GLOBAL SUSTAINABILITYSTRATEGY 2023-2025
For professional investors – December 2023

The sustainable
investor for achanging world

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y- 2 -G LO B A L S U STA I N A B I L I T Y ST R AT E G Y

About us
BNP Paribas Asset Management (BNPP AM) is BNP Paribas Group’s dedicated asset
management business that employs more than 3 000 people in more than 30 countries,
including a large commercial presence in Europe and the Asia-Pacific region.
BNPP AM manages EUR 524 billion* of assets serving individual, corporate and institutional
clients in more than 60 countries. We offer investment solutions for individual investors(through internal distributors within BNP Paribas Group and external distributors), andcorporate and institutional investors including insurance companies, pension funds andofficial institutions. We offer portfolio investment expertise in line with clients’ long-termsustainable performance expectations, including active, conviction-based strategies, multiassets and systematic & quantitative investments, liquidity solutions, emerging markets andprivate assets.
Our purpose
Our purpose is to achieve long-term sustainable returns for our clients, by placing sustainability
at the heart of our strategy and investment philosophy.
Understanding and supporting the transition to a sustainable economy is a core objective.
It guides our strategy, our culture, our structure, our products, our processes, the way weengage with our clients and with the companies and the markets we invest in.
About this document
Our Global Sustainability Strategy (GSS) sets out our multi-year, strategic approach tointegrating sustainability considerations into how we invest and operate as an organisation.
It is supplemented by numerous policy documents which detail our approach in specificareas – such as how we undertake proxy voting and company engagement, implement our
Responsible Business Conduct policy and our ESG Integration Principles and Guidelines. These
documents contain more detail about our specific policies as well as their scope. All policies,
strategies and sustainability related reports are publicly available here on our corporatewebsite. The way we implement the GSS into our products or services is described in therelevant pre-contractual documentation produced for each type of product or services.

* BNP Paribas Asset Management, as of 30 September 2023. Joint Ventures included.

- 3 -G LO B A L S U STA I N A B I L I T Y ST R AT E G Y- 4 -CO NT E NTS
Foreword – Sustainability: The heart of our strategy
Introduction
Part I – Our beliefs, ambition and commitment
I. Sustainability at the core of our investment beliefs
II. Our ambition 2023-2025
III. Our commitment: be “the sustainable investor for a changing world”
PART II – The people who make it happen
I. Our people
II. Sustainability framework
III. BNP Paribas: Stronger in sustainability together
Part III - Our approach to sustainability
Overview of our approach
Pillar I: Forward-looking perspective – the ‘3Es’
Pillar II: Responsible Business Conduct (RBC)
Pillar III: Environmental, Social & Governance (ESG) integration
Pillar IV: Stewardship
Pillar V: Integrating sustainability in our product range
Pillar VI: ‘Walking the talk’: Our CSR approach
Conclusion
Appendix
I. Memberships and pledges
Disclaimer

5
6
8
9
11
13
14
15
17
18
19
19
20
29
29
32
34
36
39
40
40
44

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y

FOREWORDS U STA I NA B I L I T Y :T H E H E A RT O F O U R ST R AT E G Y
Over the coming years, the asset management
industry will face far-reaching change, driven by theneed to reallocate capital towards a more sustainable
and inclusive economy, new geopolitical dynamics,
evolving regulation, technological transformation andchanging demographics. These highly interconnected
dynamics are creating a rapidly shifting investment
environment.

Sandro Pierri
CEO, BNP Paribas Asset Management

The scale of impending disruption is unprecedented.
It will require long-term investors to reposition theirportfolios for sustainable growth, and a radicallydifferent level of thinking across the entire financial
system than has been the case in the past. We also
acknowledge that current conflicts and the associatedgeopolitical and economic uncertainty they bring
could be a headwind to progress in the near term.

Our long-established commitment to sustainability has given us the strength andexpertise to navigate this environment and deliver sustainable returns to our clients.
However, the transition to the new world is too complex to face alone. It is only byworking with clients, issuers, regulators and peers that we can build and pursue
an effective, successful path forward. Our Global Sustainability Strategy helps tostrengthen our conviction and guide our actions.
We remain firmly committed to delivering long-term sustainable returns to ourclients in this world in transition.
Sandro Pierri,
CEO

- 5 -

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y- 6 -I N T R O D U CT I O N
We published the first iteration of our Global
Sustainability Strategy (GSS) in 2019, setting forth
our plan for implementing sustainability across ourorganisation. An incredible amount has happened
since then, including the global Covid-19 pandemic;
the war in Ukraine and conflict in the Middle Eastand the resulting humanitarian, geopolitical andenergy market fall-out; and an unprecedented
string of climate-related physical disasters. Financial
markets have seen the implementation of theEuropean Sustainable Finance Disclosure Regulation(SFDR), the most stringent and far-reaching financial
sustainability framework yet seen.
Jane Ambachtsheer
Global Head of Sustainability

Despite these transformational events, when wereassessed our strategy towards sustainability, we
found that the fundamentals of our approach havenot changed.

This document provides an update for our clients and stakeholders on our approachto sustainability and our priorities for the coming two years.
•

The first part covers the ‘what’ – our commitment, investment beliefs andambition to put sustainability at the heart of what we do. It outlines our key
priorities in the coming years: further strengthening our unique culture;continuing bold stewardship; employing a science-based, transparent approachto research; expanding our range of sustainability themed-solutions; enhancing
our focus on emerging markets and broadening our approach to impact investing.

•

The second part covers the ‘who’ – reflecting how our governance andorganisation are structured to meet our aims.

•

The last part covers the ‘how’ – our approach to sustainability, including adescription of the six pillars we employ to strengthen the way we invest,
including how we generate investment ideas, construct optimal portfolios,
control for risk and engage with companies and markets. It defines how we
respond to the diverse needs of our broad client base while protecting theirinterests.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y

Despite the challenges of the last three years, numerous developments encourage optimism:•

The Glasgow Financial Alliance for Net Zero (GFANZ), launched in 2021, now includes
more than 550 financial institutions representing 50 countries1.

•

While the risk of climate overshoot – exceeding the Paris Agreement goal of limiting
average global warming to 1.5°C – is high and rising, scenarios such as the Inevitable
Policy Response’s 2023 Forecast Policy Scenario2 and the latest Announced Pledges
Scenario of the International Energy Agency (IEA) 2023 World Energy Outlook3 suggestthat temperature rise could peak below 2°C (~1.8°C). The Climate Overshoot Commission4
has been established to help recommend an integrated strategy to reduce and manage
the risk of overshoot.

•During COP15, the 2022 UN Biodiversity conference, an agreement was reached to protect
at least 30% of the planet’s land and water5 by 2030.

•

The success of the Task Force on Climate-related Financial Disclosures (TCFD) prompted
the launch of the Task Force on Nature-related Financial Disclosures (TNFD) and theTaskforce on Inequality and Social-related Financial Disclosures (TISFD).

•The US Inflation Reduction Act and Europe’s Green Deal Industrial Plan provide
unprecedented incentives for climate investment and action to reduce emissions acrosssectors.

We are actively involved in many of these initiatives, and we integrate the opportunities theypresent into our research, strategy and approach. As long-term investors with our clients’interests at heart, we will continue to use our voice and our influence to push towards moresustainable outcomes for the companies and markets in which we invest.
Jane Ambachtsheer,
Global Head of Sustainability

1.
2
3
4.
5.

Source: GFANZ as at 30/08/2023.
Global climate policy forecast predicts ‘well below 2°C’ Paris Agreement climate goals will be met —IPR (transitionmonitor.com)
https://www.iea.org/reports/world-energy-outlook-2023
Climate Overshoot Commission
See Target 2 of the Kunming-Montreal Global Biodiversity Framework, available here

- 7 -

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y- 8 -PA RT IO U R BE L I E F S , A M B I T I O N A ND CO M M I T M E N T
BNPP AM’s sustainability journey began in 2002 with the launch of our first socially
responsible investment fund. We joined the Institutional Investors Group on Climate Change(IIGCC) shortly afterwards, and in 2006 we were a founding signatory to the UN-supported
Principles for Responsible Investment (PRI). In 2012, we introduced and implemented theUnited Nations Global Compact Principles as a standard across our investment funds and in2015 we committed to aligning our portfolios with the Paris Agreement.
In 2019, we launched our first Global Sustainability Strategy, underpinning the pillars of
our sustainability approach. In 2021, having sufficiently progressed our transition to put
sustainability at the heart of what we do, we adopted our new tagline ‘The sustainable investor
for a changing world’. The same year, we launched our comprehensive Biodiversity Roadmap
and supported the launch of the Taskforce on Nature-related Financial Disclosures (TNFD).
We strengthened our commitment to the Paris Agreement by joining the Net Zero AssetManagers (NZAM) initiative and published our Net Zero Roadmap in 2022, covering our
10 commitments spanning our investments, stewardship and operations. We also announced
the launch of Nature Action 100 at COP15, a collaborative initiative with the objective ofreversing nature loss. Our ambitious integration of environmental, social and governance(ESG) considerations into our product offerings has resulted in more than 90% of our
European-domiciled open-ended funds’ assets under management (AUM) being categorised
as sustainable (Article 8 or 9) under the SFDR (as of September 2023).

