556 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 civic responsibility: being a positive agent for change

Monitoring of salient risks in the Group s financing and investment activities

The activities of the Group corporate clients may pose a risk to human rights, particularly in the area of workers rights, and have an impact on local communities.

The Group uses its influence to encourage its clients to manage their own activities with respect to human rights. It also seeks to identify, evaluate (due diligence process), monitor and foster the improvement of the current and future performance of clients operating in sensitive sectors (defence, agriculture, palm oil, etc.) through the application of its investment and financing policies (see Systematic integration and management of Environmental, Social and Governance (ESG) risks, Commitment 3).

To ensure that the existing system meets the requirements of the French Duty of care, BNP Paribas set up a risk mapping of its clients taking into account both their business sectors and the countries they operate in. This tool covers the matter of human rights through the analyse of several criteria, such as child labour, forced labour, human trafficking and failure to respect the rights of local communities. The criteria are both sector- weighted and geographically weighted. The risk mapping thus allows the concerned business lines and functions to better deploy and monitor the most adapted due diligence measures. The criteria are both sectorweighted and geographically weighted. The risk mapping thus allows the concerned business lines and functions to better deploy and monitor the most adapted due diligence measures. Concerned to implement the most appropriate and thorough duty of care measures (see Duty of care and modern slavery and human trafficking statement in section 7.6).

Workers rights The human rights criteria in the financing and investment policies of sensitive sectors in sensitive sectors deal with matters such as workers rights, in particular child and forced labour worker, health & safety and freedom of association. These issues are also tackled in the analysis of projects covered by the Equator Principles (see Systematic integration and management of Environmental, Social and Governance risks, Commitment 3).

Rights of local communities Respect of the rights of local communities - which are at the heart of most controversies linked to major industrial projects - is another salient issue.

Therefore, for its project finance activities, BNP Paribas encourages its clients to obtain the Free, Prior and Informed Consent (FPIC) of the local communities impacted by their projects.

In accordance with the Equator Principles (see Systematic integration and management of Environmental, Social and governance (ESG) risks, Commitment 3), the Group ensures that the negative impacts are avoided and, if necessary, remedied. Moreover, in 2019, BNP Paribas actively participated in the update of the Equator Principles (EP4) standards. EP 4 focused on a number of key subjects, Social Impact & Human Rights being one of them. As part of the update process, BNP Paribas was able to give its opinion at the different stages of discussion including on specific human rights issues like the FPIC of indigenous peoples, or the implementation of grievance mechanisms by clients, in particular through its participation to the Social Risk Working Group. Discussions resulted in a greater acknowledgement of the UN Guiding Principles by the EP, and a broader use of EP-defined standards including mandatory FPIC in Designated Countries , where they were previously considered as optional. The new version of the Equator Principles will come into force in July 2020.

Due diligence and dialogue In the event of suspected or identified serious abuses of human rights by a BNP Paribas customer or a company in its portfolio, the Group conducts in-depth due diligences and discusses the matter with the company concerned (see Systematic integration and management of Environmental, Social and Governance (ESG) risks, Commitment 3).

In 2019 for example, BNP Paribas received a letter from an NGO informing it of the impending referral to of the IFC s (International Finance Corporation, a subsidiary to the World Bank) ombudsman on behalf of communities that were allegedly forcibly displaced by a mining company operating in West Africa, without having had access to a grievance procedure or the opportunity to lodge an objection. These allegations concerned the growth of mining activity in the country and mentioned the high levels of pollution of local water sources and a significant deterioration in air quality due to the release of hazardous substances from mining operations. BNP Paribas forwarded these elements to the concerned Relationship Managers business managers to inform them and have them to engage in a direct dialogue with the mining company, one of the Group s clients. Discussions are ongoing between the mining company, BNP Paribas and the NGO. The mining company has demonstrated its willingness to cooperate and to settle the complaint, which is still under investigation.

COMMITMENT 9: CORPORATE PHILANTHROPY POLICY FOCUSED ON THE ARTS, SOLIDARITY AND THE ENVIRONMENT

The Group is developing a structured corporate philanthropy policy that is both global and local. The BNP Paribas Foundation coordinates this commitment around three areas of application: solidarity, the arts and the environment (see Advance awareness and sharing of best environmental practices, Commitment 12).

In 2019, the BNP Paribas philanthropy budget of EUR 44.53(1) million was broken down as follows:

■ 68.2% for solidarity, including support for refugees;

■ 21.3% for the arts;

■ 10.5% for the environment.

(1) This amount does not include the exceptional support of EUR 20 million contributed by BNP Paribas to the Fondation de France for the reconstruction of Notre-Dame de Paris Cathedral.