BNPP IP applies strict investment criteria, ownership practices and implementation principles, to ensure that we deal with ESG requirements in a manner “consistent with our fiduciary responsibilities to act in the best interest of our clients“.
When it comes to exercising asset owners’ rights, and engaging with issuers priorhand to exert efficiently our influence as steward of such assets, we pay particular attention to potential conflicts of interests. Enshrined in section 3.6 of the Voting Policy, is our approach to preventing and managing conflicts of interest which aims at preventing undue influence that might stem from differing interests between BNPP IP, BNPP IP’s parent company, and those of our client(s).
As an asset manager owned by a large financial institution, BNPP IP can face several potential conflicts of interest, notably when acting as steward of its clients’ assets (e.g. in its proxy voting and engagement activities), i.e. mainly due to:
- Employees being linked personally or professionally with a company whose securities are submitted to vote.
- Business relations existing between the company whose shares are being voted on and another company of BNPP Group.
- Exercise of voting rights and engagement concerning shares of BNPP Group or of significant participations or holdings of the Group.
- Potential conflicts of interest are managed to ensure that the Voting Policy standards are followed. On top of the PVC process mentioned in Principle 1, BNPP IP implements several other principles and decision processes, to prevent or manage conflicts of interest, such as:
- The Voting Policy stresses that voting rights –and related influence in the engagement process- are exercised, in line with our fiduciary duty, “in the best interests of clients in order to protect and enhance the long-term value of their shareholdings”. This principle is paramount in BNPP IP’s approach to stewardship.
- The detailed Voting Policy which determines the decision process for the exercise of voting rights and engagement is approved at Board of Directors’ level, which comprises independent director(s).
- Resolutions submitted to vote are examined on the basis of analyses conducted by external independent consultants.
- Employees are due to respect the gifts and entertainments policy and to declare any other professional activity to the Compliance Officer.
- “Chinese walls” between BNPP IP entities and the other companies of the BNPP Group ensure that the staff of BNPP IP entities remains independent and neutral in its missions and responsibilities.
In addition to the comprehensive mapping of potential conflicts of interest and corresponding means of mitigation, records of more stewardship-specific potential conflicts of interest and their means of prevention or resolution are kept as part of the PVC minutes. Conflicts of interest that could appear as not already managed by the above principles and processes are addressed through an escalation procedure involving top management.