EXTRA-FINANCIAL REPORTSUSTAINABLE
FUTUREIN PROGRESS
2023 SUSTAINABILITY REPORTThe sustainable investor for a changing world
For Professional Investors – Marketing Communication

ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTCONTENTS

03
04
05
06
10
25
34

About this report
2023 in figures
Editorial from Sandro Pierri
At a glanceO ur strategy and approach
The 3Es
Responsible BusinessConduct
37 ESG integration
47 Our commitment to climate
59 V oting and engagement

101
107
114
115

Sustainability
in our product range
Corporate Social
ResponsibilityM apping to key stewardshipcodesGlossary

Click here to accessthe glossary.

ESG
INTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESSUSTAINABLE FUTURE
IN PROGRESS
We are living and investing in a dynamic time, with geopolitics,
macroeconomics, and regulation in constant evolution. Further
contributing to the complexity, climate change, growing social inequality
and environmental damage are impacting the current and future
performance of the companies and markets in which we invest.
As the sustainable investor for a changing world, we are committed todelivering financial returns to clients while contributing, through our
influence and our investment decisions, to positive real-world outcomesfor our common future. Recognising that sustainability is not an end
but a means, we understand that our efforts must evolve and adapt.
And the responsibility we hold obliges us to document our actions
and our impact. Just as the world around us changes, our approach tosustainability tackles the key challenges of today to help design a better
tomorrow.
In this context, the transition towards a sustainable future is a perpetual
process, too complex to face alone. We believe that it is by working
collectively with clients, issuers, regulators and peers that we cancontribute most effectively.

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MAPPING TO KEY
STEWARDSHIP CODESABOUT THIS REPORTThis report is produced annually by our Brand andCommunications department and our Sustainability Centre
along with contributions from various departments throughout
the organisation. The management teams of both departments
review the report and the board of directors of BNP PARIBASASSET MANAGEMENT Europe, which includes the CEO of
BNP Paribas Asset Management, is responsible for approving
it. BNP Paribas Asset Management is the source for all data
presented in this document, presented as at 31/12/2023, unlessotherwise specifically indicated. All strategies, policies andapproaches described in this report apply to BNP Paribas AssetManagement entities including BNP Paribas Asset Management
UK (Limited). Certain Joint Ventures and Affiliated Entities
may not apply all policies or may apply their own customised
versions.
The content of this report on BNP Paribas Asset Management’s
approach and corporate philosophy is only for information
purposes and does not constitute an offer to buy or sell any
services, products or investments. These statements apply
differently to each BNP Paribas Asset Management product,
the characteristics of which, including those relating tosustainability, are described in the legal documentation of thefunds, available on BNP Paribas Asset Management websites
according to your country of residence and investor profile.

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2023 IN FIGURESThe sustainable investor
for a changing world€540bn 3,207

Our focus is on generating
long-term sustainable returns

A future makerin action€356.8bn

1,931

3,933
461

total AUM1

employees locatedacross 34 countries

ESG2 AUM (in scope of our Global
Sustainability Strategy)

general meetings voted
in total

525

400

90%

85%

investment
professionals

67

countries in which
our clients are basedclient-servicing
specialists

Walking
the talk

hours volunteeredby our employees

of our open European range classified as
Article 8 or 9, representing €281.5bn3

support of shareholder
proposals on climate

participants in environmentally-themed
workshops (fresques) since 2019€139.5bn

36%

2.2 tCO2e

AUM in funds with a European
sustainability label

management resolutions
opposedoperational GHG emissions per employee
whereas our 2025 target is 1.85

Source: BNP Paribas Asset Management, as of 31 December 2023, Joint-Ventures included.
1 - Assets under Management.
2 - Environmental, Social and Governance.
3 - AUM in Sustainable Finance Disclosure Regulation (SFDR) / Article 8 and Article 9 funds (all types of products). Article 8 funds: promoting environmental and/or social characteristics / Article 9 funds: having a sustainable investment objective.

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4ABOUT
THIS REPORTEDITORIAL

Sandro Pierri
CEO, BNP Paribas
Asset Management

2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH”2023 turned out to be yet anotheryear of abrupt and profoundchanges in global financial markets.
Over the coming years, the asset
management industry will face
far-reaching change, driven by
the need to reallocate capital
towards a more sustainable andinclusive economy, new geopolitical
dynamics, evolving regulation,technological transformation andchanging demographics. These
highly interconnected dynamics
are creating a rapidly shifting
investment environment.
Throughout last year’s turbulence,
we navigated these challenges
in a frequently volatile market
environment to generate the best
possible performance for the assets
we manage on behalf of our clients.
We reinforced our positioning as‘The sustainable asset manager
for a changing world’ and marked
several achievements:

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION• We grew our Environmental, Socialand Governance (ESG) fund range,
with a focus on ESG fixed income
exchange-traded funds (ETFs).
• We continued to invest in our
ESG data programme to support
the further integration of ESG
into our investment portfolios
and products.
• We completed the acquisition ofa majority stake in leading Danish
natural resources specialist
International Woodland Company,
demonstrating our forwardlooking approach to sustainabilityrelated investment strategies,
particularly in private markets.
• We updated our Global
Sustainability Strategy, which
describes how we will work
towards our ambition of being
even more transparent andscience-led in our approachto sustainability.

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Understanding how the transitions our worldis facing affect the dynamics of risk-adjusted
returns for the assets we are investing in is key
to delivering long-term sustainable returns forour clients.
We believe this will help us
generate improved risk-adjusted
excess returns for the assets
we manage for you – returns
that can also have positiveenvironmental and social impacts.
We will develop our net zero andsustainable solutions and publish
our roadmap approach to equality.
We will continue to engage withinvestee companies to encouragethem to improve their ESG
performance, and we will ‘walk
the talk’ ourselves – by seeking
greater sustainability in our own
operations.

Understanding how the transitions
our world is facing affect the
dynamics of risk-adjusted returns forthe assets we are investing in is key
to delivering long-term sustainable
returns for our clients. This is what
our investment teams are focusing
on day in day out, together with theircolleagues supporting them.
As long-term investors with ourclients’ interests at heart, we willcontinue to use our voice and our
influence to push towards moresustainable outcomes for thecompanies and markets in which
we invest.”

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AT A GLANCEABOUT USAWARDS

07 — 08

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AT A GLANCEABOUT USBNP Paribas Asset Management (BNPP AM) is BNP Paribas
Group’s dedicated asset management business that employs
3,207 people in 34 countries, including a large commercial
presence in Europe and the Asia-Pacific region. Throughthe BNP Paribas Group integrated model, BNPP AM hasaccess to a broad international client base and has close
relationships with BNP Paribas’ distribution networks.
Ranked the 10th largest asset manager in Europe*,
BNPP AM manages €540 billion of assets and benefits
from the expertise of more than 500 investment
professionals and around 400 client-servicing specialists,
serving individual, corporate and institutional clientsin 67 countries.
We offer investment solutions for individual investors(through internal distributors within BNP Paribas Groupand external distributors), and corporate and institutional
investors including insurance companies, pension funds andofficial institutions.
We offer portfolio investment expertise in line with clients’long-term sustainable performance expectations, including
active, conviction-based strategies, liquidity solutions,emerging markets, multi-assets, systematic, quantitative& index and private assets.

BNP Paribas Asset Management, 31 December 2023.
Joint ventures included in the figures.
* Source: IPE Top 500 Asset Managers 2023.

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AT A GLANCE

A well-balanced, globally diversified
and European-rooted asset manager
AUM by client type**

AUM by asset class

26%
Fixed Income

23%
Multi-Asset & Solutions

22%
Equity21%
8%
Money Market Alternatives

7%
North America

AUM by geography*

49%
Global38%
Europe3%
2%
Latin
America Asia 1%
Emerging

AUM by distribution channel

58%
Institutional

18%
Insurance

17%
Corporates

14%
PensionFunds

14%
RetailClients

14%
PrivateClients

10%
8%
5%
Official Other Asset
Institutions
Managers

AUM by client geography

47%
EMEA*** (ex-France)

30%
France

17%
Asia

6%
Americas

Employees by geography

19%
Group
Networks

12%
Wholesale

11%
Joint
Ventures

35%
Asia

29%
France24%
7%5%EuropeAmericas UK(ex-France and UK)

Source: BNP Paribas Asset Management, 31 December 2023. Joint ventures included. Figures may not add to 100% due to rounding. - *Asset Class Region - ** Excluding investment in our own funds – €498bn. - *** EMEA: Europe (including UK), Middle East, Africa

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AT A GLANCE

AWARDS

Recognised for our expertise: 71 awards won in 2023,
including 47 related to sustainability
Pan-Europe

APAC

People• ESG Investing: Best ESG ETF
provider• Asia Asset Management,
2023 Best of the Best Awards:
Best ESG Manager (Asia andMalaysia, fourth time winning),
Best Climate Change Strategy(ASEAN), Best ESG Engagement
Initiative (Hong Kong and Singapore)• Financial News, Fifty Most
Influential in Sustainable Finance,
Michael Herskovich• Central Banking Awards:
ESG services• 2023 Singapore Morningstar andHong Kong Morningstar, Awards
for Investing Excellence: Best AssetManager - Sustainable Investing(Hong Kong and Singapore)• Insurance Asia News, Institutional
Asset Management Awards 2023:
Best ESG Thematic Strategy –Corporate Governance (APAC)• Asian Investor, Asset Management
Awards 2023: ESG ExcellenceAwards - Best Social Investment
Strategy Adviser (APAC)• Financial News, 25 Rising Starsof Fund Management,
Robert-Alexandre Poujade• Financial News, 100 Most
Influential Women in Finance,
Jane Ambachtsheer• Funds Europe 2023, CIO of
the Year, Olivier De Larouzière• Joint Committee on Climate
Change (JC3), Leaders in Climate
Change, Angelia Chin-Sharpe• Palmarès Giverny-Le Point 2023,
Top 50 committed leaders under
40 who contribute to accelerating
France’s ecological and socialtransformation, Pauline Blandin

Trademark, copyright, and other intellectual property rights are and remain the property of their respective owners.

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Editorial

JANE
AMBACHTSHEER
11• OUR PURPOSE• OUR STRATEGY• OUR APPROACH
TO SUSTAINABILITYSUSTAINABILITY
GOVERNANCE
15

OUR CULTURE
16

12 — 14

OUR PEOPLE

INCENTIVESCLIENT NEEDS

17 — 1920

21 — 22

CONFLICTS
AND ASSURANCE
23 — 242023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

10ABOUT
THIS REPORTEDITORIAL

Jane Ambachtsheer
Global Headof Sustainability

2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH”As long-term investors with ourclients’ interests at heart, a core
part of our strategy involves using
our voice and our influence topush towards more sustainableoutcomes for the companies
and markets in which we invest.
2023 was no exception. This
report provides an overview ofour key achievements last year.
We are excited about the many
projects we worked on, whether
helping clients to reposition theirportfolios for net zero, engaging
policymakers or helping to establish
a new collaborative initiative focus
on nature. I am inspired by thepassion and deep expertise I see mycolleagues bring to work every day,as well as the breadth and depth oftheir accomplishments.
The world is changing dramatically,
driven in large part by the threeinterlinked challenges of climatechange, ecosystem degradation

THE 3ESRESPONSIBLE
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and inequality – made evermore challenging by geopoliticaluncertainty and economic constraints.
Our sustainability strategy, built
on six pillars, helps us to navigate
these societal-scale problems. We
rely on the active engagement of ourcolleagues, clients and industry peersin collaborating to better understandand address these challenges, andwith our investment teams to put theinsights we gain to work in portfolios.
The current context can bechallenging. We have seen the moststringent and far-reaching financial
sustainability framework introducedin Europe, and while we see progress
towards net zero, the path is bumpy
and not moving quickly enough. But
we also know that what happens on
climate action in this decade will bedecisive, and leaders everywheremust stay on course in order toprotect future environmental andeconomic stability.

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESI am inspired by the passion and deep expertise
I see my colleagues bring to work every day,as well as the breadth and depth of theiraccomplishments.
We remain firmly committed todelivering long-term sustainable
returns to our clients in this worldin transition, and hope you enjoy
reviewing the progress we arereporting on in the following pages.”2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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STEWARDSHIP CODESOUR STRATEGY AND APPROACH

OUR PURPOSEOUR STRATEGY

Our purpose is to achieve longterm sustainable returns for ourclients, by placing sustainability
at the heart of our strategy andinvestment philosophy.

•P hilippe Boulenguiez, Global Chief Operating
Officer

Because understanding and supporting thetransition to a sustainable economy is key for us,
we have adopted a single-minded sustainability
approach. It shapes our firm and guides what
we do: our strategy, our culture, our structure,
our products, our processes, the way we engage
with our clients and with the companies and themarkets we invest in.

•G uy Davies, Deputy Head of Investments,
CIO Fundamental Active Equities

This vision is endorsed by our Executive
Committee, composed of:• Sandro Pierri, Chief Executive Officer• Steven Billiet, Global Head of Global Client Group• Marion Azuelos, Global Head of Human Resources• Robert Gambi, Global Head of Investments• David Vaillant, Global Head of Finance,
Strategy and Participations• Pierre Moulin, Global Head of Products
and Strategic Marketing• Jane Ambachtsheer, Global Head of Sustainability•D avid Bouchoucha, Head of Private Assets•E mmanuel Collinet de La Salle, Head of Group
Networks

Sustainability is at the coreof our investment beliefs.
Our investment beliefs underpin our approachby weaving together investment teams that coverdifferent asset classes, geographies and themes.
Sustainability is a core component of this,as outlined below.

•C écile Lesage, Chief Financial Officer

Conviction-driven•R oger Miners, Head of Distribution Europe

In a changing world, our conviction-based
investment philosophy provides scope tocapture both short- and long-term opportunities
for value creation. Our approach combines athorough understanding of market dynamics andfundamentals (at security, sector, thematic levels),
enabling high conviction positions and a dynamic
allocation of capital across varied time horizons.

•M ike Nikou, Head of APAC•O
 livier de Larouzière, CIO Global Fixed Income

Research-driven
Research is the foundation on which we build
our market views to support our convictions.
We apply both a quantitative and fundamental
approach to our research with a cultureof curiosity, collaboration and challenge.

Global perspective
A global perspective is needed to make better
investment decisions, in an increasinglyinterconnected world.

Powered by people
People drive investment decisions. We arecommitted to attracting, nurturing and retaining
our diversity of talent. We align incentives to ourclients’ long-term sustainable objectives.

Sustainable

Risk management

We are convinced we make better decisions by
integrating sustainability considerations acrossour investment processes. We believe this will
result in better outcomes for our clients, markets
and the planet.

The value created through our research andidea generation needs to be carefully preserved
through appropriate risk utilisation.

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STEWARDSHIP CODESOUR STRATEGY AND APPROACH

OUR APPROACH
TO SUSTAINABILITY

The 6 pillars of our approach1

Our approach to sustainability is built on six pillars.
It provides a strong framework, built to recognisethat systemic risks such as climate change or
biodiversity loss cannot be fully addressed throughexclusions or the integration of ESG factors
into portfolio management.
Our stewardship activities and strategy with regard
to the 3Es complement and amplify our efforts to reducematerial investment risks, as well as systemic risks that
require collective and urgent action.

Forward-looking perspective: the ‘3Es’ (Energy transition, healthy Ecosystems, and Equality)
Enhance investment decision-making, preserve long-term market performance2
Responsible BusinessConduct (RBC) and
sector-based exclusions
Articulate expectations
for responsible businessconduct and sensitive
sectors; avoid regulatory
and stranded asset risk

4
Stewardship(voting, engagement,
policy advocacy)

ESG

3
ESG integration
Enable better investment
decision-making

Our investments

Protect company value,
influence sound regulatory
framework, promote bettersocial and environmental
outcomes5
Sustainability
in our product range
Provide investment
solutions to help ourclients through theirsustainability journey

Our products

6
Corporate Social
Responsibility (CSR)
walking the talkOur corporate practices anddisclosures should matchor exceed the standards
we expect from the entities
in which we invest

Our operations

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Our approachin practice
Our approach to sustainability begins with aninvestment philosophy, a set of underlying beliefs
that inform investment teams when they are
managing their funds. Relevant Environmental, Socialand Governance (ESG) considerations are integrated
into investment philosophies.

Our proxy voting activity is led by our stewardshipteam, which liaises with portfolio managers to seek
input on strategic votes. Engagement on governanceand sustainability topics is typically also led by ourstewardship team, while investment teams include
ESG topics in their ongoing company meetings.

At the idea generation stage, investment teams
think broadly about future investment opportunities.
Integrating ESG factors allows them to include or
discard opportunities based on ESG considerations.
For example, some strategies identify thehighest‑rated ESG names in an investment universe
as a priority for additional financial analysis.

Per our ESG Integration Guidelines, we monitor
the ESG score and carbon footprint of investments
against their benchmarks with the aim ofoutperforming on each.

During portfolio construction, ESG factors canbe used to screen companies, overweight or
underweight positions, or tilt portfolios. For example,
many of our multi-factor portfolios have a tilt awayfrom carbon-intensive names and towards high ESG
performers.

We believe our approach provides a strong
framework for embedding and managing
sustainability risks and opportunities in theinvestment process.

Regarding risk management, we have a fiduciary
duty to our clients to take all risks into consideration,
including ESG and sustainability risks.

Our fund reports contain these two Key Performance
Indicators (KPIs) so that clients can better
understand the position of their portfolios.

Our multi-faceted approachalso involves a more detailed
set of investment beliefs
focused on sustainability:• Behaving as a ‘universal
owner’ helps to shape amore sustainable economic
future• ESG integration can enhance
the way we invest• Our fiduciary duty is alignedwith sustainability• Stewardship is both anopportunity and an obligation• ‘Walking the talk’ is critical toachieving excellence
See our Global Sustainability
Strategy for more information.

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STEWARDSHIP CODESOUR STRATEGY AND APPROACHSUSTAINABILITY
GOVERNANCE
We expect high standards of governancefrom the companies in which we invest,
including on all sustainability matters,
and we hold ourselves to the same
standards. Our approach to sustainability
is managed by a company-wide
governance framework.
This framework ensures that our sustainability-related
policies and practices are embedded and implemented
appropriately throughout our business, and that any new
initiative is well-conceived, properly structured anddelivered effectively.
Our governance system ensures board and executive-level
oversight of the implementation of the Global Sustainability
Strategy (GSS) and our business strategy.
At an operational level, it is an effective mechanism toensure that our policies and processes are aligned with
our ambition and that there is continuous communication
among stakeholders.

BNPP AM EXECUTIVE BOARD

BNPP AM EXECUTIVE COMMITTEE

Strategic oversight of overall business

Strategic oversight of sustainability approach

Chair: CEOChair: CEOSUSTAINABILITYCOMMITTEEINVESTMENTCOMMITTEESTEWARDSHIPCOMMITTEEGLOBAL PRODUCTCOMMITTEEEXECUTIVE CSRCOMMITTEE

Oversees and validates
our approachto sustainability

Approves sustainability
methodologies andmonitors ESG integration

Reviews voting andengagement implementation

Approves sustainability
characteristics of products

Chair: CEOChair: Global Headof Investments

Co-Chairs: Equities CIO & Global
Head of Sustainability

Chair: Global Head of Products
and Strategic Marketing

Oversees the implementationof our approach to Corporate
Social Responsibility (CSR)
Chair: Head of Corporate Social
Responsibility

OTHER ESG-RELATED PROGRAMMES OR COMMITTEESSUSTAINABLE REGULATIONPROJECTSUSTAINABLE METHODOLOGYOVERSIGHT COMMITTEE*ESG INTEGRATION STEERINGCOMMITTEEESG DATAPROGRAMME

Oversees the development andimplementation of regulatoryrelated methodologies, definitions,disclosures and processes

Oversees and validates ESG
methodologies that are linked
to regulatory/label frameworks

Manages the scoring evolution
process and ensures deepening
implementation of our ESG
Integration Guidelines

Supports the development anddeployment of various researchmethodologies and internal datacapabilities to support investment
analysis, portfolio construction& measurement and reporting

Co-Chairs: Global Head of Products andStrategic Marketing and Global Head of
Sustainability

Chair: Global Head of Products
and Strategic Marketing

Chair: Sustainability Integration Lead* Sub-Committee of the Sustainability Regulation
ProgrammeSponsors: Global Head of Products
and Strategic Marketing, Global Headof Sustainability and Global Chief
Operating Officer• Implementation is monitored by our internal control systems• Integrated into BNP Paribas Group Sustainability

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STEWARDSHIP CODESOUR STRATEGY AND APPROACHOUR CULTURE
At BNP Paribas Asset Management, we believe thatsustainable investment practices have the potential tocontribute positively to global economic, environmental
and societal conditions while achieving long-termsustainable returns for our clients.
The key to achieving these outcomes lies in our people.
At BNPP AM, this is at the heart of what we do;our people are proud of the impact they make, notably
through helping our clients achieve their objectives,and contributing to a better future.
We believe our people make the most meaningful impact
on the world when they are living up to their full potential.
That is why we have built a culture of empowerment thathelps release the potential within each of our employees,
nurtures it, and allows it to flourish.

Building sustainability into our culture
To deliver on our purpose and strategy, we needa workforce that understands our goals andembraces them. We also believe that creatinga work environment that is consistent with ourinvestment philosophy will help keep sustainability
top of mind for our employees, and enable themto more authentically incorporate sustainability
principles into their day-to-day activities.

Our updated Global Sustainability Strategy,
released in early 2024, now includes a pillar
on ‘walking the talk’, and we see corporate social
responsibility and operational sustainability
as an important differentiator in our recruitment
strategy and for achieving our business objectives.
We have dedicated resources on this topic to help
us achieve our goals.

We include questions about our culture and strategy
in our employee engagement surveys and we ask
these questions annually to track our progress.
In 2023, the responses continued to be
overwhelmingly positive, with 90% of respondents
saying it is important to them that we becomea fully sustainable asset manager and 77%of respondents saying they could see how theirrole supports our commitment to sustainability,
which has increased by 5% since 2021. We believethat these results speak to the effectiveness of ourapproach, but we know we must remain vigilant inthis area, as it is a vital component to maintaining
our leading position on sustainability1.

We believe that through our objective
to embed sustainability in all we do– our investments, our people, ourprocesses, our operations and otheraspects of our business – we canbuild a culture of sustainability thatwill help us to deliver our businessstrategy more effectively.

90%

of respondents say it isimportant to them that we
become a fully sustainableasset manager

77%

of respondents say they
could see how their role
supports our commitment
to sustainability

1 - 2nd in Europe for sustainable thematic strategies, according to an analysis made by BNP Paribas Asset Management basedon Morningstar data as at 31/12/2023.

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MAPPING TO KEY
STEWARDSHIP CODESOUR STRATEGY AND APPROACHPEOPLEWe believe that our people make the mostmeaningful impact on the world when
they are living up to their full potential.
We do this by focusing on building a culture of empowerment
and a work environment that is inclusive and inspiring.
In addition to this, we believe that through our objective
to embed sustainability in what we do – not only in ourinvestments, but also in our people processes, in ouroperations and in other aspects of our business – we canbuild a culture of sustainability that will help us to moreauthentically deliver on our business strategy.

Sustainability Centre
The Sustainability Centre is a well-resourced teamof sustainability specialists who drive our approachto sustainability. 2023 saw the addition of new rolesin the team, including an ESG Specialist to focus
on private assets and a CSR Project Manager to help
us implement employee and community-focused
CSR initiatives.
The Sustainability Centre is responsible for developing
and implementing the firm’s sustainability strategy,
ESG Integration Guidelines and Policy, Stewardship
Policy and Responsible Business Conduct Policy, as
well as our ambitious targets on the energy transition,
the environment and equality. It plays a crucial role inmeasuring, tracking and reporting on our impact andprogress on sustainability.
The ESG research team within the Sustainability
Centre provides investment teams with research,
analysis and data at company and sectoral levels.
It also supports these teams in their efforts
to integrate sustainability-related risks andopportunities into investment strategies.
Our ESG research analysts’ insights are informed
by a variety of external data and researchsources. They also deliver a range of educational
opportunities to colleagues across the organisation.
Members of the Sustainability Centre are highly
qualified and have extensive relevant experience.
More than half of the team members identify
as women and we have team members locatedin Boston, Hong Kong, London, New York, Paris,
Shanghai, Singapore and Toronto. This means they
not only bring regional expertise to the global team,but they are also able to work closely with local
investment and sales teams. Team members havebackgrounds in consulting, advocacy and policy,
working with Non-Governmental Organisations(NGOs) and intergovernmental organisations, rating
agencies, mainstream investments, sell-side analysis,
sales and marketing and various industry experience.

35

ESG experts across
3 continents(Asia, Europe andNorth America)

20

new positions
since 201713+

years average
professional
experience

10

languages spoken

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ESG Champions• Update of our Global Sustainability Strategy.

Our network of over 140 ESG Champions plays
a vital role in linking our investment and sales
teams with our Sustainability Centre. The network
is supported by leaders in our Sustainability Centre
and Product and Strategic Marketing teams. They are
subject matter experts within their investment orsales teams, pursue specialised education and have
performance objectives related to their responsibilities.

• Review of our ESG data and research strategy.

They meet monthly and are provided with training
and briefings to keep their knowledge current on
relevant ESG market developments, and on our
ESG research methodology, exclusion policies andstewardship activities.

Many members of the Sustainability Centre anda number of our ESG Champions count themselves
as part of the BNP Paribas Group’s Network ofExperts in Sustainability Transition, or NEST. The
members of NEST work not only within theirbusinesses and entities, but also across the Groupto share knowledge and support clients in theirtransitions.

Topics covered in 2023 include:• Updates to our various ESG-related methodologies,
including sustainable investments and net zeroassessment.
• Overview of the Principal Adverse Impact (PAI)
regulation and methodology.
• Our forthcoming Equality Roadmap and approach.
• Sessions on the Task Force on Nature-related
Financial Disclosures (TNFD) and deforestation
risks in portfolios.
• Various topics related to climate including fiduciary
duty through the lens of net zero, outcomes from
COP28 and decommissioning challenges in theenergy sector.

• Overview of our voting and stewardship activities.

Network of Experts
in Sustainability
Transition

The network comprises over 700 employees and,in 2023, organised 25 internal webinars attended
by more than 3,000 participants. In addition to this,they hosted NEST day, a sustainability conference
for members of the NEST network with external
experts on topics such as climate change and
the Just Transition. NEST published four newslettersin 2023 on the ecological and just transition,
capitalising on the knowledge of more than
100 internal and external experts. This included a
special edition on the Just Transition, which used asits foundation a study of almost 10,000 Europeans on
the speed and consequences of the energy transition.

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Professional development: Sustainability Academy @AM
We recognise that the sustainable investing space and
ESG issues are rapidly evolving, and it is critical that ouremployees keep up to date if they are to be successful inachieving their objectives. We also believe that sustainability
education is a key lever to building a strong culture ofsustainability, to attract and retain employees and to ensure
we successfully deliver on our business strategy.
We are investing significantly in ensuring that our employees
have the most current knowledge on sustainability issues.
In 2022, we formalised our approach to sustainability
education by developing a sustainability education strategy
and launching the Sustainability Academy @AM.
This involved developing six different training paths forour employees depending on the level of sustainability
knowledge they require in their roles. Each training path
requires between 4 and 15 hours to complete with certain
employee populations needing to complete an external
certification in addition to this. We rolled out thesetraining paths to all employees in 2022 and completionof the training was formalised into many of our employee
development plans for 2023.

Some highlights from training we developedin 2023 include:• Integrating our Sustainable Investing Primer e-learning,co-built with the CFA Institute, into a number of employee
learning paths.
• Making Net Zero and Equality part of the central themesof our annual three-day Investment Symposium.

• Designing a three-hour workshop for our Investments
teams on ESG integration processes, regulations, tools,
data and governance, including case studies on bestpractices presented by different investment teams acrossall asset classes of the firm.
• Embedding sustainability into our FAME (Financial& Asset Management Expertise) training curriculum
and our Demystification series designed for a wide rangeof employees, with a focus on biodiversity and SDGs
in 2023.
• Rolling out the Climate Fresk and Biodiversity Fresk
workshops globally. These interactive three-hourworkshops are designed to teach the basic sciencebehind climate change and biodiversity, and actionsindividuals and companies can take to combat it. In total,
461 employees have participated in the workshops.
• Rolling out sustainability training to a number of our Joint
Ventures and Affiliate businesses.
• Developing a specialised workshop on sustainability to be
used to train internal BNPP AM boards.
• Making available new ESG Certifications to our employees
including the CFA Certificate in Climate Investing and the
PRI in Alternative Investments certificate.
We are pleased with the level of uptake of the training
strategy with employees spending on average 4 hours and
37 minutes on internal sustainability-related training in
2023. This does not included the many hours our employees
spent studying for external certifications.

In addition to internal training:• 709 employees have received a sustainable financeexternal certification such as Certification AMF Durable,
CFA Certificate in ESG Investing or Certificate in Climate
and Investing, EFFAS Certified ESG Analyst, or one of thecertificates offered by the PRI. 68% of our sales and 71%
of our investment teams have completed an ESG
certification.
• Of the employees with external certifications,27 employees completed a certification programme
developed by BNP Paribas Group with the University ofCambridge’s Institute for Sustainable Leadership (CISL).
The CISL Positive Impact Business Certified Training is
a 7.5-day course, delivered online and in person in 2023,
over a three-month period and tailored to sustainability
and finance. On completion, graduates became Positive
Impact Pioneers, a community of internal sustainability
experts who develop projects that drive positive impact
within the organisation. In addition to this, 234 employees
completed an 8-hour online version of the training.
We have added questions on sustainability skills to our mostrecent employee engagement survey and 76% of employees
said they had the correct level of sustainability-related
training to perform their role.
We believe we have developed an effective strategy forensuring that our employees have the skills and knowledge
they need to help us deliver our strategy over the long term.
We believe we have an effective approach to ensuring our
employees have the right training; however, sustainability

is evolving rapidly and we plan on introducing new topics
and dive deeper into existing topics in 2024 to continue
to keep them current. This includes training on avoiding
greenwashing, regulatory changes and topics like net zeroand biodiversity.

709

employees have received
a sustainable financeexternal certification

76%of employees said they
had the correct levelof sustainability-related
training to perform their
role

461

participants inenvironmentally-themed
workshops (fresques)
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INCENTIVESSpecific sustainability objectives were assigned
to the following teams:

We have tightened the alignmentof our Remuneration Policy with oursustainability goals over the past
few years, integrating sustainability
with performance assessments,
financial rewards and the professional
development of our employees.

Executive Committee

ESG Champions

Where relevant, Executive Committee
members have goals related to thesuccessful implementation of BNPP AM’s
Global Sustainability Strategy andthe integration of sustainability risks
throughout our investment processes
and stewardship activities.

Our rewards strategy is designed to achieve sound,responsible and effective remuneration policy and practices.
In particular, it is designed to avoid conflicts of interest,
protect clients’ interests and ensure that excessiverisk-taking is discouraged.

The Sustainability Centre

ESG Champions have been appointed
within Investments and the Global
Client Group (GCG) and, liaising with
the Sustainability Centre, help promotesustainability and integrate sustainability
risks within each team.
Each investment team has at least one ESG
Champion responsible for communicating
issues related to sustainability risks toteam members. ESG Champions’ objectives
reflect this, including additional goals
specific to their Champion role.

We use objectives to align an employee’s activities withthe company’s goals. Sustainability-related roles andresponsibilities are defined for a set of key internal functions
most closely involved in delivering our GSS. Within theseroles, specific sustainability-related objectives are assigned
and cascaded down to teams and individuals. At the end of
the year, the fulfilment of these objectives is assessed during
annual performance reviews, which are a key input in thedetermination of the annual variable remuneration awards.
We continue to push sustainability-related objectives toa number of key employees, including investment teammembers as well as our ESG Champions. In addition, manyroles, such as our ESG Champions, have compulsory ESG
training incorporated into their annual objectives.

This team drives our approach tosustainability and is responsible fordeveloping and implementing thefirm’s GSS, ESG Integration Guidelines,
Stewardship Policy, Responsible BusinessConduct and various other policies.

Investment teams
As part of most investment processes,
analysts and portfolio managers
integrate ESG factors into company, asset
and sovereign evaluations in different
ways. Successfully implementing our
ESG Integration Guidelines, including
the aim to beat the related universe or
benchmark on ESG scores and carbon
footprint objectives, is a goal of our Chief
Investment Officers and is disseminatedto investment teams, where relevant.

Product and Strategic Marketing

Scoring Research and monitor the link
between ESG integration and investment
performance. This is reflected in theobjectives of this department, and of its
members where relevant.

Central Functions and teams
Our central functions (Compliance,
Legal and Risk) and many other teams
play an important role in implementing
our sustainability agenda, and relevant
sustainability goals are cascaded to teammembers from the Executive Committee
member or department head.

This team leads on the alignmentof BNPP AM products with sustainable
regulation and labels, which is reflected
in its objectives. It also plays an importantrole in helping to lead the GCG ESG
Champions network and in educating ourclients and colleagues on sustainable
regulation topics. This is reflected in theobjectives of this department, and of its
members where relevant.

Quantitative Research Group
Members of this team co-develop ESG

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REFLECTING
CLIENT NEEDSIN OURINVESTMENT
SOLUTIONS

We have several touchpoints withclients to ensure that we can help
them achieve their investment
objectives:• Client Relationship Managers have a deep
and detailed knowledge of their clients’businesses, understanding both thechallenges they face now and those they
are likely to face in the future.
• Client Account Managers are responsible
for the day-to-day management of clients
invested in mandates or dedicated funds.
• We use third-party consultants to conduct
in-depth interviews with investment
decision-makers to ensure we understandglobal trends and needs.
During the pitching process and client
onboarding, we make an assessmentof a client’s investment needs and gain
an understanding of their sustainability
goals.
We meet regularly with clients to updatethem on their investments and to assess
any changes in their investment
circumstances, including those related
to sustainability. We ask clients andprospects to whom we provide a MiFID
service about their ESG preferences
through the MiFID ESG questionnaire.
We also recognise that we have a roleto play in moving our clients along
the sustainability curve.

We do this largely through the training weprovide them via our Investment Academy,
created in 2009 with the purpose of sharing
knowledge and expertise with our clients.
Classes are delivered online and in-person,with over 15,500 people having attended
since inception.

We cover a number of technical andregulatory topics affecting the asset
management industry and we havealways had a focus on sustainability.
Among the topics included in the 2023
curriculum were:• The basics of Sustainable Investing: theimportance of sustainable investing, typesof ESG products, introduction to regulationand sustainability stakeholders.
• Stewardship: introduction to stewardshipand proxy voting.
• ESG implementation: custom training
covering the fundamentals of integrating
ESG within portfolios.
• Sustainable Investing Advanced: four-hourin-depth training built in conjunction with
our Sustainability Centre experts.
• CFA x BNPP AM: Sustainable Investing
Primer.

