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BNP Paribas Asset Management

PRI reporting framework 2017

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Implementation not in other modules

SG 12. ESG issues in strategic asset allocation

New selection options have been added to this indicator. Please review your prefilled responses carefully.

12.1. Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated.

12.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

12.3. Additional information. [OPTIONAL]


SG 13. Long term investment risks and opportunity

13.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following you act on.

13.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

13.3. Indicate which of the following tools you use to manage emissions risks and opportunities

13.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

We have developped our own methodology to calculte the carbon footprints of 94 open-ended equities portfolios. They are made public here (in French)  www.bnpparibas-ip.fr/intermediaire-selectionneur-de-fonds/bnp-paribas-investment-partners-mesure-lempreinte-carbone-de-pres-de-100-fonds-actions/

 

 

 

13.5. Additional information [Optional]

Our climate change strategy (http://docfinder.is.bnpparibas-ip.com/api/files/C7415B62-3F41-4D20-88BF-DDBBA97CC75F) includes all of our actions and policies geared to helping tackle climate change, providing a conceptual and an operating framework. Our climate change strategy is an integral part of our overall Responsible Investment Policy and is based in our long-term approach to business and investment.

The overarching objective of the climate change strategy is to establish a business action plan that will help BNP Paribas Investment Partners to gradually align its investments with the below 2 degrees warming limit set by our governments.

We believe that exceeding 2 degrees Celsius of global warming above pre-industrial levels will seriously affect humanity and the global economy. This, in turn, might affect the value of investments in the long run. We therefore believe that it is our duty to better understand, assess and manage climate change risks. We are working towards measuring, disclosing and reducing carbon risks in our portfolios; and encouraging companies to report and reduce their carbon footprints

A three-pillar strategy: Allocation of Capital / Responsible Stewardship/Transparency & Commitment

1) Allocation of Capital

The first and most important step is to fully understand, identify and evaluate carbon risks. Only then can we work towards adapting our investments. Therefore, we are firstly working towards identifying and measuring carbon risks in our portfolios.

- Measuring the carbon footprint of our portfolios

In October 2016, we published a second set of carbon footprints, bringing to 100 the number of funds for which the carbon footprint is available.

- Identifying carbon risks and decarbonising our porfolios

We started by divesting from thermal coal mining in all our Socially Responsible Investment (SRI) funds and by applying a strict policy on coal power. In addition to our established policy for all "sensitive or controversial activities" as defined jointly with our parent company BNP Paribas, our coal policy from now on excludes all mining companies that generate more than 10% of their revenues from thermal coal and power producers that emit more than 600kg of CO2/MWh.

We intend to progressively extend this policy to our open-ended funds.

We are committed to the ongoing development of our capacity to assess climate change risks and opportunities and to this end have developed an analytical methodology for ‘decarbonising’ equity portfolios to offer value-adding insights for our institutional clients by identifying where carbon risk lies in their portfolios.

We equally aim to examine how stranded some of our assets might be at both sector and company level. Much work needs to be done in this critical area. We aim to progressively identify them, in particular in the energy and utilities sectors, in order to inform our investment decisions.

 

2) developing our low-carbon product range and financing energy transition

As an asset manager, we are working towards being able to inform and provide our clients with a thorough analysis of the impacts of climate change on their investments, as well as to encourage them to decarbonise their portfolios and provide them with a wide range of strategies to be able to do so.

We commit to continue working on widening and prioritising our low-carbon product offer, encompassing a complete range of investment solutions in mandates, dedicated and open-ended fund through thematic or best-in-class funds, and low carbon ETF.

Our low-carbon offer currently has assets under management totalling over EUR 25 billion.

 

3) Responsible Stewardship

 - Addressing climate change in our voting at AGM

At the end of 2015, we revised our voting policy to specifically address climate change in our voting duties. We updated our policy so that we could use our voting leverage to deliver our climate strategy. Specifically, it stipulates that:

 We will vote "abstain" on the financial statements of a company when:

 The company does not report properly on its carbon footprint (scope 1 and 2).

 The company does not communicate nor does it want to engage with us in relation to its business strategy to mitigate and adapt to climate change.

 We will vote in favour of value-enhancing resolutions which ask corporates to reduce greenhouse gas emissions in alignment with a 2 degree world and also to stop lobbying against policy designed to achieve this.

 We will indicate, in advance, a willingness to vote in favour of resolutions requesting disclosure on low-carbon compliant business plans.

 We will always, prior to voting, offer to engage with each company.

 

- Engaging in dialogue with companies

In relation to climate change, our engagement strategy with the companies we invest in aims to improve:

 - Companies’ carbon disclosure in line with our duty and commitment to report publicly the carbon footprint of our portfolios

 - Companies’ overall environmental performance

 - Our understanding of what actions companies are taking to align themselves with the goal of a below 2 degree scenario

 

4) Transparency and Commitment

- Public commitment and reporting on progress

We are committed to monitoring and reporting annually on our activities and progress. We will report on the progress made in relation to our policy and, in particular, public commitments:

-  Through the Montréal Carbon Pledge and our commitment to report the carbon footprint of our open-end funds every year

 - Through the Portfolio Decarbonization Coalition and our commitment to report annually to UNEP FI on our progress in decarbonising our portfolios


SG 14. Allocation of assets to environmental and social themed areas (Private)


SG 15. ESG issues for internally managed assets not reported in framework

15.1. Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Fixed income - Securitised

see our best in class  ESG assessment as describe in the fixed income module

Cash

same level of requirements as for our equities and fixed income management : investments must comply with BNPP IP responsible investment policy and progressively make use of our internal ESG scores and research for investment decision taking.

15.2. Additional information [Optional].

BNPP IP responsible investment policy applies to all our open-ended funds, whatever the asset class. it is made possible as our ESG requirements apply to the issuers level whatever the financial instrument.


SG 16. ESG issues for externally managed assets not reported in framework (Not Applicable)


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