, the impact of these risks and opportunities on its strategy and businesses. Efforts are also being made to compare the expected development of BNP Paribas businesses with prospective climate scenarios in order to assess the Group s resilience to climate change.

These analyses are taken into account in the Group s strategy.

A. CLIMATE-RELATED RISKS AND OPPORTUNITIES IN THE SHORT, MEDIUM AND LONG TERM

Climate risks are fully incorporated into the Group s risk management process. They are identified, analysed and managed on the basis of various work and analyses carried out by the Risk Function, the divisions and the businesses and through several committees which give rise to actions and decisions.

BNP Paribas includes in its analysis the physical risks and transition risks, the risks for its own operations and those for its customers and the companies in which the Group invests. It applies the principle of double materiality.

B. CONSIDERATION OF THEIR IMPACT ON THE GROUP S BUSINESSES, STRATEGY AND FINANCIAL PROJECTIONS

BNP Paribas strategy incorporates climate-related risks and opportunities into the CSR strategy (see page 544), reinforced by the Group s Purpose (see page 543).

These climate risks are taken into account by the Group s businesses. BNP Paribas has thus committed to aligning its loan portfolio with the climate objective of the Paris Agreement (see page 561). The Group has made strong commitments to decarbonise the energy sector, which is key in the fight against climate change, in particular by deciding to stop financing thermal coal (see page 560). With regard to asset management, BNP Paribas Asset Management manages its investments based on indicators related to coal, GHG emissions and physical risks, and uses its voting rights to influence the energy transition of companies (see page 596); BNP Paribas Cardif applies a low-carbon transition filter to shares and corporate bonds held directly.

The main sources of climate-related risks for BNP Paribas are summarised in the table below. An indication of the time horizon at which each risk is likely to materialise is given: short-term (ST), up to two years; in the medium term (MT), between three and ten years; or long-term (LT), after ten years. The potential importance of each risk is also estimated, based on expert judgement (between + , moderate, and ++++ , very significant).