2018 REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT

2018 Registration document and annual fi nancial report - BNP PARIBAS552

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

Our environmental responsibility: combating climate change

Financial innovation supporting the transition

Since 2015, BNP Paribas has launched nine Climate indices raising over EUR 2 billion (including EUR 750 million in 2018). These solutions give investors a fi nancial return while enabling them to contribute to the energy transition. In 2018, the Group launched the following products:

■ a range of indices with Euronext aimed at supporting the energy transition, by selecting 40 to 50 companies with the best energy transition strategies from those with the largest market capitalisations in France and in the euro zone;

■ The first climate impact bond that allows investors to generate fi nancial returns while offsetting their carbon footprint via the Kasigau ecological corridor project in Kenya.

A key actor in the booming Positive Impact Loans market (PIL)

BNP Paribas is very active in the recent and fast growing market for Positive Incentive Loans (PIL). The interest rates paid by the borrowing company on PILs depend on the rate of achievement of a set of predetermined Ethical, Social, Governance (ESG) objectives. As such, the rates are reduced if the Company exceeds its objectives and increase if it does not achieve them. In particular, BNP Paribas participated in the following green PILs:

■ a EUR 2 billion PIL for Solvay, with an interest rate linked to the Company s ability to achieve (in absolute terms) a greenhouse gas emissions reduction objective;

■ a USD 500 million PIL for Olam, a leader in the agribusiness based in Singapore with an interest rate linked to a wide range of ESG indicators.

Supporting companies in achieving carbon neutrality

Achieving the goals of the Paris Agreement requires reducing global greenhouse gas emissions as much as possible, as well as achieving carbon neutrality. This involves offsetting residual carbon emissions (notably through carbon sequestration in soils and plants). With this in mind, in November 2018, BNP Paribas Securities Services launched ClimateSeed, a voluntary carbon offsetting platform for companies. At launch, 19 project developers selling carbon credits representing 8 million tonnes of carbon dioxide equivalents were already on the platform.

Support for innovative start-ups in the energy transition

The energy transition also requires developing more effi cient and new technologies. To support this necessary technological development, at the end of 2015, the Group committed to investing EUR 100 million by 2020 in innovative energy transition start-ups. A t the end of 2018, the Group had invested more than EUR 35 million in seven start-ups and three energy transition funds. Out of the four direct investments in start- ups made in 2018, one is in the French company METRON, which has developed artifi cial intelligence software designed to optimize and reduce the energy consumption of industrial processes. Another investment was made in RIDECELL, an American company, which will help deploy fl eets of shared vehicles that will ultimately become autonomous and electric.

International recognition

In October 2018, BNP Paribas received its accreditation from the Green Climate Fund (GCF), whose objective is to catalyse funding for low-carbon projects that are resilient to climate change . In particular, this fund will help to direct growing funding to the most under-developed countries, small islands and African states.

HELPING COMPANIES TO IMPROVE THEIR ENERGY EFFICIENCY Since energy effi ciency plays a key role in reducing greenhouse gas emissions, BNP Paribas is committed to stepping up its actions in this area. Its subsidiaries BNP Paribas Real Estate Services, BNP Paribas Leasing Solutions and Arval make a particular contribution.

Assisting entrepreneurs in their energy effi ciency efforts

In its Domestic Markets, the Group offers specifi c support to entrepreneurs to help them assess, design and fi nance the work required to boost their energy effi ciency. For example, in Belgium, through its Sustainable Business Competence Centre, BNP Paribas Fortis offers expertise and support to its SME clients in order to design and fi nance infrastructure for the production of renewable energy or works to improve energy effi ciency within their plants. In 2018, this department was involved in projects representing EUR 620 million of investment , including 9 projects in the fi eld of energy effi ciency.

In Brazil, BNP Paribas has strengthened its commitment to energy effi ciency by developing a new fi nancing solution. Signify (formerly Philips) used this solution to fi nance an LED lighting installation project for a car factory and dispose of the used light bulbs.

BNP Paribas Real Estate Services, offering companies responsible real estate

In 2018, BNP Paribas Real Estate Services of which 100% of the real estate activity with corporates has obtained an environmental certifi cation (with the two highest certifi cation labels) has made an environmental commitment particularly through the signing of the following two charters:

■ Call for action: Make our Planet Green again charter with the International Biodiversity & Property Council;

■ The charter of the CIRCOLAB association which encourages real estate players to promote the circular economy.

BNP Paribas Real Estate Services also conducted a pilot operation by installing an urban farm on the roof of its headquarters. This is not only a means for the Group to showcase its business lines and an urban agriculture laboratory in relation with AgroParitech, but also provides an area for employees to socialize.

In 2018, BNP Paribas Real Estate Services fi nanced a pre-planning study for a future low carbon neighbourhood label developed by CSTB and Eliot consultants.