534 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

MANAGEMENT AND MONITORING TOOLS FOR ESG RISKS

Monitoring and exclusion lists

To identify the companies presenting the highest environmental and social risks, the Group defines and applies financing and investment policies and manages exclusion and monitoring lists in accordance with the level of identified ESG risks. At the end of 2019, these lists included 1,087 companies: 943 were excluded and 144 under monitoring. Whereas no business relationship whatsoever is allowed with a company on the exclusion list, the companies on the monitoring list are subject to Group measures intended to ensure that they permanently change their practices and reduce their ESG risks. Lastly, BNP Paribas has compiled an exclusion list that clearly mentions specific goods and activities that the Group is unwilling to finance, such as tobacco. These lists are periodically updated using data supplied by customers and external sources, and by analysing the key controversies involving corporate clients accused of serious violations of environmental standards or human rights.

Transactions handled by the Group s CSR teams

In 2019, the Group s CSR teams were asked to give an expert opinion in the assessment of ESG risks for 2,340 complex or sensitive transactions (financing, new accounts, export support, etc.) compared to 1,627 transactions the previous year.

Operational control plan

To ensure that ESG risk management tools are strictly applied in all entities and business lines, the Group has introduced a CSR operational control plan. This establishes the process of continuous improvement necessary for the effective management of ESG risks. In 2019, the Bank updated this control plan to incorporate the new ESG risk management policies defined by the Group to comply with the French law on corporate Duty of care. The CSR, RISK and Compliance Functions and the business lines are responsible for implementing the plan as part of the new governance put in place to establish first and second lines of defence for ESG risks within BNP Paribas.