HIGHLIGHT

Partnering with the
CFA Institute to launch
the Sustainable Investing
PrimerWith the CFA Institute, the global associationof investment professionals, we launched ane-learning primer to support the understandingof the importance of acquiring ESG skills andthe growing need for greater sustainability
knowledge and awareness among finance andinvestment professionals. This is part of an ongoing
partnership that started with the award-winning
Sustainable Investing Gameshow. The e-learning
module, jointly developed with the CFA Institute,is available to all our clients and staff.
The Sustainable Investing Primer consistsof a two- or three-hour online course covering
topics such as:• climate change and the mainstreaming ofsustainability;• an introduction to ESG analysis and the conceptof materiality;• different approaches to sustainability;• greenwashing;• ways to assess sustainability credentials.
It is important for us to ensure that our clients
understand the evolution of the marketplace andwe see this training as furthering this goal.

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How we communicate with and report to our clients
Our goal is to provide our clients with informationthat can help them better understand how we have
implemented what they have asked of us and thesustainability characteristics of their investments.

On an annual basis
We publish our Sustainability Report, Stewardship Report,
Voting Report and Principles for Responsible Investment(PRI) Transparency Report to provide an overview ofour sustainability-related activities for the year. We also
repackage this content into more easily digestible pieces
that are shared with clients throughout the year.

On a semi-annual basis
We produce a Solidarity Investment Report for our clients
who invest in funds that finance the development of thesocial economy. The report outlines the outcomes andimpacts of these investments along with case studies ofvarious individual investments.

On a quarterly basis
We produce targeted reports for our institutional
clients invested in dedicated funds or mandates
and hold meetings with them to discuss the reports.
Portfolio managers or product specialists usually join
the meetings and go through performance in detail.
Sustainability topics are often covered at these meetings.

On a monthly basis• For applicable funds, we generate fund reports andfactsheets that include ESG metrics such as the carbon
footprint, ESG score and ESG contribution of theirportfolios versus their respective benchmarks.
• We have introduced a new chapter on sustainability
metrics in our reporting to institutional clients.

On an ongoing basis• We publish reportings linked to labels or any othersustainable classification such as extra-financial
reporting for French SRI label, fund transparency
reports or impact reporting.
• In line with MiFID II regulation amendments,
we have started to publish European ESG Template(EET) reporting.
• We share thought leadership with our clients onsustainability topics throughout the year, and publish
shorter pieces, podcasts and videos on sustainability
topics in our Viewpoint blog.
• We publish key policies, guidelines and annual reports
covering stewardship, voting, compliance and assurance
on a dedicated page on our corporate website.
• We send ad hoc updates on new developments related
to net zero, including podcasts, videos, blogs and otherthought leadership, Sustainable Finance Disclosure
Regulation (SFDR) and other policy matters.

HIGHLIGHT
Dialogue established by our sales teams with our clientson sustainable investing is essential. To do this effectively,
it is important to provide our sales representatives withthe right training and tools, in a variety of formats andfor educational purposes, to ensure relevant and useful
dialogue with our clients. Client-facing members of our
Global Client Group have their own learning path in our
Sustainability Academy @AM and are encouraged to obtain
third-party sustainability certifications to better equipthem to engage with our clients (see page 19).
The marketing and communications teams have long beencommitted to reporting on our actions and produce multiple
media (brochures, videos, client events, podcasts, articles,
infographics, etc.) to help our clients understand thechallenges and opportunities presented by sustainability.
To improve the effectiveness of our client
communications, a sustainability coordination committee
meets monthly with members of the sales, marketing,communications and Sustainability Centre teams toensure activations and share best practices. The head of
the coordination committee also contributes information
at each meeting of GCG ESG Champions on activations
and tools made available to them.

Taking the temperature
We partnered with BNP Paribas Corporate andInstitutional Banking and Coalition Greenwich tosurvey institutional investors and intermediaries
on thematic investing. The global survey wasmeant to better understand their objectives,preferred themes, selection criteria
and investment plans. Highlights from the2023 BNP Paribas Thematics Barometer:• Achieving a positive impact or contributing
to sustainable outcomes is the main overall
objective in using thematic investing, withenhancing investment returns the second mostimportant.
• The most appealing sustainability themeis renewable or clean energy followed byclimate change solutions.
• U.S. investors’ appetite for thematic investingis much lower compared to Europe and Asia.
• 84% of investors think that employing thematicinvesting has a positive impact on long-term
investment performance.

In 2023, we strengthened our ESG reporting toinstitutional clients by including an ESG chapter withsustainability metrics such as ESG scores and carbon
footprint data. We also continued to keep our clients
abreast of evolutions in SFDR, implementing net zero
investment strategies and other thought leadership on
sustainability topics.

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CONFLICTS AND
ASSURANCE
We have fiduciary duties to our clientsand beneficiaries, and we believe thatby putting our clients’ interests above
ours or our employees’, we can assure
stakeholders of our integrity.

Conflicts of interest
All employees of BNPP AM are boundby the BNP Paribas Group Codeof Conduct, which imposes obligations
to work in clients’ best interests by:• Providing clients with the mostappropriate products and services.

• Decisions within BNPP AM must be takenin the interests of its clients, even if
such decisions may be detrimental to,or conflict with, the interests of a clientof another business area or a proprietaryinterest of BNP Paribas Group.

• Giving clients clear, honest andnon-misleading information and, whenrequested, an opinion related to expected
performance, associated risks and pricing.

• Staff working for BNPP AM mustremain independent and neutralin the performance of their duties
and responsibilities.

• Providing quality service that promotes
the client’s best interests.
• Treating clients fairly, without giving
any client (or other counterparty) undue
preferential treatment.
• Behaving transparently, notably bymaking available, at the client’s request,
any information related to the service or
product offered or subscribed.

Our executive team has embedded
a culture throughout our businesswhere clients’ interests mustbe given priority and no client will
be disadvantaged. To ensure this:• BNPP AM is appropriately segregatedfrom other businesses within
BNP Paribas Group. We use ring-fenced
IT systems to conduct our business.

If a conflict of interest arises and theimplemented policies and procedures
are not sufficient to ensure withreasonable confidence that theinterests of a client will be protected:• BNPP AM must clearly disclose thegeneral nature and sources of the conflictto the client before undertaking businessfor the client and such disclosure must be
approved by Compliance.

• Under BNPP AM’s policy, over-reliance on• The governance arrangements fordisclosure without adequate consideration
the asset management activities ofof how conflicts may be managed
BNPP AM also function independently
appropriately is not permitted.
from the BNP Paribas Group. This includes
BNPP AM’s hierarchical reporting line,
Identification and management
which is separate from those of otherof conflicts
BNP Paribas Group businesses
To identify potential conflicts of interest,and converge only at the level ofa mapping exercise has been conducted
the Executive Management Committee
and the results have been used to createof BNP Paribas Group.
Conflicts Registers for BNPP AM, which
Employees are reminded of applicable
are maintained and reviewed regularly
policies and procedures during mandatory
by our local Compliance teams. Employees
annual training and other trainingof BNPP AM should also detect and identify
sessions during the year, and by regular
any potential conflicts of interest andcommunications of regulatory changes.
inform their local Compliance team to
In addition, as a matter of policy,
manage the potential conflicts and updateprocedures (including those related
the Conflict Registers if needed.
to conflict management) are regularly
reviewed and updated as required.

They contain details of actual or potential
conflicts that may arise between BNPP AM(including its employees) and its clients(or between clients of BNPP AM).
These registers are an essential tool for the
management of actual or potential conflictsof interest.
• Senior management of BNPP AM receive
written reports at least annually on thesituations contained in the conflicts ofinterest records.
• Moreover, senior managers must takeappropriate steps in their oversight of thebusiness and are required to demonstrate
their accountability, including conflicts ofinterest management.

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Assurance
Delivery of our business strategy, including
our sustainability activities, is subject to a setof internal controls comprising three linesof defence, per BNP Paribas Group’s Internal
Control charter.
• Our first line of defence is that internal control is amatter for every BNPP AM employee, whatever theirhierarchical position or responsibilities. Managers
and their respective staff constitute the first lineof defence. They are accountable, at each level ofthe organisation, for achieving the objectives andmonitoring the risks of the businesses or services
they operate or deliver.
• Our second line of defence is provided by entities
exercising second level controls, namely, risk,
compliance, legal (integrated control function),Group tax and Group finance. They are responsiblefor defining and implementing the management
framework of accounting and financial information
risk (non-integrated control functions).
• Our third line of defence is provided by the
Inspection Générale of BNP Paribas Group, an
independent and hierarchically integrated internal
audit function, which reports directly to the Chief
Executive Officer (CEO) of BNP Paribas Group.

Finally, we seek external assurance in certain
areas of our business to provide third-party
verification and validation of our approachand outcomes:• EY provides an independent assurance report on
the alignment of BNPP AM’s impact management
systems with the Operating Principles for Impact
Management.
• EY also audits our Socially Responsible Investment(SRI) labelled funds marketed in France. We are
currently assessing the feasibility of having futureyears’ Sustainability Reports externally assured.
We review our procedures every three years
to ensure they are still current and effective. In
practice, the main policies governing sustainability
within our investment approach are reviewed at least
annually either in our Sustainability Committee or in
our Stewardship Committee.
In 2023, we underwent a review by the
Inspection Générale of our sustainability governance,
communications, sustainability product definitions,and the control framework in place surrounding
sustainability. This was a follow up froma 2020-2021 review of our sustainability-related
activities by the Inspection Générale, which provided
us with second-party validation of our policies
and processes.

We believe that this multi-pronged approachprovides us with an arms-length opinion of
the validity of our policies and processes and helps
to ensure our communications are fair, balanced
and understandable.

Protecting against greenwashing
There has been growing skepticism
around how deep the implementationof ESG integration and sustainable
practices really goes. Our clients trust
us to steward their assets
in a sustainable manner and it isa privilege we take very seriously.
In 2023, we went further to safeguardthat trust by issuing guidelines to ouremployees about greenwashing, what
it is and how to avoid it, including in
the terminology used within corporate
and marketing collateral. We also
provided numerous presentations
and training sessions to various
management teams to reinforce theimportance of our guidelines andensure that they are adhered to in
everyday business matters. In 2024,
our plan is to launch new training
modules on the topic.

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STEWARDSHIP CODES

THE 3Es

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THE 3Es
We believe a better world is one withan economic model built on a successfulenergy transition, healthy ecosystems
and greater equality in our societies– our 3Es. These are critical preconditions
that together represent a pathway tothe economic sustainability that enables
us, as investors, to safeguard long-term
returns.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENT

A forward-looking perspective
Through the process of developing our
Global Sustainability Strategy, we identified three
critical preconditions for a more sustainable andinclusive economic system: a successful energy
transition, healthy ecosystems and greater equality
in our societies.
Taken together, these form a pathway to economic
sustainability that will enable us, as investors,
to safeguard long-term returns. We have establisheda set of targets and developed Key Performance
Indicators (KPIs) relating to these 3Es, addressing
how we will align our investment research,
portfolios, and company and regulatory engagementin support of each. This section details how
we are addressing these risks to help promote
well-functioning markets.

Market-wide risks
The identification of market-wide risks is an essential
task for any asset manager and is performedby different groups within the Investments divisionof BNP Paribas Asset Management (BNPP AM).
Our Macro Research and Investment Strategy team ischarged with providing well-researched, high conviction,
counter-consensus views to portfolio managers to
support their investment decisions. The team now has
six economists responsible for covering macroeconomicand economic policy and political developments in
key regions of the globe, as well as two strategists
responsible for covering the core asset markets: fixedincome, foreign exchange, commodities and equities.

SUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

Energy transition
The credit research team within the Global Fixed
Income department performs the same function,
focusing on analysis of the fundamentals of privatesector issuers within the universe of corporations
that we invest in. Our investment teams arepermanently engaged in assessing potential market
moves and the risks to individual positions or toentire portfolios. Risk managers supporting ourFundamental Active Equities and Global Fixed Income
groups work closely with investment teams to carryout regular and ad hoc stress testing analysis using
our investment management system.
Combined with and supplementing other risk
measures and reports, such as tracking volatility andValue at Risk (VaR)/Expected Shortfall, stress testinggives us important insights into how portfolios are
expected to perform in a range of possible scenarios.
The risk managers regularly conduct analysis ofprospective and customised scenarios, as well as
reviews of historical scenarios for relevant data.
While we know history never repeats itself exactly,
such reviews allow us to identify acute sensitivities
to factors that manifested themselves in past market
regimes and environments, and to assess theirrelevance to today’s conditions.

Energy transition is the term now widelyused to describe the structural shifts that are
occurring in the global energy system.
Propelled by the climate crisis, there are fourmain drivers of this energy transition:• public policy;• technology;• changing consumer preferences;• changing investor preferences.
These four factors operate in a feedback loop,
so the energy transition will likely intensify andaccelerate over the next decade. The transition
is an opportunity in the short, medium andlong term to boost growth, both from increased
investment in the low-carbon economy andby fostering innovation and technologicalprogress. In the long run, it is the only plausible
growth we can aspire to, and those who do not
adapt will be left behind.
Our approach to the energy transition incorporates
the notion of a ‘just transition’ to ensure that theshift will be inclusive and responsive to the needsof displaced workers and those communities andregions most affected by climate change (aligningwith E#3, Equality).
Our Net Zero Roadmap outlines our commitments
related to our investment, stewardship andoperational practices.

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

THE 3Es

Healthy ecosystems
Unless we act immediately and radicallyto reverse environmental degradation, notonly will we destroy our natural capital,
we will be unable to sustain the economic
growth rates and prosperity levels that
populations in developed countries enjoy,
let alone extend these to developing
nations.
As an asset manager with a broad rangeof clients that all depend upon a stablebiosphere, we have the dual responsibilityof understanding how our investments
impact nature – our role in driving thiscrisis – and how nature loss may translate
into financial risks.
Our overall objective is to improve theenvironmental impact of our investments.
We have two targets with respect to ourwater and forest footprints:• Improve the water efficiency of ourinvestment portfolios, especially in waterstressed areas, and measure and disclose
the water footprint of our portfolios.
We encourage water-intensive companies
operating in water-stressed areas tosignificantly improve their water efficiency
while ensuring water access to local
communities.

Equality• Support global efforts to end forest
loss by 2030. Our target is for relevant
companies in our portfolios to:— Adopt No Deforestation, No Peat,
No Exploitation (NDPE) commitments
for agricultural commodities (palm oil,soy, paper, timber and beef products).
— Adopt NDPE commitments by 2030
for non-agricultural sectors (mining,
metals, infrastructure, etc.).
Our Biodiversity Roadmap details the plan
we have made, and we have separate
reports on our portfolio biodiversity footprint
and exposure to deforestation.

Inequality threatens the legitimacy of thecompetitive marketplace. Unequal accessto opportunities widens the gap between
the wealthy and the rest of society,threatening social mobility, cohesion andstability, and creating downward pressure
on aggregate demand.
Investors can approach inequality as anopportunity to foster economic growth,
reverse wage stagnation, increasepurchasing power and improve financial
market stability along with social cohesion.
Addressing gender or racial discriminationand investing more in employees havethe potential to yield benefits worth
trillions of dollars for global economies.
Our objective is twofold: to improve theway we invest by better understanding
and evaluating social risks andopportunities; and to play a constructiverole by promoting equality and challenging
corporate actions that compromise
investors’ ability to achieve broad-based
wealth creation.
We will outline objectives and targets in
our approach for tackling inequality when
we release our Equality Roadmap in 2024.

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

THE 3EsC A S E ST U D Y

Exploring the roots of our exposure to deforestation
CONTEXT: Deforestation and the conversion ofnatural ecosystems can pose a long-term risk to
our investments and society. At the same time, there
has been little research on connecting investment
portfolios to this risk.
ACTIVITY: In 2023, we quantitatively assessed theexposure of our corporate holdings to potential
deforestation and conversion of natural ecosystems
through corporate production and consumptionof forest and ecosystem-risk commodities (FERCs).
The objective of this analysis was to further assess
the current state of quantitative data and set a
precedent for the industry, and also to identify
companies we hold and FERCs that are driving
deforestation and conversion of natural ecosystems.
We developed a proprietary methodology basedon publicly available datasets from CDP, Trase,
Forest 500 and Forest IQ to estimate the potential
deforestation and conversion of natural ecosystems
linked to our corporate holdings’ production andconsumption of selected FERCs by combining:
1 - disclosed production and consumption data
for each FERC; andfor only 6% of these AUM. Even though narrow, thisresult is still interesting, considering that we focused
our analysis on four sectors consuming or producing
the highest share of FERCs (consumer staples,
consumer discretionary, materials and energy). These
represent 24% of our corporate holdings. Outsideof these sectors, our exposure to deforestation islimited. It is important to note that this analysis
presents the total exposure of all investors in thecompanies we assessed, since we did not consider
our ownership share in each company. Results
show our corporate holdings are mainly exposed topotential deforestation and conversion of natural
ecosystems associated with palm oil in Indonesia,
Malaysia and Colombia, as well as cocoa in Côte
d’Ivoire. Palm oil has been on investors’ radar forsome time, but these results suggest cocoa should
be a priority as well. We find that a large share of
the potential deforestation and conversion of natural
ecosystems is declared ‘deforestation-free’ bycompanies, but few of them have strong traceability
systems in place, which raises questions over thecredibility of these claims.

2 - deforestation risk coefficient estimates for these
FERCs.

OUTCOME: This study enables us to further identify
the companies on which we want to focus ourresearch and engagement, such as:

This work is exploratory; from among the €171 billionof our corporate assets under management (AUM),
we managed to retrieve estimates of deforestationand conversion of natural ecosystems in hectares

1 - companies in relevant sectors that report only
partial quantitative data and/or no quantitativedata;

2 - companies in our portfolios that potentially drive
the largest share of deforestation and conversionof natural ecosystems and that do not havestrong No Deforestation, No Peat, No Exploitation(NDPE) policies or traceability systems, and;3 - companies that claim deforestation-free
production and consumption, but have not put
in place strong traceability systems.
In addition, to close the data gap, we urge companies
to further disclose quantitative information related
to their FERC sourcing and production. We plan
to apply this methodology to specific portfolios
and use this information to engage and educate
portfolio managers and clients about deforestationrelated risks in their portfolios, and identify potential
investment opportunities in companies that aremanaging their FERC impacts and risks appropriately.
Lastly, we will continue to leverage the six pillarsof our approach to sustainability to reduce theenvironmental impact of our investments, witha focus on forests.

Robert-Alexandre
PoujadeESG Analyst andBiodiversity Lead

“Our analysis found a large shareof the potential deforestation andconversion of natural ecosystems
is declared ‘deforestation-free’ bycompanies, but few of them havestrong traceability systems in place.”

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

THE 3Es

Participation in additional regulatory
and market-shaping initiatives
We engage with policymakers, regulators and othermarket participants in various market-shaping
initiatives to better align regulations and policies
related to the functioning of financial markets,
corporate governance and other topics related
to the 3Es.
BNPP AM has a long-term commitment to,and successful track record of, public policy
engagement to advance its sustainability goals.
We advocate both to strengthen ESG considerations
within the financial sector and, more broadly,
to improve sustainability-related regulation forthe markets in which we invest.
We actively engage policymakers, helping to shape
the markets in which we invest and the rules thatguide and govern company behaviour. Public policy
can affect the ability of long-term investors togenerate sustainable returns and create value.
It can also affect the sustainability and stabilityof financial markets, as well as social,environmental and economic systems.

We also add our voice to the advocacy of manyorganisations at the forefront of calling forurgent, far-reaching policy action to address
priorities related to the 3Es:
• Jane Ambachtsheer, our Global Head of Sustainability,
was a member of the Financial Stability Board’s (FSB)
Task Force on Climate-related Financial Disclosures(TCFD).
• Members of the Sustainability Centre hold positions
on the leadership committees or boards of the ICGN,
Global Network Initiative and the TNFD.
• We are a founding member of the Institutional
Investor Group on Climate Change (IIGCC).
• We are a Strategic Partner of the Inevitable
Policy Response.
• We are a member of the Investor Agenda and arerobustly implementing its framework.
We believe that being an active participant in these
discussions is an effective means to promote wellfunctioning markets. In the table on pages 31-33, you willfind some of the memberships, investor statements andother initiatives we take part in. Participation in thesebodies and initiatives keeps us current on systemic andmarket-wide risks and how they are evolving. In 2023, weundertook a review of our Global Sustainability Strategy;
during this process, we reviewed the system risks
identified – the 3Es – to ensure they remain relevant toour clients and our investment strategies.

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CLIMATESUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

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THE 3Es
HIGHLIGHT

Staying connected with regulatory developments
CONTEXT: For the regulatory framework to reach
its overarching objectives, it requires investment
products to drive change through the allocationof capital and investors’ willingness to invest in
those products. Labels are an enabler of this synergy:
through their standard-setting role and theirinherent transparency, they provide investors withcertainty and reassurance. At the same time, the EU
is determined to secure a net zero and just future forits citizens while also outlawing greenwashing. In
pursuit of these policy objectives, it established theSustainable Finance Disclosure Regulation (SFDR)
in 2019. Since then, the EU has held numerous
consultations with stakeholders as it rolls out theimplementation of SFDR and develops the associatedtechnical standards.
ACTIVITY: In 2023, we took part in numerous
consultations with standard-setting bodies
in France and Belgium in their review of theirrespective labels (ISR1 and Towards Sustainability).
We also participated in a number of SFDR-related
consultations.
OUTCOME: The new ISR and Towards Sustainability
labels will include a new set of criteria with higher
minimum standards. We are pleased with thisoutcome as we believe it will help investors shift
more capital towards the transition.
In parallel, we welcome the upcoming review of
the SFDR framework by the European Commission

as a way to address the well-known limits of thecurrent framework. Indeed, individual investors
do not necessarily have the expertise to performtheir own sustainability due diligence, so a productclassification system with high minimum standards
will provide individual investors with the level ofsustainability they are looking for. The new standards
will also help shape standardised disclosures sothat products can be easily comparable. We would
like to see a focus on key information so that itremains digestible to investors and for minimum
sustainability standards and disclosure requirements
to integrate benchmarks so investors can makemeaningful comparisons across products and asset
managers, helping to accelerate the transition.

January 2023
First consultationon the reviewof the Towards
Sustainability label
Central Labelling
AgencyFebruary 2023
Consultation
on Funds’
sustainability
namingESMA

Laurence
Caron-Habib
Head of Public
Affairs“We believe SFDR will build marketwide trust and pave the way forinvestors to reallocate their capital
towards investment products that
overweight sustainability in theirinvestment allocation.”

April 2023

Second consultationon the reviewof the Towards
Sustainability label

May 2023

Consultationon the reviewof the ISR label

Comité du label ISR

July 2023

Consultation on
SFDR technicalstandards review

December 2023
Consultation on
SFDR review

European Commission

ESMA

Central Labelling
Agency1 - Investissement Socialement Responsable.

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THE 3ESESG
INTEGRATION

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THE 3Es

Our memberships and pledges
Name of Organisation, Initiative or CodeSupporter since

Climate change

Ecosystems

Equality

Governance

Finance industry association/Code

Other

Access to Medicine Index (ATMI)

2016

•

Access to Nutrition Initiative (ATNI) Investors in Nutrition and Health

2014

•

AIGCC Asian Utilities Engagement Program

2021

Align

2021

ASEAN Capital Markets Forum (ACMF)

2021

Asia Investor Group on Climate Change (AIGCC)

2018

•

Asia Protein Transition Platform (ARE)

2022

•

Asia Securities Industry & Financial Markets Association (ASIFMA)
Asian Corporate Governance Association (ACGA)

•
•
•
•

•

> 10 years

•

2013

•

Association Française de la Gestion financière (AFG)> 10 years•

Association of the Luxembourg Fund Industry (ALFI)> 10 years•

Bank Negara Malaysia Joint Committee on Climate Change (JC3)
Belgian Asset Managers Association (BEAMA)

2019

•

> 10 years•

Business Benchmark on Farm Animal Welfare (BBFAW) (Global Investor Statement on Farm
Animal Welfare)

2016

•

Business Coalition for a Global Plastics Treaty

2021

•

CDP

> 10 years

•

•

•

Cerrado Manifesto

2018

Climate Action 100+ (CA100+)

2017

•

Climate Change Technical Expert Group of the HK Securities and Futures Commission (SFC)

2020

•

Climate China Engagement Initiative (CCEI)

2023

•

Coalition for Environmentally Responsible Economies (CERES)

2019

•

Council of Institutional Investors (CII)

2018

•

Dutch Fund and Asset Management Association (DUFAS)> 10 years•

EFAMA (European Fund and Asset Management Association)> 10 years

•

2018

•

Eumedion

•

•

•

•

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THE 3ESESG
INTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

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THE 3Es
Name of Organisation, Initiative or CodeSupporter since

Climate change

Ecosystems

Farm Animal Investment Risk and Return (FAIRR)

2021

•

•

Forum pour l’Investissement Responsable (FIR)> 10 years••

Equality

Governance

Finance industry association/Code•••

Global Network Initiative (GNI)

2019

Global Standard on Responsible Corporate Climate Lobbying

2022

Hong Kong Green Finance Association (HKGFA)

2018

•

Hong Kong Stewardship Code

2019

•

ICMA - Green Bond Principles

2017

•

IFC - Operating Principles for Impact Management

2019

•

IIGCC Net Zero Engagement Initiative (NZEI)

2023

•

Inevitable Policy Response (IPR)

2021

•

Institutional Investors Group on Climate Change (IIGCC)> 10 years•

Insurance Asset Management Association of China (IAMAC)

2021

•

•
•

Investment Association UK> 10 years•

Investment Management Association of Singapore (IMAS)> 10 years•

Investor Alliance for Human Rights / KnowtheChain (Investor statement on forced labor in global
supply chains)

2019

Investor Initiative on Hazardous Chemicals (IIHC)

2023

Investors Against Slavery and Trafficking (IAST)

2023

Investors’ Policy Dialogue on Deforestation (IPDD)

2023

IPC (Investidores pelo Clima) Brazil

2022

Italian Asset Management Association (Assogestioni)

•

•
•
•

•
•

•
•

> 10 years•

Malaysian Code for Institutional Investors

2019

•

Monetary Authority of Singapore Green Finance Industry Taskforce (GFIT)

2019

Nature Action 100 (NA100)

2022

Net Zero Asset Managers Initiative (NZAMI)

2021

Partnership for Biodiversity Accounting Financials (PBAF)

2021

Pensions and Lifetime Savings Association UK (PLSA)> 10 years••> 10 years

2018

•
•

International Corporate Governance Network (ICGN)

Investor Agenda

Other

•
•
•
•
•

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THE 3ESESG
INTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

THE 3Es
Name of Organisation, Initiative or CodeSupporter since

Climate change

Ecosystems

Equality

Governance

Finance industry association/CodePRI Advance2022

Principles for Responsible Investment (PRI)2006

ShareAction Investor Decarbonisation Initiative for the Chemical Sector

2023

Sustainable Trading

2022

Task Force on Climate-related Financial Disclosures (TCFD)

2017

Tobacco-Free Finance Pledge

2018

Transition Pathway Initiative (TPI)2017

UK FRC Stewardship Code

2022

•

> 10 years•

United Nations Environment Programme Finance Initiative (UNEPFI)
Zoological Society of London (ZSL) SPOTT Crusher and Refiners; Timber, Pulp and Paper

•

Other
•

•
•
•
•
•
•

2018

•

BBFAW private letter to the EU Commission on animal welfare legislation revision

2023

•

•

Business Call for a UN Plastics Treaty

2021

•

•

CDP Open Letter to Governments on Plastics Crisis

2023

•

•

EPR Statement for packaging

2021

•

Financial Institution Statement ahead of the Convention on Biological Diversity COP 15

2021

•

FAIRR G20 Finance Ministers letter on repurposing agricultural subsidies

2023

•

•

•

Forum per la Finanza Sostenibile (ITASIF) Letter to the Italian State on Sustainability

2023

•

•

•

Global Investor Statement on Water

2023

•

FAIRR letter to FAO Director General requesting Global Roadmap for Food System to 2050

2022

•

•

•

IIGCC Chemical Sector Investor Expectations

2023

•

Investor Statement in Support of the Maintenance and Expansion of the Bangladesh Accord

2021

Investor Statement on Tobacco2023

PRI/Ceres - Investor expectations statement on deforestation in soybean supply chains

2019

Statement on COVID-19 ACT to support for an effective, fair and equitable global response
to Covid-19

2021

Investor statements and letters signed since 2021

•
•
•

•
•

•

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CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESRESPONSIBLE
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BUSINESSCONDUCTWe expect companies to meet theirfundamental obligations to respecthuman and labour rights, protect theenvironment and ensure anti-corruption
safeguards wherever they operate.
We also have a series of policies thatset out the conditions for investing inspecific sectors and guide our screening
requirements and engagement approach.
We engage with many companies in areasin which they fall short and exclude
the worst offenders.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOur approach to Responsible
Business Conduct
It is our belief that companies’ businessconduct impacts the value and reputationof entities in which we invest. We expect
companies to meet their fundamental
obligations to respect human and labour
rights, protect the environment and ensureanti-corruption safeguards wherever
they operate, in line with the UN Global
Compact Principles and OECD Guidelines
for Multinational Enterprises (OECD MNEGuidelines).
We will avoid investing in companies
in violation of these standards andcompanies struggling to meet the standards
will be put on a watchlist.
A series of policies set out the conditions
under which we will invest in specificsectors and guide our screening
requirements and related stewardship
activities. These criteria are based on
relevant international conventions andregulations (including the supplemental
criteria provided by the OECD for sensitive
sectors such as responsible agricultural
supply chains and conflict minerals),
BNP Paribas Group CSR Policies andvoluntary industry standards.

In each sector, we highlight mandatory
Responsible Business Conduct (RBC)
requirements that must be met by issuersin order for us to invest.
In addition to the compulsory standards,
we have also developed criteria that we
encourage companies to comply with. The
latter provide a good framework for further
analysis and dialogue with companies.
Finally, we have a set of policies thatcommit us to exclude certain sectors or
activities when we deem them to be in
violation of international norms, or of
causing unacceptable harm to society or
the environment, without counterbalancing
benefits. These are generally sectors where
engagement makes little sense.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

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STEWARDSHIP CODESRESPONSIBLE BUSINESS CONDUCTRBC STANDARDS
United Nations Global Compact (UNGC)& OECD MNE Guidelines

Sector-specific
Requirements

A universal benchmark for assessing companies
based on 10 principles covering:
Human Rights, Labour, Environment and Anti-corruption
Including the UN Global Compact Watchlist

Implementation of minimum standards and exclusion
criteria for sensitive sectors: Agriculture, Coal,
Controversial Weapons, Mining, Nuclear, Oil & Gas, Palm
Oil, Tobacco, Wood Pulp

The following principles govern our implementation of RBC within our investment processes:

1

Investment universes
are periodically screened with a	view to identifying issuers that arepotentially in breach of UN Global
Compact Principles and OECDMNE Guidelines or mandatory
requirements applicable tocontroversial sectors and products.

2

This assessment is conducted by
our Sustainability Centre based on	internal analysis and information
provided by external experts, inconsultation with BNP Paribas
Group CSR.

3

As a result of this process,we maintain two lists:	• An exclusion list of issuersthat are associated with serious
and repeated breaches of
UNGC Principles or mandatory
requirements related tocontroversial sectors and products.
• A watchlist of issuersthat are at risk of breaching ESG
standards, with whom we may
engage in dialogue to encourage
improvements.

Our Sustainability Committee, which includes our most senior executives and is chaired by our CEO, oversees changes to the exclusion list.
The list is updated at least once a year. The Sustainability Committee must also approve the implementation of all new or updated sector policies,
as well as the initial exclusion list or changes to the list as a result of these policies.

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CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESESG
INTEGRATION

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By integrating considerations of relevant
Environmental, Social and Governance(ESG) factors into our investment
decisions, we can identify and assess
potential areas of hidden risks andopportunities. Our ESG scoring andintegration approach is applied acrossa wide range of investment strategies.
We believe that analysing investments using ESG criteria
helps us account for a wider set of risks and opportunities
and better understand the role companies have indriving systemic risks and addressing the challenges of
the transition towards a more sustainable and inclusive
economy. This helps us make better-informed investment
decisions in line with our fiduciary duty. We believe that
ESG considerations are interpreted and taken into accountby market participants in different ways. Coupled withinconsistent levels of disclosure by companies, this can leadto market inefficiencies which can create opportunities for
ESG-savvy investors. While we expect corporate disclosure
to increase, shifts in consumer, investor and regulatory
expectations will likely persist in a dynamic environment
experiencing secular change (particularly as a result ofclimate change). Against this background, we believe
we make better investment decisions by identifying andsourcing relevant ESG data and integrating it into ourinvestment analysis and decision-making.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESWe accomplish this primarily in two
ways: through our ESG Integration
Guidelines and through the developmentof proprietary sustainability research.
We continue to implement our ESG
Data Programme, which oversees thedevelopment and deployment of ourvarious research methodologies. Throughthis programme we are developing
internal capabilities to clean andmanipulate data that can be used tosupport investment analysis, portfolio
construction, and measurement andreporting. The functional relationshipamong our Sustainability Centre,
Quantitative Research Group, Digitaland IT teams is critical to our ability
to develop and maintain our proprietary
and third-party ESG datasets and deliver
the results to our investment teams,
clients and regulators.

RESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESESG Integration Guidelines

Proprietary Sustainability Research

Our ESG Integration Guidelines shape how ouranalysts and portfolio managers incorporate
relevant ESG factors into their company or asset
evaluation and portfolio construction decisionmaking processes. Specifically:

The lack of correlation among ESG rating providers points to a lackof consensual ESG views and to the embedded biases in ESG rating
model design and output. We chose to build our own proprietary ESG
scoring framework to ensure scores are tailored to our needs andinvestment beliefs.

• We avoid investing in entities without associated
ESG research; andWe apply our own definition of materiality – built on the latest
thought leadership, our ESG analysts’ extensive track record and thedetailed industry and subject matter expertise of our sector analysts
and portfolio managers – in order to hand-pick our metrics and weighthem appropriately. We look beyond headline values to evaluate
individual metrics that can give valuable insight into investment risk
and opportunities.

• We apply better-than-benchmark (BTB)
constraints on ESG and carbon for portfolios
within the scope of our guidelines.
While recognising there are many possible
approaches, we have defined these guidelines
to serve as evidence of the integration of ESG
factors in our relevant portfolios. We believe that
we should apply the principles in the guidelines
to all asset classes to the greatest extent possible.
We promote these guidelines to our existingdelegated managers and managers we partner
with, and we will not delegate to new externalmanagers who do not incorporate sustainability
policies and practices.
For client mandates, we will apply as manyof these principles as we can and promote
greater incorporation of sustainability principles,while respecting the wishes of our clients.

We apply an additional layer of data quality and control to the data
we source from third parties to narrow our focus to the indicators that
we deem have sufficient coverage, quality and insight. Covering nearly
13,000 issuers of securities, this helps our portfolio managers pinpoint
an issuer’s performance on material ESG issues and integrate this into
their investment decisions. We believe our methodology is markedly
differentiated, with a more focused number of ESG metrics and a clear
preference for ‘performance’ over ‘policy’ indicators.
We also recently launched our proprietary Sustainable Development
Goals (SDG) scoring framework. Similar to our approach to ESG
scoring, we wanted more insight into the SDG performance ofcompanies than we could obtain from off-the-shelf third-party datasolutions. The SDG framework embedded in our SDG model provides
granularity at the SDG target level and assesses the alignment
or misalignment of company revenues at the business line oractivity level. This information informs our Sustainable Investment
determination, which is critical for Article 9 portfolio construction
and security selection.

