532 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
7
Our economic responsibility: financing the economy in an ethical manner
A COMPREHENSIVE ESG RISK MANAGEMENT SYSTEM FOR PRODUCTS AND SERVICES PROVIDED BY THE GROUP
➤ REINFORCEMENT OF THE GROUP S ESG RISK MANAGEMENT SYSTEM
CSR Sector Policies: Palm oil, Wood pulp, Agriculture, Coal- red power plants, Nuclear,
Unconventional Oil & Gas, Mining, Defence
Global Credit Policy (for Corporate & Retail clients)
Monitoring & exclusion list
Questionnaires linked to the French law on the Corporate
Duty of care
Specic Credit & Rating policies; Rating Adjustment
for CSR Matters
Dedicated CSR Tools for Businesses:
- CIB CSR screening Grid - IRB Tool
Asset Management: ESG criteria for collective
investment funds/institutional
mandates
Ad-hoc CSR recommendations:
Advice on specic transactions
Equator Principles/Projects
Industry Research CSR Tools:
1. Guide for CSR Assessment 2. Sector mapping: - Sensitivity - Key issues
CS R se ns iti vi ty
Sector / Policy level
RISK APPETITE FRAMEWORK
CODE OF CONDUCT
KYC
Company level Transaction level
➤ PROJECTS SUBJECT TO THE EQUATOR PRINCIPLES
2011 2012 2013 2014 2015 2016 2017 2018 2019
Number of transactions concerned in the year 30 13 21 26 17 23 8 17 8
Number of grade A transactions in the year 5 2 3 6 1 2 1 3 2
Number of grade B transactions in the year 20 10 13 18 15 21 7 14 6
Number of grade C transactions in the year 5 1 5 2 1 0 0 0 0
MANAGING PHYSICAL RISK Physical risks cover climate change consequences (extreme weather events) on the assets of the Group's clients. They give rise to financial
risks for companies due to the direct impact on their assets, as well as indirect impacts from their supply chains and markets. The final physical risk exposure score for each counterparty analysed is therefore based on three risk factors: operational risks, (upstream) supply chain risks and (downstream) market risks.
For the first time in 2019, BNP Paribas conducted an assessment of the physical risks posed by a sample of clients in its portfolio. The pilot study covered the nine industrial sectors which are the most exposed to physical risks. For each of these sectors it looked at the ten main clients in terms of credit exposure.
On a scale of 1 to 100, the overall score is 42, which is below average and therefore indicates a low risk profile. Unsurprisingly, the analysis identified disparities between the nine sectors in the studies. There were also disparities between global regions with greater vulnerabilities observed in South-East Asia and in North America. Finally, the level of exposure to physical risks varies based on the type of operational risk being analysed. The analysis shows that the sample group is particularly exposed to water and temperature stress, and to localised flooding.
