5212019 Universal registration document and annual financial report - BNP PARIBAS
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
CONTRIBUTING TO THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS (SDGS)
A CSR strategy aligned with the SDGs
The Group s CSR strategy fully contributes to achieving the UN s 17 SDGs that aim to build a sustainable future by 2030: ending poverty and hunger, promoting equality and building sustainable cities, whilst protecting the planet. It covers economic growth priorities, inclusion of vulnerable populations and preserving resources.
BNP Paribas contributes specifically to SDG 17 (partnership for the goals) through numerous partnerships between banks (see United Nations Principles for Responsible Banking, Commitment 1) or covering environmental themes (see Advance awareness and sharing of best environmental practices, Commitment 12), or reducing inequality (see Business for Inclusive Growth in Identifying models for more inclusive growth), or PAFADD project to support women in agriculture and sustainable development (in More inclusive growth models in Supporting female entrepreneurship, Commitment 1).
United Nations Principles for Responsible Banking
At Climate Week NYC 2019, BNP Paribas signed the Principles for Responsible Banking (PRB) alongside 130 banks from 46 countries.
Thanks to this coalition, which covers approximately one-third of worldwide banking assets, the SDGs and the Paris Agreement are at the heart of banking strategy for the first time.
The measures selected to meet PRB transparency challenges are listed in the table of concordance (see Table of concordance with GRI, ISO 26000, Global Compact, Sustainable Development Goals, Principles for Responsible Banking and TCFD in section 7.8).
Measuring our contribution to the SDGs
More generally, it is important for BNP Paribas to measure its contribution to the SDGs. At the end of 2019, total financing contributing to the energy transition and the SDGs was EUR 180 billion (compared with EUR 168 billion in 2018).
Economic sectors making a full contribution to the SDGs Some business sectors are identified for their positive overall contribution to the SDGs such as, for example: community, social, education, health, agriculture, waste management, public transport and renewable energies. Among the financing that the Group supported:
■ in the agricultural sector, a loan signed with Neumann will finance more than 100,000 coffee growers in 10 countries;
■ in the transport sector, the Group s Senegalese subsidiary BICICIS has arranged and financed the new EUR 150 million tranche for the regional high-speed train (Train Express Régional (TER)) between Dakar and AIBD international airport;
■ in the waste management sector, Republic of Ivory Coast subsidiary BICICI has channelled more than EUR 3 million into a vehicle fleet to collect household waste, which will vastly improve waste management in large towns;
■ in terms of access to housing, we have provided GBP 50 million in financing to Optivo (with an option to increase to GBP 75 million). This social housing association manages 45,000 apartments and provides accommodation for nearly 90,000 people. The amount saved on interest on this loan will help 1,000 people to find a job.
Other activities are also considered as having a positive impact, such as Group support to microfinance (see Products and services that are widely accessible, Commitment 7), to social enterprises (see Financing social entrepreneurship, Commitment 1) to energy efficiency (see Enabling our clients to transition to a low-carbon economy respectful of the environment, Commitment 10) and also partnerships with international institutions. This methodology has been approved by extra-financial rating agency Vigeo Eiris.
Partnerships with development banks and institutions Thanks to these partnerships which amounted to a total of EUR 850 million in 2019, BNP Paribas provided specific support to targeted client categories and sectors: SMEs (Tunisia), supporting exports, energy efficiency (Morocco, Poland), women entrepreneurs (Turkey, Morocco, etc.) and financing for greener maritime transport (partnership with the European Investment Bank).
Other financing with a strong positive impact Ultimately, some transactions do not belong to any of these sectors, although they contribute to attaining the SDGs through their positive impacts. Amongst these transactions, Sustainability Linked Loans (SLL), formerly called Positive Impact Loans (PIL), make it possible to vary interest rates on the basis of the borrower s achievement of environmental and/or social objectives. BNP Paribas, which is one of the leaders in this sector, was ranked first in the world by Dealogic at the end of 2019. In total, BNP Paribas granted EUR 96.3 billion in SLLs in 2019, including EUR 6.2 billion directly underwritten by the Bank.
Some specific examples illustrate this approach:
■ in March 2019, distribution company Bunzl, agreed a EUR 105 million loan whose margin is indexed to its CO2 emissions reduction per million in revenues in EUR;
■ in September 2019, Sodexo agreed a loan for EUR 1.3 billion which involves an adjustment to the cost of loan based on the company s performance in meeting its 50% waste reduction target by 2025.
Other innovative products are also being developed. Thus, BNP Paribas participated in the issuance by Italian leading power generator ENEL of a EUR 2.5 billion SDG-linked bond. The coupons on this bond are linked to the achievement of targets derived from the UN s SDGs: SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action).