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MAPPING TO KEY
STEWARDSHIP CODESESG INTEGRATIONThe evolving regulatory landscape
There is a growing political and social drive toreallocate capital to activities that help tackle
the sustainability issues the world faces. As
part of this, regulators are requiring greatertransparency on the degree of sustainabilityof financial products. Their aim is that moreprivate investment can be channelled towards
sustainable outcomes while preventing
greenwashing.

The complexity and evolving nature of theserules mean asset managers need to remain
vigilant. They must, in fact, ensure adherence
to regulations and deliver on the claims theirproducts are making in order to keep theconfidence of their clients.
Since the implementation of SFDR in 2021,
we have been transforming our fund range
to align with its embedded principles. Today

RBC Standards
Minimum Standards
We will exclude issuersthat are in breach of
UNGC and OECD MNEGuidelines or that are notmeeting our mandatory
requirements applicable
to controversial sectors
and products.

our assets under management (AUM) held infunds classified as Article 8 or 9 apply a numberof sustainability binding constraints. Our
adoption of these constraints not only reflects
the scale of our commitment to the spiritof SFDR – over 90% of our open-ended fundrange is now classified as Article 8 or 9 under
SFDR – but also our ongoing ambition to be the‘sustainable investor for a changing world’.

For us, application of SFDR-linked criteria to
our fund management processes has further
emphasised our approach to ESG integrationand has laid a firm foundation for the next
phases of our planned ESG integration strategy.

ESG Integration Guidelines
Entity without an
ESG score
We will avoid investingin a public entity without
an ESG score, performing
qualitative ESG analysis
in the absence of aquantitative ESG rating.

Weakly-rated entities
Holdings of weakly-rated
public entities(in active portfolios) willneed to be justified byadditional documented
qualitative ESG analysis
or engagement.

Regulatory Guidelines

Better-than-benchmark
ESG scores

Better-than-benchmark
carbon footprint

We should aim to holdportfolios with a morepositive ESG scorethan their respective(invested) benchmarks.

We should aim tohold portfolios with alower carbon footprint
than their respective(invested) benchmarks.

Minimum ESG coverage
requirements under
SFDR
We require at least
90% of ESG coverage
for assets in portfolios
investing in developed
markets. The thresholdis set at 75% for markets
where data is harder tocollect*.

E/S thresholds

SI thresholds

EU Taxonomy thresholds

We require a minimum
percentage ofassets aligned with
‘Environmental/Social’
characteristics for
Article 8 funds.

We require 100% ofassets** considered“sustainable
investments”, as per
our methodology,
for Article 9 funds.
A minimum percentage
is also defined for many
Article 8 funds***.

A minimum EU
Taxonomy alignment
rate commitment isdefined for each fund inscope. This alignmentis calculated based on
Bloomberg data.

* Such as emerging markets, small-cap equities or high-yield bonds** Except for cash and derivatives*** This minimum % is specific for each fund2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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STEWARDSHIP CODESESG INTEGRATION

Our proprietary ESG ratings

Data, research and voting service providers

Our proprietary ESG scoring framework
benefits from the combined knowledge
and expertise of three teams, helping
to generate robust ESG insights
for better-informed decisions:

Our ESG research analysis and findings are
independent and based on a wide variety ofsources not limited to ESG data providers.
These include the knowledge we gain fromparticipating in various investment forums
and communities, and our relationships withacademic institutions and other aspects ofcivil society.

Sustainability Centre• Selects data providers and assigns metrics
and weights to sectors;• Assesses data quality and coveragewith the Quantitative Research Group;• Manages data corrections and qualitative
overlays;• Reviews key themes and sectors to identify
key trends and update data models
and overlays accordingly.

Quantitative Research Group• Analyses data quality, bias and metriccorrelations to inform and enhance
the selection of metrics;• Normalises the distribution of metrics scores;• Provides technical expertise and solutions
to build and maintain a robust scoring
framework.

Investment teams• Involved in every step of the ESG scoring
development process and related
enhancements;• Provide inputs for data corrections
and overlays;• Utilise scoring to support investment
decision-making.

We believe our ESG scoring is a
powerful tool to help investment teams
generate long-term sustainable returns
for investors. It is:• Comprehensive, covering more than
13,000 issuers;• Focused on materiality, using a limited
number of material, insightful metrics foreach sector;• Investment insight-driven, built with andfor investment professionals;• Robust, with a statistically rigorous model
developed with our Quantitative ResearchGroup;• Dynamic and forward-looking, integrating
unique insights through qualitative
overlays.

We select our ESG data providers using a twostep due diligence process. Our Quantitative
Research Group begins by analysing
providers’ data sets. This includes examining
the coverage of data and its quality, and astatistical review of estimation methodologies,
among other items. At the same time, theSustainability Centre performs a qualitative
review of methodologies used and therelevance of selection criteria. Once we haveselected a provider, we upload the data sets
to our IT systems. We have a number ofcontrols in place to ensure the completeness,accuracy and consistency of data. Our market
data team oversees governance related to therelationship with the provider; as part of thisprocess, we perform an annual review of ourmarket data contracts. We have long-term
relationships with our data providers andwe work closely with them to ensure they are
evolving their products and services in a waythat meets our expectations. If after dialogue

a data provider continues to fall short,
we will look to terminate the relationshipand replace the provider with one better
suited to our needs.
ESG research brokers are selected, monitored
and assessed through a formal processorganised by our Sell-Side Relationshipdepartment. This means we count on andvalue the interactions our teams have withresearch brokers and follow up internally if
we see declines in usage to understand why.
This feeds into a process where twice a year,
we assess the quality of the research andrate the provider. Annually, we conduct aformal review involving our Chief Investment
Officers, research users (including the
Sustainability Centre) and Sell-Side
Relationship management where we decide
whether to continue relationships withresearch brokers based on use and quality.
We use proxy voting providers to help us
implement our voting policies. We do notdelegate decision-making authority to themand we will take each voting decision forevery shareholder’s meeting internallywith no outsourcing of the final decision.
This ensures that our service provider
delivers the outcomes we are looking for.
Arrangements with proxy voting providers
are reviewed annually.

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MAPPING TO KEY
STEWARDSHIP CODESESG INTEGRATION

ESG data programme
In response to the growing importance ofsustainability data to our overall business success,in 2021 we launched a firmwide multi-year
ESG Data Programme responsible for overseeing
the evolution of our data architecture.
This programme is one of the central transverseand strategic projects involving stakeholders
from nearly every department.
The programme is organised across six different
work streams and is intended to enhance
the integrity of our ESG data as well as ensure
it remains cutting edge.

25

employees working
on the ESG Data
Programme

STREAM 1:
ESG Indicator

Implementation of new
indicators and evolutionof the calculationof existing indicators

STREAM 2:
ESG Data Usage

Transformation of data
to end user needs

STREAM 3:
ESG Ambitions

Forward-looking datarequirements

STREAM 4:
Data Quality andGovernance

STREAM 5:
Issuer Referential

STREAM 6:
Data Sharing

Control, governance andremediation of data

Implementation of uniqueissuer data based on ourneeds

Development andimplementation of data
sharing protocols within
the Group

HIGHLIGHT

Our specialised external data providers• Sustainalytics provides us with raw data
metrics that we use selectively to feed our ESG
scoring model. We also use this provider for
United Nations Global Compact analysis andcontroversies offerings.
• Trucost, CDP, Bloomberg, 427, TPI, SBTi andClimate Action 100+: we use these data sources
for our climate change and physical risk
analysis. Bloomberg and Trucost also provide
us with corporate Scope 1 and 2 carbon
emissions data.
• CDP, Trucost, Forest 500, TRASE, SPOTT, FAIRR
and Iceberg Data Lab provide us with water,
deforestation and biodiversity metrics we
use to assess and report on the biodiversity
footprints of our portfolios and holdings.
• ISS, Glass Lewis and Proxinvest provide us withgovernance research and data to feed our ESG
scoring model.

• Beyond Ratings and Maplecroft provides us
with data and research used in our ESG
sovereign research and scoring framework.
• FactSet provides us with financial andenterprise value data.

• We partnered with Matter to create arevenue-based SDG alignment model for
corporates leveraging FactSet Hierarchy data,
which is used as part of the Sustainable
Investment definition.
• CDP, Bloomberg, Trucost, FactSet,
Sustainalytics and ISS are also used to source
certain SFDR Principal Adverse Impact (PAI)
indicators.
• ESG and mainstream brokers provide us withresearch papers and other market information.

Bérénice
Lasfargues
Sustainability
Integration Lead

“High-quality ESG data is at the core of
our research engine. We take a ‘buy andbuild’ approach to our data programme
as there is no single turnkey solutionthat meets our needs.”• Bloomberg provides us with EU Taxonomy
alignment rate data, which we use as part ofour Sustainable Investment definition and EU
Taxonomy alignment thresholds.

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Encouraging change
in our value chain
We extend our analysis of companies’
sustainability performance to some of our
suppliers, and specifically our execution brokers.
We have developed a process for assessing andrating the ESG performance of the brokers weuse. The purpose is not only to encourage good
corporate social responsibility practices within ourvalue chain, but also the creation and expansionof the market for sustainability instruments.
We are part of Sustainable Trading, a nonprofit organisation looking to better embed ESG
practices in the financial markets trading industry.
They achieve this in part by co-developing a setof best practices to be shared between members.
The goal is to eventually assess members on the
progress they are making in implementing thesebest practices within their respective organisation.
Another goal is to provide benchmarking tools sothat members can learn from each other.

Emmanuel Blanc
Head ofSell-Side
RelationshipManagement“We see Sustainable Trading as
an important catalyst of change
within the value chain of the asset
management industry. Our ongoing
dialogue and workshops help us tocollectively have a deeper impact
as well as progress the goals of our
Global Sustainability Strategy.”2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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MAPPING TO KEY
STEWARDSHIP CODES

Global equities (equity)

ESG INTEGRATION

Examples of ESG integration
Euro high yield bond (fixed income)
Credit strategy committee

Portfolio strategy committee

Issuer selection

Portfolio construction• Discussion of macro and credit
outlook.

Based on top-down views,
portfolio manager defines
monthly model portfoliowith Duration Time Spread
contribution by rating andsectors based on credit researchsector views and ESG indicators.

• Fundamental assessmentof issuers (including ESG
indicators and Sustainability
Risk Assessment).

• Build a robust portfolio taking
into consideration client andstrategic objectives including
the overall ESG and carbon
scores of the portfolio relative
to the benchmark.

• Definition of top-down
views: sectors including ESG
indicators from Sustainability
Centre and Sustainability Risk
Assessment, rates and spread.

• Selection based on:
Fundamentals - Relative value- Pricing and Technicals ESG score.

Review of index
construction methodology,
including the integrationof sustainability in index
construction, index ESG
characteristics and thestrength of the index
provider’s ESG research.

Methodology development• Align index rule book with Towards
Sustainability label guidelines and,as much as possible, BNPP AM
Responsible Business Conduct.
• Determine definition, methodology
and sub-themes of the Blue Economy
investment clusters with the index
provider in order to develop a custom
methodology for rule book.

ESG & fundamental
analysis

Portfolio construction& risk management

Company monitoring& engagement

Proprietary screening
for companies witha combination ofsustainable quality,business momentum
and valuation.

• Comprehensive ESG
process using in-house
scoring methodology
and RBC Policy.

• Risk management
focused onrevenue exposure,diversificationand sustainability
criteria.

• Ongoing monitoringof all relevant
companies.

• Detailed company
research including
further ESG analysis,desk review, external
research and company
meetings.

• Better-thanbenchmark ESG
ratings and lowcarbon footprint.

• Financial modelling
integrating
sustainability andnon-financial criteria
to generate Internal
Rate of Returns (IRRs).

• Curve positioning, instrument
choice, capital structure.

Blue economy equity (index strategy)
Index provider selection

Idea
generation• Continuous
engagement byinvestment teamon company
performance
including ESG.
• Firmwide global
coverage of voting,engagement andstewardship.

Infrastructure debt (private assets)
Index monitoring
Continuous monitoringand engagement with
the index provider
to adjust rule bookwhen significant
discrepancies are
identified.

Engagement with issuers
Engage with selected constituents ofthe ETF as part of our overall firmwide
engagement efforts to improve theirsustainability practices, track their progressand report back to stakeholders.

Normative andsector exclusions
Exclusions based oninternational norms
and controversial
activities in line with
the BNPP AM RBC
Policy.

Selection criteria

Selection of assetsaligned with an ad hoctaxonomy specific toeach fund objective.

Qualitative ESG
assessment

Quantitativeenvironmental
assessment

Qualitative
assessmentof material
environmental,social andgovernance risks
and opportunities.

Climate andenvironmental metrics
computed by an
external provider,in order to determine
the eligibility of theasset for the fund.

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MAPPING TO KEY
STEWARDSHIP CODESESG INTEGRATIONHIGHLIGHT

Investing in nature
To meet the needs of investors who areincreasing their allocations to sustainableprivate investment strategies, we decided tobroaden our private markets investment
platform by acquiring leading Danish natural
resources specialist International Woodland
Company.

has a role to play in addressing the challenges ofprotecting and restoring natural capital, as well
as appealing to institutional investors looking todiversify into uncorrelated assets that can offer an
inflation hedge and enhanced risk-adjusted returns.
Additionally, it contributes to meeting the objectives ofinvestors looking for sustainable strategies. We planon launching exciting new strategies related to thisasset class in 2024.

Forestry, agriculture and related natural capital
strategies have attractive risk-return profiles and areimportant contributors to mitigating climate change
and achieving net zero. Forestry, for example, offers
appealing investment returns and inflation protection,C A S E ST U D I E S

as well as the potential for carbon capture andconservation projects. Almost all climate scenarios
rely on Negative Emission Technologies, particularly
forestry and other land use changes, to reach net
zero emissions and limit global warming to 1.5–2°C inorder to cover biogenic emissions and emissions from

ESG integration in exchange
traded funds (ETFs)

hard-to-abate sectors. Beyond this, forestry provides

CONTEXT: Passive investment strategies are amany benefits, including biodiversity preservation andgrowing part of our product mix, and for some time

water management, and the global climate systemhave contributed to our solutions to investing incannot function without healthy forests.

sustainability, including pioneering on some ESG

As an investment market, natural capital is still at

strategies such as Low Carbon or Circular Economy.

a nascent stage. Nonetheless, the natural capital

ACTIVITY: Since mid-2017, our ETF launches havemarket is evolving rapidly, encouraged by initiatives

focused on sustainable indices replication. We havefrom the United Nations and other supranational

worked with index providers to shift a number of ouragencies, and is expected to be accompanied by theexisting ETFs to ESG (and Paris-aligned or Carbon-

continued development of associated investment andTransition) benchmark indices in order to strengthen

growing client awareness. Private finance clearly

the sustainability characteristics of our ETF & Index

funds range. 2023 was particularly important for fixedincome: we launched four Fixed Income ESG ETFs
and were ranked second in Europe by inflows in thissegment.

that incorporate ESG considerations. While fund

OUTCOME: 88% of the ETF & Index funds range,
representing €30 billion in AUM, is now classified as
Article 8 or Article 9 according to SFDR regulations,
including 100% of our fixed income ETFs. This will
deliver real results: for example, the MSCI SRIS-Series 5% Capped range aims to reduce the carbon
intensity of its portfolio by an initial 50% whencompared to the traditional index it is derived from,followed by annual decreases of 7%, in line with the
1.5°C trajectory of the Paris Agreement. Our ETF &Index funds range covers equity and bond markets,several geographic areas and multiple ESG thematicinvestments.

private markets ESG investing.

raising in private markets broadly lost momentum inthe second half of 2022 as macroeconomic conditions
changed, it was also the most successful year yet for
ESG AUM in the segment have grown by 35% per year
over the last decade. Despite these positive trends,
which continued into 2023, data provider Preqin findsthat only 42% of the AUM across private capital ismanaged by funds that have an active ESG policy.
ACTIVITY: We have been involved in a range ofasset classes within private markets for a number ofyears. In 2023, we harmonised a number of different
businesses involved in private assets by integratingthem within BNP Paribas Asset Management in a new
Private Assets business unit. As part of this move,
we took the step of creating a cohesive approach

We continued to expand this range in early 2024with the launch of two new ETFs that include
an active ESG approach. These active fixed income
ETFs apply an index-like approach combined with
our proprietary approach to sustainability, meaning
our proprietary ESG methodology, exclusion policies
and active engagement.

to ESG integration across all private asset classes,
setting a minimum standard in each while taking into
account the specifics of each asset class.
Integrating ESG considerations into private assets
requires significant resources and an approach
tailored to each underlying asset. For example,
for our infrastructure and real estate loan portfolios,

Sustainability in private assets

we developed methodologies that measure

CONTEXT: Asset managers are increasingly applying
sustainability criteria to investments in private
markets as they seek to meet growing demand frominvestors and regulators for investment strategies

networks. For a small- to medium-sized (SME) issuer,*

the carbon and environmental impacts from thenumber of households gaining access to digital
we assess the level of awareness of a company’s
executives on ESG themes and analyse the choices
the company is making.

* Private assets are investment opportunities that are unavailable through public markets such as stock exchanges. They enable investors to directly profit from long-term investment themes and can provide access to specialist sectors or industries, such as infrastructure,real estate, private equity, and other alternatives that are difficult to access through traditional means. Private assets do, however, require careful consideration, as they tend to have high minimum investment levels and may be complex and illiquid.

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Growing green bonds

Scoring sovereigns

CONTEXT: As the sustainable investment spacematures, investors are increasingly looking for new
thematic products that incorporate sustainability
attributes in the fixed income asset class.

CONTEXT: Rating the ESG performance of sovereigns
is fundamentally different than it is for corporate
issuers.

ACTIVITY: Our fixed income investment teams
work very closely with our ESG research analysts
to mitigate and minimise any downside risks at
the issuer level, but also to anticipate any positive
impact opportunities through the Thematic Bonds
investments. Our ESG scoring system grants bonuses
to green and social bonds validated by our ESG
analysts, meaning portfolio managers are incentivised
to invest in more green and social bonds with positivesocial and environmental outcomes in their portfolios.
In addition to the Global Green Bond fund, we havelaunched dedicated green bond strategies focusing
on corporates and on sovereigns and agencies. We
continue integrating ESG into all our fixed income
funds and growing climate solutions such as
corporate and sovereign engagements. Our credit
research team is also integrating ESG factors into
their analysis through a Sustainable Risk Assessment.
To strengthen our contribution towards thedevelopment of the sustainable finance market,
we were elected to the Executive Committee of theInternational Capital Markets Association Principles
in 2023, and we have also joined the Impact Reporting
Working Group coordinators as well as becoming oneof the Advisory Council coordinators.

ACTIVITY: We adapted our ESG scoring methodology
to provide a view of the ESG performance of a country
and enable us to compare countries with different
levels of economic development across a variety ofenvironmental, social and governance dimensions.
Notably, we assess countries’ ambition for tacklingclimate change with regard to their National
Determined Contributions (NDCs), through detailed
information on the policies adopted by countries toaddress climate change and their forward-looking
physical climate risk exposure. In addition, we take
into consideration countries’ commitments concerning
climate change, informing our engagement with themon this issue.

S-pillar (12 themes) and G-pillar (7 themes),
comprising a total of 225 Key Performance
Indicators (KPIs) structured around 33 key themes.
OUTCOME: We have developed a robust scoring
system that covers almost 110 countries.
We have also supplemented our scoring with direct
engagements with governments. This includes
discussions with policymakers from members of
the European Union, Japan, the UK and Chile about
their green, social and sustainability bond issuances,helping to clarify their strategy on climate change,
the actions they are taking, progress achieved and theconstraints they are facing.

We also apply the BNP Paribas Group’s sensitive
countries framework, which includes risk mitigation
measures for certain countries or activities that areconsidered particularly exposed to money launderingor terrorism financing.
And finally, as with our company scoring model,
we incorporate qualitative inputs from the investment
teams’ in-depth knowledge, and from dialogue
and engagement with debt management officials
and policymakers. Our Sovereign ESG data model has
equal weighting for each of the E-pillar (14 themes),

2 0N2P3 PSAUR SI BT A S
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Supporting
cutting-edge researchthrough GRASFIIn 2018, we established an academic partnership with
the Global Research Alliance for Sustainable Financeand Investment (GRASFI) so that our investment
teams would have access to leading research, helping
to inform the broader debate as well as our own
methodologies and investment approaches. The annual
GRASFI conference brings together researchers fromaround the world to present their findings on a rangeof topics related to sustainability.
Each year, prizes are awarded for the best work inseveral categories. The prize for best paper of 2023
was awarded jointly to two papers: “Financial Market
Response to Climate Litigation Against Corporations”
and “The effect of Divestment from ESG Exchange
Traded Funds”.
These were two of over 40 papers presented at lastyear’s conference, hosted by the Yale Initiative on
Sustainable Finance and attended by members of ourinvestment teams. We later presented a summary of
the conference papers to our ESG Champions as wellas posting summaries of a number of the papers on
our blog, giving investment staff the opportunity toincorporate the findings into their own thinking.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT
TO CLIMATE

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIOUR COMMITMENT
TO CLIMATE
We believe a shift to a low-carbon, moresustainable economy is essential for the
long-term health of capital markets. It
is widely accepted that reaching global
net zero emissions by 2050 is essential
to prevent substantial and irreversible
damage from climate change. This isimminent if no action is taken, which
is why the transition to a low-carbon
economy is one of our strategic areasof focus – one of our 3Es: Energy
transition, healthy Ecosystems,
and greater Equality in our societies– and why in 2022 we strengthened
our years-long commitment todecarbonise our investment portfolios
by releasing a roadmap to chart ourpath to achieving net zero.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCT

Committed to Climate: Our Net Zero Roadmap outlines
our commitments and action plan to reach net zero
emissions in our in-scope portfolios by 2050 orsooner. It is our strategy for assessing and managing
climate change-related risks and opportunities
within our investment portfolios and operations.
In the following pages, we outline our progress onreaching these commitments as well as reporting to
the recommendations of the Task Force on Climaterelated Financial Disclosures. Our goal is to fine-tune
and enhance this report over the coming years as ourpractices expand and evolve.

Governance
Board oversight
The BNP Paribas Asset Management Holdings board has
ultimate responsibility over climate-related risks andopportunities.
•T he board receives annual training on sustainabilityrelated investment issues, climate change and ournet zero approach.
•O ur business strategy incorporates climate changerisks and opportunities, and the board receives regular
updates on how we are achieving our business goals.
In addition, the board is briefed on and kept abreast of
regulatory matters, many of which are related in partor in whole to climate change.

ESG
INTEGRATION

CLIMATEVOTINGAND ENGAGEMENT•T he board is provided with overviews of any updates
made to our Global Sustainability Strategy (GSS),
which includes our approach to climate change andthe energy transition.
•T he board receives regular updates from managementon our Net Zero Roadmap and our progress towards
achieving the commitments we have made.
At the BNP Paribas level, sustainability, and more
specifically the energy transition, is one of the Group’s
three key priorities in its 2022–2025 strategic plan and,as such, receives regular oversight from its executive
management and board.

Assessing and managing
climate‑related risks and opportunities
Our approach to managing sustainability risks,
including climate, is part of our corporate governanceframework. Several committees are in place tooversee the integration of ESG risks into the relevant
investment process.

SUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES• The Investment Committee, chaired by our Global
Head of Investments, oversees the implementationof these commitments and is responsible forthe progress of the company towards net zerocommitments at the asset class level.
• The Global Product Committee, chaired by the
Global Head of Products and Strategic Marketing,is responsible for the oversight of the integrationof sustainability-related criteria, including
decarbonisation and net zero objectives, into each
investment product strategy.
• We have also put in place the Sustainable
Methodology Oversight Committee. This group is
responsible for overseeing the development andimplementation of methodologies, definitions,disclosures and processes related to sustainable
regulation, including those related to climate change
and net zero.
Learn more about our overall approachto sustainability governance.

Our Net Zero Roadmap is overseen through aformal governance framework, ensuring appropriate
supervision and oversight of our net zero commitment.
• Our Sustainability Committee, chaired by the CEOof BNP Paribas Asset Management, is responsible
for the strategic direction of sustainability-related
topics, including our net zero commitments, which
are reviewed annually.

Source: BNP Paribas Asset Management, 2023

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE
Our net zero commitments in brief

Investments
1 - Reduce the carbon footprint of our in-scope investments by 30% by2025, decreasing to 50% by 2030 (Scope 1 and 2)1
2 - Aligning in-scope investments with net zero:
60% by 2030, rising to 100% by 2040
3 - Exit coal by 2030 in EU and OECD countries, and by 2040 for the restof the world
4 - Increase investment in climate and environmentally themed solutions
5 - Engage with our clients

Stewardship6 - Vote for climate action
7 - Engage with companies on net zero
8 - Advocate for NZ 2050 aligned climate policy

Operations
9 - Reduce our operational emissions
10 - Report on progress
1 - “Scope 1” refers to the direct emissions from sources that are owned or controlled by thecompany. “Scope 2” refers to the indirect emissions linked to the company’s purchased or
acquired electricity, heat, steam and cooling. “Scope 3” refers to all other indirect emissions,
including those related to the use of its products. Scope 3 emissions are not included in thecalculation since the measurement of these emissions is not standardised or consideredsufficiently reliable yet to be used in reporting. Given the importance of Scope 3 emissions inmost sectors, we are evolving our approach to calculating Scope 3 emissions with the aim ofincluding it in our approach in the future.

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49ABOUT
THIS REPORTEDITORIAL FROMSANDRO PIERRI

2023 IN FIGURESAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE

Strategy

Net Zero Asset Managers (NZAM) initiative to lendcoherence and accountability to our commitments.

While climate change presents significant risks
to our business and our clients, if acted on now,it also presents substantial opportunities.
We have identified climate change and the needfor a successful energy transition as one of three
key sustainability-related prerequisites for a stablefinancial system in our Global Sustainability Strategy.
The GSS also outlines the levers – our six-pillar
approach to sustainability – through which we canapply action to combat climate change and facilitate
the energy transition through our business.
In 2021, we raised our climate ambition bycommitting to the goal of achieving net zero portfolio
emissions by 2050 (or sooner) and we joined theWe then published our Net Zero Roadmap, covering
the progressive alignment of our portfolio investmentswith the goal of reaching net zero emissions, together
with associated efforts across our stewardship
activities and operations.
To drive change, we have set a goal to decarbonise
our investment portfolios. As an asset manager,
we do not directly manage our strategic asset
allocation per se. Rather, this is determined,
to a large extent, by client demand for specificasset class strategies; our regional growth profile;and mergers, divestments and acquisitions, among
other factors. Based on our current asset allocation
and because of the lack of available data andmethodologies in other asset classes, we have

% of our AUM within
the scope of our net
zero commitment

decided to focus on listed equities and corporate
bonds in the first phase of our commitment towards
net zero financed emissions. About half of our assets
under management are within the scope of our initialcommitment – a calculation made by focusing on
funds in our range that are currently Article 8 or
Article 9 under the Sustainable Finance Disclosure
Regulation (SFDR).

Value of our AUM within
the scope of our net
zero commitment€269bn50%

50%€250bn20192023 metrics

2023

2019

2023

While our in-scope AUM has not changed on a relativebasis, our overall AUM that falls under the scope of
our commitment has increased by almost €20 billion.
We expect that our in-scope AUM will increasesignificantly as we introduce methodologies forsovereigns and agencies and add these to our scope.

We have contributed to the fight against climate change through significant actions and initiatives for several years.
Brought to market a rangeof climate-focused strategies,
including:
THEAM Carbon Offset andClimate Care, Easy Low Carbon,
Climate Impact, Green BondFounding member of: PRI,
Montreal Carbon Pledge, Portfolio
Decarbonisation Coalition
Joined Climate Action 100+

2002-20182019

Launched the dedicatedEnvironmental Strategies
Group (and Energy Transition
strategy)

Implemented our new
Coal Policy

Signed the Net Zero Asset Managers
Initiative

Introduced beat the benchmark
on carbon footprint objective

Set 2030 portfolio alignment target

Launched our Global
Sustainability Strategy

Expanded our Unconventional
Oil & Gas policy

Further tightened our Coal Policy

2020

Launch net zero products
Revise net zero targets
on a 5-year basis

Launched Net Zero Roadmap

2021-2022

2023 +

Source: BNP Paribas Asset Management, 2022

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE
Climate is a key consideration in our product development
and investment management practices. We have also
developed a range of policies, procedures, methodologies andtools to help us contribute to the net zero goal, including our:• Net Zero AAA framework (Achieving, Aligned or Aligning),
to measure the alignment of investments in corporates
with climate goals.
• Sector-specific exclusion criteria within our Responsible
Business Conduct (RBC) Policy, addressing the highest
emitting sectors.
• ESG scoring framework that places strong emphasis
on climate change.
• ESG Integration Guidelines that include better-thanbenchmark goals for the carbon footprints of some portfolios.
• Consideration of climate-related Principal Adverse Impacts(PAIs) statement at the fund and entity level.
• Reporting of alignment with the EU Taxonomy on climatechange mitigation.
• Methodology to identify Sustainable Investments as per
the SFDR, including criteria related to the alignment ofcompanies with EU Taxonomy climate objectives andclimate-related Sustainable Development Goals (SDGs),
as well as with the objective of maintaining the global
temperature rise to below 1.5°C.
• Integration of climate change themes into our stewardshipapproach including our voting, engagement and public policy
advocacy activities.
• Development of investment products that allow our clientsto proactively invest in the energy transition and/or meet
decarbonisation objectives.

We have used climate-related scenarios in a number of ways
to support and implement our approach. For example, we
provide funding and are a strategic partner of the Inevitable
Policy Response (IPR), an initiative which forecasts the speed
and scale of the transition to net zero. IPR have developed a
Forecast Policy Scenario as well as a Required Policy Scenario,
which identify the incremental progress needed to move to a
net zero aligned scenario. We employ IPR tools, such as their
Quarterly Briefing content, to educate and inspire debate
among investment teams. We have also used IEA climate
scenarios to inform the carbon intensity reductions we requirein the power sector, as articulated in our RBC Policy.

Time horizons
The implementation horizon for the commitments in our
Net Zero Roadmap is from 1 January 2022 to 1 January 2050.
However, because the climate investment landscape ischanging so rapidly, with new scenarios, data and tools
becoming available frequently, we expect to evolve thecommitments outlined in this roadmap as we progress on
our net zero journey.
We consider the following time horizons to be relevant withrespect to climate change:• short-term horizon to be 2025 as this is relevant for ourbusiness planning and our clients;• medium-term horizon to be at or before 2030 as this is thedate that the Intergovernmental Panel on Climate Change(IPCC) identifies as the point when carbon emissions mustbe halved;• long-term horizon to be at or before 2050 as this is when
we need to achieve net zero emissions as a society.

We use a 2019 baseline for our carbon footprint reduction
commitment.

Risks and opportunities to our businessWithin our investment portfolios, we see risks associatedwith climate change manifesting largely in the following
three ways:• Transition risks: these are risks arising from a process ofadjustment to a low-carbon economy and take the formof policy changes, or technological and physical risks,that can lead to a revaluation of many assets as costs oropportunities materialise.

Resilience of the organisation’s strategy,
taking into consideration different
climate-related scenarios
To date, we are unable to provide a reliable quantitative
estimate of the financial impact of key environmental,social and governance (ESG) quality risks on our assets
under management. Nevertheless, work is under way toassess the financial impact of the main environmental risks(temperature, precipitation and wind), and we will shareadditional analysis in due course.

• Physical risks: risks arising from the physical effects ofclimate change and environmental degradation (such as
floods and storms, sea level rise, heat waves or droughts,
which cause material damage or disrupt trade).
• Liability risks: consequences arising if parties that havesuffered losses or damage as a result of the effects
of climate change make representations to companies
they consider responsible in order to obtain compensation.
Such actions could occur against companies that extractand emit carbon and, if they have liability insurance, against
their insurers.

Indication of the economic sectors
and geographical areas concerned
Our ESG scoring framework takes into account the fact that
ESG risks are not always comparable between sectors andregions. It divides covered issuers into 20 sectors and four
geographical areas, resulting in 80 groups of companies listed
according to geographical and sectoral criteria.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE

Risk management
Identifying and assessing
climate-related risks
Materiality heat map
We developed a materiality heat map to underpin our
ESG rating system. This materiality heat map allows us to
identify the sectors with the highest climate transition risks
and adjust the weighting of our ESG scoring methodology
accordingly to ensure risks are appropriately assessed.
In addition, through our ESG rating methodology, we aim
to better anticipate climate responsibility risk. We can assess
this both quantitatively and qualitatively. By creating a solid
analytical framework around ESG research, we are able
to make an independent assessment of companies’ climate
commitments and their exposure to various climate risks.
The qualitative adjustment of the ESG rating takes into
account a forward-looking analysis based on a company’s
strategy, vision and ambitions. This ESG analysis is enrichedby several external research sources enabling us to covercompanies, sovereign issuers and supranational agencies.
The risk of liability is also incorporated into our tool for
tracking climate-related controversies. All companies aremonitored through a permanent flow of information fromrelevant sources (brokers, public data, media, etc.). The more
controversial a company is, the greater the reputational risk
to our funds. All controversies are ranked from level 1 to 5
and classification takes into account the impact of incidents
based on severity and number of occurrences, level ofrecurrence, responsibility and exceptional character,

response and management by the company. A company
is penalised if it faces one or more level 3 or higher
controversies. If the controversy is extremely serious or has
particularly negative consequences, the company could be
excluded from our investment universe. In addition to this,the sectors most exposed to ESG controversies and scandals
have structurally weaker ESG results in our rating system
due to the weight given to controversies in our ESG scoringmodel.

whose objective is to develop an open-source methodology
for analysing the physical risks faced by companies.
For sovereign debt issuers, we obtain a physical climate risk
assessment from Verisk Maplecroft, which considers seasonal
and annual changes in temperature and precipitationin addition to extreme events.

However, our ESG scoring framework for corporates does not
yet address physical risks. We recognise that historically our
focus has been primarily on transition risks. We have sourced
data providers that specialise in physical risk assessment andprovide us with company-level scores. These scores enable
us to have an external and homogeneous assessment of
the physical risks facing the companies in which we invest.
Unfortunately, these scores do not assess the vulnerabilityof companies to physical risks. They are a measure of the
exposure of enterprises to risk areas without taking into
account the actions that the enterprise has been able toimplement to manage these risks.
The materiality of these risks to the enterprise is also nottaken into account, as two enterprises located in the samerisk area will have the same valuation, regardless of whether
the asset in question is strategic or not for the enterprise.
These scores are therefore more useful for our engagement
activities and we have thus decided not to include themat this stage in our ESG scoring framework for companies.
We continue to work on internal research projects to assess
the sensitivity of business results to climate change.
BNP Paribas is very involved in the OS-Climate initiative,in particular within the physical risks working group,2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATEManaging climate-related risks
Calculation, publication and reductionof the carbon footprint of our portfolios
We started measuring the carbon emissions of some of ourequity funds in 2011 and we have steadily expanded thecoverage and scope. We are now measuring the carbon
emissions of both equity and fixed income eligible portfolios.
In May 2015, we were one of the first signatories of theMontreal Carbon Pledge. By signing it, we committed toprogressively measuring and publicly reporting the carbon
footprint of our open-ended funds in an informative andexplanatory way. In December 2018, we measured andreported the carbon footprint of more than €50 billion ofassets under management (AUM) on open-ended fixedincome and equity funds. As part of our GSS we committed
to reporting the carbon footprint of a wider range of ourportfolios and for these portfolios to have a lower carbon
footprint than their respective benchmarks.
As part of our net zero target, we have committed
to reducing the carbon footprint of our in-scope AUM by 50%
by 2030. Additionally, carbon emissions measures have beena heavily weighted factor in our proprietary ESG scoringmodel since inception. In our ESG Integration Guidelines,
we articulate an objective for our portfolios to have a higher
ESG score and a lower carbon footprint than their respective
benchmarks. This commitment is grounded in the belief thatas an investor, to evaluate the environmental impact of ourinvestments and assess the associated climate risk, we need
to be able to measure the greenhouse gas emissions (GHGs)
embedded in those investments. We also believe that ESG
considerations, when combined with traditional financial

analysis, can help investors to understand a wider set ofrisks and opportunities and, in turn, make better-informed
investment decisions.

