BNP Paribas has for many years been committed to supporting the transition to more sustainable production and use of energy. As long ago as 2008, the Group signed up to the Equator Principles, which provide a basis for a voluntary approach to managing the social and environmental risks linked to projects which the Bank finances. In 2011, BNP Paribas made public its commitment on the environment, reiterating that environmental protection must be a priority if we are to ensure a future for humanity.
Since then, the Group has drawn up and published a set of clear policies governing the financing of, and investment in, sectors with a strong environmental impact, including coal-fired power generation, mining operations, pulp & paper production, palm oil, nuclear power plants, agriculture and non-conventional oil and gas. These sector-specific policies, which are based on continuous dialogue with NGOs and non-profit organisations working in relation to these sectors, set out the conditions which must be met before BNP Paribas authorises any transaction. These criteria apply to all relevant products and services (including asset management) all over the world.
BNP Paribas has made a formal commitment to provide €15 billion worth of financing for renewable energies by 2020. The Group is also planning to invest €100 million in startups that are working to promote the energy transition.
At the most recent Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24), which took place in Poland last December, five major banks, including BNP Paribas, undertook to assess the alignment of their lending portfolios with the climate targets and investigate ways and means to progressively orient their lending activities towards achieving the targets set out in the Paris Agreement. The Bank thus supports the objective enshrined in Article 2.1c of the Agreement, i.e. that of “making financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” This initiative aims for the creation of common tools and indicators for use by the entire financial sector.
In 2012, the BNP Paribas Group began actively pursuing initiatives designed to reduce its CO2 emissions by increasing energy efficiency at its premises and introducing optimal practices regarding work travel. Five years later the Group had succeeded in offsetting the residual, non-reducible emissions arising from its activities, so that at end-2017, BNP Paribas was able to announce that the target of becoming carbon-neutral in its own operations had been reached. In order to maintain this carbon-neutral status, the Group launched in January 2018 a long-term carbon-offsetting programme, in partnership with the GoodPlanet Foundation. The programme provides for the installation in India of at least 13,000 bio-digestors with a view to recycling waste as a local source of renewable energy.
In Belgium, a partnership between BNP Paribas Fortis and WeForest, a non-profit organisation that promotes reforestation, has resulted in over 64,000 trees being planted in a forest in Zambia since 2017.
In order to help the drive to reverse the CO2 emissions growth curve on a 2020 deadline and keep global warming below the 2° threshold set by policymakers, BNP Paribas took the decision to reduce its support for fossil fuels. The Group ceased financing new coal-mining development, coal-fired power plants all over the world, plus coal-mining specialist companies and those companies with coal-mining activities that had not yet drawn up a diversification plan.
In addition, the Group decided in 2017 to cease all business relations with entities whose main business is exploration, production, distribution, marketing or trading in shale gas or oil from tar sands. BNP Paribas also announced that it was excluding from its investments any projects involving exploration for and/or production of hydrocarbons in the Arctic region.
Moreover, BNP Paribas has tightened up its criteria for embarking on business relations with clients in the energy sector. Henceforth, Group entities may not do business with any company if more than 50% of its turnover is related to coal. This new stipulation complements the existing criterion that all energy sector clients must draw up and implement a diversification strategy designed to reduce the coal component of its business, which must also be at least as ambitious as the national carbon reduction plan in the country in which the company is established.
In order to foster the energy transition, BNP Paribas has also decided to factor a climate change component into its assessment of companies and projects requiring financing. The Bank will gradually systematise the use of an ‘internal’ carbon price as one of the bases for financing decisions so as to take account of the changes brought about by the energy transition and the associated risks.
In 2016, a methodology for this was established, based on a notional price of $US25 - 40 per tonne of CO2 equivalent. This methodology, which applies to the six highest-emitting industrial sectors, has already been tested out in two of those sectors, namely oil and transport.
BNP Paribas strictly controls all financing of, and investment in, non-conventional energy sources and has drawn up a specific policy regarding financing and investment in non-conventional oil and gas. Moreover, given that there currently exists no real alternative to petroleum-based fuels for transport, the Group has decided to step up its support for innovative startups working in ‘green’ technologies, such as energy efficiency and energy storage, setting aside €100 million to take stakes in companies in this field so as to promote the emergence of cleaner energy solutions and foster the technological leap required to attain sustainable mobility.
In 2014, BNP Paribas began to make public the breakdown of the overall energy and electricity mix which the Bank finances. The energy and electricity mixes financed by BNP Paribas are in fact both ‘ahead of’ the current global mix from a carbon reduction/climate change mitigation point of view.
With 52% fossil sources (natural gas, coal and oil) and 26% renewable sources (hydro, wind, photovoltaic and other renewables), the electricity mix financed by BNP Paribas has a smaller carbon footprint than the global mix, which, according to the International Energy Agency (IEA), was composed in 2016 of 67% fossil sources and 23% renewables. The carbon content of the average kWh financed by the Group works out at 342 grams of CO2, versus a global average of 544 grams recorded in 2015 (source: IEA).
In accordance with the Paris Agreement, BNP Paribas is committed to ensuring that going forward the carbon content of each kWh financed by the Bank decreases as rapidly as the global average under the IEA’s ‘450 Scenario’, i.e. an 85% reduction between 2014 and 2040.
Meanwhile the same calculation has been performed for the energy resources (coal, oil and natural gas) produced by the production companies financed by the Group. Here once again, the BNP Paribas-financed energy mix is ‘ahead of’ the required pace, with less coal and oil and more natural gas in the mix than the world average (source: IEA).
In 2016, BNP Paribas decided to shed light on the Group’s financing of the airline sector. This information will henceforth be made public every year, taking account of the regulatory changes in this field.
In 2010, the BNP Paribas Foundation set up its Climate Initiative, a programme designed to provide financial support for research into climate change issues. The general aim is to broaden human understanding of the various impacts of climate change and forecast their consequences for our environment and for population groups all over the world. Every year, the Foundation donates €2 million to climate research projects. In 2017, the Foundation also carried out awareness-raising campaigns among a total of 60,698 persons.