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BNP Paribas Securities Services

Service Providers Framework 2020

You are in Research and Data Provision » Research/process level

Research/process level

RDP 02. Sources for research and/or rating

02.1. Indicate the types of sources you use for research and/or ratings of companies/sectors/geographies or similar. Tick all that apply.

02.2. Indicate how ESG factors are incorporated into your research and/or rating methodology

02.3. Describe how you define materiality and how this is captured in your research and/or rating methodology as well as final product.

          Materiality is defined by the independent third-party data providers in terms of the key issues and topics that impact each of the pillars in ESG. This can be specified according to industry or sector or country or on a transversal basis, depending on the key issue and the data provider.
        

02.4. Additional information. [OPTIONAL]

The NEC assessment is designed to be sourced on annual reports and CSR reports. Whereas the NEC methodology has been created based on a selection of various (over a hundred) relevant sources such as NGOs, regulatory sources, independent organisations, academic studies, secondary sources. Such sources helped assessing and defining the greatest stakes for each sector on which the methodology focuses. It results on each sector methodology focusing on 2 to 4 environmental stakes.

 


RDP 03. Stakeholder input (Not Applicable)


RDP 04. Up-to-date assessment and ratings

04.1. Indicate how you ensure that your ESG assessment of companies/ sectors/ geographies or similar is up-to-date and that new information is incorporated or new assessments are conducted at reasonable intervals.

04.2. Additional information. [OPTIONAL]


RDP 05. Balanced research and assessment

05.1. Indicate how you typically ensure a balanced approach to your research methodology and assessing/rating of companies/sectors/geographies or similar. Tick all that apply and explain your approach to each option.

Type of indicators

Explain your approach

          Our third party data providers provide KPIs, scores and ratings, that are based on both qualitative (e.g., does the company have a policy on...), and quantitative (e.g., how many of...). We consume data points and data point elements into our ESGRA analytics platform.
        

Explain your approach

          Our ESGRA analytics platform measures the ESG score momentum for individual issuers, and at the investment strategy level, across the E/S/G pillars. This allows our clients to be able to assess if the scores are improving/deteriorating, and the causes.
        

Explain your approach

          Our ESGRA analytics platform does not bias between one or the other pillars; we provide an equal weighting to E/S/G scores to allow our clients to be able to make their own independent assessments.
        

05.2. Additional information. [OPTIONAL]

The NEC methodology is designed to focus on environmental impact only. The balance between all environmental themes is assured by an assessment of the major stakes for each sector based on external studies, ad hoc quantitative studies, or eventually expert opinion. The methodology for each sector is based on both qualitative and quantitative data, even though qualitative data is mostly transcribed into quantitative data yet based on external studies or ad hoc quantitative studies.

 


RDP 06. Consistency and comparability

06.1. Describe the control processes in place to ensure quality of research.

          All the data fed into our ESGRA analytics platform undergoes a rigorous quality assessment and control, relying on established market data management practices that we use for our wider investment analytics services (attribution, risk analytics, performance). Our processes are ISAE3402 certified (type 2), and globally consistent. This allows our clients to rely upon a consistent service quality globally.
        

06.2. Additional information. [OPTIONAL]


RDP 07. Emerging ESG issues and trends

07.1. Indicate whether you identify and prioritise ESG issues and emerging trends.

07.2. Describe how you incorporate the identified ESG issues and trends in your product offerings and business activities.

          We are active in the ESG / sustainability field, through 3 key dimensions:
1. A dedicated sustainable finance & investment programme that brings together business leaders and SMEs across our organisation to focus on key ESG issues / trends, with a global governance
2. An active market participation through industry conferences, seminars (e.g, UNEP and UN PRI roundtables), and membership to working groups (e.g., UN PRI SDGs asset allocation)
3. Hosting, and facilitating industry forums, including our global series of Sustainable Future Forums
        

07.3. Additional information

no additional information


RDP 08. Client use of outputs

08.1. Describe how research and data provision outputs are used by clients.

08.2. Additional information. [OPTIONAL]


RDP 09.

09.1. Provide examples of cases where ESG was incorporated into your services and the tracked impact it had for investor clients in their decision making process and/or active ownership activities.

Description of ESG service provided and the impact it had on investor client’s investment decision making and/or active ownership activities.

BNP Paribas Securities Services co-innovated the ESGRA solution with the seventh Australia's biggest superfund (Unisuper):

 https://www.professionalpensions.com/professional-pensions/analysis/3004405/unisuper-an-australian-approach-to-esg

The key aspects of where our solution has helped our client are:

• Transparency across their portfolios and benchmarks in ESG scoring, wrt controversial exposures and key business involvements

• Allows targeted engagement with their investee companies on key issues / topics of concern

• Proactively manage their ESG risk exposures across their internal and external mandates

Description of ESG service provided and the impact it had on investor client’s investment decision making and/or active ownership activities.

Lagun Aro is one of the most important EPSV (Pension Fund) in Spain and use the ESG Risk Analytics reporting. The interest shown by the client was a requirement from the Executive Committee. They check in deep the results provided in order to take investment decisions and to have the best risk-profitability performance in their portfolios.

09.2. Additional information. [OPTIONAL]


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