Committed to sustainability since 2002
Launch of our first socially
responsible investment (SRI)
fund and joined the Institutional
Investors Group on Climate
Change (IIGCC)

Implementation of the United
Nations Global Compact
Principles & sector policies
of BNP Paribas Group

Exclusion of tobacco
from our investment
funds

Enhanced ESG(1) Scoringand Diversity Voting
Guidelines

Launch of Net Zero Roadmap,
Partnered with Matteron SDG(2) Fundamentals dataset

2002

2012

2018

2020

2022

2006

2015

2019

2021

2023

Founding signatory to
the UN Principles for
Responsible
Investments (PRI)

Signatory to Montreal Carbon
Pledge to align portfolios with
the Paris agreement

New Coal Policy &launch of Global
Sustainability Strategy

Launch of Biodiversity
Roadmap, Signatoryof Net Zero AssetManagers initiative

Founding memberof Nature Action 100

Source: BNPP AM as at November 2023
(1). ESG; Environmental, Social & Governance. ESG assessments are based on BNPP AM’s proprietary methodology which integrates all 3 aspects of E, S & G(2). SDG: United Nations Sustainable Development Goals

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y- 9 -I. SUSTAINABILITY AT THE CORE OF OUR INVESTMENT BELIEFS
Our investment beliefs underpin our approach by weaving together investment teams that cover different asset
classes, geographies and themes. Sustainability is a core component of this, as outlined below.

BNPP AM investment beliefs
Conviction driven
In a changing world, our conviction-based investment philosophies provide scope tocapture both short and long-term opportunities for value creation. Our approaches combine
a thorough understanding of market dynamics and fundamentals (at security, sector, andthematic levels), enabling high conviction positions and a dynamic allocation of capitalacross varied time horizons.

Risk management

Sustainable

The value created through our
research and idea generationneeds to be carefully preserved
through appropriate risk
utilisation.

By integrating sustainability
considerations across ourinvestment processes, we create
the opportunity to deliver better
outcomes for our clients, markets
and the planet.

Powered by people

Research driven

People drive investment decisions.
We are committed to attracting,nurturing, and retaining diversityof talent. We align incentives toour clients’ long-term sustainableobjectives.

Research is the foundation onwhich we build our market
views to support our convictions.
We apply quantitative andfundamental approaches to our
research; our culture is basedon curiosity, collaboration andchallenge.

Global perspective
A global perspective is needed to makebetter investment decisions in an
increasingly interconnected world.
BNPP AM, 2023

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 0 -Our multi-faceted approach also involves a more detailed set of investment beliefs focused on sustainability:

BEHAVING AS A ‘UNIVERSAL OWNER’ HELPSTO SHAPE A MORE SUSTAINABLE ECONOMIC
FUTUREAs a global investor, diversified across asset classes,
regions and sectors, our ‘universal owner’ mind-set
recognises that externalities creating profits in one place(a sector or country), can reduce value elsewhere or in the
future that we generally cannot diversify away from. We
believe the economic model that will best serve investors
in the long term is one focused on low-carbon, healthy
ecosystems. We also believe the way we invest and engage
with companies, governments and regulators can help
shape the world around us. Our seeking to actively address
systemic risks can help promote greater market stability
and improve market beta, while aiming to deliver similaror better financial returns over the long term.

ESG INTEGRATION CAN ENHANCE
THE WAY WE INVEST
ESG considerations are interpreted and taken into accountby market participants in different ways. Coupled withinconsistent levels of disclosure by companies, this canlead to market inefficiencies which can create opportunities
for ESG-savvy investors. While we expect corporate
disclosure to increase, shifts in consumer, investor andregulatory expectations will likely persist in a dynamic
environment experiencing secular change (e.g., driven
by climate 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[i],[ii].

OUR FIDUCIARY DUTY IS ALIGNEDWITH SUSTAINABILITY

STEWARDSHIP IS BOTH AN OPPORTUNITY
AND AN OBLIGATION

We have a duty to our clients to make well-informed
investment decisions, taking reputational, operational,
financial and system-level risks and opportunities into
careful consideration. ESG factors inform our risk andopportunity assessment across these dimensions andhelp us better understand the impact on companies ofsystemic risks. It is also our duty to help our clients define
the objectives that are important to them and to build
portfolios that are consistent with these. Trade-offs canoccur, particularly where companies/sectors are excluded
from an investable universe. These can affect tracking error
and may lead to periods of relative underperformance.

As long-term investors, we believe we should use
stewardship – proxy voting, company engagement andpolicy advocacy – to encourage companies, governments
and markets towards better outcomes. We are transparent
in our approach to stewardship and the outcomes weachieve. Collaboration with other investors can often
improve the likelihood of success and create efficiencies
for all parties involved in a dialogue.

‘WALKING THE TALK ’ IS CRITICAL TO ACHIEVING EXCELLENCE
We believe our corporate practices and disclosures should match or exceed the standards we expect from the entities inwhich we invest. We integrate sustainability considerations across our business, including how we manage our facilities,
foster diversity within our workforce and our company boards, and how we engage with our employees.

In 2024, we will produce a white paper covering how we put these investment beliefs into practice and how
they intersect with investment risk, performance and real-world outcomes.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 1 -II. OUR 2023-2025 AMBITION
Over the past year, we have explored the areas of focus that we felt were most important in helping us achieve
our ambition. This has enabled us to identify six strategic priorities for the near and medium term to help usdeliver long-term, sustainable returns for our clients .

NEAR TERM
1.

3.

Produce science-led, transparent research: We
draw on robust scientific and academic models andframeworks to inform our thinking, underpinned bystrong data and control processes. We strive to beboth science-based and transparent in our approach,partnering with multiple stakeholders to push towards
common frameworks and progress on shared goals.
We will deepen our relationship with academia, forexample the academic network GRASFI (the Global
Research Alliance for Sustainable Finance andInvestment), to support this objective.

Mobilise capital towards investment solutions thatembed sustainability and meet clients’ long-term
needs. Over the years we have launched various
investment solutions to help our clients progress
through different stages of their sustainability journey(best-in-class, multi-factor strategies that embedsustainability-related constraints, sustainable thematicofferings, Paris-aligned benchmark strategies, net
zero solutions supporting the energy transition, etc.).
We will continue to broaden our range of investment
solutions, enabling a wide spectrum of investors tomeet their sustainability objectives.

2.

4.

Maintain our bold stewardship approach: Over many
years, we have seen tangible results from our boldstewardship strategy. We strive to build our position
as a stewardship leader with robust and credible
policies and outcomes, including our work on policy
advocacy. We will continue along this path – engaging
directly, and in collaboration with other investors –across a range of topics, and reporting our results.

Continue to invest in our sustainable culture: We havemade significant progress in building a sustainabilityfocused culture within and throughout our firm, andit will remain a top priority as it is now embedded in
our Employee Value Proposition. Specific targets andprogrammes are included in the sixth pillar of ourapproach: CSR - Walking the Talk.

MEDIUM TERM
5.

6.

Drive sustainability in emerging markets: Already andin the future, most people in the world live in emerging
markets. This is where the biggest emissions-based
and biodiversity pressures on the planet occur, andthus where there is the greatest need to shift towards
more sustainable energy systems and land use. BNPPAM has a significant presence in emerging markets– particularly in Asia. We are increasingly using thisas an anchor to support our work on enabling a net
zero, environmentally sustainable and inclusivetransformation in the global economy. This includes
working partnerships with local colleagues andclients to develop regionally relevant ESG researchand engage with local companies and regulators. We
will provide updates on this work and its outcomesin our annual sustainability report.

Achieve a tangible impact: A growing number of ourclients seek to invest for impact. We strive to help
them achieve this by:• Offering individual investment strategies on impact
investing• Improving the outcome and impact measurementof our broader range of strategies• The way we measure and take responsibility forour own impact as a firm, for example, by using
research programmes to explore our firm-wide
impact on biodiversity loss and deforestation.
Over the coming years, we will release further
information about our approach to impact investing,clarifying how it applies to each asset class, and how it
relates to evolving industry definitions and regulatory
frameworks.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 2 -INTERNAL PRIORITIESIn addition to our six strategic priorities, we will focus on several internal priorities.

1.
Continue to invest in our ESG Data ProgrammeThis programme supports the development and deployment of our growing range of ESG researchmethodologies (including related to the SFDR, net zero and the UN Sustainable Development Goals(SDGs)). We are strengthening our internal capabilities to ensure that high quality data is available tosupport investment analysis, portfolio construction, measurement and reporting. We will continue todevelop this programme over the coming years.

2.

3.

Provide a range of educational opportunities
to colleagues and clients:• Invest significantly to provide our employeeswith the required level of knowledge,
recognising that sustainability issues are
rapidly evolving.
• Expand the range of education and training
tools for our clients, notably via ourInvestment Academy

Sharpen our strategic communication andknowledge sharing:• Embed our science-based and transparent
philosophy within our communications,increasing external impact and avoiding
the risk of greenwashing.
• Foster knowledge sharing, drawing upon
the deep experience and intellectual capitalwhich exists across teams to build andnurture our sustainable culture and for theongoing benefits of our clients and teams.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 3 -III. OUR COMMITMENT: BE “THE SUSTAINABLE INVESTOR FOR A CHANGING WORLD”
Our purpose is to achieve long-term returns for our clients, by placing sustainability at the heart of our strategy
and investment philosophy.
We seek to minimise the adverse impacts of ourinvestments, use our influence to help shape abetter future, and allocate capital towards companies
that are contributing to positive change. The
dialogue established with our clients on sustainable
investing is essential, and we also need to consider
their sustainability-related preferences. To do thisefficiently, it is important to provide our sales andclient service representatives with the right tools,
in a variety of formats, to enable relevant and usefulengagement.
We have an important role to play in bringing ourclients along the sustainability journey. We do thisthrough the training we provide via our Investment
Academy, created in 2009 with the purpose of sharing

knowledge and expertise with our clients, as well
as by using a variety of communication channels.
Our marketing and communication teams have long
been committed to reporting on our actions andproducing a wide range of media (brochures, videos,client events, podcasts, articles, infographics) thatenable our clients to understand the challenges andopportunities related to sustainability topics, ourapproach, and the solutions we offer.
Since the launch of our first GSS in 2019, we haveundertaken additional commitments to deliver on our
vision to be the sustainable investor for a changing
world, notably through our Biodiversity and Net Zero
Roadmaps.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 4 -PA RT I I
THE PEOPLE
WHO MAKE IT HAPPENAt BNP Paribas Asset Management, our Employee Value Proposition focuses on the potential
for sustainability to improve global economic, natural capital and societal conditions whileachieving long-term sustainable returns for our clients.
For us, the greatest potential lies in people. At BNPP AM, this is at the heart of what we do; ourpeople are proud of the impact they make, notably through our contribution 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 that helps
release the potential within each of our employees, nurtures it and allows it to flourish.
We believe that through our objective to embed sustainability in all we do – our investments,
our people, our processes, our operations and other aspects of our business – we can build
a culture of sustainability that will help us to deliver our business strategy more effectively.