2023 metrics
We have substantially reduced the carbon footprint of ourportfolios since 2019. While it is difficult to isolate the various
factors that led to this reduction, we have implemented
a number of measures over the last few years that have
impacted our financed emissions.
For example, the implementation of our coal policy in 2019
and then of our oil and gas policy in 2020 – and the ongoingtightening of these policies – have greatly reduced our
exposure to the most carbon intensive companies.
Our better-than-benchmark rule for certain strategies where
we aim to hold portfolios with a lower carbon footprint
than their respective benchmarks, incentivises our portfolio
managers to further reduce the level of financed emissions intheir funds. In addition, we aim to hold portfolios with morepositive ESG scores than their respective benchmarks andseveral indicators related to GHG emissions are currently
embedded in our proprietary ESG scoring framework.
With the introduction of the SFDR rules, our definition of
Sustainable Investment has made oil and gas ineligible,
meaning that they cannot be held in Article 9 funds or in the‘SI’ component of Article 8 funds. We also have 213 fundswith the French ISR or the Towards Sustainability labels andboth of these labels have significantly enhanced their criteria
vis-à-vis high carbon industries, which has also helped toreduce our overall exposure to carbon over time. In addition
to this, our PAB funds are also following the PAB rules onannual portfolio carbon footprint reduction.

The reduction of our carbon footprint can also be due to the
reduction of the carbon footprint of invested companies. Our
2023 carbon footprint data is from September and does not
yet reflect the 2023 carbon footprints of the companies weinvest in. We use the latest available data to calculate carbon
footprints, meaning that we are largely using prior year data.
This means that the carbon footprint reduction we haveexperienced in 2023 might, at this stage and until we havethe updated carbon data, reflect a selection effect (e.g., areduced weighting in high carbon intensive companies) rather
than a change in carbon emissions of invested companies
themselves. We continue to work with data providers to lookfor ways to access more timely data but for the time being,
we accept that there will be a lag in reported emissions.

Carbon footprint of our in-scope AUM (tCO2e/m€ EVIC)
91.72

Scope 1 and 2

38.37

Scope 1 and 2

2019

2023

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATENZ: AAA Framework for Net Zero Alignment

2023 metrics% of in-scope AUM in net zero alignment

We have developed a proprietary framework to measurealignment with global net zero goals of our investments incompanies, largely inspired by the Paris Aligned Investment
Initiative Net Zero Investment Framework. This Triple A
framework (NZ: AAA) assesses whether companies are Net
Zero Achieving, Aligned or Aligning based on a number of data
sources, including Transition Pathway Initiative, Science Based
Targets initiative (SBTi), Climate Action 100+ and CDP. Mostof these sources are publicly available and have objectives
related to categorising companies according to their carbon
emissions reduction pathways. This framework outlines the
progressive alignment of our portfolio investments with our
net zero commitments and reinforces our goal to contribute to
net zero emissions by 2050. This framework helps us to better
understand the carbon reduction targets of the corporates wefinance, the credibility of their climate strategies as well as theclimate value added by the products and services they offer.

In 2023, the proportion of our holdings in companies nottaking any concrete climate action has been substantiallyreduced, with 45% of our in-scope AUM fitting in this category,
down from 60% in 2019. This decrease is a result of thegrowing number of companies taking climate commitments.
As we see more companies announcing carbon reduction
targets and as we are already close to our 2030 alignment
target, we are in the process of reviewing our NZ: AAAframework in an effort to make it more performance-oriented.

June 2022

Our assessment is based on an Implied Temperature Rise
(ITR) indicator, which translates corporate GHG reduction
targets into a projected global temperature change outcome
to facilitate this assessment and the comparability between
corporate commitments. This indicator is designed to translate
greenhouse gas emissions pathways into predicted global
temperature figures. Our ITR indicator is an implementationof the CDP and World Wildlife Foundation methodology using
CDP target data and the Financial Institutions Temperature
Scoring tool developed by the SBTi. In addition to using ITR
in our NZ: AAA framework, we also assess the climate value
added of the product and services offered by the companies
we invest in using EU Taxonomy alignment as well as our SDG
framework.

4%
Achieving
net zero21%
Aligned to a net
zero pathway

15%
Aligning towards a
net zero pathway

60%
Not aligned

2023

4%
Achieving
net zero28%
Aligned to a
net zero pathway

23%
Aligning towards
a net zero pathway

45%
Not aligned

2030 target

60%
Achieving net zero/Aligned to a net zero pathway/
Aligning towards a net zero pathway

40%
Not aligned

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2023 IN FIGURESAT A GLANCEOUR STRATEGYAND APPROACH

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE
Responsible Business Conduct policy
Our Responsible Business Conduct policy contains our sector-specific exclusion
approaches and scope of application and is a key tool in managing climate-related risks in our portfolios.
We exclude:
1

Thermal coal mining companies	that meet any of the following
criteria:• are developing or planning todevelop thermal coal extraction
capacities such as new minesor expansion of existing ones;• derive more than 10% of theirrevenues from the miningof thermal coal;• produce more than 10 million
tonnes of thermal coal per year;• do not have a strategy to exit fromthermal coal activities by 2030 inEuropean Union and OECD countries
and by 2040 for the rest of theworld.

2Power generators that meet	
any of the following criteria:• are adding operational coal-fired
power generation capacity to theirpower portfolio;• have a carbon intensity above
400 gCO2/kWh (as of 2024, thisthreshold has been reduced to
381 gCO2/kWh). This exclusion
will be further tightened to follow
the Paris compliant trajectory
for the sector as determined by
the International Energy Agency(IEA) Sustainable Development
Scenario (SDS). This means power
generators’ carbon intensity willneed to fall to 346 gCO2/kWhby 2025, otherwise they will be
excluded from our investment
portfolios;• still have coal capacity in theirgeneration mix in 2030 in European
Union (EU) and OECD countries andby 2040 for the rest of the world.

3	

Oil and gas companies that meet
any of the following criteria:• companies deriving more than
10% of their activities fromunconventional oil and gas or morethan 10% of their revenues fromunconventional oil and gas;
• companies deriving more than 10%of their exploration and production
activities from the Arctic region
or with more than 10% of theirrevenues from activities in the
Arctic region;• companies with oil and gas reservesin the Amazon region;• trading companies for which
unconventional oil and gas resources
represent more than 30% of theirbusiness as well as companies thatown or operate pipelines or LNG
export terminals supplied withmore than 30% of their volume fromunconventional oil and gas.

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55ABOUT
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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATEESG Integration Guidelines (integration oftransition and liability risk into ESG analysis)
As per our ESG Integration Guidelines, for a wide rangeof strategies, we aim to hold portfolios with more positive
ESG characteristics than their respective benchmarks.
This includes targeting a lower carbon footprint than theirrespective invested benchmarks, broadly encouraging
investment in companies with higher-quality climate risk
profiles.
We implement our ESG Integration Guidelines primarily
by providing our investment teams with proprietary
ESG scores. Our ESG scoring framework places
strong emphasis on climate change risks within
the Environmental pillar, including the GHG emissionsof all companies. Climate change is one of the 11 themesof this framework, accounting for 11.8% of the ESG
score on average across sectors, and up to 25% for thesectors most affected by climate change. The ESG ratings
resulting from this analysis therefore also reflect theconsideration of transition risk.
It is important to note that, in line with our objective
to align our portfolios with net zero and given thatthe world is facing a serious carbon emissions problem,
we have introduced an absolute bias to carbon emissions
in our relative ESG rating system, mainly sectoral.
As a result, sectors, regions and emitters that emit morecarbon and other GHGs will have a structurally lower
ESG score than those that emit less.

Our ESG score for sovereign debt issuers also includes
a 22% weighting for climate change factors, including 11%
for assessing physical climate risk within the country
and 11% for taking into account each country’s approach
to climate change mitigation.

Consideration of Principal Adverse Impacts (PAIs)
Based on a combination of the different pillars of oursustainability approach, our Article 8 and Article 9
products consider and address or mitigate climate-related
PAIs on a qualitative basis. We disclose climate-related
PAI values in our entity-level statement and at the fundlevel in the European ESG Template (EET).

4%of our in-scope AUM
is aligned with the
EU Taxonomy forsustainable activities
The EU Taxonomy establishes the general frameworkfor determining whether an economic activity qualifies
as environmentally sustainable for the purpose of
establishing the degree to which an investment isenvironmentally sustainable. We have developed an
approach to calculating alignment with the EU Taxonomy
and it is something we track and report on.

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AT A GLANCE

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE
FOCUS

Investing in climate opportunities
While the transition to a low-carbon economy
creates many risks, it also generates significant
opportunities, which forward-looking investors may
capture with the right investment tool.

strategy. It allows clients to invest in renewableenergy, clean mobility and the circular economy,
including new sectors such as batteries, hydrogenand carbon capture.

We also communicated with our clients about net zeroand our net zero strategy:

We have a long history of helping our clients invest
in the transition, launching our first SRI fund in 2002
and one of our first environmentally-focused funds
in 2006. We have since brought to market a rangeof climate-focused strategies. In 2019, we created a
dedicated Environmental Strategies Group, launching
our Energy Transition equity strategy followed by ourEnvironmental Absolute Return Thematic (EARTH)
and Emerging Climate Solutions equity strategies.

Early in 2024, we brought to market a new equity
strategy: the Global Net Zero Transition strategy,
where we apply our NZ: AAA framework with a justtransition lens focusing on engagement in orderto source companies within the MSCI ACWI Index.
The strategy includes a charity class fund, where we
donate part of our management fee to the charity
Electriciens sans frontières, which builds smallscale renewable energy projects in communities
predominantly located in the Global South.

• We published thought leadership pieces on
climate change and net zero topics throughout
the year – articles, research papers and videos on
our Viewpoint blog. As an example, we publishedin November 2023 a research paper on Aligninginvestments with the Paris Agreement – Frameworks
for a net zero pathway, exploring various strategies
for institutional investors to align their equity
portfolios with pathways targeting net zero
greenhouse gas emissions by 2050.

Our goal is to continue to increase our climate andenvironmentally themed investment solutions whileembedding climate and net zero considerations acrossour range of investment strategies.

We continue to further develop climate andenvironmentally themed investment solutions for clientswith the launch of new products and the acquisitionof IWC (see page 44). In addition, our solutions team isworking with some of our institutional clients to provide
them with tailor-made climate and environmentally
themed investment solutions so they can align their
existing and new portfolios toward net zero.

With respect to fixed income, our Green Bondstrategy has grown €1.4 billion since its debut.
In 2021, we launched our Sustainable Asian Cities
fixed income strategy designed to target opportunities
for enhancing urban mobility, incorporating lowcarbon elements, improving basic infrastructure
to help cities operate and thrive, and improving
their resilience to extreme weather events.
We rank among the biggest ESG passive managers in
Europe and this reflects our long history in this class,starting with the first low-carbon ETF in 2008. As of
31 December 2023, we manage €15.6 billion in ParisAligned Benchmarks and Climate Transition Benchmarks.
In 2023, we created a new private assets business
unit to bring together our range of activities in thisarea and launched the Climate Infrastructure Debt

Partnering with our clientson their net zero journey
We engaged with clients to discuss the challenges
and opportunities around net zero, explain our
strategy to contribute to this goal, but above all,to better understand their needs around net zero.
We also continue to encourage our clients who
have not done so to apply our Responsible BusinessConduct policy to their existing segregated accounts,
mandates and dedicated funds.

• We provided our clients with a range of educational
tools on net zero.

16

Paris-aligned, climatetransition-aligned or fossil
free open-end funds€15.6bnin AUM in Paris-aligned,
climate transition-aligned orfossil free open-end funds

22

environmental and climate
thematic open-end funds€22bn

in AUM (in AUM
in environmental
and climate thematic
funds)

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESOUR COMMITMENT TO CLIMATE
Integrating climate change into our voting,engagement and public policy advocacy
We use our leverage as a large shareholder to vote, and havemeaningful engagement with investees, on climate-related
issues. This helps us manage climate-related risks by better
understanding our investee companies’ transition plans andurging them to enhance their approaches where needed.
We also believe that helping to shape legal frameworks,
regulations, standards and guidance relating to climate change
is integral to reducing systemic risks related to climate change
and is aligned with our fiduciary duties to our clients.

Voting• We apply climate-related expectations to our voting,as detailed in our voting policy. For example, we oppose
management resolutions on the approval of discharge of theboard, board reelections or financial statements (dependingon the market) at companies that do not properly report on
their carbon footprint (Scope 1, 2 and 3, when appropriate)or their climate lobbying activities, nor communicate orconstructively engage about their climate strategy. In
addition, we expect companies identified as the world’s
largest corporate GHG emitters to publicly announce theirambition to achieve net zero GHG emissions by 2050 orsooner. This results in a significant opposition vote at general
meetings for climate-related considerations. In 2023, we
opposed 1,080 resolutions at 200 companies based on our
climate-related expectations.
• We support shareholder proposals when they align with our
ESG expectations, as detailed in our Governance & Voting
Policy. We opposed 55% of Say-On-Climate proposals thatwere within our scope in 2023, reflecting proposals that did
not meet our expectations.

Engagement• We co-lead engagement with 10 companies in Europe,
the U.S. and Asia through the collaborative initiative Climate
Action 100+. We also take part in dialogues led by otherinvestors in CA100+ and lend our name to all engagements
undertaken in the name of this initiative, with all companies,
in our capacity as a supporter.
• We also co-chair the European Climate Lobbying Working
Group of CA100+, sit on the Corporate Programme Advisory
Group and participate in the Asia Investor Group on Climate
Change (AIGCC) programme of engagement with Asianutilities.
• Engagement related to our RBC Coal Policy: We engage
individually with portfolio companies to confirm theemissions intensity of their power generation and evaluate
the potential for us to work with companies to enhancetheir decarbonisation ambitions. We also engage with thosecompanies whose carbon intensities are close to, but still notin line with our policy.
• Engagement on corporate climate lobbying: We have beensuccessful in getting a number of large emitters such as
Danone to align their direct and indirect climate lobbying
activities (i.e., those conducted by their industry associations)with the temperature goals of the Paris Agreement by filingor co-filing shareholder proposals requesting them to do so.

Integration of climate risks into our overall risk
management governance
We have a framework for the identification and review ofsustainability risks, which includes climate-related risks,
in our overall risk framework. We have defined roles andresponsibilities for first and second lines of defence in thevarious departments implicated. An action plan has been definedfor each identified risk and the assessment of sustainability risks,
as well as the associated control plans, are presented at theinternal control committee chaired by our CEO.
We have an independent department that aims to ensure
centralised and cross-functional supervision of operational
and investment risks, including climate change risks.
The department is involved in three important dimensions:• The independent review of climate-related models, alongwith the legal department for when there are regulatory
implications.
• Monitoring sustainability indicators in portfolios. Funds aretracked automatically, and divergences versus expectations
are considered as breaches. Voluntary commitments
including carbon constraints are monitored by the CIO’s
office. For example, for SFDR Articles 8 and 9 funds where
better than benchmark performance related to ESG score
and carbon footprint is part of a fund’s objectives, these
constraints and any related divergences are monitoredby the investment CIO office through a dedicated dashboard
and breaches are reviewed by the Investment Committee.

Number of management resolutions opposedfor climate-related reasons
1,080
745

2021

770

2022

2023

% of climate-related shareholder proposals
we supported
89

90

2021

2022

85

2023

• Oversight of operational risks related to a number ofprocesses involving sustainability issues including thoserelated to climate (e.g. reporting, data and IT systems).
Our risk management team is involved in sustainabilityrelated governance, including our net zero workstream
dedicated to climate change, and works closely with the RISKESG team at BNP Paribas Group to ensure the sharing of bestpractices. Within the BNP Paribas Group’s RISK Department,
RISK ESG manages the integration of ESG risk factors into the
BNP Paribas Group’s risk management framework and into theactivities of the Group’s various risk teams.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING ANDENGAGEMENT

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

VOTING AND ENGAGEMENT
As long-term investors, we use voting, engagement and policy advocacy to influence companies
and governments around the world to help shape sustainable and equitable economies.
Promoting good ESG standards among all types of issuers and holdings is an essential elementof our ownership responsibilities.

A future makerWe are committed to being a ‘future maker‘, using ourpractices among corporate and government issuers.

investments and our influence with companies,• As ESG performance can be material to financial

policymakers and standard setters, to contribute to a
successful energy transition, healthy ecosystems, andgreater equality in our societies. We use the tools of
voting, and engagement with issuers and policymakers,
to realise this ambition.

performance, our voting and engagement can reducerisk, unlock value and positively impact the world
by encouraging both better corporate practices andTHE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

VotingEngagement

Public policy advocacy

We exercise our rights andresponsibilities by making consideredvoting decisions in line with ourpolicy. Voting is core to discharging
our fiduciary duty. It drives better
corporate governanceand sustainability practices.

We use informed engagement withequity and bond issuers to improvetheir performance on governanceand sustainability. Engagement inturn informs our votes and influences
issuers’ eligibility for investment
and ESG ratings. It is also designed
to counter global systemic risks andmarket failures.

We actively engage with regulatorsand policymakers to help shape themarkets in which we invest and therules that guide and govern company
behaviour.

Voting and engagement to shape issuers’ policies and practices

transparency.
• We exclude companies, sectors or activities

To ensure that our activities are effective, consistentthat are in violation of international norms,

and support our objectives and duties as fiduciaries,or that cause unacceptable harm to society and/or

they are not only rooted in our GSS but also codified

the environment. We engage to drive change,in our Stewardship Policy and Governance and Voting

but if our engagement is not effective, divestment

Policy, reviewed annually and revised as needed –can be a last resort.

and approved by the Stewardship Committee.

• Appropriate and comprehensive corporate disclosure

Our conviction: Voting and engagement are both

is fundamental to sound investment decision-making.

an obligation and an opportunity.

• Collaboration with other long-term investors and• We cannot deliver on our commitment to clientsstakeholders can help to achieve our common

without undertaking effective voting, engaging

environmental and social aims, particularly whenwith issuers to improve their performanceengaging with companies and regulatory bodies.

on sustainability, and wide-ranging policy advocacy.

• We have a duty to advocate for policymakers to• Meaningful engagement with issuers enhancesdeliver legislation, regulation and standards that

our investment processes so that we can manage

foster sustainable and equitable development, andlong-term risk for our clients by promoting strong ESG

that address systemic risks and market failures.

An integral element of our investment
process is to vote on behalf of our clientsat Annual General Meetings (AGMs) andExtraordinary General Meetings (EGMs)of companies in which we invest.1
We are committed to consistently
exercising our voting policy acrossportfolios and markets, subject totechnical and legal constraints.
We coordinate dialogue withportfolio managers, ESG analysts andstewardship analysts so that final
voting decisions can feed into thequalitative elements of our ESG ratings.

Our Governance and Voting Policy
provides full details of our approachto voting.
Our engagement encompasses our
public equity holdings – both actively
and passively managed – and extends
beyond them. We regularly engage
with issuers of various types of bonds,
and sovereign issuers and agencies, onmaterial ESG issues, including climatechange, which may impact the value of
our investments in sovereign bonds ortheir ability to meet their obligations toinvestors.

Within our private assets business,
we engage investees in relation toa wide range of ESG matters specificto each asset and strategy. These can
include: discussing relevant issues
with general partners when selecting
external funds; setting expectations for
management teams on ESG topics wheninvesting in corporates; including ESG
clauses in binding deal documentation;
voting at board meetings to promote
ESG or impact considerations. We also
participate in several initiatives on ESG
and impact in private assets.

1 - We exercise voting rights for equities in mutual funds, UCITS, Accredited Investment Fiduciary (AIF), foreign investment funds, mandates and for Employee
Investment Funds for which voting rights are delegated to BNPP AM.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT
Escalation process
Investor-issuer dialogue is the foundationof good stewardship – it allows trusting
relationships to be built, permitting candid
solution-oriented discussions about issues thatmight not otherwise be addressed.
Dialogue, however, is a two-way street andthere are times when stronger measures arenecessary to encourage a company to cometo the table and discuss our concerns or
to take the action we have asked for.

Our approach to stewardship provides
for a variety of escalation strategies,
including:• voting against a company’s board discharge
or elections or financial accounts;• submitting private questions to companies’
top management;• submitting public questions at general
meetings;• filing or co-filing shareholder proposals
at general meetings;• making public statements;• rarely, but when deemed appropriate,
announcing our voting intentions aheadof time and;• additional legal strategies.
These decisions are taken on a case-by-case basis,to ensure that our concerns have been properly
heard and dealt with. Our shareholder proposal

filing strategy is approved annually by the
Stewardship Committee, as are decisions about
the filing of specific shareholder resolutions.
We also regularly exclude from our actively
managed portfolios companies that fail to meet
our Responsible Business Conduct standards andSector-Based Policies.

Public policy advocacy
to shape markets
BNPP AM has a long-standing commitment topolicy advocacy to advance our sustainability
goals, contribute to a well-functioning financial
system and mitigate systemic risks. We believethat helping to shape legal frameworks, regulation,
standards and guidance relating to sustainablefinance and sustainability issues that have serious
implications for the real economy, inter alia
climate change, nature loss and inequality,
is integral to the fulfilment of our fiduciary duties
to our clients.
One of the core tenets of the PRI, to which
we are a signatory, is participation‘’in the development of policy, regulation,and standard setting (such as promoting
and protecting shareholder rights)”.
We also operate within the provisionsof the Group’s Charter for Responsible
Representation with Respect to the Public
Authorities.

Our approach is set out in our Stewardship
Policy 2024.
We contribute to initiatives at the international,
regional and national levels on matters relating
to sustainable finance, corporate governanceand disclosure, as well as on a wide rangeof sustainability issues. While we sometimes
meet agencies and policy makers individually,
we favour engagements undertaken in
partnership with other investors, throughformal or informal networks, wherever possible,
so as to be able to put forward a consistentposition.

We present various examples of our public policy
advocacy throughout this section to demonstrate
how we take a joint approach to trying to shape
the policies and practices of corporates andrelevant public policy.

Given the important role played by accounting
and other professional bodies, we also aim toshape the standards and guidance they develop
and oversee.

Our approaches include:• public submissions to legislators,
regulators and multilateral institutions,e.g., responding to public consultations;• participation in the development of policy
proposals in public and private forums, suchas technical advisory committees and investor
associations;• meetings with policymakers;• publication of white papers and;• endorsement of public statements
and commitments developed by investor
and other stakeholder initiatives.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

ShareAction: ranking
and general findings
BNPP AM was ranked second outof 77 asset managers around theworld by ShareAction in its 2023
Point of No Returns report.
The scores and ranking are
based on the ambition, scope,and transparency of the firms’
approaches to responsible
investment to determine how far
they are safeguarding against keysocial and environmental risks.
We scored 79% on the Stewardship
section and were given an A rating.
The average score was 58%.
Note: ShareAction 2023 Point of No Returns reportis based on 2022 figures.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Voting: exercising our rights and responsibilities
Our approach to voting is governed by a setof principles which underpin our expectationsof the companies we invest in and guide
how we exercise our ownership duties.
Our Governance and Voting Policy sets
the rules we apply to proxy voting, including
on ESG-related matters. It is updated each year.
We vote proxies solely in the best interestsof our clients and the ultimate beneficiariesof the funds for which we are responsible.
We seek to take a constructive and positive
approach with the boards of companies weinvest in, clearly setting out our expectations as
a diligent steward of assets. However, we will not
hesitate to abstain or oppose management, or to
support shareholder proposals. When companies
do not meet our expectations, we oppose
the following key categories of management
resolutions, depending on the market:
Board Elections; Discharge of Board andManagement or Financial Statements.
To help us implement our policies, we use theservices of proxy voting providers ISS, which
provides global voting research and a voting
platform for all companies, Glass Lewis andProxinvest, which provide research on selectedcompanies. However, we do not delegate
decision-making authority to them and we takeeach voting decision for every shareholder’smeeting, i.e., we do not outsource the final decision.

Our 2023 full proxy voting record is publicly
available on our website. The following content
is a summary of our voting activity in 2023,
including details on our most significant votes
and our rationales for votes on environmental
and social proposals.

Key revisions to our voting policy
for the 2023 season
Each year, we review our Governance and Voting
Policy to adapt it to evolving market practices
and the many remaining challenges in the fields
of corporate governance, and environmental
and social responsibility. Our 2023 Governanceand Voting Policy again strengthens andreinforces our expectations in these areas,
specifically by:

Raising the gender diversity thresholds
for boards of directors to:• 35% in mature countries, i.e., for Europe,
North America, Australia, New Zealand andSouth Africa, with exceptions allowed in cases
where the proportion of women is between 20-35%;• 20% threshold in emerging countries, i.e.,
for all other markets, with exceptions allowedin cases where the proportion of women is
between 10-20%.

Introducing an ethnic diversity expectation
for North America, UK and Ireland:• Voting against incumbent directors who aremembers of the nomination committee if theboard has no apparent racially or ethnicallydiverse composition (based on ISS’ definition2)
for North America, UK and Ireland.

Introducing a new board opposition rule
where companies have dual-class shares:• Voting against incumbent nomination and/or
governance committee members (or the Board
chair in the absence of such committees) atcompanies with a dual-class share system withdifferential voting rights (including preference
shares with no voting rights system).
• Setting an exception rule for new IPOs with asunset clause within five years of the IPO.

Continued consideration of sustainability
factors in voting decisions
We also continue to factor into our voting
decisions other elements of companies’
sustainability performance. We retained the
expectations we set last year for the world’s
largest GHG emitters, given our commitment to
the Net Zero Asset Managers (NZAM) initiative.
We expected these companies to publicly
announce their ambition to achieve net zero

GHG emissions by 2050 or sooner, underpinnedby credible decarbonisation strategies andintermediary targets, in line with global efforts
to limit warming to 1.5°C.
In relation to biodiversity, we expectedcompanies to assess and report on their key
impacts and dependencies on nature, beginningwith companies in high-impact sectors andwith a priority focus on deforestation and water.
We focused on companies in sectors designatedby CDP as high impact and which failed todisclose through the CDP Water and Forest
questionnaires. Finally, while we engage withsome companies with low scores on our ESG
rating system, especially those in which wehave active positions, we also have the option
to sanction certain resolutions as an escalation
measure especially if these companies do
not improve their practices. We also sanction
companies whose policies and practices do notalign with our RBC policy.

MichaelHerskovich
Global Headof Stewardship“We advocate hybrid AGMs,
with the same rights for those
who vote remotely and in person.
As in previous years, we continue
to advocate for high governancestandards and we opposed 36%of the management resolutions
we voted on because we did not
believe they were in the bestinterests of our clients.”

2 - Taking into account relevant technical and legal considerations.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

2023 voting scope
Each year, we monitor the total votable sharesin the portfolios we manage and assess thepercentage of votes exercised during the year
in alignment with our Governance and Voting
Policy. We use two principles to select the sharesfor which we exercise voting rights.

We aim to concentrate our efforts on:• widely held positions;• companies where our collective investment
schemes hold a significant portion of theissuer’s capital.

Specifically, the total number of meetings
we vote at is defined where our aggregatedpositions meet at least one of the threefollowing conditions:• represent 90% of accrued total stock positions;• make up 0.1% or more of the company’s market
capitalisation; orOver the past three years, we have maintained
a high and rising opposition rate. This is dueto the high expectations we have of companies
as described above and because we make ourown voting decisions. This year the percentage
of votes against management was 36%,
three percentage points higher than in the prior
two years. We voted at 1,931 general meetingsin 2023, primarily in Europe, reflecting the splitof our assets under management.

Total number and percentage of votes by region for the last 3 years
Year

2023

2022

Meetings
voted

36%

of management
proposals in 2023,
compared to

33%

APAC

Other*

898

540

414

79

47%

28%

21%

4%

908

526

432

110

46%

27%

22%

6%

974

554

467

103

46%

26%

22%

5%

1,976

2,098

* Other includes markets such as Latin America and Africa.

Votes for and against, including abstentions, in 2023

in the prior
two years.

Voted for:64%

• ad hoc demand.
The total value of the assets under managementthat fell within our voting scope (which isbeyond Undertakings for Collective Investmentsin Transferable Securities (UCITS) withmandates) was €68 billion. This voting scope
represents nearly 52% of meetings3 held bycompanies held in all our UCITS with mandates,
which represented 79% of ballots voted4.

North
America

1,931

We opposed

2021

EuropeOpposed:36%

The main focus of our opposition, excluding
shareholder proposals (the analysis forwhich is presented from pages 62 to 65),
continued to concentrate on three topics:• executive compensation;• financial operations; and3 - The total possible voting scope included 3,677 meetings in 2023.
4 - We voted 18,156 ballots out of 22,927 votable ballots.

• board elections.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

Similar detail on all other types of votes isavailable in our 2023 Voting Report. We outline
examples in a later section that illustrate how
our engagement with several companies in
the run-up to their AGMs informed our voting
decisions. In some cases, we abstained or voted
against an item on the ballot to indicate an
escalation in our concern.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Our votes on management and shareholder proposals
Management proposals

Shareholder
proposals

Total

Board elections

Executive pay

Financial operations

Routine business and other5

Total voted

25,988

12,621

3,924

2,431

6,139

873

Voted for16,509

7,343

1,943

1,459

5,187

577

Voted against

8,476

4,878

1,695

842

863

198

Abstained

1,003

400

286

130

89

98

2023 Total Opposition Rate (abstained or against)

36%

42%

50%

40%

16%

34%

2022 Total Opposition Rate (abstained or against)

33%

36%

61%

38%

13%

28%

2021 Total Opposition Rate (abstained or against)

33%

37%

60%

39%

12%

30%

5 - Approval of accounts, appointment and remuneration of auditors, mergers and acquisitions, anti-takeover measures, etc.

Executive compensation(50% opposition vs. 61% in 2022)

Financial operations(40% opposition vs. 38% in 2022)

Board elections(42% opposition vs. 36% in 2022)

The reasons for our opposition
excessive or disproportionate amounts
to executive compensation plans
relative to the company’s performance;(e.g., stock-options, restricted stock• Absent or weak ESG performanceplans, severance payments andcriteria, not clearly linked to the‘say-on-pay’ proposals) typically fall
into the following general categories:
company’s sustainability strategy;

We oppose management proposals
related to financial operations,which generally request a sharecapital increase, for the following
reasons:• A share capital authorisation was
proposed without pre-emptive rights
and without a specific objective(more than 5% of share capital or
20% with a specific purpose), whichleads to excessive dilution for current
shareholders.

Our votes in opposition toindividual directors generallyindicate our belief that there is
weak corporate governance andan issue related to the balanceof power. Most votes against
directors fall into the following
categories:

We also voted systematically against
all anti-takeover devices.

• A non-independent director• Poor transparency on aspects of thecompensation policy (volume, weight,
nature of the performance criteria,
targets, etc.);• Compensation practices that were notin line with stakeholders’ interests, with

• A ‘pay for failure’ approach based on
insufficiently challenging performance
criteria; and/or• Compensation not oriented towards
rewarding good long-term performance.

• The volume was considered too
significant (i.e., where authorisations
exceeded 50% of the share capital); or

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

with insufficient overall board
independence;• Non-compliance with our
expectations on gender diversity;• Directors with poor attendance orterm of mandate exceeding four years.
On pages 72-73, we provide several
examples of our engagement withrespect to voting; commentary on
our engagement and related votes ongender diversity on boards can be foundon page 91 in the Equality section.

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AT A GLANCE

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D YFiling shareholder proposals (1/2)
In 2023, we continued our leadership on the topic
of shareholder proposals. We submitted ten
shareholder proposals: eight proposals in Italy
relating to governance and two proposals in the U.S.
on environmental topics.

Italy: Proposals with Assogestioni via
the Voto di Lista system
CONTEXT: The slate voting mechanism is usedin Italy to elect directors and statutory auditorsof listed Italian companies, selected and proposedby shareholders, including institutional investors.
Assogestioni proposed for most Italian companies,
and typically for three seats, a list of independent
directors. Another list is usually proposedby the leading shareholders. Most of these votes
happen every three years and Assogestioni uses
a head-hunter and independent selection process tochoose candidates.
ACTIVITY: We filed shareholder proposals in supportof the Assogestioni list at eight companies: Autogrill;
Brunellocucinelli; Finecobank; Terna; Poste Italiane;
Eni Spa; Enel Spa and Mediobanca.
OUTCOME: At all companies, directors were electedfrom the Assogestioni list, which allowed us toreinforce good governance and board independence
at those companies.

U.S.: Environmental proposals
Although we have celebrated an increasing numberof majority votes on shareholder proposals in the
U.S. that raise sustainability issues, majority votes
are rare. The purpose of submitting a proposal is not
to win the vote, but to effect a change in corporate
practice. Negotiated withdrawals of shareholder
proposals can be more meaningful than strong voteresults because they are based on dialogue andan effort to reach agreement that is acceptable toboth sides. Sometimes it can take years of proposal
resubmissions before a company is willingto come to the table and negotiate. We co-filed
at two companies’ AGMs this year.

This advisory resolution received a 33% vote.
As discussions with the company did not appear
to be making progress during the remainderof the year, we resubmitted the proposal forthe 2023 proxy season. We had further discussions
with the company in early January; the toneof the conversation was far more constructive.
OUTCOME: In late January, we reached agreementwith UPS to publish its first climate lobbying
report, no later than the second quarter of 2024.
In exchange, we withdrew the shareholder
proposal and, due to the timing, agreed
not to resubmit the proposal for next year.

