2018 Registration document and annual fi nancial report - BNP PARIBAS518

7 A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS

7

Our economic responsibility: fi nancing the economy in an ethical manner

CONTRIBUTING TO THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

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 preserving the planet. It covers economic growth priorities, inclusion of vulnerable populations and preserving resources.

BNP Paribas contributes specifi cally to SDG 17 (partnership for the goals) through numerous partnerships covering the areas of the environment (see Advance awareness and sharing of best environmental practices, Commitment 12) or health, for example. As an example, the Tobacco Free Finance Pledge brings together banks and investors, governments, NGOs and health players to promote a tobacco-free world.

More generally, it is important for BNP Paribas to be able to measure its contribution to SDGs. At end-2018, total fi nancing to promote the energy transition and the SDGs (loans to companies belonging to business sectors considered as directly contributing to achieving the SDGs) was EUR 168 billion (compared to EUR 155 billion in 2017).

Financing that contributes to attaining the SDGs

Economic sectors making a full contribution to the SDGs Some business sectors are identifi ed for their positive overall contribution to the SDGs such as, for example: community, social, education, health, agriculture, recycling, renewable energies, research. Among the fi nancing that the Group supported:

■ in the agricultural sector, a loan signed with Sucden, with its margin indexed on the certifi cation of cocoa bought in Ivory Coast;

■ for the transport sector, the creation of two metro lines in Santiago de Chile for a total of USD 106 million will improve the quality of life for 2.2 million inhabitants who will access the city centre in under half an hour and will reduce greenhouse gas emissions;

■ regarding water, in Belgium, the company Water Link received fi nancing of EUR 46 million dedicated to distribution infrastructures in Flanders, the installation of 200,000 digital meters and the development of an intelligent control centre, able to optimise the distribution network, in particular through better leak detection.

Other activities are also considered as having a positive impact, such as: Group support to microfi nance ( Products and services that are widely accessible, Commitment 7), to social enterprises ( Investments and fi nancing with a positive impact, Commitment 1) to energy effi ciency ( Partnering with our clients in the transition to a low-carbon economy, Commitment 10) and also partnerships with international institutions.

Partnerships with development banks and institutions Thanks to these partnerships amounting to almost EUR one billion, BNP Paribas provides specifi c support to targeted client categories and sectors in 2018 : SMEs (Tunisia), supporting exports, energy effi ciency (Morocco, Poland), female entrepreneurs (Turkey, Morocco ) and fi nancing for greener maritime transport (partnership with the European Investment Bank).

Other fi nancing 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, the Positive Incentive Loans (PIL) make it possible to vary interest rates on the basis of the borrower's achievement of environmental and/or social objectives. In all, over EUR 3 billion in PILs were signed in 2018.

There are some specifi c examples of this approach:

■ in December 2018, Thames Water signed a GBP 1.4 billion loan: its interest rate is linked to environmental, social and governance indicators. The savings generated by good ESG performance will be paid to 21 charities active in the environment and water topics;

■ in February 2018, Danone signed a EUR 2 billion syndicated loan including a credit margin adjustment mechanism, upwards or downwards, based on the company s ESG criteria provided by third parties, reviewed at least once per year. BNP Paribas is the sustainability agent for this loan.

The start-ups also contribute to attaining the SDGs by developing innovative solutions in response to major environmental and social challenges. Among the 493 high-impact start-ups which are French Retail Banking clients, 24% have a positive impact on biotechnologies, 17% are active in the fi elds of medical and pharmaceutical research, and 14% have a tangible impact on energy effi ciency.

Investment solutions which contribute to attaining the SDGs

To enable the savings of its individual and institutional clients to contribute to achieving the SDGs , the Group has developed a range of products. Thanks to the mapping developed this year by BNP Paribas Asset Management (http://fr.zone-secure.net/52766/385002/#page=6), each investor can identify the SDGs to which it contributes through its savings.

The investment bank, BNP Paribas Corporate and Institutional Banking, has launched a range of responsible indices. Private investors and institutions can, therefore, identify companies that make a signifi cant contribution to achieving the SDGs with regard to the products that they offer or their exemplary conduct. Since 2013, BNP Paribas has launched 26 ethical indices, 5 of which are closely linked to the SDGs which have made it possible to raise over EUR 5.5 billion, including EUR 600 million for the indices linked to the SDGs.