I. OUR PEOPLE
To support our firm-wide sustainability approach, each team has an important role to play.
A. THE SUSTAINABILITY CENTRE
The Sustainability Centre drives the firm’s approach to sustainability. This dedicated teamof more around 35 ESG experts is responsible for developing and implementing the firm’s
Global Sustainability Strategy, ESG Integration Principles and Guidelines, stewardship policy
and implementation, and Responsible Business Conduct Policy.
They also work towards our ambitious targets related to the energy transition, healthy
ecosystems and greater equality in our societies. The Sustainability Centre plays a crucialrole in measuring, tracking and reporting on BNPP AM’s progress on sustainability.
Within the Sustainability Centre, we have multidisciplinary ESG expertise in the following
teams:• Sustainability Research• Stewardship• Social Business• Corporate Social Responsibility (CSR)• ESG Specialist team

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 5 -Members of the Sustainability Centre are located in Boston, Hong Kong, London, New York, Paris, Singapore andToronto. This means they can bring regional expertise to the global team and work closely with local investment
and sales teams.

Sustainability Centre~35 13 ~13 10

ESG
newexperts positions
Across Asia, Europe
and North America

Since 2019years

Average
professional
experiencelanguages
spokenB. ESG CHAMPIONS

C. INVESTMENT TEAMSOur network of ~140 ESG Champions, as of September
2023, plays a key role in linking our investment
and sales teams with our Sustainability Centre anddisseminating information across the business. They
are subject matter experts within their relevant teams,
pursue specialised ESG education and certifications
and have performance objectives reflecting their
responsibilities. ESG Champions also act as a first pointof contact on sustainability matters in their respective
teams, actively sharing knowledge and contributing
to meeting our sustainability priorities. We also have
ESG Correspondents in each asset class, who act as
key partners on ESG topics (such as ESG methodology
developments, data updates and reporting).

Investment teams and processes are at the core of
implementing our sustainability approach. Analysts
and portfolio managers integrate ESG factors into
company, asset and sovereign evaluations in different
ways, depending on the individual investment
strategy.
Our Chief Investment Officers (CIOs) ensure that theirteams implement our ESG Integration Guidelines
and achieve any sustainability-related commitments
which have been taken at a portfolio level. The
Investment Committee is also involved in guiding theevolution of our ESG methodologies.
A positive feedback loop exists between theinvestment teams and the Sustainability Centre:
Portfolio managers actively contribute to ESG research– both from a methodological perspective andregarding individual company scoring and analysis –and engage in discussions about how best to integratesustainability themes into product development andclient reporting. Dynamic dialogue also takes place inrelation to joint engagements by investment teams
and Sustainability Centre colleagues with companies
and policymakers on a range of topics.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 6 -D. QUANTITATIVE RESEARCH GROUP (QRG)

F. CENTRAL FUNCTIONS AND TEAMSOur QRG comprises around 30 technical experts. The
team works closely with the Sustainability Centre to
co-develop numerous ESG scoring datasets, undertake
relevant research and monitor the link between ESG
integration and investment performance. It also plays
a key role in the firm-wide ESG data program.

Our central functions (Compliance, Legal and Risk)
and many other teams play an important role in
implementing our sustainability agenda. For example,
sustainability risks are included in the risk function’scontrol framework, to ensure that the sustainabilityrelated roles and responsibilities linked to delivering
our sustainability processes have appropriate
procedures, controls and monitoring in place. The
Legal team provides regulatory intelligence and is
responsible for the interpretation of legal texts. The
RISK Investment Monitoring & Control team monitors
adherence to our Responsible Business Conduct
policy, as well as our commitments under different
regulations and industry labels. The IT team plays acritical role in delivering our ESG Data Program. The
HR team is a core partner in developing and delivering
our sustainability education programme.

E. PRODUCTS AND STRATEGIC MARKETING (PSM)
This team leads on the alignment of BNPP AM productswith our approach to sustainability. It ensures aconsistent application of ESG key performanceindicators (KPIs) across our product range, ensuring
suitable sustainability naming practices, andanticipating and aligning with sustainable regulationand labels. The team also plays a key role in helping
to lead the GCG (Global Client Group) ESG Champions
network and educating our clients and colleagues onsustainable regulation topics.
PSM works hand-in-hand with the Sustainability
Centre and investment teams to develop and promote
high-conviction sustainability strategies and products.
Innovation is focused on building new sustainabilitythemed investment strategies, as well as working
with clients to develop customised products that meettheir investment and sustainability preferences. PSM
also has a key role in building our digital and datacapabilities to support the integration of sustainability
criteria into products.

G. GLOBAL CLIENT GROUP (GCG)
Our sustainability approach also helps supportclients to achieve their own sustainability priorities.
Relationship teams encourage clients to adopt
relevant parts of our sustainability strategy for
mandates, provide updates to clients about regulatory
developments, and promote investment practices
integrating sustainability across the industry. Our
marketing and communication teams ensure ourclients and colleagues are aware of sustainabilityrelated approaches and developments, and regularly
communicate our sustainability activities. We provide
a wide range of sustainability education opportunities
for clients, an area we will continue to focus on in
the coming years.
A wide range of other teams (Communications,Operations, etc.) are involved in bringing oursustainability principles and practices to life.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 7 -II. SUSTAINABILITY FRAMEWORKWe expect high standards of governance from thecompanies in which we invest, including on all
sustainability matters, and we hold ourselves to thesame standards. Our sustainable investing approach ismanaged by a company-wide governance framework
which ensures our sustainability-related policies
and practices are embedded and implemented
appropriately throughout our business, and that
all new initiatives are well-conceived, properly
structured and delivered effectively.

Our governance system ensures board and executive
level oversight of the implementation of the GSS andour business strategy. At an operational level, we
believe it is an effective mechanism to ensure thatour policies and processes align 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 ourapproach to sustainability

Approves sustainability
methodologies andmonitors ESG integration

Reviews voting
and engagement
implementation

Approves sustainability
characteristics of products

Oversees theimplementation of ourapproach to Corporate
Social Responsibility

Chair: CEOChair: Global Head ofInvestments

Co- Chairs: Equities CIO &Global Head of Sustainability

Chair: Global Head of Products
and Strategic Marketing

Chair: Head of Corporate
Social Responsibility

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

Oversees the development andimplementation of regulatory
related methodologies, definitions,disclosures and processes.

Oversee and validate ESG
methodologies that are linked
to regulatory/label frameworks

Manage the scoring evolution
process and ensure deepening
implementation of our ESG
Integration Guidelines

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

Co- Chairs: Global Head of Products
and Strategic Marketing & Global
Head of Sustainability

Sustainability Centre, Quantitative
Research Group, digital and IT

Sustainability Centre, Investments
and Quantitative Research Group

Sustainability Centre, Quantitative
Research Group, digital and IT*sub-Committee of the Sustainability
Regulation Programme• Implementation is monitored by our internal control systems• Integrated into BNP Paribas Group Sustainability

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 8 -III. BNP PARIBAS: STRONGER IN SUSTAINABILITY TOGETHER
Our sustainability culture and ambition is strengthenedby being part of the BNP Paribas Group. We benefit
from access to resources and colleagues with abreadth of experience across many fields. BNPP AM is
involved in our group-wide sustainability architecture,
participating in committees, sharing research anddata, ideas and experiences with colleagues fromBNP Paribas Group’s Company Engagement & CSR,
and Investment & Protection Services. We can thus
make the most of each other’s expertise and gain
synergies from our efforts towards our sustainability
commitments.

BNP PARIBAS ‘NETWORK OF EXPERTS INSUSTAINABILITY TRANSITION’ (NEST)The BNP Paribas Group’s Network of Experts in Sustainability Transition, or NEST, comprises over 700
sustainable finance experts (as at November 2023) from across BNP Paribas business lines and functions.
By pooling their expertise to support the transition of Group clients, NEST members can contribute beyond
their own businesses by sharing knowledge and supporting clients across the Group. This network includes
members from BNPP AM’s Sustainability Centre and several BNPP AM ESG Champions.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 1 9 -PA RT I I I
O U R A P P R O A CH
TO S U STA I NA B I L I T Y
OVERVIEW OF OUR APPROACH
The 6 pillars of our approach

1.

Forward-looking perspective: the ‘3Es’ (Energy transition, healthy Ecosystems, and Equality)
Enhance investment decision-making, preserve long-term market performance2.

Responsible Business Conduct(RBC) and sector-based exclusions
Articulate expectations
for responsible businessconduct and sensitive
sectors; avoid
regulatory
and stranded asset risk

3.

ESG

ESG integration

Enhance risk-adjusted
outcomes

4.

Stewardship (voting, engagement,
Policy advocacy)
Protect company value, influencesound regulatory framework,
promote better social andenvironmental outcomes

Our Investments

5.

6.

