528 2019 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

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Our economic responsibility: financing the economy in an ethical manner

■ In 2019, BNP Paribas Personal Finance continued to roll out the Net Promoter System to its subsidiaries; the 3rd campaign benchmark was launched at 15 entities, 80% of which regularly measure NPS following client transactions.

■ BNP Paribas Cardif has now deployed on-the-spot recommendation surveys in 25 out of 27 entities, and is making gradual additions to its system. In 2019, 10 entities exceeded the Cardif Forward 2022 objective (NPS > +50).

■ Within BNP Paribas Wealth Management, the Net Promoter System has been extended to the majority of the sites.

ETHICS AT THE HEART OF SUPPLIER RELATIONS Group purchases amount to around EUR 10.6 billion in expenditures globally.

BNP Paribas strives to develop balanced relationships with its suppliers. With this in mind, the Group has adopted a Responsible Sourcing Charter which sets out commitments directed to both the Group and its suppliers.

In addition, the Procurement teams abide by strict deontological principles, in order to manage strict Code of conduct in order to manage the risks of mutual dependency, adapt its practices to allow small and medium suppliers to compete in its call for tenders, small and medium suppliers, implement processes for faster payment of supplier invoices, and offer suppliers an appeal process through an internal ombudsman (see Fostering dialogue with stakeholders in Our strategy, section 7.1). In return, the Group expects its suppliers to run their businesses in accordance with strict environmental, social and governance criteria (see Integration of ESG criteria into supply chain management, in Systematic integration and management of environmental, social and governance (ESG) risks, Commitment 3).

In France, under its Diversity & Inclusion policy, the Group has taken multiple actions to foster procurement from suppliers working with vulnerable and disable employees (STPA). In 2019, BNP Paribas SA renewed its company-wide agreement on the integration of people with disabilities into the workplace for the fourth time. This agreement, which has been signed for a three-year term (2020-2022) with all trade unions and approved by the French Ministry of Labour, includes a EUR 1.8 million (excl. tax.) procurement target with STPA suppliers.

COMMITMENT 3: SYSTEMATIC INTEGRATION AND MANAGEMENT OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS (ESG)

By financing and investing in industries with multiple Environmental, Social and Governance (ESG) issues, operating in countries whose legal and governance systems are not at the same level of maturity, BNP Paribas faces a wide variety of challenges that require increased vigilance when making financing and investment decisions. The appropriate management of ESG risks is of prime importance as it helps financial risks to be managed properly. The Group s ESG risk management system is part of an overall approach and is based on:

■ the development of financing and investment policies to regulate activities in sectors with high ESG risks, such as coal-based electricity production;

■ the creation of a list of excluded goods and business activities, such as tobacco;

■ the publication of public positions which demonstrate the Bank s interest in issues that may pose environmental and social risks, such as ocean-related activities;

■ the respect of the Equator Principles for major industrial and infrastructure projects;

■ the development and use of tools to manage and monitor such risks (such as questionnaires for activities that have prominent risks), including a generic control plan;

■ integration of the risk management stream, RISK, as the 2nd line of defence.

New environmental and social risk management tools were developed in 2019 to meet the French law on the Duty of care of parent companies and of companies using sub-contractors (See Duty of care and Declaration on modern slavery and human trafficking, section 7.6).

FINANCE AND INVESTMENT POLICIES GOVERNING THE GROUP S ACTIVITY IN SECTORS WITH SIGNIFICANT ESG ISSUES

BNP Paribas strengthens its climate, transition and physical risk management system

Since 2011, BNP Paribas has contributed to speeding up the energy and green transitions, partly by combating climate change. In effect, the Group has an indirect impact on climate change through its corporate financing activities and must factor in climate-related risks. These consist of both physical risks (see Managing physical risk, Commitment 3) and transition risks, resulting from changes in the regulatory environment and public policies aimed at a low-carbon economy. The Group s actions thus help to mitigate these risks.

The Group tests numerous tools and methodologies used to best assess the exposure of its credit and investment portfolio to climate risks (both transitional and physical). As such, the Group:

■ supports and implements the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and publishes information in line with these recommendations. In 2020, as previously, they will be summarised in the table of concordance (see Table of concordance with GRI, ISO 26000, Global Compact, Sustainable Development Goals, Principles for Responsible Banking and TCFD, section 7.8) and listed in a dedicated report;

■ has also made a commitment to the Science Based Target initiative (SBTi). This coalition includes the Carbon Disclosure Project (CDP), the