2018 REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT

2018 Registration document and annual fi nancial report - BNP PARIBAS 529

7 A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL,

CIVIC AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS

Our economic responsibility: fi nancing 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: Defense, Nuclear,

Coal-fired power plants, Palm oil, Unconventional Oil & Gas, Mining, Wood

pulp, Agriculture

Global Credit Policy (for Corporate &

Retail clients)

Monitoring & exclusion list

Specific 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/institu- tional mandates

ad-hoc CSR recommenda- tions: advice on

specific 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

Sector / Policy level

RISK APPETITE FRAMEWORK

CODE OF CONDUCT

KYC

Company level Transaction level

In keeping with its ESG risk management system, BNP Paribas includes ESG criteria in its decision-making process, and strengthened its control of these risks in 2018:

■ as was the case for the Know Your Client (KYC) process, in 2017, ESG criteria were integrated into 5 specifi c credit and rating policies, increasing the number of policies containing ESG criteria to 20 at the end of 2018;

■ pursuant to the Duty of care law, additional analytical grids are being developed on ESG risk analysis for sectors that are not covered by an ESG risk management system and deemed sensitive, as a supplement to the current mechanism (sector policies, CSR screening).

Since 2012, 29,476 employees received online training on at least one of the Group s fi nancing and investment policies. Classroom-based training sessions have also been enhanced. In 2018, 150 employees in the Risk teams also received training as part of the integration of the Risk stream as the second line of defence in the credit and investment decision- making processes.

Integrating ESG criteria into assets under management

With the double objective of managing risk and investing responsibly, BNP Paribas Asset Management the BNP Paribas Group s asset management business line has applied ESG criteria to all its collective

investment funds since 2012. These criteria are notably based sector policies and on the UN Global Compact s ten principles in the areas of human rights, labour law, protection of the environment and anti- corruption. As such, BNP Paribas Asset Management maintains the dialogue with companies that are excluded by its responsible investment policy or on a watch list, as well as for its ESG analyses.

In 2018, BNP Paribas Asset Management also:

■ committed to measuring its ESG integration progress through the implementation of ESG performance indicators at the portfolio and management company levels;

■ signed, on 26 September the Tobacco-Free Finance Pledge. As such, the Company has excluded tobacco companies in all of its open-ended funds;

■ systematically exercised its voting rights, as a shareholder, to promote ESG best practices in companies in which the management company and its clients have invested. In 2018, BNP Paribas Asset Management voted at 1,464 General Meetings on 17,953 resolutions, and abstained from or opposed 22.2% of these resolutions. In accordance with its strategy on climate change, the BNP Paribas Asset Management adapted its voting policy and reserves the right to abstain from approving the fi nancial statements or the discharge of companies that do not suffi ciently communicate their CO2 and 2° C strategy. In 2018, this right to abstain was implemented 16 times;