Provide investment
solutions to help
our clients throughtheir sustainability
journey

Our corporate
practices anddisclosures shouldmatch or exceed thestandards we expectfrom the entities inwhich we invest

Our products

Our operations

Sustainability
In our productrange

Corporate Social
Responsibility (CSR)
walking the talk

Our approach provides a strong framework, built to recognise that systemic risks such as
climate change or biodiversity loss cannot be fully addressed through exclusions or the
integration of factors in portfolio management. Our stewardship activities and strategy withregard to the 3Es complement and amplify our efforts to reduce material investment risks,
as well as systemic risks that require collective and urgent action.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 0 -PILLAR I: FORWARD-LOOKING PERSPECTIVE – THE ‘3ES’
We believe the optimal economic model can be built on a successful Energy transition, healthy Ecosystems,
and greater Equality in our societies – our 3Es. Taken together, these form a pathway to economic sustainability
that will enable us, as investors, to safeguard long-term returns. These themes guide our strategic research,stewardship, responsible business conduct, sustainable thematic investing and CSR approach. They are also
reflected in the other pillars of our approach to sustainability, and our roadmaps describe our detailed strategy
and targets.
In pursuing these three topics:

E#1: ENERGY TRANSITION•

We can invest in the companies and sectors thatare part of the solution, encouraging their growthand benefiting from their success through ourallocation of capital.

•

We can divest from companies that we believe to
be at risk from inevitable structural changes, andwhose behaviour is too much at variance with ourown beliefs and investor preferences.

•

We can integrate our knowledge and perspectives
on the 3Es into our investment processes acrossasset classes. This optimises our ability to makewell-informed decisions – particularly in a world
with imperfect information and inconsistentlevels of knowledge – thus helping to protect andenhance investment outcomes for clients.

Energy transition describes the structural shifts in the
global energy system. Ignited by the climate crisis,
it has four main drivers: public policy, technology,changing consumer preferences and changing investor
preferences. These operate in a feedback loop, making
it likely that the energy transition will intensify andaccelerate over the next decade. The transition is an
opportunity in the short, medium and long term toboost growth, both from increased investment in the
low-carbon economy and by fostering innovation andtechnological progress.

•

6.

We can exercise investor stewardship – throughour proxy voting and engagement activity – andvia discussions with policymakers, regulators andgovernments.

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’).
Those that do not adapt will be left behind, so a strong
component of our strategy has been our pledge ‘tomake a substantive contribution to the low-carbon
energy transition’. We bolstered this pledge by signingup to the Net Zero Asset Managers (NZAM) initiativein 2021. In 2022, we published our Net Zero Roadmapof our investment, stewardship and operational net
zero commitments6. These are outlined in the table in
the next page. While our initial commitment covers
50% of our assets under management, we aim toincrease this proportion of AUM to ensure we reachnet zero by 2050 or earlier.

Please refer to our Net Zero Road Map for a detail presentation of our commitments: extension: https://docfinder.bnpparibas-am.com/api/files/F5EE3377-26CE4DFD-B770-DBD29323D78B

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 1 -Commitments

1

Reduce the carbon footprint of our in-scope corporate investments (Scopes 1
and 2)7
a 30% by 2025
b. 50% by 2030

2

Align with net zeroa. 60% of in-scope investments to be Net Zero Achieving, Aligned or Aligning(“NZ: AAA”) by 2030
b. 100% of in-scope investments to be NZ:AAA by 2040

3

Exit coal
We will exclude mining companies that do not have a strategy to exit thermal
coal activities, and power generators that still have coal capacity in their generation mix, in 2030 for European Union and OECD countries and in 2040 for
the rest of the world.

4

Invest in climate solutions
Substantially increase our climate and environmentally themed investments

5

Engage with our clients
Engage with our clients to transition towards net zero investing

6

Vote for climate action
a. Signal our expectation that companies report on their carbon footprint, andthat the world’s largest greenhouse gas (GHG) emitters set an ambition toachieve net zero by 2050 or sooner
b. Vote in favour of thoughtful shareholder proposals and submit proposals of
our own to accelerate corporate action on climate change.

7

Engage with companies on net zero
Implement an engagement strategy that is consistent with our ambition for all
assets under management to achieve net zero emissions by 2050 or sooner.

8

Advocate for NZ 2050 aligned climate policy
Play an active role in advocating for net zero aligned policy, and seek to ensurethat any relevant direct and indirect policy advocacy that we undertake is supportive of achieving global net zero emissions by 2050 or sooner.

9

Reduce our operational emissions footprintContinue to offset our operational emissions while we improve energy efficiency
and use more green energy.

10Report on progress
Produce TCFD8 aligned reporting.

Investments

Stewardship

Operations

We look forward to working with clients, the companies in which we invest, peers and governments on achieving
a critical mission: a net zero economy by mid-century. Further details on our Energy Transition approach areavailable in our Net Zero Roadmap.

7.

8.

“Scope 1” refers to the direct emissions from sources that are owned or controlled by the company. “Scope 2” refers to the indirect emissions linked to thecompany’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 the calculation since the measurement of these emissions is not standardised or considered sufficiently reliable
yet to be used in reporting. Given the importance of scope 3 emissions in most sectors, we are evolving our approach to calculating scope 3 emissions with theaim of including it in our approach in the future.
https://www.fsb-tcfd.org/

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 2 -FOCUSING ON HIGH-EMITTING SECTORSAs part of our net zero commitment, we will
progressively align our investments in the highest
carbon-emitting sectors with a global target. We
have already started with the Power Generation
and Oil & Gas sectors, as defined in our Responsible
Business Conduct Policy.
Our holdings in the power sector track theInternational Energy Agency’s Sustainable
Development Scenario for power generation, andour overall exposure to coal power production islimited. As we do not have scientific benchmarks
based on activity metrics for mining companies,
we have selected thresholds we believe are strict
enough to reduce our overall exposure to coalmining. We have been reducing the threshold overtime and will continue to do so. We will exclude
mining companies with thermal coal activities andpower generators that still have coal capacity intheir generation mix, in 2030 for European Union
and OECD countries and in 2040 for the rest of
the world.

9.

In oil & gas, we have exclusions and mandatory
criteria in place for companies with significant
involvement in the exploration, production, trading
and/or pipeline distribution of shale oil or gas, oilsands and other oil & gas resources, especially insensitive areas. We recently strengthened our policy
on unconventional oil & gas and on particularly
sensitive areas in terms of climate and biodiversity,
namely the Arctic and Amazon regions.
Looking ahead, our priority is to start to alignour investments in other high-emitting sectors,
beyond power production. We will continue ourengagement to drive the energy transition throughcollaborative initiatives like Climate Action 100+
(CA100+) and the Asia Investor Group on Climate
Change (AIGCC) Asian Utilities Engagement
Programme, and through individual engagement.
As we continually strive to improve our knowledgeof climate-related risks and opportunities, we areundertaking several related-research projects todevelop better tools and metrics to assess related
exposures, as well as tracking and reporting against
our net zero commitments9.

Examples of our key research work streams are outlined in our net zero roadmap available here: https://docfinder.bnpparibas-am.com/api/files/F5EE3377-26CE4DFD-B770-DBD29323D78B

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 3 -E#2: HEALTHY ECOSYSTEMS
Healthy ecosystems provide humanity with a vast
range of crucial services, many of them irreplaceable:•

Provisioning services (food, fresh water, fuel,pharmaceuticals, etc.)•

Regulating and maintenance services (climate
regulation, erosion control, water purification, pest
control, soil health, etc.)•

Cultural services (recreation, tourism, scientificand intellectual development, spiritual enrichment,etc.).

These ‘ecosystem services’ underpin our global
economy, generally off our balance sheets, unnoticed,
until they disappear. 55% of global GDP10 is moderately
or highly dependent on high-functioning biodiversity
and ecosystem services.

According to the world’s leading scientists, the natural
world is in crisis. We are losing biodiversity – thefabric of life on Earth – at an alarming rate. We arein the midst of Earth’s sixth mass extinction event:approximately 25% of all species on Earth is at riskof extinction by 2050 – about one million species ofplants and animals11. The biodiversity crisis presents
a unique threat to our economies, our investments
and our way of life.
As an asset manager with a broad range of clients
who all depend upon a stable biosphere, we havethe dual responsibilities of understanding how ourinvestments impact nature – our role in driving thiscrisis – and understanding how nature loss may
translate into financial risks.

The planetary boundaries
In 2009, the Stockholm ResilienceCentre introduced the planetary
boundaries concept, which focuseson the nine systems that regulate thestability of the Earth.

CLIMATE CHANGE

BIOSPHERE
INTEGRITYNOVEL ENTITIESRadiative
forcing
Increasir s ng risk

CO2
concentration

Genetic

STRATOSPHERIC OZONEDEPLETION

rating sp
e ope
ace
Saf

Functional

ATMOSPHERICAEROSOLLOADINGLAND-SYSTEMCHANGE

Freshwater use(Blue water)

FRESHWATER CHANGE

Green
water

OCEAN
ACIDIFICATIONPN

BIOGEOCHEMICAL
FLOWS

Source: Stockholm Resilience Centre, September 2023.

10. Gross Domestic Product11. See: https://www.ipbes.net/news/Media-Release-Global-Assessment

In early 2022, scientists announced
that the Earth has crossed six ofthe nine planetary boundaries
demarcating the safe operating spacefor humanity:
•
•
•
•
•
•

Pollution from ‘novel entities’
Freshwater use
Climate change
Biosphere integrity
Biogeochemical flows
Land-system change.

This unravelling of nature, alreadyunderway, poses an existential threat
to humanity and the economy.
In September 2023, scientists wereable to map out all nine boundary
processes, confirming six of nine arebeing crossed.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 4 -“The value of biodiversity is that it makes our ecosystems more resilient,which is a prerequisite for stable societies; its wanton destruction
is akin to setting fire to our lifeboat.”

Johan Rockstrom, Director,
Potsdam Institute for Climate Impact Research (PIK).