UPS: Paris-aligned Climate Lobbying
CONTEXT: We are working to encourage companies
to align their direct and indirect climate lobbying
activities (i.e., those conducted by their industry
associations) with the temperature goals of
the Paris Agreement. Specifically, we ask companies
to produce annual reports on these efforts, consistent
with the Global Standard on Responsible Corporate
Climate Lobbying, which we helped launch.
ACTIVITY: In 2022, we co-filed a shareholder
proposal at the AGM of United Parcel Service (UPS)with Mercy Investment Services, requesting thatthe company publish its first climate lobbying report.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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65

ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIOUR STRATEGYAND APPROACH

AT A GLANCE

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D YFiling shareholder proposals (2/2)
Archer Daniels Midland (ADM):
Eliminating native vegetation conversion
from global supply chains
CONTEXT: Non-forest biomes, such as the Brazilian
Cerrado, are critical ecosystems that harbour
substantial biodiversity as well as providing key
ecosystem services, including water yield and carbon
sequestration. In recent years, the Cerrado, which
receives less legal protection than the Amazon,has seen substantial conversion for agriculture.
ADM is a systemically important commodity trader
and, in our view, lagged its peers in its approach tonative vegetation conversion (NVC).
OBJECTIVE: Our goal is to convince ADM to expand its
deforestation commitment to include a time-boundcommitment to eliminate NVC from its global supply
chains. Our request is consistent with a joint
message conveyed at COP27 by the United Kingdom
and United States, highlighting the criticalimportance of NVC commitments.
ACTIVITY: In the fourth quarter of 2022,
we submitted a shareholder proposal to thecompany, seeking an independently verified
commitment to eliminate NVC from ADM’s supply
chains by 2025. We ultimately withdrew that
proposal in exchange for an agreement by ADM topublish - with the assistance of one or more credible
independent third parties - a report assessing
the feasibility of amending ADM’s no deforestationcommitment for its highest risk South American
supply chains (corn and soy) to be NVC-free by 2025.
In addition, the company agreed to adopt atime-bound commitment no later than six months
after publication of the report, based on the resultsof the feasibility assessment. ADM also agreed
to consult with its investors during this process.
During the fourth quarter, ADM updated its Policy
to Protect Forests, Biodiversity and Communities
to commit to eliminating NVC or the repurposingof wild land for crops such as soy and corn, fromits supply chains for ‘high risk areas’ by 2025 for direct
suppliers and by 2027 for indirect suppliers. The policy
defines the Brazilian Amazon, Cerrado and Pantanalbiomes as well as the Paraguayan and Argentinian
Chaco as ‘high-risk’ areas for native vegetation
conversion. The policy establishes a 2025 cut-off datefor NVC in these areas for all suppliers, meaning thatland conversion beyond 2025 will not be permitted.
The 2027 date for indirect suppliers provides
the company with the additional time they believe
is needed to confirm compliance with their policy.
We met with ADM executives to discuss theirfeasibility study and to receive further details
on these new commitments. Although we would
strongly prefer to see a 2025 complianceor ‘target’ date for ADM’s indirect suppliers,
we do appreciate the rigour with which the company
plans to pursue verification that indirect suppliers

are conversion-free and the fact that these newcommitments have been made ahead of schedule.
In addition, when companies set cut-off dates in the
future, there is a risk that they may be incentivisingfurther conversion up to that deadline. We stressedto the company the critical importance of taking
all available steps to prevent increased conversion
until the 2025 cut-off date, as well as working
to encourage rehabilitation and restorationof degraded land. Nevertheless, we believe these
new commitments represent important progress.
We look forward to the publication of ADM’s
feasibility report, which paved the way for theseimportant commitments.
OUTCOME: ADM adopted new commitments in
response to our shareholder proposal and will soon
be publishing the feasibility study that led to theadoption of these commitments. Although we sought
a commitment to eliminate NVC from ADM’s supply
chains by 2025, and ADM will not be able to ensurethat its indirect suppliers are compliant until 2027,
we are pleased with ADM’s responsiveness and hopethese new commitments will have systemic impact
on key biomes throughout Latin America.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Our record of voting
on environmental
and social topics
Where companies do not meet our
expectations in relation to various
environmental and social matters, as
set out in our voting policy, we oppose
management resolutions on the approvalof financial statements, discharge ofthe board, or (re-)election of directors(depending on the market).
In 2023, we opposed 1,521 resolutions at 271 companies
for these reasons (71% related to our climate-related
expectations, 17% related to our RBC policy, 6% related
to our biodiversity-related expectations and 6% linked
to low ESG scores) – a substantial increase compared
to 2022 (1,391 resolutions at 248 companies).

Opposing key resolutions linked to environmental and social expectations
No.
of resolutions%of total

No. of company
meetings% of company
meetings

Responsible
Business Conduct
policy

264

17%

32

12%

Climate-related
expectations

1,080

71%

200

74%

Biodiversityrelated
expectations

91

6%

27

10%

Low ESG score

86

6%

12

4%

Total

1,521

ESG topic

271

In 2023, we opposed

1,521
271

resolutions atcompanies basedon our environmental
and social expectations

Our principle is to votein favour of shareholder
proposals when they arein line with the long-term
interests of the company.

Percentage figures may not total 100% due to rounding errors

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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67

ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D I E SEngagement related to voting on environmental and social issues

Poor health and safety practices
and related governanceat Norfolk Southern
CONTEXT: On 3 February 2023, a Norfolk
Southern train carrying hazardous materials
derailed in Ohio, causing substantial harmto the local community and environment.
The Environmental Protection Agency andDepartment of Justice filed a civil complaint
against the company, alleging a violationof the Clean Water Act.
Local community members and businessowners, as well as the state of Ohio, also filed
lawsuits. According to media coverage, thecompany’s accident rate jumped 80% between
2013 and 2022, with 27% more accidents,
significantly worse than the industry average.
Further, the company has been accusedof cutting workers, lengthening trains andlobbying against safety measures to drive
shareholder value. The National Transportation

Safety Board is investigating the company’ssafety culture. Post-accident, the CEO pledged
US$6.5 million to help those affected by thechemical spill but refused to back away fromthe company’s plan to spend US$7.5 billion onshare buybacks.
VOTE: We chose to vote against all membersof the Board to signal our serious concern thatsafety issues do not appear to be receiving
sufficient attention. The intention to proceedwith the buyback plan during this high-profile
disaster – an accident that may have been
prevented had the appropriate safety measuresbeen taken – underscored the need to send astrong signal to a board that does not appear
to be putting our best interests first. However,investors overwhelmingly re-elected the
Norfolk Southern board.

ESCALATION

Weakened deforestationcommitments at Procter & Gamble (P&G)

CONTEXT: In May 2023, P&G updated its Forest
Commodities Policy, removing a commitment
to end forest ‘degradation’ – practices thatsignificantly impair a forest’s ability to continue
to produce various ecosystem services, without
converting the forest to non-forest uses
(deforestation). The commitment on degradation
had been in P&G’s policy since 2021, following
a majority vote on a shareholder proposal.
ACTIVITY: We submitted questions during P&G’s
ESG conference call about the removalof ‘degradation’ from the company policy
and the implications for its supply chain.
The company responded that degradation
was removed to avoid confusion over multiple
definitions of ‘degradation’, but nothing hadchanged in practice. This was the only time
during the briefing that this issue was mentioned
and may be the only public explanation– or acknowledgment - the company has provided
for the change. Following the ESG briefing,
we had two calls with P&G executives todiscuss the change in policy and get a better
understanding of P&G’s oversight of the

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

harvesting of pulp from the Canadian Boreal for
its premium tissue products, including Charmintoilet paper. Prior to our first call, we submitted
a lengthy set of questions, to which P&G provided
a partial written response. Our discussion covered
certification schemes, Canadian forestry policy,
the impact of the EU Deforestation Regulation,
woodland caribou protection, the protection of“intact forest landscapes” (IFLs), and P&G’s efforts
to replace virgin fibre with more sustainable
alternatives.
VOTE: Members of the P&G founding family
initiated a ‘Vote No’ campaign, asking investors
to vote against the CEO and certain directors at
the company’s AGM, due to the change in policy
and concerns that the company was not taking
sufficient action to address deforestation andforest degradation. In response, we requested
a call with the targeted directors, but
our request was denied. As we remained
unconvinced that P&G is effectively managing
this critical risk, we chose to vote against allincumbent directors.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTHIGHLIGHT

Focus on ‘Say-on-Climate’ proposals
Following the emergence of ‘Say-on-Climate’
management proposals in 2020, we developed
clear assessment criteria to guide our voting
decisions, set out in our Governanceand Voting Policy (section 4.5). Theseare proposals submitted by companies’
management to AGMs to give shareholders
the opportunity to vote on the company’s
climate policy and transition plans.
We assess each proposal qualitatively todetermine the company’s level of ambition,
the alignment of the climate strategy with theobjective of achieving net zero GHG emissions
by 2050 or sooner, in line with global efforts
to limit warming to 1.5°C, its current emissions
trajectory and its performance againstcomparable peers.
Having almost doubled between
2021 and 2022, the number of climate-related
management proposals fell in 2023 acrossall markets.
Only 22 ‘Say-on-Climate’ proposals fellwithin our voting scope in 2023 versus 40
the previous year. We believe this decline
is likely due to several factors, including
the irregular frequency of ‘Say-on-Climate’votes (a majority of companies still offer oneoff votes) underpinned by the lack of common
standards and regulation.

In addition to remaining largely concentrated
in Europe (82%), half of these votes wereat companies that had already submitteda ‘Say-on-Climate’ proposal in previous years.
We paid particular attention to the way wevoted on those, aiming to retain our highexpectations and to keep pushing for more
ambitious plans. Overall, the climate plans
we voted on in 2023 looked better than those
we voted on in previous years, although
improvements are still needed. Concomitantly,
our opposition rate decreased from 79% in 2022
to 55% in 2023. Our abstention rate increased
in relation to companies transitioning
towards – but not already achieving – morecomprehensive plans. As an example,
we abstained in some cases where, despite
positive features, companies did not aligntheir GHG emissions reduction targets witha 1.5°C scenario.

Paula Meissirel
Senior Stewardship
Analyst“We believe institutional investors should
adopt a rigorous and critical approach whenvoting on Say-on-Climate proposals but
also consider climate considerations whenvoting on other key items. Our objective is
to combine these with an active corporate
engagement strategy on net zero transition
plans.”The level of support gained by companies
at their AGMs ranged from just over
53% at Credit Suisse Group AG to 99%
at EDP -Energias de Portugal SA.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTENGAGEMENT
Our long-term investment horizon places
a company’s corporate governancearrangements and the quality of its
senior management teams at the heartof our investment decisions, alongside
their sustainability performance. Sound
governance and effective managementof sustainability impacts, risks andopportunities are critical to companies’
long-term success and financial
performance.
They are therefore a centrepiece in our engagements
during and outside the voting season. Engagement isundertaken for the benefit of clients and their beneficiaries,
on behalf of our equity and debt holdings, with companies
and with agency, sovereign and sub-sovereign issuers.
This supports the implementation of our RBC policies,
informs our ESG research ratings and enhances
our investment decision-making.

Engagement with companies primarily takes
three forms, although there can be overlap:

1

Discussions on governance mattersin the run-up to annual meetings and votes,	
which inform our annual voting decisions. These
discussions address how boards are composedand function, and ensure that the appropriate
incentives are provided to management within
remuneration plans to deliver companies’
strategic objectives, including sustainability
objectives.

2

Dialogue over one or more years to improvecompanies’ management of sustainability	risks, opportunities, dependencies and impacts,
particularly in relation to the 3Es (Energy
transition, healthy Ecosystems and Equality).

3

Given our global presence and the wide
geographic scope of our clients’ holdings,
we endeavour to engage consistently acrossall regions on key ESG issues and in line withthe 3Es. Our approach varies by region only
to the extent that we adapt it to the prevailingregulations, the policy environment, norms
and cultural sensitivities.
We undertake our engagement individually, i.e.,
on a one-to-one basis with companies, as wellas collaboratively, i.e., with other institutional
investors with aligned goals. See pages 31-33
for a list of collaborative initiatives we belonged
to during 2023.

Engagement linked to ESG performance. This canbe triggered by new information that indicates	
a company might be in breach of one of our RBC
polices, stimulated by regular revisions to our ESG
ratings or in relation to a new bond issuance.
We also engage with companies in relation totheir issuance of green, social or sustainability(GSS) bonds, as well as agencies, states andregional issuers of sovereign debt. The purposeof this engagement is to provide feedback on
the structure of their bonds, evaluate the bonds’
linkages to the issuers’ environmental and social
policies and to encourage clear annual reporting.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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AT A GLANCERESPONSIBLE
BUSINESS CONDUCT

THE 3ESESG
INTEGRATIONVOTINGAND ENGAGEMENT

CLIMATESUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Our engagement
in figures

Total number of issuers we engaged with directly
and number of interactions
634

373

326

296

2021

2022

Issuers

E only185

E

Environmental - S

E&S
58

APAC

Other

Number

326

175

79

52

20

%

100%

54%

24%

16%

6%

A breakdown of our interactions with issuers. Sometimes we address multiple topics orthemes, and the engagement can take place for various reasons (e.g. addressing an issue
related to an RBC policy, a low ESG rating, etc.).

Interactions

E,S
and G
57

North
America

2023

Total
interactions:580

G only138
G&E
54

EuropeThe majority of our engagement took place in Europe, followed by North America, APAC and other.

In most of our engagements we address multiple
ESG topics rather than just one. Total interactions
covering each topic are as follows:

We also signed more than 2,000 letterssent to companies through collaborative
organisations we are a signatory toor supporter of (i.e., ARE, Business
Benchmark on Farm Animal Welfare(BBFAW), CDP’s Non-Disclosure Campaign,
IIHC, FAIRR, NA100 and NZEI).

All regions

580

528

In 2023, we engaged with 326 issuers
through 580 interactions. We engaged
with 76% by sending letters or having
discussions with the issuers individuallyand for the remaining 24% we engaged withstructures through collaborative initiatives
or on an ad hoc basis with other investors.

Engagement with issuers, by region

G&S
28

S only61

Social - G

GovernanceInteractions
3Es / theme-specific274

Corporate governance-specific169

Multiple ESG topics*

57

Bond issuances

40

RBC policies

19

Low ESG ratings

21

TOTAL

580

* This category covers engagement that is not exclusive to one topic or theme, i.e., corporate governance, the 3Es, ESG
performance.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

1 Engagement to improve governance and inform our votes
In this section, we set out selected examplesof our engagement to give a flavour of ouroverall activities.
During proxy season, we ask selected companies
to engage with us or respond to their requests
for dialogue.

We generally concentrate on our largest
holdings. The goal of such engagements is to:• communicate our voting policy to promote
good corporate governance and to prepare
for the next general meeting;• obtain additional information on individual
resolutions; and• express our concerns about specific resolutions
that do not meet the expectations set out inour voting policy.
Beyond the proxy season, we also havediscussions with companies on topics suchas strategy, long-term performance, risk
management, ESG issues or other concerns.
During the 2023 proxy season, we had
169 interactions with 91 companies related
only to voting, compared to 210 interactions
with 106 companies in 2022. Of theseengagements, 31 were successful (34%).

the proposal we are opposing, or if we change
our vote in favour of the proposal after amodification of the resolution from the issuer,or where we obtain additional information.
However, a potential modification of our voting
decision is not the only criterion for success:some companies modify their practices thefollowing year and are not necessarily counted
in the successful engagement statistics.
The examples below focus on topics otherthan gender diversity on boards; we were again
proactive in 2023 on this topic, engaging with38 companies in all regions ahead of their AGMs.
This engagement informed many of our votes
and is described in a later section (see page 91)
in the context of our engagement on our third E,
Equality.

C A S E ST U D I E SEuropean companies
split CEO and Chair roles
CONTEXT: We have long sought a split
in the role of CEO and Chair as we believe
it is in shareholders’ best interests. One of theboard’s most critical functions is to oversee
management, including the CEO. When the board
is chaired by the CEO, we believe this critical role
can be severely impaired.
ACTIVITY: We have raised many times in recent
years with Air Liquide, Schneider Electricand Alstom our view that they should split
the Chair / CEO role, including during 2023
dialogues.
OUTCOME: We were pleased that all threecompanies split these roles in 2023. This movebrings these companies into line with good
governance practice and our position andrequest. We will continue to engage with thesecompanies in order to ensure they retain thisseparation of roles over the long term, especiallyfor companies where the former CEO becomes
Chair.

We consider a voting-related engagement
to be successful if the company withdraws

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

Stellantis improves remuneration
package structure
CONTEXT: We believe that executive
compensation plans should be designed
to deliver strong long-term performance,
discourage irresponsible risk-taking, strengthen
employee loyalty, take into consideration
their impact on inequality and foster inclusive
growth. Since we did not believe that the Sayon-Pay proposals put forward by Stellantis NV
management at the 2022 AGM reflected theseprinciples, we voted against them, as did manyother shareholders. The proposal was rejected.
ACTIVITY: We continued to engage with thecompany after the 2022 AGM and into 2023
to improve its compensation policy. We had
three meetings dedicated to remuneration issues
in the run-up to the 2023 AGM with Investor
Relations, Corporate Counsel, and a member ofthe Executive Committee.
OUTCOME: We achieved some but not all of our
objectives. In line with our requests, the revised
remuneration policy put to the 2023 AGM removed
the time-based long-term plan and provided forequity awards to be fully performance-based.
The 2023 grant no longer allows below-median
total shareholder return vesting. The company
also provided more transparency ex-ante and2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT
ex-post about the performance criteria and theexceptional bonus. As the new remuneration policy
was better than the previous one, we voted for it.
However, the company did not change theexceptional awards granted and distributed
time-based long-term plan awards in 2022.
We therefore did not vote in support of thetwo items relating to the remuneration reports.
By improving its remuneration policy, the Board
should have better incentivised the executives
to deliver both good sustainability outcomes andfinancial results. We will continue to engage with
Stellantis on other aspects of its remuneration
practices that do not align with our expectations.

TotalEnergies SA removes differential
voting rights
CONTEXT: A key tenet of good governance isrespect for the ‘one share, one vote’ principle.
This ensures equal treatment of all shareholders
by aligning control via voting rights witheconomic interest and, therefore, investment
risk. We have long enshrined the expectationof ‘one share, one vote’ in our voting policy andengage with companies where this is not the case.
ACTIVITY: The objective of this engagement
was to convince the company to remove thedifferential voting rights structure in its bylaws.
(The company allowed tenure voting rights,
which in practice were only applicable toa limited number of investors that haveregistered shares and not to institutional investors.)

Members of the Stewardship and ESG researchteams have engaged with TotalEnergies on
corporate governance issues for more than
10 years. We regularly raised our concerns about
the lack of a ‘one share, one vote’ structure(among other governance and climate topics).
OUTCOME: We strongly welcomed the moveby TotalEnergies’ management at the 2023 AGM
to remove the differential voting rights
by amending the bylaws. We voted in favourof the proposed amendment as we consider
it positive to shareholders’ interest. The
amendment was approved by the AGM.

Securing good end-of-tenure CEO
remuneration at Société Générale SA
CONTEXT: A key item on the agenda of the2023 AGM was the announcement of the CEOtransition as of May 2023, with the nominationof Mr. Kruppa to replace Mr. Oudéa. Having been
CEO of the bank since 2008 and having duly
announced his departure during the 2022 AGM,
Mr. Oudéa was considered a ‘good leaver’.
ACTIVITY: We held a meeting with the Chairof the Board of Directors in January 2023 todiscuss various corporate governance matters.
A follow-up meeting was held in February to
discuss the remuneration terms and highlight
our concerns with regards to Mr. Oudéa’s
proposed termination package, specifically that
his variable remuneration for the time spent as
CEO should be pro-rated. We also made some

proposals to strengthen the structure of thebonus and the weighting and nature of the ESG
metrics.
OUTCOME: Following our exchanges, the Chair
issued a letter in May stating that the company
had considered our views and would pro-rate
the CEO’s long-term incentive plans for 2019,2020 and 2021 according to the time spentin the position. It also stated that Mr. Oudéa
would not be awarded any long-term incentives
for 2022 and 2023. In addition, the company
decided to change the structure of the bonus
to increase the portion tied to financial criteria(from 60% to 65%) and increase the share of ESG
criteria in the LTIP (from 20% to 33%), replacing
the criterion on ESG ratings performance witha more operational performance target on the
climate alignment of lending portfolios, as we
had suggested. These decisions allowed us to
support the Remuneration Policy – which was
passed with 78.7% shareholder support.

Improving ESG metrics inremuneration packages at Danone SA

to the ESG criteria proposed for the longterm incentive plan. The company proposed
to continue to use only its scores on the CDP
Climate Change, Water and Forests programmes.
We reiterated our view, expressed many times
previously, that this approach does not properly
relate to, or capture, the CSR objectives andstrategy of the company, or its priorities.
Moreover, as Danone has long been given ahigh ranking by CDP, these criteria were notchallenging. We articulated our view that thecompany should replace the CDP ratings withinternally set objectives that are more closely
linked to its sustainability goals.
OUTCOME: The company decided to amend its
remuneration policy and long-term plan criteria.
It agreed to replace the CDP criteria with three
indicators linked to health (with a reduction
target for sugar in products intended for children),climate (reduction of GHG emissions across its
entire value chain, i.e., Scope 1, 2 and 3) and social(employee engagement level vs. an externalbenchmark). We strongly welcome this positivechange, in line with our request.

CONTEXT: In order to achieve strategic
commitments on sustainability issues, it iscritical that companies embed appropriate
metrics within their remuneration policies toincentivise and reward their delivery.
ACTIVITY: We engaged with Danone SA aheadof its AGM to discuss certain items on theagenda. We had particular concerns relating

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Public policy engagement

C A S E ST U D Y

EU Listing Act: Facilitation of multiple-vote shares
The European Commission (EC) published theListing Act Directive in December 2022 andsolicited feedback until March 2023. It aims
to simplify the listing requirements, including
those post-listing, in order to make public
capital markets more attractive for EU
companies and to facilitate access to capital for
SMEs. One of the goals is to allow SME listings
to use multiple vote share structures.
We responded through three trade associations(ICGN, AFG and Eumedion) as well as
contributing to the response of our parent
company BNP Paribas. We set out our view that
we consider the optimal share structure forall companies wishing to benefit from accessto public capital to be one vote for each sharewithin the same class. We noted that we do notsupport the proposed optional safeguards at
Member States’ discretion, such as the transferbased sunset clause, the time-based sunset
clause or the event-based sunset clause, as
they could introduce further distortion between
jurisdictions. We believe the most importantprinciple and safeguard that all Member Statesshould be required to introduce is one that limits
the benefit of multiple voting shares for a
five-year period across European jurisdictions(a so-called uniform sunset clause). Further,
we do not support the proposed provisionthat allows Member States that already haveregimes on multiple-vote shares not to amend
their rules. There is no justification for distortion
between jurisdictions and differing shareholder
protection among Member States.

Shareholder Rights Directives
OBJECTIVE: The European Commission
published a survey in relation to a study it was
conducting to assess the implementation andapplication of certain parts of the Shareholder
Rights Directives (SRDs). These Directives lay
down a common regulatory framework on
minimum standards for exercising shareholder
rights at EU-listed companies. The study was
entrusted to a group of consulting firms andaimed to determine whether the SRDs are fit
for purpose and to make recommendations
for future improvements. The survey closed in
mid‑December.

companies, given the disconnect between
economic power and voting. We advocated forconsistency across Europe enabling a vote tobe accepted when cast close to the AGM, which
technology already exists to facilitate.
OUTCOME: The European Commission will gather
views from stakeholders on certain aspectsof the SRDs, as well as a broader range of theprovisions of the SRDs and potential futurechanges.

ACTIVITY: We responded through various tradeassociations, AFG and EFAMA. Their submissions
noted that there remain exogenous, regulatory,
and technical barriers, particularly in Europe,
which limit access to voting, and which
do not seem to be in line with the statedpurpose of the SRDs. In addition to real national
and/or regulatory particulars (Powers ofAttorney, registered registrations, etc.), these
difficulties relate to practices specific to certain
actors that are party to the voting process.
Inconsistencies were also highlighted between
the desire to promote voting and shareholder
dialogue under the SRDs and a planned directive
on multiple voting rights (Listing Act), which
destroys the power of investors to influence

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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2 Thematic engagement: focus on the 3Es
3Es: Energy transition
The majority of our engagement to drive the energy transition is undertaken
through collaborative investor initiatives like Climate Action 100+ (CA100+) andthe Asia Investor Group on Climate Change (AIGCC) Asian Utilities Engagement
Programme. However, we also engage with companies individually to advance ourfinanced emissions reduction goals.

C A S E ST U D YGreen Finance Industry Taskforce consultation
OBJECTIVE: Building on the two earlier roundsof consultation, a third and final consultation
paper was released in February 2023 by theGovernment of Singapore, which sought viewson the detailed thresholds and criteria forclassification of green and transition activities infive sectors:
1 - agriculture and forestry/land use;
2 - industrial;
3 - waste and water;

Our thematic engagement is central to our commitment
to being a future maker and focuses on the ‘3Es’ –‘ENERGY TRANSITION’, ‘HEALTHY ECOSYSTEMS’ and‘EQUALITY’. This is because we believe climate change,
nature loss and widening inequalities to be global
systemic risks. Our engagement is designed to delivera low-carbon global economy which operates within
the nine planetary boundaries while providing everyone
with the opportunity to play their part in that economy
and to be treated in accordance with international humanrights principles and standards. We deliver this throughboth collaborative and direct engagement.

We aim to establish in-depth dialogues withcompanies, by, for example, urging them to:

4 - information and communications technology;• align their corporate strategies and capital deployment
with the goals of the Paris Agreement;

The consultation also sought views on the“Do No Significant Harm (DNSH)” criteria
proposed. BNPP AM was invited in March toattend an industry roundtable with MAS to
discuss implementation of the taxonomy.

• reduce their impacts and dependency on nature anddetermine how they can make a positive contribution
to the restoration of ecosystems in line with the goalsof the Global Biodiversity Framework;• provide greater opportunities for women at all levelsof the organisation;• respect human rights within their own operations
and across their supply chains;• adopt more equitable and transparent remuneration
policies that ensure that profits are distributed more
fairly across the business;• ensure that their products are accessible and affordable
for all.

5 - carbon capture and sequestration

we emphasised the need for consistent reportingby corporates in order to make the information‘decision‑useful’. In the MAS industry roundtable,
we emphasised the need for underlying
data from companies, and that reporting at
a corporate level may remain challenging;reporting at a facility level (e.g., for green bonds)
is an option.
OUTCOME: The third consultation ended in
March 2023. GFIT was due to publish the final
taxonomy, which it said would take into accountfeedback from all three public consultations,by the end of June 2023. The Government ofSingapore is working with the EU on a common
taxonomy that provides ‘inter-operability’, i.e., toensure that the two systems are fully aligned.

ACTIVITY: We contributed to our tradeassociation’s response (ASIFMA). Oursustainability analysts provided specificfeedback on classifications relating to theirsectors (e.g., palm, cement) and the DNSH
criteria. We also supported the measures-based
approach adopted by the Green Finance Industry
Taskforce (GFIT) Taxonomy for the industry
sector. It is important to recognise that theindustrial sector is inherently ‘in transition’, but

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D I E SCOLLABORATIVEENGAGEMENTClimate action 100+: Engagement to drive adoption of the Net Zero Company Benchmark standards (1/2)
CONTEXT: We are a long-standing memberof CA100+ which facilitates investor engagementwith the world’s 170 biggest emitters responsible foraround 85% of global emissions6. The initiative set out
three overarching goals for companies relating to:

Having come to the end of the first five-year cycle

co-lead engagement with 10 companies (those inCompanies varied in their receptivity to engagementin 2022, the initiative published in 2023 a review ofbold are new since 2023): Danone; China Petroleum &over the year and willingness to take the steps

progress up to October 2022, illustrated on page 12

Chemical Corp (Sinopec); Exxon Mobil; Iberdrola; Nestlé;

we requested to improve their performance andof their report. In summary, an increasing number

Power Assets Holdings; PTT; Repsol; Saint-Gobain;transparency. This was compounded by changes toof companies had set a net zero ambition for 2050

Stellantis. (We no longer co-lead engagement

the investor groups and related delays in reaching out

1 - governance and oversight of climate change risk;

as well as long-term targets. Progress was slower

with Naturgy.) We are a contributing investor forto the companies to continue previous engagement.

2 - action to reduce greenhouse gas emissions
across the value chain consistent with the Paris
Agreement’s goal of limiting global averagetemperature increase to well below 2°C above
pre-industrial levels, aiming for 1.5°C. Notably,
this implies the need to move towards net zero
emissions by 2050 or sooner;in setting medium-term targets and particularly

engagement with 11 companies: for those shown inshort-term targets. Few companies had publishedbold we were confirmed in this role late in 2023.

Having been active in 2022, during most of 2023

decarbonisation strategies that meet the standards

Air Liquide; Anhui Conch; Carrefour (new to CA100+

by the CA100+ investor group for an engagement call.

of the NZCB. Only one company - Enel Spa - hadfocus list); Chevron; Delta Airlines; Samsung

It was therefore decided to escalate our request

illustrated how it will reorientate its capital

Electronics (new to CA100+ focus list); Southernby sending a letter to the Senior Independent

allocation to deliver on its climate commitments.

Company; Unilever; United Tractors.

Director/Chair of the ESG Committee.

More companies were partially or fully meeting

We are also a co-chair of the European Climate

It was only after this step that the company’s IR and

Lobbying Working Group of CA100+, and sit

sustainability teams responded. A call was eventuallyon the Corporate Programme Advisory Group

held in November 2023 once the results of the NZCB

and the CA100+ Steering Committee.

2023 had been published.

OBJECTIVE: The goal of our engagement is that

Similarly, Iberdrola became much less responsive,

companies meet all of the expectations embedded inonly providing short written answers to some of our

the NZCB. During the first three quarters of 2023

requests. We last wrote in December to ask again for

we continued to engage with CA100+ companies

a call but had not received a reply by the end of thebased on the engagement plan linked to the 2022

year. The only engagement call with Saint-Gobain

NZCB results. Then, following the release of the 2023

took place in December 2023 to discuss its NZCBNZCB in October 2023, we started to prepare forresults. Having only become a co-lead for Danone late

the next engagement cycle (from October 2023 toin the year, we did not have a call with the company

September 2024). We developed engagement plans

to discuss issues other than lobbying during 2023.

We took this opportunity to increase our involvementwith participating investors as required by CA100+(The results of our engagement on that subject are

and recalibrate it with our holdings. We now

and submitted them to the initiative’s secretariat.

in a separate section below.)

3 - enhanced corporate disclosure and implementtransition plans to deliver on robust targets in linewith the final recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD)
and other relevant sector and regional guidance.
Since 2021, the companies’ progress on disclosure
has been measured against 10 metrics of the Net Zero
Company Benchmark (NZCB). Several other metrics
measure performance. This benchmark is produced by
the initiative in October of each year, with underlying
analysis provided by several expert research bodies.
The collaborating investors then engage withcompanies, in small groups, to encourage them tomeet the expectations embedded in the benchmark.

the initiative’s expectations on transparent,
Paris-aligned climate lobbying. By 2022, nearly aquarter of companies had satisfied all of the aspectsof good climate governance and over a third had
published complete TCFD reports.
For the second cycle of CA100+ beginning in 2023,
the initiative made several changes to how it operates.
It offered members the opportunity to make changes
to the companies they lead engagement with,or support as a contributing investor. It also updated
the methodology of the NZCB and strengthened
its membership requirements.

Stellantis did not respond to ten requests made6 - Up to 2022, the initiative covered 168 companies. From 2023 onwards that figure has increased to 170 companies: 14 companies were added to the focus list while ten companies were removed
based on a series of criteria ranging from corporate actions, the war in Ukraine, changes to emissions profiles and investor interest.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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Climate action 100+: Engagement to drive adoption of the Net Zero Company Benchmark standards (2/2)
We had introductory calls with Carrefour andSamsung, as they are new additions to the CA100+
initiative, and led calls on lobbying with Danone andUnilever, outlined separately on page 79.
We had the most extensive and productive
engagement with Repsol, Nestlé and Power Assets.

COLLABORATIVEENGAGEMENTACTIVITY: We engaged with Repsol in each quarterof 2023. During our exchanges, the main requests wemade of the company, many of which we had made inprevious years, were to:• take steps to achieve the standards embeddedin the NZCB, given its importance to investors
and other stakeholders, and provide feedback on
the draft IIGCC Net Zero standard for the sector;• provide more absolute emissions reduction figures;• set targets that include all Scope 3 emissions
particularly those from its downstream business
which it currently omits – beyond the new scenario
analysis and other detailed disclosures it madethis year;• publish more detail on its methodology for the
Carbon Intensity Indicator (CII) and bring it into linewith the standard industry methodology for suchcalculations;• disclose more information about its new projectplans (capex), particularly break-even points, anddata on revenues aligned to the Green Taxonomy;• confirm its planned schedule for future Say-onClimate votes and provide more comfort thatthe Board has the appropriate composition andknowledge;• be more transparent in relation to its direct andindirect climate advocacy and ensure its lobbying
supports the realisation of the Paris agreement.
OUTCOME: We made some progress with the company
on some points but not on others. Repsol confirmedthat it follows the NZCB closely and strives toimprove where feasible.
It committed to provide feedback to IIGCC on the draft
NZ sector standard. However, it did not commit toincorporate Scope 3 emissions within its targets, noragree to bring its CII calculation method into line withindustry practice.
The company provided additional granularity on
the break-even figures for new projects which wewelcomed. However, we emphasised investors’ needto have forward-looking indicators about the pace oftransition and commodity price thresholds, and asked
for formal disclosure on what percentage of the capex
will flow to high-carbon vs low-carbon investments,
showing how this will change over time. Repsol also
committed to provide taxonomy-aligned data andtheir definitions/assumptions underlying this data.
Finally, it agreed to have a separate call to discuss
climate lobbying.

We saw particular progress in the caseof Power Assets. As well as taking part in thegroup-wide meetings, alongside our co-lead investor
we met the company’s CFO in person to discuss
recent group-wide commitment by CK Hutchinson,
its ultimate parent company, to pursue net zero. We
discussed decarbonisation for Hong Kong, the role ofnuclear transmission from China for the city, as wellas technology switching from gas to hydrogen, whichis in the plans for its gas assets.
OUTCOME: CK Hutchinson made a group-widecommitment of reducing Scope 1 and 2 emissions
by 50% by 2035 versus a 2020 baseline, as well as
a commitment to pursue net zero emissions acrossits value chain by 2050. Power Assets has also
committed to a 67% reduction goal by 2035.

ACTIVITY: We had meetings with the three companies
we co-led engagement with during the year, to discussvarious aspects of their progress towards achieving
the standards set out by the NZCB.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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AIGCC Asian Utilities Engagement Programme
CONTEXT: Asian power utilities currently havea high dependence on coal. We co-lead theengagement with Tenaga Nasional Berhad(TNB), the largest electric utility company
in Malaysia, under this initiative.
OBJECTIVE: We aim to encourage Asian power

COLLABORATIVEENGAGEMENT

utilities to accelerate their coal phase-out
by 2040 at the latest (for non-OECD based
companies) and transition towards net zeroby 2050 at the latest.
ACTIVITY: In 2023, we continued previous
discussions about the company’s emissions
reduction intentions. The company has
announced a net zero ambition and started towork on its roadmap and targets to achieve it.
While its emissions reduction targets align with
Malaysia’s NDCs, they are not yet sufficient
to align with the Paris Agreement or withframeworks such as SBTi.
In June 2023, we also participated in an in-person
multi-stakeholder policy roundtable organised by
AIGCC. At the roundtable we discussed the roleof gas and coal phase out among other topics.
Tenaga, investors and local policy makers andregulators attended.