In 2021, we published our biodiversity roadmap,
Sustainable by Nature, setting forth our views on thenature and urgency of this crisis and how we as aninvestor can and should respond to it. We used avariety of tools to understand our own dependencies
and impacts on nature and analysed our global assets
under management to understand our exposure towater and deforestation risks.
In 2022, we published our first biodiversity footprint(see call out box). We also updated BNPP AM’s
Responsible Business Conduct policy, including how
we approach the wood pulp, palm oil and agriculture
sectors.
Our overall objective is two-fold: to improve how
we invest by better understanding and evaluating
environmental risks and opportunities; and to reduce
the environmental impact of our investments. We
have two specific targets with respect to our waterand forest footprints:•

Improve the water efficiency of our investments,
especially in water-stressed areas, and measureand disclose the water footprint of our portfolios.
We encourage water-intensive companies
operating in water-stressed areas to significantly
improve their water efficiency while ensuring
water access to local communities.

•

Support global efforts to end forest loss by2030. Our target is for relevant companies inour portfolios to: Adopt No Deforestation, No
Peat and 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.).

FOCUS ON OUR BIODIVERSITYFOOTPRINT

In 2022, BNP Paribas Asset Management
published the first results of its research todetermine the biodiversity footprint of its
investments, following collaboration with
Iceberg Data Lab and I Care & Consult, whichenabled the development of a tool to identify
and quantify the potential negative biodiversity
impacts of portfolio companies.
In 2023, BNPP AM updated its analysis basedon the Corporate Biodiversity Footprint (CBF)
method.
This biodiversity footprint assessment enables
us to establish a baseline against which we
can monitor our performance. It also provides
a high-level compass to identify where closer
analysis of individual issuers is warranted. This
complements the suite of tools and analysis our
ESG analysts perform at the sector and issuer
level and helps to identify key targets for direct
engagement by our stewardship team andportfolio managers.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 5 -Healthy ecosystems: objectives and targets
Our new areas of focus for 2023-2025 are shown in the following table, identified alongside the relevant pillarof our sustainability approach and the relevant Intergovernmental Science-Policy Platform on Biodiversity andEcosystem Services (IPBES) pressure:
IPBES pressure12

Area of focus for 2023-2025
Update our Forest analysis from 2021

Land/water/sea use change

Explore an evolution to our Agriculture policy, toaddress seafood and other ocean-related topics
Update our Water analysis from 2021

Resource use/replenishment

Investments
Pollution

Conduct new deep dives: planetary health diets, foodwaste
Review our potential investment exposure to the
IUCN13 Red list Index, Red List of Ecosystems, Species
Extinction risk
Update our Water analysis from 2021
Conduct new deep dives: plastics, pesticides, chemicals
Continue existing initiatives such as SUSTAIN, SELINA,
PBAF or TNFD

All pressures

Land/water/sea use change

Participate in Nature Action 100; Investor Policy
Dialogue on Deforestation (IPDD)

Resource use/replenishment

Participate in Nature Action 100; ARE Sustainable
Proteins; FAIRR

Pollution

Participate in Nature Action 100; Investor Initiative on
Hazardous Chemicals (IIHC); Business Coalition for a
Global Plastics Treaty

Invasive species and others

Participate in Nature Action 100; Blue Economy ETF
engagement activity

All pressures

Support and file shareholder resolutions; continue ourrole in the Open Letter to Governments on the Water
CrisisStewardshipAll pressures

Operations

Strengthen and promote our range of nature-based
solutions; Establish BNPP AM Future Forestry Fund(with IWC acquisition)

Provide BNPP AM colleagues with opportunities fortraining and development, including biodiversity
Fresk workshops, specific training and volunteer
opportunities
Reduce the impact on biodiversity of our operations.

Further details on our existing commitments and achievements in terms of environment sustainability areavailable in our biodiversity roadmap and in our biodiversity footprint.
12. Details of our climate change approach are available in “E#1: Energy transition”
13. IUCN: International Union for Conservation of Nature, IUCN Red List of Threatened Species, Red List of Ecosystems | Home (iucnrle.org)

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 6 -E#3: EQUALITY
Of the three ESG elements, investors have beenslower to take action on addressing social (‘S’) issues
and associated risks than they have environmental(‘E’) issues, despite social risks posing an increasing
threat to social stability and global markets. Genderand racial/ethnic inequality, human rights andworker rights, among many other social issues, havebecome increasingly important to society, companies
and investors. Underpinning and reinforcing manyof these social risks is inequality, or the inequitable
distribution of income, wealth and wellbeing.
Historically, inequality has been understood andmeasured through income disparity, often at countrylevel through poverty rates. Through this lens, theworld has made significant progress in reducing
extreme inequality. But the nature of inequality haschanged since 1980. So-called ‘between-country’inequality, which rose between 1920 and 1980,
has since declined strongly, while ‘within-country’inequality, which declined between 1910 and 1980,
has increased significantly since.14 Today the global
bottom 50% captures only 8% of total income and2% of wealth (measured as Purchasing Power Parity(PPP)), while the global top 10% captures 52% of
total income and 76% of total household wealth.15
This wealth concentration has been especially true
for the ultra-rich.

We view inequality holistically, starting from different
circumstances of birth, often amplified by institutions
and policies, enabling access to different opportunities,
leading to inequitable and unequal outcomes (seeFigure 1, below). In calling for greater equality, we
are not challenging the many benefits of competition– for wealth creation, innovation and even societal
well-being. Rather, we are pointing to a problem
that threatens the legitimacy of the competitivemarketplace. Unequal access to opportunities widens
the gap between the wealthy and the rest of society,threatening social mobility, cohesion and stability, andcreating downward pressure on aggregate demand.
On the flip side, investors can address inequality as
an opportunity: to foster economic growth, reverse
wage stagnation and increase purchasing power, andimprove financial market stability along with social
cohesion. Addressing gender or racial discriminationand investing more in employees has the potential toyield trillions of dollars-worth of benefits for global
economies.16,17

Figure 1: A holistic perspective of inequality
Absent adequate opportunities, inequalities pass down over generations, widening the inequality gap over time

Institutions
Different Circumstances
at birth
GenderRace
Ethnicity
Sexual orientation
Disability
Parental Resources
Birthplace
Family / Community Values

Civil Society
CultureGovernment
Markets / Business

Policies
Tax
Antitrust
Wages
Healthcare & Benefits
Labor Rights
Non-discrimination
Disclosure / Capital Allocation

Different Opportunities
Access to:
Vital services
Decent jobs
Living wage
Entrepreneurial Opportunity
Education
Participation and PowerSocial Safety Nets

Different Outcomes
Inequalities of:IncomeWealthWellbeing

Investors can shape the institutions, policies,
and opportunities that perpetuate inequality

14. Sources and series: wir2022.wid.world/methodology and Chancel and Piketty (2021).
15. Ibid.
16. W. K. Kellogg Foundation. 2018. The Business Case for Racial Equity. https://wkkf.issuelab.org/resource/the-business-case-for-racial-equity-new-mexico.html
17. World Economic Forum. 2021. Upskilling for shared prosperity. https://www.weforum.org/publications/upskilling-for-shared-prosperity/

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 7 -The 3Es are interconnected
The Energy transition, healthy Ecosystems andEquality (3Es) are interrelated in complex ways –both driving and undermining our ability to achieveeach one. For example, at the nexus of our Energy
and Equality themes is the ‘just transition’ – theconcept that the greening of the economy must be
fair and inclusive, create decent work opportunities
and leave no one behind. As outlined in our Net Zero
Roadmap, we strongly believe that the transition to a
low-carbon economy will boost prosperity, but that
this prosperity must be equitable and inclusive forworkers, communities and affected stakeholders.
We emphasise the just transition because it
reduces systemic risk, enhances human capital andstrengthens companies’ social licence to operate andsuccessfully decarbonise. We already engage withcompanies on the just transition topic and will further
elaborate how we assess company performance inthis regard in future.
Our role in understanding and addressing equality
Our objective is two-fold: to improve the way weinvest by better understanding and evaluating social
risks and opportunities; and to play a constructiverole by promoting equality and challenging corporate
actions that compromise investors’ ability to achieve
broad-based wealth creation.

To date, we have made significant strides in gaining
a better understanding and evaluating the impact ofinequality in our sustainability approach. For example:•

Our Responsible Business Conduct policy (pillar II)
uses normative frameworks such as the UN Global
Compact to exclude the worst actors on key issues
that severely impact inequality such as humanrights, labour standards and anti-corruption•

Our proprietary ESG scoring model (pillar III)
includes a range of corporate indicators linked
to inequality (e.g., worker health & safety, supply
chain standards). For some of these themes, we
track programmes and policies (e.g., freedom of
association, diversity programmes) because thathas traditionally been the only available data. For
other themes we track performance metrics (e.g.,
employee turnover rate, employee fatality rate),
which we view as crucial for undertaking rigorous
assessments and managing social risks•

We offer clients the opportunity to invest inthematic strategies linked to social themes (such as
our Inclusive Growth and Social Bond strategies).

Looking ahead, we have outlined the following
objectives and targets in our approach for tacklinginequality.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 8 -Areas of focus on Equality for 2023-2025

Investments

1

Introduce additional data points and vendor(s) to enhance our ability to undertake social-specific analysis of portfolios using novel data/approaches andincorporate enhanced social indicators into our proprietary ESG Scoring Models(corporate and sovereign)2

Develop new and promote existing investment strategies linked to equality andsocial themes

3

Review our Responsible Business Conduct (RBC) policies on adherence to international human rights and social norms in our investment processes

4

Conduct deep dives on just transition, gender equality and migration

5

Proxy voting: Focus further on addressing both the causes and symptoms ofsystemic inequality through our proxy voting on issues such as board composition and executive compensation. Look to expand our policy to tackle otheraspects of inequality to drive greater inclusivity.

6

Shareholder proposals: Support well-crafted shareholder resolutions designed
to reduce corporate contributions to inequality and clarify our approach to making decisions. Explore the potential to submit shareholder proposals on these
topics, where warranted.

7

Corporate engagement: Expand our engagements on equality priorities, tailoredto the drivers of inequality unique to each region, through bilateral dialogues
and collaborative initiatives. Consider joining other relevant initiatives that address the priorities set out in our Equality Roadmap.

8

Public policy and standard setting: Seek opportunities to influence public policy
through engagement with policymakers and standard setters, such as throughthe development of social taxonomies and related industry initiatives.

9

Build a gender-balanced and inclusive workplace by setting targets for womenon internal boards, senior management positions and in our leadership pipeline(talents).
See Pillar 6 in this paper for our specific commitments on this topic.

10

Support programmes that aim to get young people facing systemic barriers to
success into the workforce

Stewardship

Operations

Further details on our thinking and approach will be available in our Equality Roadmap, to be published in 2024.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 2 9 -PILLAR II: RESPONSIBLE BUSINESS CONDUCT (RBC)
We expect companies to meet their fundamental
obligations in the areas of human and labour rights,
protecting the environment and ensuring anticorruption safeguards, wherever they operate, in linewith the UN Global Compact Principles and OECD
Guidelines for Multinational Enterprises (OECD MNEGuidelines).
These are shared frameworks, recognised worldwide
and applicable to all industry sectors, based oninternational conventions on human rights, labour
standards, environmental stewardship and anticorruption. We aim to engage with companies where
they fall short and exclude the worst offenders.
We also have a series of sector policies that govern
the conditions for investing in sensitive sectors andguide our screening requirements and stewardship
activities. These criteria are based on relevantinternational conventions and regulations, BNP Paribas
Group CSR Policies and voluntary industry standards.

PILLAR III: ESG INTEGRATION

We believe that analysing investments using ESG
criteria helps us account for a wider set of risks
and opportunities and better understand the role ofcompanies in driving systemic risks and addressing
the challenges of the transition towards a moresustainable and inclusive economy. This helps us
make better-informed investment decisions in linewith our fiduciary duty. We accomplish this throughthe application of our ESG Integration Principles& Guidelines, and the development of proprietary
sustainability research.
Our approach to ESG integration embraces the
double materiality principle – that the sustainability
characteristics of an investment are a two-sided coin:• Sustainability risks and opportunities, e.g., financial
risks posed by the investment because of its
particular characteristics (such as a financial loss
incurred by a company because of a heatwave)• The externalities of an investment, i.e., negativeor positive impacts on the environment or society
from the activities of an investee entity (such as soil
pollution associated with building an industrial plant).

In each sector, we highlight mandatory requirements
which must be met by issuers if BNPP AM is to invest
in them. This provides a good framework for further
analysis and dialogue with companies.
We have policies that can lead us to exclude particularsectors or activities (tobacco, coal, controversial
weapons, etc.) when we view them to be in violationof international norms, or to cause unacceptable
harm to society and/or the environment, without
counterbalancing benefits.
Our Responsible Business Conduct (RBC) policy
applies to our eligible open-ended funds18 managed
or delegated by BNPP AM entities – the applicabilityof our RBC policy is stated in their prospectuses.
Since 2020, this policy has been the default approachfor new client segregated accounts, mandates anddedicated funds. We are engaging with clients tofurther extend the applicability of this policy acrossmandates.

OVERVIEW OF OUR ESG INTEGRATION PROCESSWe score and integrate ESG factors across a wide
range of investment strategies through investment
research, universe screening, idea generation, security
valuation, portfolio construction, risk management,
asset allocation and scenario analysis. This process
is guided by our formal internal ESG Integration
Principles and Guidelines as well as regulatory and/or voluntary (e.g., sustainability label) requirements.
While recognising there is a diversity of possible
approaches, we have defined a set of standard
indicators to serve as evidence of the integration of
ESG factors in our relevant portfolios.
In line with the Sustainable Finance Disclosure
Regulation (SFDR), how we approach and use ourframeworks is disclosed in the dedicated documents
annexed to the funds’ prospectuses, web pages andannual reports. The SFDR documentation articulates
how our products take into account the double
materiality principle (that is, how investee businesses

18. There are exceptions for some portfolios (e.g., ETFs and indexed funds, buy and hold strategies, etc.). Please refer to the RBC policy available here for further
details on its scope of application.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 0 -affect the world and how the world affects them). It
describes the binding elements of each investment
strategy relating to each fund’s positioning on ESG
criteria and on other SFDR criteria such as theminimum proportion of sustainable investments andof investments aligned with the EU Taxonomy.
This is of particular importance in how we position
our product range and assess our contribution to
the reallocation of capital towards companies thatare instrumental in the transition towards a moresustainable economy. We monitor our aggregate
capital allocation towards companies identified as‘Sustainable’ (under SFDR) in European open-ended
funds classified as Article 8 or 9. As of November
2023, these funds had on average an overweightof +15% in ‘Sustainable’ investments versus theirrespective benchmark or universe19.
Please refer to our ESG Integration Principles andGuidelines for further details on our firm-wide
approach and prospectuses for details at product level.

INTEGRATING ESG AT VARIOUS STAGESOF THE INVESTMENT PROCESS

Investment beliefs and universe screening:
Investment strategies are guided by our underlying
beliefs, which influence investment teams indeveloping investment strategies and managing
portfolios.
Idea generation and security valuation: Integrating
ESG factors at the idea generation stage allows
our investment teams to include or discard
opportunities based on ESG considerations. For
example, some strategies identify the highestrated ESG entities in a universe as a priority for
additional financial analysis, while some exclude
the lowest-rated ESG entity from their universe(e.g.: best in class). Other strategies are explicitly
structured around a sustainability theme (such as
the energy transition).
Portfolio construction and risk management: ESG
factors can be used at the portfolio construction stage

to screen companies, overweight or underweight
positions, or tilt portfolios. For example, our multifactor portfolios are systematically tilted awayfrom carbon-intensive entities and towards high
ESG performers. Many of our SFDR Article 8 and
9 funds also have to outperform their benchmark(or investment universe) on ESG ratings.
Post-investment (monitoring engagement,
voting, performance, reporting): Proxy voting
activity is led by our Stewardship team, which
liaises with portfolio managers to seek input on
strategic votes. Engagement on governance andsustainability topics is typically led by this team,while investment teams also include ESG topics intheir ongoing company meetings. All commitments
linked to sustainability-related indicators at thefund level (as stated in the legal documentationof each fund), are monitored continuously by the
portfolio managers and by an independent team.

BNPP AM communicates on the scope of its assets integrating ESG criteria, which corresponds to the sum ofassets held in products applying a binding ESG criteria in their investment process. This scope includes products
applying at least BNPP AM’s RBC Policy (Pillar II in this strategy document), as well as products classified as
Article 8 or 9 under the SFDR. As of September 2023, assets integrating ESG criteria totalled EUR 346 billion.

19. Analysis performed on our European open-ended funds classified as Article 8 or 9 under the SFDR for which relevant a benchmark or universe is available.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 1 -FOCUS ON PROPRIETARY SUSTAINABILITY RESEARCH
Inconsistent, non-standardized, unaudited andlargely voluntary disclosures by companies area major challenge for investors’ ESG integration.
Recent regulatory and voluntary initiatives aim toaddress this by harmonising the ESG indicators thatmatter to investors. Such initiatives include the EU’s
ESG disclosures frameworks (part of the Corporate
Sustainability Reporting Directive), the International
Sustainability Standards Board (ISSB), and, in the US,
work undertaken by the Securities and Exchange
Commission. We are supportive of these efforts andprovide input to consultations on the development ofa healthy ESG data ecosystem.
The non-correlation among ESG rating providers
points to a lack of consensual ESG views andembedded biases in ESG rating model design andoutput. We thus chose to build our own proprietary
ESG scoring framework to ensure scores are tailoredto our needs and investment beliefs.
Our proprietary sustainability research encompasses
quantitative and qualitative ESG views from our
Sustainability Centre ESG analysts, our investment
team ESG Champions and Correspondents and ourQuantitative Research Group experts.
We apply our own definition of materiality – built
on the latest thought leadership, our ESG analysts’

extensive track record and the detailed industry/
subject matter expertise of our sector specialist
analysts and portfolio managers – to hand-pick
our metrics and weigh them appropriately. We lookbeyond headline values to evaluate individual metrics
that can give valuable insight into investment risk
and opportunities.
We apply an additional layer of data quality and control
to the underlying metrics we source from third parties
to narrow our focus to the indicators that we deem tohave sufficient coverage, quality, and insight.
Covering nearly 13 000 issuers of securities (as at
November 2023), this helps our portfolio managers
pinpoint an issuer’s performance on material ESG
issues and integrate these 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 apply a similar mindset to most of the ESG
indicators we use: a keen focus on finding the best
fit-for-purpose data for each use, either via extensive
market due diligence or by partnering with third
parties to create data solutions and advance bestpractices around a particular data point when there
is a market gap (e.g., Net Zero alignment, the SDGs,
Biodiversity).