OUTCOME: The company has increased
receptiveness towards early coal phase-out
proposals since Malaysia’s National Energy
Transition Roadmap (NETR) was launched inAugust 2023. The remaining barriers include
existing power purchase agreements (PPAs),
negotiations with multiple stakeholders(particularly where TNB does not have 100%
ownership), and the lock-in for gas if coal isreplaced by gas rather than renewables. Justtransition also needs to be considered in parallelfrom the start of any phase-out plan, in line withthe recently released Glasgow Financial Alliancefor Net Zero (GFANZ) guidance on managed coalphase-out that we helped draft.
We had constructive discussions on the company’s
progress to date, in particular renegotiation of
TNB’s power purchase agreements and potential
for early coal phase-out. One of its plants isslated to close one year early. We underlined
investors’ expectations to phase-out coal by 2040
at the latest for non-OECD based companies, theurgency of embedding an accelerated coal exit
within its plans and aligning with frameworks
such as SBTi. We also explored in more detailrenewables opportunities for TNB under NETR.

Jane Ho
Head of Stewardship– Asia Pacific“In the Asia Pacific region,
countries are at different stages ofdevelopment and decarbonisation
journeys - this is why understanding
the nuances, including social andgeographical ones, is criticallyimportant for impactful engagements.
We value working with our peers on
collaborative engagements to support
focus companies and governments tomove forward.”

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D I E SContinuing our leadership on Paris-aligned climate lobbying engagement (1/2)
CONTEXT: Realising a low-carbon future as
envisaged by the Paris Agreement depends in largepart on supportive policy, regulations and fiscal
measures. It is therefore critical that companies
and the industry associations they belong to do not
obstruct the passage of such measures and – ideally– proactively support them. This is why the CA100+

COLLABORATIVEENGAGEMENTNZCB Indicator 7 assesses the extent to which
companies align their climate policy engagementwith the Paris Agreement.
In addition to co-leading engagement with ten
CA100+ companies globally and raising this topic,
BNPP AM is one of five co-leads of the CA100+
Climate Lobbying Working Group for Europe.
Each year, this group identifies which European
companies perform most poorly on this issue within
the NZCB and identifies ways in which engagement

stakeholders with valuable tools to use to evaluate
companies’ progress with respect to both disclosure
and performance. The report details how few
companies’ lobbying supports policies necessary
to deliver the Paris Agreement goals. In fact,
only 4% of companies are aligned. Clearly, much
more engagement is needed to improve companies’
performance in this critical area.
OBJECTIVE: Encourage selected CA100+ companies
to align their direct and indirect climate lobbying
activities with the temperature goals of the Paris
Agreement. Specifically, we ask them to produce
annual reports on these efforts, consistent with the
Global Standard on Responsible Climate Lobbying,
which we helped to develop and launch in 2022 withother investors.

EuropeWe then support the companies’ CA100+ co-leads’

ACTIVITY: We had in-depth discussions during
the year with four European companies: Nestlé(February 2023), Danone (April 2023), Unilever(September 2023) and Repsol (November 2023).

engagement directly.
While TPI assesses companies’ disclosed
commitments on lobbying, InfluenceMap,
an independent think tank, assesses various aspectsof CA100+ companies’ policy positions and lobbying
activity on an ongoing basis, assigning each arating from A to E. (It also evaluates the quality ofcompanies’ lobbying reviews once they publish themand provides a score for each review out of 100.)
These assessments provide investors and otheroutcome of our 2022 engagement with Air Liquide.
OUTCOME: Air Liquide: Having provided thecompany with detailed feedback on its draft
assessment of its lobbying activities in December
2022, Air Liquide published its updated disclosures
along with its URD in February 2023. InfluenceMap
has given the company’s review a score of 36/100
using its updated 2023 methodology. Further,
the company’s rating on Indicator 7 of the NZCB
increased from not meeting any criteria to partially
meeting them. Despite modest improvements, thecompany therefore still has some way to go to meet
the Global Standard.
Danone: We were pleased that the Danone Position
on Climate Advocacy was published in late May 2023,

can be stepped up to improve their performance.
engagement on lobbying or undertake separate

the outcomes in relation to those companies, and the

We provided each with a detailed bespoke gap
analysis of their performance against the Global
Standard leveraging the analysis of TPI and
InfluenceMap. All of the companies welcomed thatanalysis and the clear guidance we provided on
how disclosure needed to be improved. Repsol andUnilever have yet to publish updated disclosure,which they promised to do in 2024. Here we outline

which brought its approach more closely into linewith the Global Standard. This document reiterates
the company’s emissions reduction targets, andoutlines the principles it urges policymakers toembrace in setting climate policy. It also includes
a commitment to conduct its advocacy in line with
the Paris Agreement and its own climate policy
goals, i.e., to restrict global average temperaturerise to 1.5°C. Danone also committed to work toensure alignment between its position and thoseof the trade associations, coalitions and platforms
at global, regional and local levels. It also provides

In December 2023, the company published an
updated Danone Policy on Advocacy (which covers
its advocacy on all topics, not just climate).
It includes a description of how the company
governs advocacy, and internal measuresand processes around conflict of interest andwhistleblowing, disclosure of key global and regional
trade association and coalition memberships andboard seats, and a commitment to address any
misalignment with trade association positions,
including on climate. The company also noted itwill publish positions on key policy topics on its
corporate website, a summary of advocacy on key
topics during the preceding year (including climate)
and will roll out a training programme to teams
in all countries. Danone now meets all indicators
within Indicator 7.1 of the NZCB and achievesa B rating on this element of its advocacy from
InfluenceMap.
The company also signposted readers to its annual
CDP Climate survey response, which includes
information about its lobbying activities. Taking
all of these materials together, InfluenceMap gave
Danone a score of 50/100 for its review of climate
lobbying, the second highest score any company has
achieved to date. We welcome these improvements
and will continue to press the company to disclose
more about its indirect lobbying in future.

recent examples of positive climate advocacy.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D I E SCOLLABORATIVEENGAGEMENT

Continuing our leadership on Paris-aligned
climate lobbying engagement (2/2)
Nestlé: Following our dedicated call on climate lobbyingin February 2023, in May 2023 the company published amuch-improved Climate Advocacy Industry Associations
Review. It was much more comprehensive and betteraligned to the Global Standard than the previous report,
reflecting many of the recommendations we had made.
These included providing extensive information on
governance arrangements, increasing the number ofassociations assessed and analysis of each one against
clear criteria, including alignment of positions with theParis Agreement.
Nevertheless, InfluenceMap gave the review a score of
only 36/100, which illustrates substantial room for further
improvement. InfluenceMap also believes that the climate
lobbying of many of the trade associations to which Nestlé
belongs is partially misaligned with the Paris goals.
This, too, will be a focus of our discussions in 2024.

U.S.
As well as co-filing a shareholder resolution at UPS torequest climate lobbying disclosure, as described on
page 65, we also contacted Exxon Mobil to ask about
the veracity of reports we had read that indicated it hadprovided funding for the Texas Policy Foundation and
the State Financial Officers Foundation, which have bothbeen linked to recent anti-ESG policy work. The company
denied providing any funding for the Texas group.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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THE 3ESESG
INTEGRATION

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STEWARDSHIP CODESVOTING AND ENGAGEMENT

3Es: Ecosystems
Reducing the negative environmental impact of our investments and stimulating positive impact.

HIGHLIGHT

BNPP AM plays leading role in developing and launching Nature Action 100
CONTEXT: We are in the midst of a mass extinction crisis
that threatens the achievement of 80% of the United Nations’Sustainable Development Goals sub-targets related topoverty, hunger, health, water, cities, climate, oceans andland. Collaborative engagement is particularly well suited toaddressing systemic risks. While a broad range of long-term
collaborative investor engagements exist that focus on various
drivers of the biodiversity crisis, including climate change,
deforestation, plastics, chemicals, etc., there was no single
collaborative engagement focused explicitly on nature loss.
OBJECTIVE: Form a collaborative investor engagement initiative toinitially engage with the 100 companies most systemically importantto achieving the global goal of reversing nature loss by 2030.
ACTIVITY: We have worked with a group of institutional investors
for nearly two years to launch Nature Action 100 (NA100).
We ‘soft launched’ the effort in Montreal at the end of 2022,
in tandem with COP15 of the Convention on Biological Diversity.
Investor participants will engage initially with 100 companies
drawn from eight sectors identified as significant contributors
to nature loss – chemicals, biotech and pharmaceuticals,
consumer goods retail, food and beverage, retail and restaurants,
metals and mining, forestry and paper products and household
and personal goods. All 100 companies were notified of their
inclusion in the initiative in an introductory letter to the CEO
outlining NA100’s core investor expectations.
Our first steps, in the fourth quarter of 2023, were to
co-sign letters to all 100 companies and express our interestin joining teams to engage companies in Asia, Europe andNorth America. We also submitted detailed comments
on a draft benchmark which will be used to gauge corporate
progress against NA100’s objectives.
OUTCOME: As of the end of November 2023, more than
200 institutional investors from around the world, managing
or advising more than $27 trillion, had agreed to participate,and by the end of the fourth quarter, investor engagement
teams had been formed. From now on, we will be participatingin engagement with Archer-Daniels-Midland Company (ADM),
Conagra Brands Inc., Danone, General Mills Inc., The Home
Depot, McDonald’s Corporation, Sime Darby Plantation andSolvay. We were also pleased to take the role of co-Chairof the NA100 Steering Group.

Adam Kanzer
Head of Stewardship– Americas“The collapse of nature will touch every aspect of ourlives and our economies. We must act now to end
deforestation, but we must go further, engaging on all key
drivers of nature loss, which include climate change,
land use change, exploitation of species, invasive species
and pollution, including chemical and pesticide use.”

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

Improving corporate disclosure of environmental impacts

C A S E ST U D Y

CONTEXT: In 2023, for the second time, we participated in the CDP
Non-Disclosure Campaign to encourage companies selected by CDP
to respond to its annual surveys assessing corporate performance on
climate, water and forests.
OBJECTIVE: Drive further corporate transparency around climatechange, deforestation, and water security.

COLLABORATIVEENGAGEMENTACTIVITY: The campaign officially launched in May 2023, with arecord 288 financial institutions with nearly US$29 trillion in assets
participating in the coalition. We acted as lead for the engagement withfive companies, focusing on Water Security disclosure, and co-signed
letters to 1,590 companies.
OUTCOME: In total, 317 companies disclosed via the relevant CDPquestionnaires, representing a 20% success rate. The highest successrate was in the Climate disclosure category (20%), followed by Forests
and Water security (each at 14%). We also led the engagement withfive companies with significant impacts on freshwater within our top
holdings. Of those, two submitted the questionnaire, while the threeothers did not respond to our engagement; we voted against items on
the agenda of these three companies’ AGMs. We intend to continue ourengagement through the CDP NDC campaign in 2024 with a focus on
our portfolios’ highest impacts.

Climate change
Forests
Water security
Overall results

EngagedDisclosed

%

1,234
414
463
1,590

221
58
66
317

20%
14%
14%
20%

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MAPPING TO KEY
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Public policy engagement
CDP Investor letter to governments on water

Investor Policy Dialogue on Deforestation (IPDD)

The CDP coordinated and issued an open
letter to governments in March 2023 toemphasise the need to accelerate theimplementation of initiatives to achieve
Sustainable Development Goal 6 (increasing
access to water and sanitation) and otherwater-related targets. It called on policy
makers to deliver robust water action in the
run up to the UN General Assembly 2023
Water Conference being held that month.

We joined the IPDD in May 2023. IPDD
aims to coordinate a public policy dialogue
with government authorities and other key
stakeholders to halt deforestation, with an
initial focus on tropical forests and native
vegetation in key countries.

We joined other investors with
US$3 trillion in AUM to sign this letter
which called on all governments to:
1

2

Strengthen their National Sustainable
Development Strategies for 2030
before the UN Water Conference,
to ensure a planned and equitabletransition to a water secure world
by 2030 or sooner;
Commit to ambitious, domesticshort-term water targets and outline apathway, including clear water secureroadmaps, for each water-dependent
sector;3

4

Implement domestic policies to deliver
these targets, incentivise private
investments in water solutions andensure ambitious pre-2030 action
through: efficient mechanisms for
pricing water risks and impacts, theremoval of environmentally harmful
subsidies by set deadlines, and thedevelopment of just transition plans
for affected workers and communities,
and;Commit to implementing mandatorywater disclosure requirements alignedwith international best practicerecommendations that work for people
and planet, ensuring comprehensive
disclosures that are consistent,
comparable, and decision-useful.

This list may expand in the future. During 2023,
we participated in Working Group calls for
Brazil, Indonesia and the U.S.

The objective of the IPDD initiative is to ensure
long-term financial sustainability of members’
investments in the countries they are invested
in by promoting sustainable land use andforest management and respect for humanrights. Through collaborative engagement, theIPDD urges relevant government authorities
and industry associations to adopt andimplement regulatory frameworks that ensure
protection of tropical forests and human rights.
The IPDD was established in 2020 and ishosted by the World Economic Forum/Tropical
Forest Alliance and supported by the Principles
for Responsible Investment. It is supported by
67 investors with c. US$10 trillion in AUM.
The group is focused on the producing nationsof Brazil and Indonesia and key consumer
nations, China, the EU and the United States.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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Biodiversity and human health: addressing the pharmaceuticalindustry’s dependency on horseshoe crabs (1/2)
CONTEXT: Virtually every vaccine, injectable drug andmedical device implanted in the human body must firstbe tested for potentially deadly endotoxin contamination.
The standard test relies on a component of the bloodof the horseshoe crab.
Horseshoe crabs are miraculous: there are four species inall, one North American and three Asian. They predate thedinosaurs by 100 million years and have survived five mass
extinction events. While these tests are critically importantto protect human health, horseshoe crab populations are
declining. The four extant species of horseshoe crabs were
described by the International Union for Conservation of
Nature (IUCN) Species Survival Commission in 2019 as being
imperilled. They cited a wide range of threats including
overfishing for use as food, bait, habitat loss or alteration
due to shoreline development, and armouring against coastal
erosion. Another factor is their use in endotoxin testing.
These combined pressures have led to one of the three Asian
species to be declared endangered and the U.S. species to be
designated as vulnerable by the IUCN specialist scientists.
If these populations cannot be sustained, both human healthand corporate profitability are at risk, as well as otherspecies that depend on these crabs for their survival. One key
example in the U.S. is the rufa red knot, a species of shorebird
that is currently threatened with extinction due to thedeclining number of horseshoe crab eggs, a key food source.
The acronyms for the blood component used for testing are
TAL if extracted from Asian crab species and LAL if collectedfrom the U.S. species. Synthetic alternatives to both are now
available and approved for use by EU and U.S. regulators,
and technologies exist to substantially reduce the volume ofhorseshoe crab blood in standard industry testing kits. The
U.S. Pharmacopeia (USP) published a draft chapter in Augustwhich would further facilitate the widespread use of synthetic
alternatives for endotoxin testing and opened a comment
process that closed on 31 January 2024.
OBJECTIVE: To reduce the pharmaceutical industry’s
dependency and impact on horseshoe crabs while placing
human health on a more secure foundation.
ACTIVITY: Towards the end of 2021, we wrote
to 14 pharmaceutical companies to encourage themto transition to the widely approved synthetic alternative.
In early 2022, after a disappointing response rate,
we raised the issue with the Pharmaceutical Supply Chain
Initiative (PSCI), a membership organisation representing
75 of the world’s largest pharmaceutical companies thattackles pre-competitive supply chain challenges. PSCI agreed
to take the issue to their membership, and an industry
working group was formed.
In May 2023, PSCI published a position paper on the use ofhorseshoe crabs in the pharmaceutical sector, listing a seriesof ‘good practices’, including an immediate end to the useof the blood of two species of the Asian horseshoe crab, oneof which is endangered, and encouragement to minimise theuse of horseshoe crab blood in endotoxin testing techniques
worldwide, including by using synthetic alternatives.

It also suggested the companies share data on the healthof the horseshoe crab populations, to better understandindustry use and population health. After the release of
the PSCI position paper, we again raised the issue with
21 companies (14 in Europe, 7 in the U.S.). We asked themto explain where they stood in relation to the PSCI Good
Practices and to work towards fully adopting them.
We also urged them to submit supportive comments
on USP’s proposals and probed the extent to which
the companies had a good understanding of the statusof the North American horseshoe crab populations.

Merck and Pfizer in North America and AstraZeneca plc,

OUTCOME: We have learned through our engagement thatit takes time to transition to synthetics once a company
has performed the necessary tests to ensure patient safety
will continue to be protected. We know that global demandfor endotoxin testing will only go up in the future, atunpredictable rates; while the timing of future epidemics andpandemics is unpredictable, they will undoubtedly come.
If a future LAL/TAL shortage prevents the pharmaceuticalindustry from developing and producing new vaccines
at a moment’s notice, lives will be unnecessarily lost,
profits sacrificed and economic shutdowns extended.

is classed as endangered, it nevertheless puts more pressure

Fagron NV, GSK plc, Merck KGA, Novartis AG, Novo Nordisk
A/S, Orion OYJ, SANOFI SA, UCB SA in Europe. We learned thatthese companies are at different stages of addressing thischallenge. A few were not aware of the issue until we raised
it. Of those that were, nearly all concurred that there is aneed to reduce the industry’s dependency on this ancient
species. Many confirmed that they had already taken steps
to end the use of tests based on TAL in their own labs and/or
by first tier suppliers and replace them with LAL-based tests.
While this is marginally preferable because the Asian specieson the threatened North American crab population.

There are essentially three phases in the process ofdevelopment pharmaceuticals where LAL/TAL is used:• the testing of all water used by laboratories;• the testing process that is approved by a regulator
for new drugs; and• the testing process that was approved by regulatorsfor existing, ‘legacy’ products.

The industry’s lack of preparedness for this highly
predictable risk places profits, portfolios, economies, lives
and ecosystems at risk.

Many companies confirmed they had already switched,

Several companies responded in writing or agreed to havecalls (or both); Biogen (including members of the board),
Bristol-Myers Squibb, Johnson & Johnson (in writing),

phase of testing accounts for a large proportion of the

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

or were in the process of switching, the testing of lab water
to synthetics. This is a welcome step, as this pre-regulatory
LAL used – with estimates up to 90%. Other firms are still
conducting experiments to ensure that the synthetic tests

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Biodiversity and human health: addressing the pharmaceuticalindustry’s dependency on horseshoe crabs (2/2)
are equivalent to LAL-based tests, and determining whether
they are suitable for their needs. Most companies seemed toagree that if the equivalence can be proven, and subject toregulatory approval, they should be in a position to move to
testing all future products using synthetics. However, they
cautioned that transitioning testing for legacy products would
be much more difficult and costly, given that those products
had been accepted for sale by regulators based on specified
TAL or LAL tests. Additional regulatory guidance will be needed
to eliminate this final hurdle, a request several companies
have indicated they are making.

In 2024, we hope to accelerate progress at those companies
that are already taking steps and engage with additional
companies. We look forward to the PSCI’s report on progress,
which it committed to compile, and to continue to engage
with the PSCI to drive further progress across the industry.

After two years of outreach, we had not received any substantive
response from Amgen. Therefore, in December, we submitted
a shareholder proposal asking for a public report on thecompany’s biodiversity impacts and dependencies. The bodyof the proposal focused on the horseshoe crab issue, as an
example of one key dependency on nature. Soon thereafter,
the company responded, and we have had several productive
calls. We learned that Amgen is aware of the issue and has
been taking steps to address it. We are considering withdrawing
the proposal in exchange for a commitment to provide regularpublic reports on their phase-out process.
As of the end of 2023, Vetoquinol SA had not responded
to our request for engagement nor had endotoxin testing
supplier Lonza Group AG. Orion OYJ had provided a brief
written answer to our original enquiry but did not respondto a follow-up request for a call.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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Food system transformation (1/4)
FOCUS

The current food system is
responsible for around 30% of global
emissions; without concerted action
by the food and agriculture sector
we will not achieve net zero or cap
global average temperature riseat 1.5°C. It has also been identified
as the principal driver of nature
loss, through land conversion
and particularly deforestationand degradation of high-value
ecosystems. The food system is also
responsible for substantial waterand chemical use, and waste andpollution. Rates of obesity and dietrelated disease continue to risearound the world, due to the poor
nutritional quality of much of thefood sold and the lack of accessfaced by many to healthy affordable
foods. At the same time, millions
continue to suffer food insecurity,
micronutrient deficiencies andundernutrition. Issues relating tohuman rights also crop up regularly,
as do alleged mistreatment ofworkers. Poor animal welfare
practices are a leading contributor to
the rise of antimicrobial resistance(AMR) – and are expected by experts
to contribute to the next pandemic,
when (not if) it comes. As such, thisis a sector that sits at the crossroads of our 3Es and necessitates
wide-ranging engagement.
We therefore maintained our focus
this year on this sector in all regions,with the ambition of driving atransformation towards a healthierand more sustainable food system.
Other than our engagement withcompanies on climate-related issues
through CA100+, discussed in theprevious section, we also worked indifferent ways, usually with otherinvestors, to press companies toaddress a variety of issues, as thecase studies below illustrate. In
some cases, we engaged directlywith the companies.

Public policy engagement
Letter to G20 Finance Ministers
calling for an end to harmful
agricultural subsidies (FAIRR)
In August 2023, we were pleased
to sign a statement developedby FAIRR, along with 32 otherinvestors with US$ 7 trillion
in AUM, that called on the G20
finance ministers to repurpose
agricultural subsidies in line with
Paris climate commitments andKunming-Montreal commitmentson biodiversity. Subsidies and otherincentives make up around
15% of total agricultural production
value globally. In total, the UN has
identified almost US$ 470 billionof annual subsidies that are pricedistorting and environmentallyand socially harmful, representing
87% of all agricultural subsidies
worldwide. Subsidy regimes are
estimated to drive US$ 4-6 trillionof economic costs per year throughdamage to nature.

• Shift incentives that prioritiseyields of certain products at
the expense of the climate andenvironment and balance this withnew monetary incentives that put avalue on sustainable agriculture;• Decouple support from production
metrics for single commodity
transfers with high associatedgreenhouse gas emissions; and• Increase available funding for
Just Transition Mechanisms orfunds to unlock the necessaryfinance to support affectedstakeholders who are impacted
by reforms.

Rachel Crossley
Head of Stewardship– Europe“The economic and planetary case fortransforming food systems is compellingand one on which investors must act. The
groundbreaking, authoritative Food System
Economics Commission Global Policy Report7
calculated that the economic value of thehuman suffering and planetary harm to foodsystems is well above US$10 trillion a year,
substantially more than it contributes to global
GDP. In short, our prevailing food system isdestroying more value than it creates.”
7 - FSEC-Executive_Summary-Global_Policy_Report.pdf(foodsystemeconomics.org).

Recommendations to the G20
Finance Ministers included:• Use measurable, performancebased conditions to deliver
financial support to Member Statesand farmers in proportion withthe cost of delivering public goods
or environmental services;

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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Food system transformation (2/4)
FOCUS

Transition to sustainable
proteins (1/2)

Initiative

FAIRR Protein Diversification Engagement

Asia Protein Transition Platform (ARE)

CONTEXT: The climate crisis, coupled with global
food security and worsening diet-related healtharound the world, necessitate a huge dietary shift
away from animal-based proteins. Nearly 14.5% of
global GHG emissions are attributed to livestock
production. The sector is also the number one
cause of deforestation due to cattle ranching andsoy production, uses a huge amount of water andcauses extensive pollution. It is also the largest userof antibiotics. Alternative proteins can and shouldplay a role in mitigating the environmental impactsof the global demand for protein. Alternative
proteins are plant-based, and often utilise
fermentation and cultivation technologies. They areless resource-intensive than conventional animal
proteins. Increasing the consumption of alternative
proteins is essential to food system transformation.

Investor supporters

US$10.8 trillion investor initiative coordinated by FAIRR.

US$3 trillion investor initiative coordinated by Asia Research andEngagement (BNPP AM is a founding member).

Initiative scope

20 global food manufacturers and retailers.
BNPP AM will support engagement with selectedcompanies we hold.

40 of Asia’s largest listed and most influential protein producers,
manufacturers, retailers, hotels and restaurants. BNPP AM will
support engagement with selected companies we hold.

Engagement asks

1 - Integration of protein diversification into climate
strategies;

Annual reporting against the initiative’s expectations,and progress towards its 2030 protein transition vision.

OBJECTIVE: To increase the proportion of alternative
sustainable proteins manufactured and sold bymajor food manufacturers and retailers, and to
improve sustainability of current protein production
practices, working through collaborative investor
initiatives.

2 - allocation of resources to diversify the protein portfolio
and improve nutrition and sustainability attributes;
3 - engagement of consumers to promote the uptake ofnutritious and sustainable alternative protein sources.
Activity

We signed joint investor letters prepared and sent by FAIRR
in November to the CEOs of the following companies
to request engagement about the companies’ strategy
on sustainable/alternative proteins: Ahold Delhaize andCarrefour in Europe and Amazon, ConAgra, Costco, General
Mills, Kraft Heinz, Kroger, Loblaw, Mondelez, Target, Hershey
and Walmart, in North America.

We had bilateral engagements with SM Investments, QL Resources,
Yum China, Jollibee and China Mengniu. Discussion focused on the
traceability of raw materials, deforestation, GHG emissions, andanimal welfare, including the responsible use of antibiotics.

In Europe, Ahold Delhaize and Carrefour agreed to engage.
BNPP AM will serve as lead for both engagements.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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Food system transformation (3/4)
FOCUS

Transition to sustainable proteins (2/2)
Asia Protein Transition Platform (ARE)
outcomes

antibiotics for non-prophylactic use as a resultof collective feedback from investors.

The ARE programme is further advanced than the
FAIRR programme, having been launched earlier.
During the year we had bilateral engagementswith SM Investments, QL Resources, Yum China,
Jollibee and China Mengniu. Discussion focusedon the traceability of raw materials, deforestation,
GHG emissions, and animal welfare, including
the responsible use of antibiotics.

Jollibee committed to cage-free egg supply globallyby 2035, and by 2025 in the U.S. We had discussed
this during our one-on-one meeting with thecompany and the platform had also nudged thecompany on the welfare topic over time. This wasin addition to NGO campaigning on this specific topic.

Deforestation:
China Mengniu issued a new Forest Protection
Policy, including a zero-deforestation commitment(ZDC) by 2030, which we view as a very positive
development and hope to reference this whenengaging with other dairy companies.
In response to the collective platform effort,
Thai Union included a clear ZDC by 2030
in their 2030 strategy published in July 2023.

Animal Welfare:
China Mengniu released its animal welfare policy
which is in line with the FARMS Initiative dairy
standards we shared with the company. This policy
also includes a meaningful statement to reserve

Thai Union has also included animal welfare asa material issue in its latest sustainability reportin response to collaborative engagement.
The platform also engaged with UOB Bank, which
has added animal welfare to its Responsible Finance:
Agriculture (excluding palm oil) Sector Policy.

Alternative Proteins:
UOB Bank included alternative proteins as qualifyingfor ‘green proceeds’ loans, an encouraging precedentin the region in response to collective engagement
and research.
The other companies were at different stagesof their sustainability journeys; most are focused
initially on climate and need to extend work to
areas such as deforestation, which are inextricably
linked to their climate targets. Companies alsomentioned barriers in terms of market readinessand lack of a regulatory push, indicating potential
need for investor support on policy engagement.

FAIRR initiative to reduce the threatof antimicrobial resistance (AMR)
CONTEXT: An estimated 70% of global antimicrobial
use by volume occurs in animal agriculture andcontributes substantially to what the World
Health Organisation (WHO) considers to be a
top ten systemic global risk to public health andthe economy. For many animal pharmaceuticalcompanies, antibiotics and other antimicrobials
constitute a material portion of their productportfolios. The overuse and misuse of theseproducts is a significant contributor to AMR,
catalysed by current manufacturing, labelling,
marketing and sales practices. We therefore agreed
to take part in FAIRR’s collaborative engagement
initiative on this matter.

demand for alternatives to antibiotics, and reduce
the spread of AMR.
ACTIVITY: In July we co-signed FAIRR’s lettersto the CEOs of Vetoquinol SA, Virbac SA and
Dechra Pharmaceuticals plc., in Europe and Merck,
Zoetis and Elanco in the United States. We alsojoined a parallel initiative focused on restaurant
chains, signing letters to McDonald’s, Starbucks,
Yum Brands, Darden, Texas Roadhouse, Domino’s,
Bloomin Brands, Restaurant Brands Internationaland Papa Johns.
OUTCOME: The industry organisation,
HealthforAnimals, as in previous years, provided
a high-level response to the letter on behalf of its
six member companies, in which it stated its viewthat it did not support an engagement processmoderated ‘by a third-party NGO’ (i.e., FAIRR).
We are considering what our next step will bein early 2024.

OBJECTIVE: To drive greater disclosure andclarity over if – and how – these companies
are addressing the risk of AMR throughout theirvalue chain, from factory to farm. Further,to identify key actions the companies must take tofuture-proof the long-term sustainability of theirantibiotic portfolios, capitalise on the growing

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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Food system transformation (4/4)
FOCUS

Sales targets for healthy foods
OBJECTIVE: To secure commitments from
Nestlé SA to improve its targets and performanceon nutrition, diets and health, specifically by setting
ambitious targets to increase sales of healthy foods.
ACTIVITY: To follow up on our letter to the company
at the end of 2022, we wrote in February 2023
to ask Nestlé SA the world’s largest food company- to set a target to increase the sales of healthy foods.
(In 2022 it had committed to assess its products
against the Health Star Rating (HSR) nutrient
profiling system, providing it with the necessary
data to be able to set such a target. HSR publishedthis information in its Creating Shared Value andSustainability report for FY2022). In early July,
we joined a call with Nestlé SA with other investors
facilitated by Share Action’s Healthy Markets
campaign to hear about the approach it was
proposing to setting its target. As we wereconcerned by some of the proposals the company
outlined, and wanted clarification of others, wewrote to the company after the call to ask various
questions and make clear our preferences.
OUTCOME: Disappointingly, the company did not
respond to our questions and suggestions. However,it announced its target at the end of September
which indicated that it had not taken our concernson board. Several elements of the approachthe company has taken are problematic: while itdoes commit to increasing sales of ‘healthy foods’,
it includes in that definition several categories offoods which its chosen nutrient profiling model– the HSR system – states clearly are out of
scope, i.e., the HSR is not suitable for assessing
the healthiness of those products. These include
baby formulas for infants over 12 months of age,instant coffee, and mineral and vitamin products.
Further, we had advocated that the company should
articulate its target as a proportional target, i.e.,with the aim of growing sales of healthy products
as a proportion of overall sales, so that over time
its portfolio and sales comprise more healthy
products and fewer less healthy products.
With respect to its portfolio of chocolates,
ice cream and other indulgent high-calorie,
low-nutrition products, it has not made acommitment to improve their nutritional profile.
The more positive outcome was that the company
pledged to extend its policy on marketing tochildren up to 16 years of age, from 13 currently,
in line with the Investor Expectations on Nutrition
and Health, which we support.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Driving the transition to safe and sustainable chemicals (1/2)
FOCUS

Synthetic chemicals are integral to modern life;
nearly 95% of all manufactured products use thesechemicals as inputs. We also cannot solve theclimate crisis without them; they are used in solar
panels, electric vehicle batteries and many other key
components of new technologies critical to our future.
Yet few sectors are as firmly implicated in driving
the triple global planetary crises of climate change,
biodiversity loss and pollution, nor in damaging
human health. A study by researchers at the EHESPSchool of Public Health in France and the Harvard
School of Public Health estimated that the costs
associated with environmental chemical exposures
worldwide may exceed 10% of 2016 global GDP –US$ 7.5 trillion8. To put that in context, the sector’s
total revenues that year were US$ 4.4 trillion.
The chemical sector is the third-largest source ofindustrial greenhouse gas (GHG) emissions globally.
Chemical pollution is a key driver of biodiversity
loss; it has been demonstrated to negatively impact
insects, pollinators, fish and bird populations,among other species. In terms of impacts on humanhealth, exposure to hazardous chemicals throughout
their life cycles threatens workers’ health, in thegeneral population, and disproportionately impacts
vulnerable and at-risk groups. Concern centreson ‘forever chemicals’ that do not break down in
the environment and accumulate in the bodies ofhumans and animals.

In the European Union, 75% of the almost
300 million tons of chemicals used annually are
considered hazardous to human health or theenvironment. Many toxic substances have been
linked to birth defects, cancer, obesity, attention
deficit disorders and a range of other ills.
During 2023 we therefore began to ramp up our focus
on this sector, by joining and beginning to engage
through several initiatives to address the systemicrisks related to chemical production and use.
These included:
1 - The Investor Initiative on Hazardous Chemicals(IIHC), launched in January 2023, where we area member of the Steering Committee;
2 - Clean Production Action’s 2023 Chemical
Footprint Project (CFP);3 - IIGCC’s investor expectations for chemicalcompanies’ transition to net zero, which
we signed;
4 - ShareAction’s Investor Decarbonisation
Initiative for this sector, which we joinedlate in the year. (We will therefore report on
engagement through this initiative next year.)
We also actively support related public policy
development.

Tackling the supply of hazardous
chemicals (1/2)
CONTEXT: The ChemScore benchmark, publishedannually by ChemSec, a Swedish NGO, provides
investors and other stakeholders with consistent,
comparable information on the efforts of 50 of
the world’s largest chemical producers to reduce
their chemical footprint and transition to portfoliosof safer, less persistent chemicals. It also rates
companies’ chemicals management strategies.
Better disclosure of this type of information helps
us score these companies more accurately in our
ESG ratings and to identify key areas for further
engagement. Working through the Investor Initiativeon Hazardous Chemicals (IIHC) we engage withselected chemical manufacturers to address theseissues and encourage them to respond to ChemSec’srequests for information when they are compilingthe annual benchmark. IIHC is supported by morethan 50 institutional investors.
OBJECTIVE: To encourage major manufacturersof hazardous chemicals to phase them out andreplace them with safe and sustainable alternatives,
and to improve their transparency in relation totheir current global production and sale of suchchemicals or products that contain them.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

While there are many types of hazardous chemicals,of particular concern are per- and polyfluoroalkyl
substances (PFAS). PFAS comprise around 4,700
man-made chemicals, many of which are hazardous
to humans and the environment. Their chemical
structure makes them so persistent that they havebeen termed ‘forever chemicals’, because they don’t
break down in nature and so accumulate over timein our bodies and in the environment. PFAS areused in products like fire-fighting foam, cosmetics
and non-stick pans for example. PFAS therefore
need to be removed from product formulations or
substituted with safe alternatives.
ACTIVITY: For 2023, ChemScore supported investor
engagement with 16 of the 50 companies it rated in
2022. BNPP AM was assigned to lead engagementwith AkzoNobel and support engagement with 3M,
Dow, LG Chem, PPG, Sherwin Williams and Yara.
During the year we had calls with all of them.
We asked each company to increase theirtransparency around production of hazardous
chemicals and publish time-bound phase-out plansfor persistent chemicals, as well as to take othermeasures that would demonstrate a commitment
to more sustainable modes of production.