SCIENCE-BASED AND TRANSPARENT RESEARCH
We have made an active decision to draw upon high-quality academic research to support the developmentof new methodologies and inform the development of new sustainability policies and processes. To doso, we anchor our sustainability research on a ‘science-based and transparent’ principle, recognising
the value of working hand-in-hand with external experts and standard-setters, including in the field of
academia. In this regard, we are a proud founding sponsor of the Global Research Alliance for Sustainable
Finance and Investment.
We have also co-developed a UN Sustainable Development Goals (SDG) alignment methodology with
Danish fintech, Matter. The SDG Fundamentals methodology covers the alignment/misalignment of issuers
across all 17 SDGs. Applying criteria grounded on a rigorous interpretation of UN metadata on hundreds of
SDG targets and associated indicators, the methodology stays true to the 17 broad SDGs and minimises
the risk of greenwashing by avoiding subjective or loose interpretations of them.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 2 -PILLAR IV: STEWARDSHIP
Promoting good ESG standards is an essential elementof delivering our ownership responsibilities. We believe
meaningful engagement with issuers can enhance
our investment processes and better enable us tosuccessfully manage long-term risk for our clients.
Our Sustainability Centre experts and portfolio
managers are in regular contact with companies weinvest in, emphasising long-term value creation. We
also meet issuers of thematic and sovereign bonds

to provide feedback on their proposed issuances andmeet country representatives to discuss national
climate change commitments and policies, and othersustainability related policies and regulation.
We collaborate closely with our peers and civil society
organisations to take action to shape the future to thebenefit of our clients and wider society, for example
through participation in the Climate Action 100+ andNature Action 100 initiatives, and many others.

WE VIEW VOTING AND ENGAGEMENT AS BOTH
AN OBLIGATION AND AN OPPORTUNITY•

We cannot deliver our commitment toclients without undertaking effective voting,engagement and policy advocacy to encourage
investee companies to improve•

Meaningful engagement with issuers enhances
our investment processes so we can manage
long-term risk for our clients by promoting
strong ESG practices in our investee companies•

As ESG performance can be material to financial
performance, our voting and engagement can
reduce risk, unlock value and positively impact
the world by encouraging the adoption of better
corporate practices and transparency•

We exclude companies, sectors, or activities
that are in violation of international norms,
or that cause unacceptable harm to society
and/or the environment. We engage to drivechange, but if our engagement is not effective,
divestment can be a last resort•

Appropriate and comprehensive corporate
disclosure is fundamental to sound investment
decision-making.

•

Collaboration with other long-term investors
and stakeholders can help to achieve ourcommon environmental and social aims,
particularly when engaging with companies
and regulatory bodies•

We have a duty to advocate for policymakers
to deliver legislation, regulation and standards
that foster sustainable and equitabledevelopment, and that address systemic risks
and market failures.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 3 -OUR APPROACH TO VOTING AND ENGAGEMENT
We are committed to being a ‘future maker’, using
our investments and our influence with companies,
policymakers and standard setters, to contribute to thetransition to low-carbon, environmentally sustainable
and inclusive economies.

To ensure our activities are effective, consistent andsupport our objectives and duties as fiduciaries, they
are detailed in our Stewardship Policy, our Governanceand Voting Policy and our Public Policy Advocacy
Policy, and are reviewed annually, revised as needed
and approved by the Stewardship Committee. We also
report yearly on our stewardship activities.

VOTINGENGAGEMENTPUBLIC POLICY

We exercise our rights andresponsibilities by making
considered voting decisions inline with our policy. Voting iscore to delivering our fiduciary
duty. It drives better corporate
governance and sustainability
practices.

Informed proactive
engagement with equity
and bond issuers aims to
improve their performance on
governance and sustainability.
Engagement in turn informs
our votes and influences
issuers’ eligibility forinvestment and ESG ratings.
It is also designed to counter
global systemic risks andmarket failures.

Active engagement withregulators and policymakers
to help shape the markets inwhich we invest and the rulesthat guide and govern company
behaviour.

ESCALATION PROCESS
Investor-issuer dialogue is the foundation of goodstewardship – it allows trusting relationships to bebuilt, permitting candid solution-oriented discussions
about issues that might not otherwise be addressed.
Dialogue, however, is a two-way street and there
are times when stronger measures are necessary to
encourage a company to come to the table and discuss
our concerns.

When more robust action is required, we can makepublic statements, propose shareholder resolutions,call an extraordinary general meeting or intervene
jointly with other institutions. These decisions aretaken case-by-case to ensure our concerns havebeen properly heard and dealt with. Our shareholder
proposal filing strategy is approved annually by the
Stewardship Committee, as are decisions about thefiling of specific shareholder resolutions.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 4 -PILLAR V: SUSTAINABILITY IN OUR PRODUCT RANGE
To integrate sustainability across our product range, we layer several frameworks and methodologies involving
key indicators to ensure any sustainability claim we make at product level can be demonstrated.
ARTICULATING THE DIFFERENT SUSTAINABILITYFRAMEWORKS IN OUR PRODUCT RANGE
The initial frameworks that we apply to our products
are our RBC and ESG integration approaches (pillars
II and III). These address the sustainability risks towhich our products are exposed and the negative
impacts that the product could have on sustainability
outcomes.
The next step is to apply the framework we havedeveloped to implement the Sustainable Finance
Disclosure Regulation (SFDR) and transform our
product range into the categories it introduced: Articles
8 and 920. We use our ESG integration framework(when relevant) to define a set of minimum criteriathat our products must meet to be classified in either
category.

Our Article 8 and 9 product range is built using
robust proprietary methodologies and enhanced
reporting capabilities to position them in line withthe criteria defined by client ESG preferences. We
strongly support the objective of the European
framework for sustainable finance to reallocate
capital towards companies that are instrumental in
the transition towards a more sustainable economy
and the positioning of our product range is rooted inthis philosophy: we offer our clients the investment
tools to partake in the transformation of our economy.
The final step of product classification involves
adherence to European sustainability labels, forexample, the label “ISR” in France, or the label“Towards Sustainability” in Belgium. Our labelling
policy shows our commitment to sustainability
while following external standards recognised by
the market.

Figure 2: BNPP AM product classification framework
Our goal is to apply a consistent approach to classifying our products: the ESG attributes of our products arereflected in product-level legal documentation.

ESG INTEGRATION

ART. 8 & 9

EU SUSTAINABLE LABEL

ART. 9€346.0bn integrating ESG criteria
Applying a constraint qualifying for Art. 8 & 9 or applying
BNPP AM RBC (exclusion policy).
€266.4bn Article 8 or 9 under SFDR
Applying an ESG constraint, resulting in having ESG
scoring better-than-benchmark investment universe
for example. This constraint is controlled anddocumented in funds’ legal documentation.
€134.8bn 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 withstrict guidelines regularly audited by external parties.
€19.9bn Article 9 under SFDR
Having a sustainable investment objective.

Source: BNPP AM as at September 2023. Please note that this is for illustration purpose only and that the size of the circles is not at scale.

20. At the time of publication, a consultation on the implementation of the Sustainable Finance Disclosure Regulation (SFDR) was ongoing, with the outcome as yet
unknown.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 5 -PROVIDING DISTRIBUTORS WITH SOLUTIONS TOMEET END CLIENTS’ ESG PREFERENCES
Since the entry into force of the addendum to theMarkets in Financial Instruments Directive (MIFID) II
and Insurance Distribution Directive (IDD) regulationin August 2022, distributors of investment products
have been required to add a questionnaire to theirclients’ suitability test to collect ESG preferences.

•

Labelled funds: These products adhere to one ormore of the European sustainability labels suchas ISR in France or Towards Sustainability in
Belgium which are based on defined sustainability
standards and periodically audited by a thirdparty.

•

Sustainable thematic solutions: These allow
investors to access specific sustainable transition
themes by focusing their investments on auniverse of companies or projects whose products,
services or operations positively contribute to thattheme. As market leader in sustainable thematics23,
BNPP AM offers a wide range of solutions coveringvarious asset classes, investments styles andthemes.

•Decarbonisation solutions: These products cover awide range of strategies implementing greenhousegas (GHG)-related constraints. They include
low-carbon products integrating GHG-related
portfolio-level constraints such as alignment
with Paris-Aligned Benchmarks24 (PABs) andstrategies focused on net-zero alignment, where
each company must comply with a definitive
GHG transition pathway according to the criteria
laid out, e.g. in our NZ:AAA framework, which
identifies companies that are achieving, aligned
or aligning with net zero.

•

Impact solutions: BNPP AM adheres to establishedmarket standards when identifying a product to
be included in the impact category, such as the
Operating Principles for Impact Management(OPIM) 25. We have had a dedicated thought
leadership taskforce working on impact solutions
since 2019.

Three criteria are now added to the clients’ profiles:•

Whether they want their portfolio to take into
account negative sustainability impacts21•

Whether they want to set a minimum proportionof sustainable investments22•

Whether they want a minimum proportion of
investments aligned with the European Taxonomy
criteria.

BNPP AM’s product offering uses robust proprietary
methodologies to address each of these criteria to giveproduct distributors the building blocks they need tofulfil their clients’ ESG preferences. For each European
product classified as Article 8 or 9 under the SFDR,
its positioning in relation to these criteria is definedand disclosed in its precontractual documentation.
PROVIDING OUR CLIENTS WITH SOLUTIONS TOINVEST IN SUSTAINABILITY
We provide our clients with investment solutions
that focus on companies positively contributing to
the transition towards a more sustainable economy.
Our sustainability-focused product offering isorganised around four main families spanning asset
classes, from listed equities and bonds to private
markets and real assets.

While the above solutions may be covered within
SFDR Article 8 and 9 categories, many involve a moredemanding approach than standard Article 8 products
due to the specific frameworks they implement. As
such, they provide a rich platform of solutions forclients seeking a demanding, sustainability-focused
approach to investing.