8 - Chemical exposure costs globally higher than thought |News | Harvard T.H. Chan School of Public Health2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Driving the transition to safe and sustainable chemicals (2/2)
FOCUS

Tackling the supply of hazardous
chemicals (2/2)
In July, we co-signed a letter to the 17 companies
that had not responded to ChemSec’s requests
for engagement in preparation of the 2023
benchmark and four companies it was adding
to that benchmark for the first time. The letter
encouraged the companies to participate in the
research process, emphasising how important wefind the disclosure and practices being evaluated.
Following publication of the 2023 ChemScore resultsin November 2023, we co-signed letters to the CEOsof all companies to reiterate our expectations andrequest continued engagement with ChemSec
and/or investors.
OUTCOME: Yara’s score, rating and rank improved
substantially, in part we believe because of themore detailed disclosure the company published in
response to our engagement. Small improvements
were recorded for AkzoNobel, 3M, Dow and LG Chem
while the performance of PPG and Sherwin Williams
fell on all measures. We plan to continue to engage
with these and other companies during 2024.
OBJECTIVE: To encourage companies that use
hazardous chemicals in their products to phasethem out and replace them with safe andsustainable alternatives.

ACTIVITY: We engaged with four companies who
use hazardous or so-called ‘forever chemicals’
in their products. In Asia, we engaged bilaterallywith Samsung Electronics on PFAS (one groupof hazardous chemicals) as they are used widelyin the semiconductor production process.
In February 2023, we joined other investors ina call with Procter & Gamble to discuss theirinvolvement in the project. In June we wrote directly
to Reckitt Benckiser Group plc and Koninklijke Ahold
Delhaize N.V. to ask them to participate in the 2023
survey. More specifically we asked them this year
to provide data for their global operations, and toincrease their transparency by submitting to publish
the completed survey and to share further details
directly with investors.
OUTCOME: Samsung acknowledged the growinginternational regulatory trend to restrict thesechemicals but has yet to form a specific response
plan. It noted it aims to work closely on this matterwith the Semiconductor Industry Association (SIA).
The results of the CFP based on the 2023 survey
which will be published in April 2024 will reveal
whether the performance of Reckitt Benckiser
Group plc and Koninklijke Ahold Delhaize N.V.
has improved.

Public policy engagement
Global framework on chemicals:a roadmap for multi-stakeholder action
An ambitious comprehensive global policy
framework is essential to address the chemical
sector’s myriad impacts and risks. Developmentof such a framework falls to the multi-UN agency
body, the Inter-Organisation Programme for theSound Management of Chemicals (IOMC). In late
September, the Fifth International Conference on
Chemicals Management (ICCM5) took place inBonn, Germany, where the new ‘Global Frameworkon Chemicals – For a planet free of harm fromchemicals and waste’, was agreed. This voluntary
framework, negotiated over six years with the inputof hundreds of stakeholders, has five strategic
objectives and 28 targets. Together they provide aroadmap to 2030 to be implemented by national
governments, agencies, industry, investors andother stakeholders. BNPP AM strongly welcomes theframework.
Recognising the critical importance of the financial
sector to implementing the new framework, the IOMC
organised a workshop in June 2023 to discuss how
the financial sector might cement its contribution
to the realisation of the framework and the global
transition to sustainable chemicals.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

Having contributed through a similar meeting in
the autumn of last year, our Head of Stewardshipfor Europe, Rachel Crossley, spoke at that workshop.
We followed up by co-sponsoring and speaking at aside-event at the final Bonn conference in Septemberthat explored the role the finance sector can andshould play in realising the implementation of theframework.

CDP open letter to governmentson the plastics crisis
In November 2023, as the Intergovernmental
Negotiating Committee (INC-3) of the Global Treaty
on Plastic Pollution convened in Nairobi, Kenya, we
joined CDP alongside 48 financial institutions in an
open letter calling on governments for mandatory
disclosure of plastics data, in keeping with ourparticipation in the Business Coalition for a Global
Plastics Treaty, which we joined in September 2022.
For investors, this call to governments directly
supports the assessment and management of
portfolios’ exposure to biodiversity loss andenvironmental pollution-related risks by mandating
corporate data that is rarely available. In addition,
BNP Paribas Asset Management is a participant in
the annual CDP Non-Disclosure Campaign, which
has incorporated a module on Plastics disclosure
since 2022.

2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATIONVOTINGAND ENGAGEMENT

CLIMATESUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

3Es: Equality
Promoting a more equitable and sustainable distribution of value to ensure the long-term stability
and resilience of societies and ecosystems.

C A S E ST U D YINDIVIDUALENGAGEMENTESCALATION

Improving board independence and gender diversity
CONTEXT: Improving board diversity is one of thethree key goals outlined in our GSS. Diverse boards
have been shown to increase the likelihood thatcompanies generate more shareholder value overthe long term. Further, greater representation of
women on boards helps to open the boardroom toother voices in an increasingly complex and diverse
global marketplace and establishes a more equitabletone at the top. As set out in our voting policy, forEurope, North America, Australia, South Africa, and
New Zealand, we now expect a minimum threshold of
35% female board membership, and in Latin America,
Asia, Middle East, and Africa (excluding South Africa)
our threshold is 20%. In each market, we makeexceptions where we see meaningful progress.
OBJECTIVE: A gradual increase of gender diversity
at the board level with the goal of reaching 40%
in mature markets by 2025.
ACTIVITY: In early 2023, we selected and began
engaging with 38 companies whose performance
was not in line with our thresholds and to which
we had significant financial exposure (13 in Europe,
11 in North America, 14 in APAC). We sent letters

outlining our expectations in the first quarterof 2023 and followed up with engagement meetings
or exchanges throughout the year.
OUTCOME: We had a 29% success rate,with 11 companies adopting changes in line with our
expectations, allowing us to support board elections(or at least not sanction directors based on gender
diversity). The regions with the highest success rates
were Europe (50%), followed by APAC (36%).
In addition, eight companies met one of our policy’s
exceptions, including by making recent significant
progress or committing to meet our expectation.
For example, we supported board electionsat Stellantis as the company made an official
commitment to reach 40% female representation
on its board in 2025. In the United States,
we made exceptions at Tesla, Salesforce and Sunnova
Energy International, where the Chair
and/or Lead Independent Director was female.

Overall results
OutcomeNo. ofcompanies

Positive

11

Partial8

Negative

19%

Details

29%

The company reached our relevant regional gender diversity
threshold and, as a result, we voted in favour of board
elections (where no other factors prevented a supportivevote), in line with our voting policy.

21%

We applied exceptions in line with our voting policy, but thecompany has not yet reached our gender diversity threshold(exceptions include relative improvement, commitment toreach 40% in 2025, etc.).

50%

We opposed the election of all male directors, due to a lackof improvement on gender diversity (and in some cases forother reasons, e.g., lack of independence).

Geographic split
AmericasAsia-Pacific

EuropeOutcomeNo. ofcompanies%

No. ofcompanies%

No. ofcompanies%

Positive

0

0%

5

36%

6

46%

Partial

5

45%

1

7%

2

15%

Negative

6

55%

8

57%

5

38%

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTEngagement examples
EuropeACTIVITY: We engaged with Vonovia SE in March 2023, as theSupervisory board’s female representation had stood at 33%
for a few years while the minimum threshold of our voting
policy for Germany is now 35%. We explained that we would
no longer be able to support male director elections at the2023 AGM should the gender diversity ratio remain the same.
OUTCOME: The company was responsive and confirmedthat board elections would aim to reach 50% male to female
ratio at the 2023 AGM. We were thus able to vote in favourof most board (re)elections – which were all adopted byshareholders We are satisfied that Vonovia SE’s Supervisoryboard has now reached gender parity.
ACTIVITY: We also engaged with Telefonica Deutschland SE,
as the Supervisory board’s female representation had
not increased from 25% for several years. In order for thecompany to meet our threshold, as the Supervisory board
is composed of 50% employee representatives under the
principle of codetermination in Germany, it was key toimprove gender diversity both of employee representatives
and other directors, which for each was two women out of 8(out of a total of 16 directors).
OUTCOME: The company was responsive and agreed toarrange a follow-up meeting, during which we emphasised
the need to address female representation both at the 2023
AGM, when employee representative elections were planned,
and at the 2024 AGM for other director elections. Eventually,
the company successfully nominated three female employee
representatives, raising the total share of female directors
to 30% (five out of 16). The company’s Chair also committed

to nominate one new female director at the 2024 AGM,
which would raise the total share of female directors
to 37.5%, in alignment with our expectations.

Americas
ACTIVITY: We wrote to United Health Groupin March 2023 to urge the company to increase the ratioof women to men on its board. The company provided
a detailed response noting that when appointing a new
independent director, its Governance Committee considers
qualified women and racially/ethnically diverse candidates.
OUTCOME: The recent appointment of Kristen Gill,an Alphabet executive, brought the percentage of female
directors to 33%, an increase of 5% since last year. Further,
the lead independent director is female, and the board
is 33% racially and ethnically diverse. We therefore
supported the director’s vote.

APAC
ACTIVITY: We engaged with Meituan in March following our
initial outreach via email. The company had no female board
member at the time. We shared best practice, our voting
policy and our 20% gender diversity expectation for Asia.
We also discussed the Hong Kong Stock Exchange’s
requirement for a minimum of one female board member
by 2025.

our threshold and that we hope to see continual increases.
We reiterated our request that the company set a timebound target to achieve our regional 20% threshold.
ACTIVITY: We have also engaged with Tencent over the last
two years, providing the company with our philosophy andvoting policy, as the level of female board representation
was 13%. In March 2022, Tencent published a commitment
to diversity, equity and inclusion, including a commitment ofsteady progress on diversity at the company and board levelsin the coming years.
OUTCOME: At the 2023 AGM, female representation had
increased to 25%, which allowed us to support the elections.
The company has also set a target to further increase theboard’s female representation to 30% by 2030.
ACTIVITY: Following an email exchange with AIA on board
gender diversity, we conducted an in-person meeting in 2023
where we discussed increasing the number of female board
members, among other ESG topics. AIA’s gender diversity was
at 18%, below our 20% threshold for the region.
OUTCOME: The company shared our feedback withmanagement and has since added two new female directors,
taking female board representation to 23%. One of the newfemale directors also joined the nomination committee.

OUTCOME: In June, the company reached out ahead of its
AGM to inform us that it was looking to appoint the firstfemale director and was keen to secure our support.
We acknowledged the company’s progress and did not
sanction the company on gender this year via our votes but
made clear that female representation of 12% remains below

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

92ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D Y
Our engagement on board diversity is bearing fruit
Ahead of the 2023 AGM season, we published a global study ofthe proportion of women on the boards of the 3,500 companies inwhich BNPP AM invests with the 17,000 listed companies in the ISS
database. The study demonstrates the effectiveness of BNPP AM’s
voting policy and shareholder dialogue finding that women make up
an average of 25% of the boards of the companies in which BNPP AM
invests, compared to 18% for the broader universe of listed companies.
Regional differences are considerable, however: Europe, South Africa
and Australia are the most advanced in terms of board director
parity, whereas Asia, South America and the Middle East are lessdiverse. Company size, country of incorporation and local regulations
significantly impact levels of female board membership and are key
factors for investors to consider.

BNPP AM joins new investor initiative in APAC
Investors Against Slavery and Trafficking Asia Pacific (IAST APAC)
In 2023, we joined IAST APAC, an investor-led collaborative engagement
initiative launched in 2020, to engage with companies in the Asia-Pacificregion to promote effective action in finding, fixing and preventing
modern slavery in operations and supply chains. It is currently supported
by 45 investors with US$ 7.7 trillion in AUM, coordinating policy advocacy
and company engagement workstreams.
We joined the company engagement work stream and have participatedin capacity building forums since joining. IAST APAC leverages a common
framework and encourages companies to proactively search their supply
chains for modern slavery risks, fix the issue, and remedy harms to thoseaffected. The initiative also aims to strengthen reporting under relevant
disclosure regimes such as the Australian Modern Slavery Act.

COLLABORATIVEENGAGEMENTPRI advance: human rights and Occupational
Health & Safety (OHS)CONTEXT: In 2023, we joined a coalitionof 265 investors representing US$35
trillion through the newly launched
PRI Advance collaborative initiative.
Under the umbrella of the PRI, thiscoalition seeks to advance humanrights and positive outcomes forpeople through investor stewardship.
It supports investor engagement with39 corporates from the extractive
industries and renewable energy sector,
encouraging the implementationof international standards on humanrights and social issues, like the
UN Guiding Principles on Business andHuman Rights and the OECD Guidelines
for Multinational Enterprises.
OBJECTIVE: As a major player in thesteel industry based in Luxembourg,engagement priorities for ArcelorMittal
were developed from several sources,
including the company’s public
disclosure, ESG and controversies
ratings, benchmark assessments(including the Corporate Human Rights
Benchmark updated in November 2023),
and press coverage. These focus onhuman rights protection, occupational

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

health & safety (OHS) performance,
and the management of adverse
impacts on local communities.
ACTIVITY: Since 2023, BNPP AM has coled the engagement with ArcelorMittal.
We had a meeting with the company inNovember, following written exchanges
and previous introductory meetings.
OHS performance was at the heartof our dialogue linked to a series ofaccidents that occurred at ArcelorMittal
Termitau in Kazakhstan, with anaccident at the Kostenko mine in
October 2023 leading to 46 fatalities.

Our discussions focused on:• the governance of sustainability andsocial risk management;• the remediation plan following theKostenko mine accident in Kazakhstan,followed by ArcelorMittal Termitau’ssale to the government;• public responsiveness to serious
allegations and accountability, notlimited to Kazakhstan (i.e., social
controversies in France, Canada,
Brazil, Liberia, South Africa, etc.);• the adoption of responsible targets
on OHS performance, alignment of
OHS reporting with market disclosure
standards, and further linkage withremuneration incentives; and• the implementation of group-wide
policies, programs, and mechanisms
to perform effective external
stakeholder engagement and protect
human rights (e.g., human rights
salient risks and impacts assessment,
centralised grievance mechanism,
respect for indigenous rights).
OUTCOME: We have seen someencouraging steps forward, suchas the company’s decision to startworking on the development of agroup-wide grievance mechanism by
the end of 2024 and the appointmentof an external independent auditor
to perform a group-wide safety
audit following the recent events in
Kazakhstan. However, we are still
waiting for concrete changes andsolutions to be implemented.

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THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

3 Engagement linked to issuers’ ESG performance
Engagement related to our Responsible
Business Conduct (RBC) policy• Timber and wood pulp;• Palm oil;
• Consumer interests.

In order for us to be able to invest in companies,
they must:

Issuer in the Energy sector• meet their fundamental obligations in the areas of humanand labour rights, protecting the environment and ensuringanti-corruption safeguards, wherever they operate, in line with
the UN Global Compact Principles and OECD MNE Guidelines;• comply with a series of Sector Policies (e.g. coal policies),
established to set out the conditions for investing inparticularly sensitive sectors;• maintain good ESG performance to mitigate ESG risks
across portfolios.
These requirements are codified with our Responsible
Business Conduct (RBC) policy. In relation to our passive
investments, where the RBC policy cannot be fully applied,
we aim to address ESG risks through active corporate
engagement and voting. As a last resort, we may divest
entities which do not respond to engagement and show
no signs of improving, which are therefore considered
as not in line with our RBC. In total in 2023, we engaged
with 10 companies spanning all three regions in relation
to the following aspects of our RBC policies:• Agriculture;• Coal;• Oil and gas;

In the second half of 2021, we placed this company on our
Watchlist. We were concerned about potential breachesof the UN Global Compact’s Principle 1 on Human Rights.
Our main concern was the company’s poor safety
performance record with a series of fatal accidents overrecent years, which revealed systemic failures in its
management of occupational health and safety.
We held several engagement meetings with the company
between 2021 and 2023. Although the company was
responsive to our dialogue and claimed it intended toreinforce its sustainability strategy, it did not provide
sufficient assurance that it was actually implementing
adequate corrective measures to prevent further accidents.
For example, it did not progress in the adoption of
responsible safety targets in line with peer practice.
We therefore concluded that the company was in breachwith our RBC policy and excluded it from our portfolios
pending significant improvement.

Issuer in the healthcare sector
This issuer was flagged by our research provider as
being involved in recent years in serious product recall
controversies.

The second recall appeared to indicate a systemic problem inthe company’s safety testing and risk management practices
and led to a substantial fall in its market value. Regulators inmajor markets were investigating deaths allegedly linked to
product use and are likely to bring charges if the company isfound liable for these deaths. Investigators found inadequate
risk analysis procedures, including a lack of robust internal
investigations, health hazard evaluations and product design
reviews. The company had already made several large
financial settlements and additional provisions to coverpotential future settlements and/or fines and other costs.
We had a call with the company in September 2023 tobetter understand the actions it had taken since the recalls.
While it seemed to have shown appropriate urgency andmounted a comprehensive response under the leadership ofthe new CEO, its progress in replacing the devices had beenslower than originally anticipated. The company provides
regular public updates and was responsive to our request
for engagement, providing further requested information
after the meeting. However, the results of the pending
investigations and any associated lawsuits could havesignificant financial and reputational impacts and additional
lawsuits may emerge in other markets.
While the engagement and progress were positive, we
continue to monitor developments in the legal proceedings
and whether regulators deem the company’s new quality
testing regimes acceptable.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTEngagement with companies
with low ESG ratings

Engagement with fixed income
asset issuers

As outlined in our ESG Integration Guidelines,
for active portfolios we avoid investing in companies withlow ESG ratings generated using our internal ESG scoring
framework, without documenting the risks and/or engaging
or planning to actively engage with such companies.
Our Sustainability Centre and investment teams implement
this process together.

We continued our active engagement with bond issuers,
which we view as an important part of our stewardship
activity. We continued to strengthen and apply ourframeworks for assessing green, social and sustainability
bonds, which provide the basis for our engagement withissuers of those bonds.

It also involves escalation measures for companies that are
not responsive to our engagement and/or do not sufficiently
improve their performance over time. We may also voteagainst or abstain on key resolutions on the agenda ofcompanies’ annual general meetings, as available andappropriate. We may also address a lack of response or
action via investment decisions, like reducing our holding
in such companies or complete divestment.

Engagement with corporate bond issuers

In 2023, 36 new companies were included in thisprogramme, while engagement that was initiated in 2022
continued with others.
Of the 36, investment teams completed qualitative
assessments for 22 of them. For the other 14, a request wasmade for dialogue to discuss the apparent weaknesses inthese companies’ ESG disclosure and practices. Follow-up
exchanges are expected to take place in 2024 and futurerevisions of ESG scores later that year will reveal whether
our efforts contributed to improving their assessment.

Our fixed income teams engage with issuers of various typesof corporate bonds as part of their investment and portfolio
monitoring processes. The global corporate credits team
joins Q&A sessions with loan issuers and arranging banks tocarry out due diligence of various aspects of the credit andto negotiate financial and legal loans transaction documents(term-sheet and SFA key terms).
In respect of European high-yield bonds, investments in thefunds are constantly re-evaluated and monitored; ad hocinteractions occur with management when warranted, as wellas one-to-one meetings with management during conferences.
We outlined on page 43 how ESG ratings are integrated into
fixed income instrument selection and how our ESG Researchteam assign the ESG scores to corporate issuers according toour proprietary ESG scoring methodology for corporates. In
addition, each year or prior to initial investment, the credit
analysts within our ESG private assets teams, where an ESG
rating is not available (most typically for middle-market sizedissuers), ask the issuer to complete an ESG questionnaire.
The Sustainability Centre uses that information to maintainthe ESG score, which feeds into fund construction.

Engagement related to Green, Social andSustainability (GSS) bonds issuance

Our engagement typically focuses on:

We seek to engage with issuers in both developed anddeveloping markets, as well as with multilateral agencies. We
engage on a one-to-one basis and join roadshows where issuerspresent to multiple investors at the same time. The thematicbond engagements take place both at the ex-ante stage,i.e., at the time of issuance of GSS bonds, framework details
discussions, as well as at the ex-post step, i.e., 12 – 24 months
after bond issuance to find out about reporting commitments
and the timeline for an impact report publication. If there is
no response from issuers, we exclude the GSS bonds fromthe investment universe.

• information discovery – gathering information that is not
expressed in documentation that can help us form a more
complete assessment of the proposed thematic bond;• encouraging improvements in the structure of thethematic bond that could lead to ‘greener’ assets selected,
or ‘less desirable’ assets dropped from the eligible portfolio;• pressing companies to be transparent about the use ofproceeds and positive impacts generated by the bonds.

Engagement with corporate issuers
During 2023, our bond specialists within the ESG researchteam had 40 interactions in relation to thematic bondissuances. Of those, 27 were within developed markets,
13 with emerging markets.
We aim to participate in ex-ante investor meetings withthematic bond issuers either via the roadshow related toa specific issuance or ‘non-deal roadshows’ where issuerssound out investors’ comments or expectations. Some ofthose engagements were ex-post to discuss issuers’ impact
reporting commitments, metrics and methodologies used to
calculate those metrics demonstrating the positive impact
issuers try to achieve through the Use of Proceeds.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

Global port terminal
operator (emerging
markets)
We engaged with a green bond issuer that isa global port terminal operator with operations
in many markets globally. At that time, theissuer was a debut green bond issuer; hence
we wanted to understand its green bondframework, the projects and how the issuer
approaches sustainability in its operations.
The issuer explained that about three quartersof the proceeds will finance the electrification of
its port operations – which includes electrifying
the cranes, forklifts and heavy vehicles.
It will also use some proceeds in R&D of hybrid
vessels where the vessels use a blend of crudediesel and fuel made from waste feedstock.
We believe these projects are best practice inthe port terminal industry. The projects arealso in line with the issuer’s decarbonisation
strategy (started in 2019) that includes
renewable energy supply, low carbon fuels, andelectrification.

Pension investment manager(developed markets)
We engaged with a green bond issuer that is apension investment manager. The issuer invests
the capital provided by its pension members.
We had reviewed the ex-post report on its
outstanding green bonds which we had previously
invested in. The report did not provide sufficient
information about the types of renewable energy
technologies financed and also did not provide
sufficient clarity about the forestry assets it
invested in using the proceeds of the bond.
We also wanted to understand their climate
strategy and targets which appeared to be very
flexible in terms of outcomes.
The issuer explained that the investments(financed by green bond proceeds) it made arehighly concentrated in certain companies andtherefore it believed it could be commerciallysensitive to disclose the type of technologies.
However, it confirmed that there were nohydropower-related assets. Regarding forests,
the team is proactive in forestry management.
The assets have received sustainable practicecertifications and the issuer is putting in placea biodiversity programme for the forests it owns.
In relation to the climate strategy, the issuer
believes that its approach to private assets
allows latitude to engage and push for change
in the companies it owns. The issuer qualifies

certain companies as transition assets and aims
to reduce the carbon emission intensity of theportfolio by 20 to 25% in a few years. Overall,
we believe that the engagement yielded enoughinformation for us to remain invested in thisgreen bond.

Xuan Sheng
Ou Yong
Green Bond
& ESG Analyst“We believe that engagements with thematicbond issuers can help us avoid deals where theprojects are not credible, the issuer’s strategy
is not credible or where there is a highreputation risk for us and for our investors.
By engaging with issuers, we get better
insights into the what, the why, the how,and the future of these bonds in financing
the transition of these issuers.”

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTEngagement with sovereign andsub-sovereign issuers, and agencies
We also engage in dialogue with sovereign and sub-sovereign
bond issuers and agencies about the terms of their bonds
and on the countries’ policies and frameworks that govern
their GSS bond issuances. During 2023 the sustainablefinance market saw some sovereign issuers bring newthematic bonds to the market and some sovereigns issue
them for the first time.

Detailed examples of our sovereign engagements
at both ex-ante and ex-post steps include:
People’s Republic of Hungary: At the issuers’ request we met
to discuss potential changes/improvements to the Hungarian
Sovereign Green Bond Framework published in May 2020 andto hear an update on the government’s sustainability strategy.
We outlined our expectations of Sovereign Green Bond issuers,
such as legal protection of green projects, forward-looking
budget projections with green expenditures, updates on the
management of the proceeds, and the overall choice of thesustainability-focused projects. Both parties also discussed
the ESG-related policies that need further development in
Hungary and in the EU.
Republic of Romania: At a meeting organised by the Sovereign
Debt Institute in London, the head of the Romanian Debt
Management Office made a presentation, followed by anopen discussion with investors about their forthcoming
green bond framework and debut green bond issuance. Our
Sovereign ESG Analyst shared an overview of how we assessconventional and thematic bonds at the issuer level on ESG

issues, and how the ESG analysts assess and score sovereign
green bonds.
Republic of Turkey: We participated in a global fixed income(non-deal-specific) roadshow in connection with the country’s
Sustainable Finance Framework. High-level government
officials from the Ministry of Treasury and Finance, Ministryof Environment, Urbanization and Climate Change, andMinistry of Energy and Natural Resources presented theSustainable Finance Framework and the Second Party
Opinion, as well as a broader climate strategy, including a
Green Deal action plan, and sustainability-related guidelines.
Our ESG analysts explained that BNPP AM’s preference is theissuance of separate green and social bonds. (That is in fact
what the government did, with the issuance of a Green Bondon 5 April 2023.) We also provided positive feedback about
the choice of the Use of Proceeds and the expected allocationof funds with a focus on the Environmental and Sustainable
Management of Natural Resources and Land Use, while
the majority of the Sovereign issuers focused on the Clean
Transportation Use of Proceeds. We welcomed the proposed
72% of the green bond’s allocation to new financing.
Republic of Cyprus: We participated in a Global Investor Callat which the country’s representatives presented its newly
established Sustainable Finance Framework. (An inaugural
Sustainable Bond was later issued on 3 April 2023.) The issuer
explained that the expected allocation focus of the Social Useof Proceeds will be 83.5% to socio-economic advancement andempowerment, including a Female Entrepreneurship Scheme.
The green Use of Proceeds has been allocated predominantly
to sustainable water and wastewater management, andenvironmentally sustainable management of living natural
resources and land use, unlike other sovereign green

and sustainability bonds that focus primarily on cleantransportation. The majority of the issuance is expected to beallocated to new financing. We provided positive feedback,particularly welcoming the choice of the Use of Proceeds andthe proposed future allocation.

We also discussed various topics with the following
issuers:
German Finance Agency: German macroeconomic update,energy strategy, green budget and expenditures, and Useof Proceeds expected allocations and management of theproceeds, both ex-ante and ex-post their green bond issuance.
European Central Bank, Dutch Central Bank, the Central
Bank of Malta, the Bank of Finland and the Bank of France:
Rationale and approach to our Proprietary Sovereign ESG
assessment methodology, including particular data sources
to calculate the Sovereign Carbon footprint.

Malika Takhtayeva
Sovereign ESG
Analyst, Sustainable
Fixed Income
Lead EMEA“Despite the complexity of sovereign
engagement, there is a growing recognition
that regulators and policymakers are major
actors in shaping future sustainable economies
as they set the rules that guide and govern
companies’ behaviour. Therefore, throughsovereign engagements we in turn are shaping
what we hope will be an enabling policy
environment for sovereigns, sub-sovereigns,
agencies and corporates together.”

Sweden and the United Kingdom: Implications of the
proposed climate and green policy changes targets andbudget plans for existing green bonds. The discussions
focused on the issuer-level climate-related risks and net zero
goals and commitments of both governments.
Netherlands: Pre-issuance assessment and additional
Use of Proceeds categories regarding hydrogen and gas.
Brazil Treasury and the Debt Management Office:The Sustainability Bond framework, the nature of the
Use of Proceeds and the management of the proceeds.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTCOLLABORATIVE
SOVEREIGNENGAGEMENT
This year we continued to expand
our engagement with sovereign issuers
through collaborative initiatives.
This form of engagement is designed
to complement engagement on specificsovereign issuances, to create nationalor regional policy environments
on a range of sustainability issues.
This is critical not only to set countries
on a path to sustainable and equitableeconomies, but also critical to create
an enabling environment in which
companies operate.

C A S E ST U D I E S

PRI collaborative sovereign engagement initiativewith the governments of Australia and Japan
Government of Australia

COLLABORATIVEENGAGEMENT

In 2022, BNPP AM joined the pilot PRI-coordinatedCollaborative Sovereign Engagement on Climate
Change. We are one of 25 global investors
seeking engagement with sovereigns to reduce
their exposure to risks associated with afailure to rapidly transition to a net zero global
economy including:— The value of sovereign debt investments;— The continued competitiveness of national
economies and investee companies; and— Systemic risks through exposure to the global
economy.
The participating investors aim to support
governments and associated entities, likefinancial regulators and central banks, totake all possible steps to mitigate climatechange risks in line with the Paris Agreement.
Australia was selected as the first country forengagement.
During 2023, we participated in calls at theSovereign and the Sub-sovereign levels. We colead the Federal Government Working Group, siton the engagement advisory committee for thisengagement and lead the engagement with the
Department of Industry, Science and Research(DISR). With that department, the main topic

of the engagement was a consultation paperthat DISR has initiated and the collective viewof investors on Australia’s Future Gas Strategy.
Investors also had calls or meetings with theofficials from several other entities:• Australian Office of Financial Management(AOFM) and the Commonwealth Treasury,
responsible for developing the nation’s green
bond framework and preparing for the firstissuance of national sovereign green bonds in
mid-2024. Here discussions covered sovereign
climate risk disclosure following recent steps
by the Australian Government to publish moreclimate change-related information in coreeconomic statements and the settlement of the
O’Donnell v Commonwealth case on sovereign
bond climate disclosure.
• Treasury Corporation of Victoria, New South
Wales Treasury as well as three industry
groups (Business Council of Australia, theAustralian Industry Group and the Grattan
Institute). This was to introduce thisengagement initiative to officials and to flagan ongoing interest in Australia’s international
financing and trade activities as they relate to
the net zero transition. Further, the investor
group noted their willingness to provide more
information, if useful, about investor practice,

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

data needs and metrics on sovereign climate
risk, including the ASCOR project, to help
inform the Australian Government’s approach
to trade policy and in developing financing
vehicles for international climate development.

Government of Japan
We used the opportunity of our attendanceat the PRI Conference in September in Tokyo
to host collaborative engagement meetings
with Japan’s Ministry of Finance (MOF) and
Ministry of Economy, Trade and Industry (METI).
Members of the PRI-Coordinated Sovereign
Engagement on Climate Change, alongsideother interested signatories, PRI staff andorganisational partners, met with various
officials from the two ministries. We introduced
the role of sovereign engagement and shared
our in-house assessment process on sovereign
ESG performance.
We also discussed Japan’s ‘Green Transformation’(GX) Transition Policy and the planned issuanceof GX Economic Transition Bonds. While at an
early stage in its framework development, we
urged policymakers to provide further information
regarding use of proceeds for the GX climatetransition bonds and underlying assumptions
used in policy setting to further assist our2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENTC A S E ST U D I E SCOLLABORATIVEENGAGEMENT

investment decisions. We noted that activities
such as the use and production of ammonia andhydrogen can have a wide range of environmental
impacts. Hydrogen produced using electrolysis
powered by renewable energy, more commonly
known as green hydrogen, will have very positiveenvironmental benefits, but hydrogen produced
using methane reforming, or grey hydrogen,will more likely hinder climate mitigation. We
explained that it would be highly beneficial forinvestor decision-making for the GX framework
to include detail on the criteria for eligible
activities to provide greater confidence about theenvironmental benefits and avoid the risks ofgreenwashing.

Other sovereign
engagement
Forum per la Finanza Sostenibile (ItaSIF)- Sovereign Engagement with the Italian
Central Government
In 2021, the Italian Forum per la Finanza
Sostenibile, set up a permanent working groupto promote various joint initiatives. This year,
it launched an engagement initiative with the
Italian Central Government focused on Italy’s
policies on selected key ESG topics. As a memberof the Forum, we joined 40 investors in signing
the working group’s letter in May to the ItalianPrime Minister, raising questions about measures

to mitigate climate change and effect a justtransition, as well as relating to sustainablefinance and gender equality.

Government of Brazil
Along with other members of the Investor Policy
Dialogue on Deforestation (IPDD), in May 2023
we met Brazilian government representatives todiscuss the Brazil Sustainability Bond Frameworkand its coherence with the government’s climate
and biodiversity policies, commitments andtargets.
During Climate Week in New York in early
September, we also joined a private session witha representative from the U.S. State Department
to understand the U.S. Government’s response
to deforestation and hear a presentation fromthe Director of the Brazilian Forest Service,
the Brazilian Ministry of Environment
and Climate Change.

Countries’ alignment to net zero at the national
level will increasingly influence their sovereign
bond ratings via physical and transition risk
exposure. Just Transition concerns also create
the need for more nuance when investing insovereign bonds. Therefore, a methodology thatevolves from purely qualitative to quantitative
recommendations based on countries’ net zeroalignment is needed.
The working group aims to:• Endorse additional data sources and discuss
sovereign disclosure expectations.
• Update and improve methodologies, including
targets for portfolio coverage, thresholds
for engagement and the setting of portfolio
decarbonisation reference targets.
• Provide the foundation for forthcoming
sovereign collective engagement efforts.

IIGCC Sovereign Bonds & Country Pathways– Towards greater integration into net
zero investment strategies
In the second quarter, we joined the IIGCC’s
initiative to launch a sovereign bonds andcountry pathways working group, to reinvigorate
efforts to integrate sovereign bonds into net zero
investment strategies as they are inextricably
linked. Our Sovereign ESG analyst was asked toco-lead the group.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESVOTING AND ENGAGEMENT

4 Engagement via impact fund of funds
CONTEXT: The BNPP AM Towards Impact
Fund 1 invests in funds deploying strategies
with strong impact potential and private
equity credentials. While these funds allocate
capital in potentially impactful sectors acrossthe economy - from healthcare to climatechange mitigation solutions and the circular
economy - their capacity and expertise inmanaging Impact and ESG investing factors
may however vary greatly.

impact tools, frameworks and guidanceon how to define and formalise theirintentionality, impact objectives, actions thatcan enhance their additionality and ways ofmeasuring their impact. The exchanges aredesigned to provide them with guidance on
how to integrate their theory of change into
their selection process and lead them toproperly assessing companies’ missions andcapture relevant impact metrics.

OBJECTIVE: Our objective is to help thesefunds progress to higher levels of ambitionand practice, from the formalisation of
intentionality to the implementation of goodpractices, to guide them towards becoming
system change enablers.

OUTCOME: As a portion of the fund of funds
carried interest is related to the improvementof the underlying funds’ impact practices,
several elements are monitored on a regularbasis to assess this aspect. Since inception,
the practices of all underlying funds have
evolved, several of them having recruitedimpact specialists, with one even hiringrenowned experts, transforming an initially‘impact-friendly’ General Partner (GP) into aleading impact investing manager. Funds that
didn’t use marketplace impact frameworks
have now integrated them in their
day-to-day investment activity and some
GPs which did not label their funds as impact
investing strategies are now launching impact
successor funds. These new generations ofimpact strategies are also recognised by the

ACTIVITY: During the year we organised
several meetings with each underlying fundin order first, at the pre-investment stage,to evaluate their level of maturity on impact
and ESG considerations, then to design
customised action plans and, in the longer
run, to follow up results and potentially adapt
the selected approaches. These meetings
can involve the funds’ managing partners,
investment teams, operational teams,
and ESG or impact experts. These discussions
are the opportunity to share with themmarket, with some of these successor funds
raising inflows above the symbolic €3 billion
threshold. These engagement efforts can taketime to materialise but it is clear that as aresult, palpable changes are happening in theprivate equity investing ecosystem.

The above-mentioned securities are for illustrative purposes only; they are not intended as solicitation of the purchase of such securities, and do not constitute any investment advice or recommendation.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESSUSTAINABILITYIN OUR PRODUCT RANGE

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101ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRISUSTAINABILITYIN OUR PRODUCTRANGEWe provide our clients with investment
solutions that focus on companies
positively contributing to the transition
towards a more sustainable economy.
In 2023, sustainable finance underwent
a period of introspection and growth.
While the industry continued to progressin implementing a new regulatory
framework, public authorities initiateddiscussions on its fundamental aspects
and proposed amendments. We played
an active role in these dialogues,
anticipating the transformative impact
these new regulations would have on ourbusiness and product line.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTWe recognise the imperative of reallocating capital on asignificant scale to facilitate the transition and safeguard
the planet for future generations. However, merely
providing investment tools is insufficient; investors must
actively choose sustainability-focused products for capitalreallocation to occur effectively.
To achieve this, investors must have trust in thecredibility and efficacy of the sustainable financeframework. Recognising the pivotal role of a robust

ESG
INTEGRATION

CLIMATEVOTINGAND ENGAGEMENT

regulatory rulebook in fostering market confidence,
we have been strong advocates for the implementation andenhancement of such frameworks by public authorities.
In addition to this, our goal is to offer a product rangethat matches the diversity of our client base. From ESG
integration to solutions targeting sustainable investment
objectives, we have built a comprehensive range
allowing for the construction of diversified and impactful
portfolios.

SUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES

François Roux
Co-head of Global
Product Strategy“In 2023, we achieved a milestone with
90% of our EU open funds classified as
Article 8 or 9 under SFDR, reflecting
our commitment to sustainability.”

The BNPP AM product range(all types of products)€356.8bn integrating ESG criteria

ESG INTEGRATION

Within the €281.5bn of SFDR
Articles 8 and 9 (all types of products),
the BNPP AM Articles 8 and 9 open
fund range is strongly positioned on
MiFID/IDD Sustainability Preferences:

Applying a constraint qualifying for Articles 8 & 9 or applying BNPP AM
Responsible Business Conduct (exclusion policy).

€281.5bn Article 8 or 9 under SFDR

ART. 8 & 9• €253bn of products taking into accountPrincipal Adverse Impacts in theirinvestment decisions

Applying an ESG constraint, resulting in having ESG scoring betterthan-benchmark investment universe for example. This constraint is
controlled and documented in funds’ legal documentation.

€139.5bn with a European Sustainability label
Receiving one or several labels, delivered by States or independent
organisations, such as ‘Label ISR’, ‘Towards Sustainability’, ‘LuxFlag’,etc. This comes with strict guidelines regularly audited by external
parties.

€20.1bn Article 9 under SFDR
Having a sustainable investment objective.

EU SUSTAINABILITY LABEL

ART. 9• €241bn of products committing
to a minimum percentage holding of
Sustainable Investments (BNPP AM
methodology implementing
Article 2.17 of SFDR)• €20bn of products committing toa minimum percentage holding ofinvestments aligned with the European
Green Taxonomy

Note: the size of each circle is for illustration purposes only. It is not representativeof the related AUM size.

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESSUSTAINABILITY IN OUR PRODUCT RANGE

Our positioning
The alignment of BNPP AM’s sustainability positioning withmarket trends has been evident in recent years. Investors
have consistently shown a preference for products withmore stringent sustainability criteria, a trend that has
persisted despite evolving definitions spurred by theEuropean regulatory framework.
This market appetite for sustainability was reflected
in 2023, a challenging year for the industry. While theoverall market saw modest growth, BNPP AM experienced
significant growth in “Article 8+” funds, reinforcing ourbelief in the importance of pivoting towards sustainability.
Our product mix reflects this conviction, with a higher
proportion of more sustainable product families comparedto the broader market.

HIGHLIGHT

Planning for SFDR

Olivier Paté
Product Advisor- Sustainability

Our product range continued to undergo a transformationaligned with the SFDR framework in 2023. This involved
enhancements in data sourcing, methodologicalframeworks, and product positioning, along withextensive disclosure and reporting efforts. Some key
accomplishments include:“We have profoundly transformed ourcapabilities and our product range to provide
our clients with a solid product offering
contributing to the reallocation of capital
towards a more sustainable economy.”• enhancing our data platform by sourcing new
extra-financial indicators and independently selected
vendors for each after individual due diligence.
• strengthening our methodological framework anddeveloped internal definitions for SFDR.
• shifting a large part of our product range to SFDR
categories and the MiFID/IDD Sustainability preferences.

400+• building a disclosure factory to power our sustainability
ambition and bring more transparency to clients.

open European funds classified
as Article 8 or 9 and positioned
on ESG preferences

AUM in euros and billion by SFDR categories (according to Morningstar)

6,901

32
Article 6

4,630

125
Article 8

Article 8+*

1,898

113

=

Market13,748=

BNPP AM
287

319

19

Article 9

Source: Morningstar data as of end of December 2023.
* Article 8+ corresponds to funds flagged Article 8 under SFDR, and “socially conscious” by Morningstar (i.e. invests according to non-economic guidelines).

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BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESSUSTAINABILITY IN OUR PRODUCT RANGE

New products
We had a series of product launches in 2023 in thecontext of rising interest rates and evolving market
dynamics. Spanning various asset classes and investment
strategies, these launches exemplified our commitment tosustainability as a major European asset manager.
In the fixed income space, we anticipated the growth of
fixed income ETFs and introduced three SRI Fossil Free ETFs
covering Euro Aggregate bonds, USD Corporate bonds, andEuro Corporate Bonds Ultrashort Duration, along with one
ESG EMU Government bonds ETF. Additionally, we expanded
our Green Bond range with the launch of a Euro Sovereign
Green Bond active fund in the listed active universe.
In the private asset space, we introduced a second European
Impact Bonds fund and a Climate Impact Infrastructure Debt
fund, both classified as Article 9 under SFDR.

We have put a strong focus onthematic bonds, particularly Green
Bonds. Leveraging our proprietary
methodologies and expertise, wehave developed a comprehensive
Green Bond-focused SFDR Article 9
product range covering Global
Aggregate, Euro Corporate, andEuro Sovereign asset classes.

Monica Marzinotto
Private Assets
Product Advisor

Furthermore, in the multi-asset space, we pioneered thelaunch of an SFDR Article 9 fund of funds.
“Looking ahead, we remain committed to
exploring nature protection investment
solutions in private markets, driven by thegrowing demand for exposure to naturepositive assets and enhanced active
management of nature risks.”

HIGHLIGHT

Labels are the centrepieceof our product strategy
Sustainability labels play a pivotal rolein our sustainable product strategy,
serving as a cornerstone for driving
change in sustainable finance. Theselabels are instrumental in aligninginvestment products with capital
allocation objectives and fostering
investor confidence.
Over the years, BNPP AM has diligently
pursued a labelling strategy, resultingin €139.5 billion of assets across
171 products bearing at least one
European sustainability label by the endof 2023.
In 2023, regulatory bodies in France
and Belgium conducted comprehensive
reviews of their local labels (ISR and
Towards Sustainability) following
extensive industry consultations.
The outcome was the establishmentof new, more robust specifications
with stricter minimum requirements.

While some clarifications may beneeded for implementation, the overall
direction is clear.
In the absence of a pan-European
sustainability label, local labels
remain vital credibility instruments forsustainable finance. They continue toform a central element of BNPP AM’s
product strategy.

Leila Lhuissier
Product Advisor- Sustainability“When discussing sustainablelabels, it is essential to link
precise guidelines and demandingtransparency to foster trust in thelabels as a whole.”

We engaged actively in these discussions
and embraced the heightened standards.
In a rapidly evolving landscape,tightening criteria was necessary to
uphold the credibility of these labels.

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Reality check
It is imperative that we redirect capital towards companies
driving the transition to a more sustainable economy.
We have undertaken an assessment of our investments
to gauge their contribution to this objective. Our approach
involves measuring the deviation between our funds’
allocations in Sustainable Investments, as defined by SFDR
and our proprietary methodology, versus their reference
benchmarks. We are pleased to see that across various
product families, we observe a more significant overweightin sustainability-focused products, aligning with our
expectations.
Within our open SFDR Articles 8 and 9 funds, totalling
assets of €252 billion, the weighted average overweightin Sustainable Investment stands at +15%, equivalentto €36.8 billion in fund assets. While exact figures may
fluctuate with market conditions, we interpret this asevidence of the efficacy of our product strategies andalignment with the goal of reallocating private capital tofoster a more sustainable economy.
The effectiveness of the BNPP AM approach is evidenced
by the contribution of its product categories to the overall
capital reallocation objective.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODESBNPP AM approach (for open Articles 8 and 9 productswith a relevant benchmark or investment universe)*
Article 9€19bn• Only invest in Sustainable Investments**• The most significant positive contribution to sustainability objectives while mitigating negative externalities• An average of 54 percentage points more sustainable investments than their benchmarks(scope 99% of total open Article 9 assets)

Article 8 labelled€116bn• Higher sustainability criteria compared to Article 8• A substantial positive contribution on sustainability objectives while mitigating negative externalities• An average of 15 percentage points more sustainable investments than their benchmarks(scope 99% of total open Article 8 labelled assets)

Standard Article 8€120bnPierre Moulin
Executive Committee Member
and Global Head of Products
and Strategic Marketing“We are proud to contribute toeffective capital reallocation, tilting
more investments towards thetransition. Thanks to the assets wemanage for our clients, we are able
to do it at scale: we allocate €36.8bn
more to sustainable investmentcompared to broad market indices.”• Demanding sustainability criteria while keeping a broadly diversified portfolio• Positive contribution on sustainability objectives, and mitigate negative externalities• An average of 8 percentage points more sustainable investments than their benchmarks(scope 98% of total open standard Article 8 assets)

ESG integration€27bn
BNPP AM applies minimum ESG standards by default across its own range to manage sustainability-relatedrisks. Article 6 funds are regularly reviewed to assess feasibility to change to Article 8 and question the longterm suitability of the strategy within our range.

*The scope of calculation excludes funds with nobenchmark.
**Except for special-purpose investments such as
liquidity and hedging (EC Q&A of July 2021).

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MAPPING TO KEY
STEWARDSHIP CODESSUSTAINABILITY IN OUR PRODUCT RANGE

Solidarity
investments:
two new partners
to support
the socialand solidarity
economyWe manage multiple solidarity employee savings funds,
where 90% of the assets are invested in equities and bonds
according to ESG criteria. The remaining 5% to 10% of
the assets of these funds are invested in the social andsolidarity economy: we have team a of dedicated analysts
who make direct investments in charities, cooperatives andsolidarity businesses in France.
In 2023, our team made an additional €27.8 million in
investments in seven existing partners and two brand new
partners, bringing our total investments in the social andsolidarity economy to €171 million across 30 investees.
Groupe Vitamine T, helps people who are hard to employ
find good paying jobs and our investment in them will help
them to accelerate their mission while decarbonising theirbusiness. Our second new investment was in Urbilog, anorganisation focused on making the digital more accessible
to people with disabilities. Our investment will help
them to develop their digital accessibility consulting andIT services activities and broaden their inclusion policy toinclude diversity and disability.

€171 million
invested in the social andsolidarity economy

30

social and solidarity
economy investees

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THE 3ESRESPONSIBLE
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MAPPING TO KEY
STEWARDSHIP CODESCORPORATE SOCIALRESPONSIBILITY

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APPROACH
Walking the talk is critical to achieving
excellence. As a sustainable asset
manager, our corporate practices anddisclosures should match or exceed thestandards we expect from the entities
in which we invest. To achieve this,we have a four-pronged approach
to integrating sustainability into
our operations and as an employer:
decreasing our operational CO2 emissions,
reducing our waste to landfill, achievinga more gender-balanced and diverse
workforce, and focusing our community
initiatives on youth inclusion.

AT A GLANCEOUR STRATEGYAND APPROACH

THE 3ESRESPONSIBLE
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MAPPING TO KEY
STEWARDSHIP CODES

Reducing the environmental impact of our operations
We have committed to aligning our investment
portfolios to a trajectory in line with the objectivesof the Paris Agreement, and we plan to do the samewith our operational emissions. This commitment has
also been included as one of the 10 commitments
we have made in our Net Zero Roadmap. Our building
energy use, business travel and paper use were down
significantly in 2020 and 2021 due to the pandemic,
and we have continued some of our new habits into
2022, helping to keep our emissions in line.
The BNP Paribas Group has established a new target
for greenhouse gas emissions of 1.85 tCO2e
per employee by 2025.
We use three approaches to achieve this goal,in order of priority:from 12 photovoltaic farms in EDF Renouvelables’

Sustainable mobility

power portfolio.

We have spent the last few years
building out our programs toencourage our employees to commute
more sustainably to the office.
At our offices in France and in
Belgium, which combined represent
over half of our workforce, we havea number of options in place:

Offset any residual emissions• The Group has been offsetting any remaining
emissions associated with our office space andbusiness travel since 2017, through the following
projects in 2023:> in Kenya, the Kasigau project is a programme topreserve and restore 200,000 hectares of forest.
Led by the NGO WildLife Works, it also finances
access to healthcare, water and education for
local populations;> in India, the project is based on a ten-year

Increase the efficiency of our operations

voluntary carbon offset programme as part• Nearly all our office spaces are in green certified
buildings.

GoodPlanet Foundation, via the construction• The Group’s data centres in France were all
ISO 50001 certified in 2023.

Buy green or low-carbon electricity• The majority of our employees work from officesthat are powered by green or low-carbon electricity.
• In late 2023, the Group entered into a 10-year
Corporate Power Purchase Agreement, allowing it tosource 25% of its annual electricity needs in Franceof a partnership between BNP Paribas and theof 13,000 biodigesters;> in Guatemala, hundreds of landowners including
local communities have come together to protect
nearly 60,000 hectares of forest;> in Peru, a programme to deploy improved
woodburning stoves in several regions of thecountry, which reduces the amount of wood used

• Discounted or free transit passes.
• Monetary allowances for commuting
to work by bicycle.
• Programs to lease electric andconventional bicycles at preferential
rates.
• Bicycle repair service at our officein Paris.
• Free charging stations for electricbicycles and vehicles.
• Where employees have the option
to lease a car through work, startingin July 2023, the cars must be
electric.

and reduces carbon emissions while removing
noxious smoke from homes.

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Mission zero waste
Recognising the relationship between greenhouse gas
emissions and resource management, one of our long-term
environmental goals is to eliminate waste to landfill and tohelp protect the natural environment around us and halt
biodiversity loss. We do this in a number of ways:• In 2023, we offered gardening workshops to our employeeson the grounds of our head office in the region of Paris.
The purpose of these workshops was to teach employees
useful skills while imparting important knowledge on
how to reinforce biodiversity in urban settings. Employees
planted, maintained and harvested more than 60 varieties ofvegetables, flowers, fruits and herbs throughout the year.
These actions complement the beehives we host on the roofof our office and the honey we collect from them.
• A number of our employees have participated in half-day
workshops (or 'fresques') on biodiversity and the circular
economy. The biodiversity workshop walks participants
through biodiversity issues and pressures based on the IPBES
report.
• We hosted a global learning session in partnership with the
CDP on Nature and Biodiversity to help our employees
decipher the difference between the two and why we must
act urgently on these topics.
• Our Hong Kong office continued their Green Monday lunch
and learn series with a session by a professor from the
University of Hong Kong on plastic pollution and how we canchange our individual behaviours to reduce our impact.
• Employees from our London office participated in a ThamesRiver clean up, helping to improve the river not only

for wildlife, but also for people. During these clean ups,
employees learn about how detrimental plastic pollution
is to the waterways and those that depend on them.

GreenIT@AM
With the increasing digitalisation of our activities,
IT has taken an important place in our daily lives at the costof ever-increasing energy demand. As well, beyond IT’s rolein contributing to climate change, the production and disposalof digital equipment is associated with harmful impacts
on the environment that we can no longer ignore.
We currently have a number of initiatives in place to reduce
the environmental impact of our IT operation, including:• Closing old data centres and data rooms and streamlining
them into state-of-the-art facilities with improved coolingtechnologies that reduce the use of primary resources
by up to 50%.
• Engaging and working with our top 25 IT suppliers tocommunicate our environmental goals and update contracts
accordingly. We purchased some new IT equipment whenrelocating our head office and we made sure that thisequipment was more energy efficient.
• Rolling out partnerships such as BNP Paribas 3StepIT,
to ensure better reuse and recycling of our old IT equipment.
In 2023, 3StepIT repurposed 791 pieces of equipment on ourbehalf and recycled another 76 pieces at certified facilities.

Energy consumption
Millions of kWh

A first in the French banking
sectorIn December 2023, BNP Paribas signed
a 10-year corporate power purchaseagreement with EDF Renouvelables
to purchase energy supplied by
12 photovoltaic farms. This energy
will cover 25% of our annual
electricity consumption in France,
helping to further lower ouroperational CO2 emissions.

9.3

10

4.6

2020 2021 2022 2023

Distance travelled
Millions of km
6

Our total energy consumption has decreased significantly with
our ongoing implementation of a flex-office environment, which
requires less office space, and moving into office spaces with higher
levels of energy efficiency. The most notable changes include
moving our Paris head office to a smaller, more energy efficientbuilding, and moving our offices in Belgium to a passive building. In
addition to this, we put a plan in place to further reduce the energy
consumption of our Paris office by 10%. Combined, these offices
represent approximately 50% of our employee base.
However, our employee travel continues to increase and this isoffsetting our reductions in energy consumption. Compounding this,
we updated our emission factors in 2023 and those related to travelincreased, further increasing the negative effect of employee travelon our total emissions.

11.4

10

5.8
0.9

2020 2021 2022 2023

Greenhouse gas emissions
tCO2e per employee
2.2
1.2

0.8

1.3

2020 2021 2022 2023

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MAPPING TO KEY
STEWARDSHIP CODESCORPORATE SOCIAL RESPONSIBILITYA CULTURE OF
DIVERSITY, EQUITYAND INCLUSION
We believe that Diversity, Equity andInclusion are not just buzzwords, but are
our collective responsibility every day.
These principles are levers to unlock
our full potential, to contribute to ahigh-performance work culture and todifferentiate us as an outstanding asset
manager. We strive for a work ethic
based on the principle of opportunity
and translate this belief into concrete
policies and initiatives that are central
to our success and to driving changeboth internally and externally.

Women in the asset management industry
We operate in a highly competitive market andthe demand for talent – specifically mid-leveland senior women in fund management positions– is high and increasing. Despite operating
in an industry that has traditionally beenmale-dominated, we’ve made significant strides
in attracting, retaining and promoting women.

We have a number of KPIs in place to monitor theadvancement of women in our organisation.
• We monitor the number of women we hire, andin 2023, among employees who joined BNPP AM,
47% were women.
• Last year, we made significant progress in hiring
talent – our leadership pipeline – into our investment
platform as nearly 50% of recruits were women, setting
the stage for a more balanced and diverse future.

• An important metric in our industry is women in fundmanager roles, and within our organisation, 25% of
these roles are occupied by women. While this exceeds
the industry average of 12% (Citywire Alpha Female
Report 2023), we know we have more work to do and
we are committed to doing it.
• We offer leadership development programmes tailored
to women to support their career growth, stretch
themselves and develop their competencies andabilities so that they can reach senior leadership roles
in our company. These include:• We pay particular attention to gender pay gaps,
and on a yearly basis, we conduct detailed studies
and put action plans in place.
• We put in place various initiatives to support
new parents when they return from parental leave.

— ‘Authentic leading women’— ‘AMbition to lead’ for emerging women talent— ‘AMazing leaders’ for senior managers and experts
These programmes are complemented by externalseminar opportunities and online content via iLearn,
our award-winning in-house learning platform.

Women in senior management positions

Women on internal boards

2020

2020

27%

• All members of our Executive Committee havea Diversity, Equity and Inclusion ambition formalisedin their yearly objectives.

Women in talent programmes (leadership pipeline)
38%

2020

41%
42%

2021

33%

2021

44%

2021

2022

35%

2022

44%

2022

2023

36%

2023

45%

2023

49%

2025
target50%

2025
target40%2025
target50%

44%2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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MAPPING TO KEY
STEWARDSHIP CODESCORPORATE SOCIAL RESPONSIBILITY

Diversity is the mix, inclusion is making the mix work
Our people have always come from many different
backgrounds and cultures: we are based in
32 countries and our employees are drawn from
68 nationalities. Their countless perspectives andexperiences make us stronger and fuel our sharedcommitment to a better future.
• In 2023, we continued to educate and enhanceawareness on issues of Diversity, Equity andInclusion through conferences on a variety of topics.
We organised five events focused on elements
of inclusion which brought together over 1,000
attendees:— A session on thriving in a multicultural workplace— Two sessions on disability and health— An in-person conference on gender identity— An interactive theatrical play focused on genderand parenthood• We hosted a panel discussion with five membersof the Executive Committee exploring their visionof inclusive leadership as well as the benefits ofembracing vulnerability.
• We celebrated the strength and richness of ourmulticultural teams with a series of four short,inspiring videos from some of our colleagues who
have made significant contributions to our global
workforce. Through their experiences, we aim tohighlight the diverse perspectives, talents andadvantages that multiculturalism brings to ourcompany.
• We supported numerous professional networks thatplay an active role in promoting Diversity, Equity
and Inclusion within the Group, such as All Abroad,
Afrinity, CulturALL, Pride@AM, WeGenerations andWeLevelUp. In addition, we sponsored WE@AM, a
community of executive women in BNPP AM France,
who established this community after sharing acustomised learning journey, building a place forself-development and to generate a positive impact
on female leadership for the benefit of the firm.

Helping young people get their start in the UK
We have launched several initiatives across theglobe not only to foster Diversity, Equity andInclusion in our workplace, but to enhance theopportunities for young people entering the asset
management industry. This year, in the UK,
we continued a number of programmes:• We partnered with Headstart Action for thethird year in a row to offer work placements toyoung people to enhance their employability.
We also participated in #10000BlackInterns, aUK-based initiative to address the chronic underrepresentation of black talent in the industry.
• We participated in the CFA UK Women in
Investments programme. Since joining the
programme in 2022, we have offered nineinternships to young women in our London office.
• We are an active member of the Diversity Project,a widely recognised industry initiative which willfurther enable us to drive change.
• In 2024, we are participating in#10000AbleInterns, to address the underrepresentation of disabled talent within UK
industries.

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MAPPING TO KEY
STEWARDSHIP CODESCORPORATE SOCIAL RESPONSIBILITYHELPING YOUNGPEOPLE OVERCOMESYSTEMIC BARRIERSTO SUCCESSOur goal is to help young people facing
systemic barriers to success. Concretely, thatmeans helping them gain confidence throughmentorships and acquire the vital job
experience they need through internships.
While our volunteer efforts are wide-ranging,
we focus many of them on helping young
people. Volunteering also helps each of us
develop both professional and personal
skills while better connecting us with ourcolleagues and society. It is a very tangible
and meaningful way to have a positive
impact on the world around us. That’s why
we encourage our employees to volunteer
at least one day a year during working hours
at a community organisation of their choice.

Our commitment tomentoring young people
We embarked on an ambitious journeyto harness our employees’ knowledge
and experiences and turn them into
mentors for young people. Our goal isto help our employees help young people:• We continued our partnership with
Chemins d’avenirs, an organisation thatfacilitates young people’s inclusion in rural
France and we added another partner,
Proxité, for employees that are interested
in mentoring young people face-to-face.
• Many of our executive committee members
participated in a mentoring session
facilitated by Ecole de la 2e chance.
• We hosted a mentoring breakfast for all
our employee mentors so that they could
share their experiences with our Global
Head of HR and our Global Head ofFinance, Strategy and Participations,
our mentoring champion.
• We had a total of 12 employee mentors
in France as of the end of 2023, almost
double our 2022 number.

David Vaillant
Global Head of Finance,
Strategy and Participations“Supporting young people
over time enables themto gain the confidence andself-esteem they need tosucceed in life and we arevery pleased to be able toguide them in this reflection.
We have long encouraged our
employees to volunteer as
it is an enriching experiencethat enables them to broaden
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Volunteering
Volunteering is not only a great way to giveback to the community, but also a way forour employees to learn new skills and spend
meaningful time with each other outside ofa work environment. Some of our initiatives
related to volunteering include:

participants had never volunteered through awork-related event and almost all of them said
they would like to do it again. We were very
pleased with the outcome of Community Impact
Week and we will continue it into 2024.

• We encourage our employees to volunteer
at least one day a year during working hours;
in some countries, it can be more.

Our employees took part in a numberof other initiatives throughout the year
designed to support young people
overcome systemic barriers to success:• We more than tripled the number of hours
our employees volunteered in the community,
largely in part to a renewed emphasis on
volunteering post-Covid and the introductionof Community Impact Week.
In 2023, we launched our inaugural annual
global employee volunteer event, Community
Impact Week. Over the course of a week inMay, more than 850 employees in 19 countries
contributed over 3,000 hours of their time tocauses that were near and dear to their hearts.
In total, we hosted more than 50 community
activities that ranged from beach and park
clean ups, to work helping at food banks orcommunity homes, to working with young
people or people with disabilities.
One of our goals was to encourage employees
new to volunteering to participate in the hopesof getting them to build it into their habits.
We were pleased to learn that 57% of• We continued our partnership with the Financial
Industry Collective Outreach (FINCO) in Malaysia
through the FINCO Reads programme, where our
employees read to students at a local primaryschool with the aim of bettering students’proficiency in English.
• Through the BNP Paribas Group’s partnershipwith JINC, we hosted 10 young people fromchallenging backgrounds or neighbourhoods
at our offices in Amsterdam in December for a‘flash’ internship. These workshops give thema positive example of what you can achievethrough education and expose them to people
and environments they wouldn’t normallyencounter in their daily lives. In addition
to this, we have employees who act as careercoaches to young people just entering
post-secondary education, helping bringa different perspective to this important timein these young peoples’ lives.

• We brought 40 underprivileged children
to newly opened Bird Paradise in Singapore
for a day of outdoor education to inspire
children and to foster a love for the naturalenvironment.
• We partnered with Lingnan University in
Hong Kong to create the 8-month Future
Generations programme to give students
insights into working for a global financial
institution. The second year we have run thisprogramme, 44 university undergraduatesfrom various faculties participated, throughout
which they participated in a series of inspiring
workshops and mentorship sessions run by
our staff volunteers to discuss topics suchas investments, the product life cycle, sales,
marketing and many others.
• We have a long term partnership withThe Switch, which helps children in the Tower
Hamlets neighbourhood of London to better
prepare for their future. A number of ouremployees participate in the Writing Partners
programme, where they exchange letters withstudents to help improve their reading andwriting and get them curious about work life.

people have the right skills as the country
continues to transform and digitize. During
the 6-month programme, participants wentfrom learning basic skills in using the internet,
to ethics and security of communicating incyberspace and personal data protection.
Our employees were also actively engaged
in the learning process by sharing theirknowledge and experiences with the students.
• In New York, we participate in the
Global Finance Fellowship which offers
sophomore‑level City University of New York(CUNY) students monthly workshops at our
offices, mentorships with our employees,
a $1,000 stipend, and opportunities
to interview for our Summer Internship
Programme. This programme gives local,
largely first generation students the building
blocks necessary to start a career in finance.

3,933

Chris OuelletteHead of Corporate Social
Responsibility“Our company vision is to make adifference to people’s lives and ensure
the world is a better place for future
generations. We do that day in andday out in how we manage our clients’assets. Community Impact Week takes
this one step further and helps us “walkthe talk”: every volunteer act and every
hour given back help to build stronger,
more resilient communities.”

hours volunteeredby our employees• We partnered with Junior Achievement
Indonesia to run a digital literacy mentorshipprogramme for 375 high school and vocational
school students throughout Indonesia.
The programme’s goal was to ensure young

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ABOUT
THIS REPORT2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIMAPPING TO KEY
STEWARDSHIPCODESThe purpose of this table is to help readers findthe content related to key elements from varying
stewardship codes in this document.

AT A GLANCEOUR STRATEGYAND APPROACH

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MAPPING TO KEY
STEWARDSHIP CODESPRINCIPLE

UK

EFAMA

ICGN

HONG KONG

MALAYSIAJAPAN

PAGE NUMBERS IN THIS REPORT

Purpose, strategy and culture

1

1

1,6

-

5

1,2

2, 12-14, 16, 108-113

Governance, resources and incentives

2

1

1,2,7

1

-

1,5,7

15, 17-20

Conflicts of interest

3

1,5

1,5

7

4

2

23

Promoting well-functioning markets

4

-

4,6

-

5

-

26-27, 29-33, 60-61, 74-75,
79-80, 82, 97-99

Review and assurance

5

-

1,2,7

-

-

3,7

24

Client and beneficiary needs

6

6

3,6,7

6

-

5,6

4, 7-8, 21-22

Stewardship, investment and ESG
integration

7

1

3,6

-

5

3

13, 35-36, 38-41, 43-45,
48-58, 102-106

Monitoring managers and service providers

8

6

1,2,5

-

-

1,5

40-42

Engagement

9

1,2

4

1,2

3,2

4

60-100Collaboration

10

4

4

1,5

-

4

31-33, 58, 76-82, 85-87,
89-90, 93, 98-99

Escalation

11

3

4

1,3

-

4

61-63, 68, 91, 95

Exercising rights and responsibilities

12

1,5,6

5,7

1,4

1,6

5,6

60-69, 72-73, 91-93

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ABOUT
THIS REPORTGLOSSARY

2023 IN FIGURESEDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

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STEWARDSHIP CODES

AIF: Accredited Investment Fiduciary

GCG: Global Client Group

IPR: Inevitable Policy Response

RBC: Responsible Business Conduct

AIGCC: Asia Investor Group on Climate
ChangeGHG: Greenhouse gases

IRR: Internal Rate of Return

SBTi: Science-Based Targets initiative

GNI: Global Network Initiative

ITR: Implied Temperature Rise

SDGs: Sustainable Development Goals

GRASFI: Global Research Alliance for

IUCN: International Union for

Sustainable Finance and Investment

Conservation of Nature

GSS: Global Sustainability Strategy

KPI: Key Performance Indicator

SRI: Socially Responsible Investment

MAS: Monetary Authority of Singapore

ATNI: Access to Nutrition Initiative
AUM: Assets under Management
BBFAW: Business Benchmark
on Farm Animal Welfare
CISL: Cambridge’s Institute for Sustainable
Leadership
CSR: Corporate Social Responsibility(ISR - Investissement Socialement
Responsable - in French)
3Es: Energy transition, healthy

MiFID: Markets in Financial
Instruments Directive
NDCs: Nationally Determined

SFDR: Sustainable Finance Disclosure
Regulation
SRP: Sustainable Regulation Programme
TCFD: Task Force on Climate-related
Financial Disclosures
TNFD: Task Force on Nature-related

EET: European ESG Template

Ecosystems and Equality

ESG: Environment, Social, Governance

HSR: Health Star Rating

ETF: Exchange Traded Fund

IDD: Insurance Distribution Directive

in Sustainability Transition

EU: European Union

IEA: International Energy Agency

NGO: Non-Governmental Organisation

Investments in Transferable Securities

FAIRR: Farm Animal Investment Risk
and Return Initiative

IIGCC: Institutional Investor Group

NZAM: Net Zero Asset Managers

UNEP FI: United Nations Environment

FAME: Financial & Asset Management
Expertise

IIHC: Investor Initiative on Hazardous

FAO: Food and Agriculture Organisation
FSB: Financial Stability Board

on Climate Change

Chemicals
IPCC: Intergovernmental Panelon Climate Change

Contributions
NEST: Network of Experts

NZCB: Net Zero Company Benchmark

Financial Disclosures
TPI: Transition Pathway Initiative
UCITS: Undertakings for Collective

Programme Finance Initiative

PAI: Principle Adverse Impact

UNGC: United Nations Global Compact

PRI: Principles for Responsible Investment

URD: Universal Registration Document

QRG: Quantitative Research Group

VaR: Value at Risk

2023 SUSTAINABILITY REPORT • BNP PARIBAS ASSET MANAGEMENT

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ABOUT
THIS REPORT2023 IN FIGURESBNP PARIBAS ASSET MANAGEMENT Europe,“the investment management company”,
is a simplified joint stock company with its
registered office at 1 boulevard Haussmann
75009 Paris, France, RCS Paris 319 378 832,
registered with the “Autorité des marchés
financiers” under number GP 96002.
This material is issued and has been preparedby the investment management company. It
contains opinions and statistical data that areconsidered lawful and correct on the day of
their publication according to the economic
and financial environment at the time. This
document does not constitute investment
advice or form part of an offer or invitation
to subscribe for or to purchase any financial
instrument(s) nor shall it or any part of it
form the basis of any contract or commitment
whatsoever.
This document is provided without knowledge ofan investor’s situation. Prior to any subscription,
investors should verify in which countries
the financial instruments referred to in thisdocument are registered and authorised for
public sale. In particular financial instruments
cannot be offered or sold publicly in the UnitedStates. Investors considering subscriptions
should read carefully the most recent
prospectus and Key Information Document(KID) agreed by the regulatory authority, these
documents are available in the language of the

EDITORIAL FROMSANDRO PIERRIAT A GLANCEOUR STRATEGYAND APPROACH

country in which the financial instrument(s) is
authorised for the distribution and/or in English
as the case may be, on the following website,
under heading “our funds”:
https://www.bnpparibas-am.com/en/.
Investors are invited to consult the most recent
financial reports, which are also available on
the website. Investors should consult their own
legal and tax advisors prior to investing. Given
the economic and market risks, there can be
no assurance that the financial instrument(s)will achieve its investment objectives.
Their value can decrease as well as increase.
In particular, changes in currency exchange
rates may affect the value of an investment.
Performance is shown net of management fees
and is calculated using global returns with time
factored in, with net dividends and reinvested
interest, and does not include subscriptionredemption fees, exchange rate fees or tax. Past
performance is not a guarantee of future results.

THE 3ESRESPONSIBLE
BUSINESS CONDUCTESGINTEGRATION

CLIMATEVOTINGAND ENGAGEMENTSUSTAINABILITYIN OUR PRODUCT RANGECORPORATE SOCIALRESPONSIBILITY

MAPPING TO KEY
STEWARDSHIP CODES“The sustainable investor for a changing world”
reflects the objective of BNP PARIBAS ASSETMANAGEMENT Europe to integrate sustainable
development into its activities, although not
all funds managed by BNP PARIBAS ASSETMANAGEMENT Europe fulfil the requirementof either Article 8, for a minimum proportionof sustainable investments, or those of Article 9
under the European Regulation 2019/2088
on sustainability-related disclosures in thefinancial services sector (SFDR). For more
information, please see https://www.bnpparibasam.com/en/sustainability-bnpp-am/.

You can obtain this by clicking here:
https://www.bnpparibas-am.com/fr-fr/
investisseur-professionnel/synthese-desdroits-des-investisseurs/ a summary ofinvestor rights in French. BNP PARIBAS ASSETMANAGEMENT Europe may decide to terminate
the arrangements made for the marketing of
its collective investment undertakings/financial
instruments, in the cases covered by theapplicable regulations.

April 2024 – BNP Paribas Asset Management – Brand & Communication Department, Sustainability Centre / Design and conception: Bearideas / All
rights reserved / Illustrations: BNP Paribas Asset Management - Graphic Studio, bearideas / Copyright: Cade Martin, Thibault Stipal, Michael Blann,
Bruno Cohen, Studio Cohen- Photographies.

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