Negative impacts are identified by Principle Adverse Sustainability Impacts under SFDR. BNPP AM’s entity level PASI report is available here
SFDR sets out a framework for identifying ‘Sustainable Investments’. More information about BNPP AM’s approach to quantifying this is available here.
Morningstar data, BNPP AM analysis as of end of September 2023
EU regulation 2020/1818 introduces standards for the methodology of low-carbon benchmarks in the EU, in line with its Action Plan Financing Sustainable
Growth. The act outlines minimum requirements for the design of PABs and EU Climate Transition Benchmarks (CTBs), which are based on the commitments set
forth in the Paris Agreement.
25. Our most recent Impact Principles Disclosure Statement can be found on our corporate website
21.
22.
23.
24.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 6 -BUILDING SUSTAINABLE SOLUTIONSIn addition to the building blocks outlined above, oursolutions and client advisory team works with clientsto propose a holistic approach using proprietary
methods to build sustainable portfolios. In this way,
we help clients to:•

Define sustainability objectives and indicatorsaligned to their sustainable ambition(s)•Analyse their current portfolio based on therelevant sustainable indicators to determine thebaseline position (if applicable)•

Propose portfolio adjustments to meet theirsustainability objectives via the choice of building
blocks or the creation of a dedicated sustainable
portfolio•

Report on the sustainability characteristics of theirinvestments.

PILLAR VI: ‘WALKING THE TALK’: OUR CSR APPROACH‘Walking the talk’ is critical to achieving excellence. To achieve our objectives requires us to build a culture ofsustainability from the inside out. That is why we added our Corporate Social Responsibility (CSR) strategy as
the sixth pillar of our sustainability approach.
Our CSR strategy has four main strands, all underpinned by a foundation of strong governance.
ZERO EMISSIONSZERO WASTE

Just as we are striving to align our investment
portfolios with the objectives of the Paris Agreement,
we plan to do the same with our own operationalemissions. This is one of the 10 commitments wehave made in our Net Zero Roadmap. We have three
primary areas of emissions in our operations: ourphysical premises, our IT use and employee businesstravel. We will tackle our emissions using a threepronged approach, in order of priority:• Increase the energy efficiency of our operations• Use green or low-carbon electricity• Offset any residual emissions

Recognising the relationship between GHG emissions
and resource management, one of our long-term
environmental goals is to stop waste going to landfill
sites by focusing on three key areas over the term of
this plan:• Reducing paper consumption• Eliminating single-use plastic• Taking a responsible end-of-life approach to our
IT assets.

BNP Paribas Group has established a new target for
GHG emissions of 1.85 tCO2e per employee by 2025.
We are currently ahead of this target, but we know
we have gaps in our reporting so our goal over thisperiod will be to work on improving our operationalemissions data.

We believe Diversity, Equity, Inclusion and Belonging(DEI&B) is a powerful lever to unlock potential and candifferentiate us as an outstanding asset manager. We
want to build an inclusive workplace so all employees
can thrive. At BNPP AM and through BNP Paribas
Group, we are focusing our efforts in five major areas:• Professional equity• Multiculturalism and diversity of origins• Disability• Gender and LGBTQIA+26• Age and intergenerational relations

CREATING A CULTURE OF DIVERSITY, EQUITY,INCLUSION AND BELONGING

26. Lesbian, Gay, Bisexual, Transgender, Queer or questioning, Intersex, Asexual, and more

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 7 -We are continuously striving to develop a working
environment that fosters diversity, inclusion and equal
employment opportunity. This philosophy applies
across all of the firm’s recruitment, training, career
mobility, promotion, job benefits and pay, performanceappraisals, discipline and dismissal.
We have established a number of BNP Paribas
Group’s employee networks within BNPP AM, such
as: CulturALL, Afrinity, PRIDE, Mixcity and LatAmigos.
We continue to educate our people on DEI&B issues
through conferences on topics including gender,

multiculturalism, LGBTQIA+, women and men’s
health, neurodiversity and disability.
We understand how important it is to recognise thedifferent backgrounds, life experiences and cultures ofour staff; embracing this diversity helps us better serve
the needs of our clients and contributes to an inclusive,high-performing workplace. Diversity fosters creativity,
better decision-making, drives innovation and enriches
our talent pool. To this end, we see diversity, equity andinclusion as a strategic priority and gender equality acornerstone of our diversity agenda.

WOMEN IN ASSET MANAGEMENT
We are operating in a highly competitive market and the demand for talent – specifically mid-level andsenior women in fund management positions – is high and increasing. In an industry that remains maledominated, we compare well to our competitors. Yet we can still do more. Accordingly, we have the following
ambitions for women in all levels of our organisation by 2025:•••

50% women on internal boards – we reached 44% in 2022
40% women in senior management positions – we reached
35% in 2022
50% women in our talent programme (our leadershippipeline) – we reached 44% in 2022

We want to complement our targets for women in the workforce
with programmes and initiatives designed to help build a cultureof inclusion, allowing our employees to be comfortable being
themselves so that they can fully unlock their potential.

HELPING YOUNG PEOPLE OVERCOME BARRIERS TO
SUCCESSOur community initiatives revolve around helping
young people overcome systemic barriers to success.
Concretely, that means helping young people fromsocio-economically disadvantaged backgrounds gain
confidence through mentorships 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. For
instance, in Hong Kong, we partnered with Lingnan
University to create a programme to give students
insights into working for a global financial institution.
In France, a number of employees participate in ourpartnership with Chemins d’Avenirs, acting as mentors
to young people in rural areas. In the UK, we partnerwith Headstart Action, offering work placements foryoung people to enhance their employability and weoffer internships as part of the CFA UK Women in
Investments programme.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 8 -Volunteering helps us ‘walk the talk’: every volunteer,act and every hour given back helps to build stronger,
more resilient communities. It also helps each of us
develop both professional and personal skills while
better connecting us with our colleagues and society.
In 2023, we galvanized our firm around a global weekof volunteering – Community Impact Week – where
one third of our employees in 19 countries volunteered
over 3 000 hours to causes in the community. Our
Executive CSR Committee and our CEO have decided
to continue this annual event next year and beyond.
SUSTAINING OUR CULTURE THROUGH ONGOING
TRAINING
Sustainability issues are rapidly evolving, and it iscritical that our employees keep up to date if they areto achieve their objectives. Sustainability education isa key lever to building a strong sustainability culture,
to attract and retain employees and to ensure we
successfully deliver on our business strategy.

+700

employees
have received asustainable financeexternal certification

76%of employees
said they had
the correct levelof sustainabilityrelated training toperform their role

We are investing significantly to ensure our employees
have the most current knowledge on sustainability
issues. In 2022, we formalised our approach bylaunching the Sustainability Academy @AM. This
dovetails well with our 2 Hours 2 Learn initiative,
which encourages employees to set aside at least
two hours a month to work on their professional
development.
Our Sustainability Academy offers six different
training paths depending on the level of knowledge
each employee requires. Some of the paths include
external sustainable finance-related certifications
and as of November 2023, over 700 employees hadreceived certifications.

TRANSPARENCY AND REPORTING
Transparency is essential to good stewardship and a necessary step towards a sustainable financial system.
We recognise that our clients are entitled to information about our sustainability policies and practices.
We believe that we also have a responsibility to explain to other stakeholders – including governments andcivil-society organisations – how we define and implement our commitments to sustainability. This allows
our stakeholders to understand our approach, engage in well-informed discussions about our practices
and processes, and hold us to account on our commitments. We also benefit, as engagement with our
stakeholders allows us to reflect on our approach and generates suggestions as to how we can improve.
We commit to continuing to publish an annual Sustainability Report that demonstrates the value our approachcreates for our clients, as well as our Stewardship Report, Voting Report and Principles for Responsible
Investment (PRI) Transparency Report to provide an overview of our sustainability-related activities forthe year. These are the mechanisms we use to deliver reports linked to our net zero commitment. We also
publish a number of annual reports required by regulations such as the SFDR in Europe.
In addition, we will continue to evolve the extra-financial reporting on investment portfolios that we
provide to clients, and to regularly release thought leadership pieces as well as share information about
our approach and perspectives with the media.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 3 9 -C O NCL U S I O N
We are living and investing in a dynamic time, with geopolitics, macroeconomics andregulation in constant evolution. Further contributing to the complexity, climate change,
growing social inequality and environmental damage are impacting the current and future
performance of companies and markets.
At BNPP AM, we are committing to delivering positive real-world outcomes alongside industryleading financial returns to clients. We believe a better world is one with an economic model
built on a successful Energy transition, healthy Ecosystems, and greater Equality in oursocieties – our 3Es. Our roadmaps covering these three themes set forth our approach to
tackling the key challenges today for the benefit of a better tomorrow. By dedicating sufficient
resources to understanding these challenges, and taking on the commitments outlined inthese documents, we give ourselves the means to appropriately manage them.
The transition towards a sustainable future is a challenge that cannot be faced alone. We
therefore believe it is critical to work in partnership with clients, colleagues, companies,
governments, and civil society to move towards a more sustainable future.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 4 0 -A P P E ND I X
We engage with market participants in various initiatives to better align regulations and policies related to thefunctioning of financial markets, corporate governance and other topics related to the 3Es.
We actively engage policymakers, helping to shape the markets in which we invest and the rules that guide andgovern company behaviour. Public policy can affect the ability of long-term investors to generate sustainable
returns and create value. It can also affect the sustainability and stability of financial markets, as well as social,environmental, and economic systems.

Investor statements we have signed in the past 3 years

Supporter
since

Energytransition

Healthy
ecosystems

Business Call for a UN Plastics Treaty

2021

X

CDP Open Letter to Governments on the Plasticcrisis2023

X

Financial Institution Statement ahead of theConvention on Biological Diversity COP15 (Ceres/
Finance for Biodiversity Foundation)

2021

X

Financial sector statement on biodiversity for
COP15 (Investor Agenda)

2021,
2022

X

G20 Agricultural Subsidies Statement (FAIRR)

2023

X

Global Investor Statement in Support of an
Effective, Fair and Equitable Global Response to
COVID-19 (Access to Medicine Index)

2021

Global Investor Statement to Governments on the
Climate Crisis (Investor Agenda)

2021

Global Investor Statement Water

2023

Global Roadmap to 2050 for Food and Agriculture:
Statement to FAO (FAIRR)

2022

X

Global Standard on Responsible Climate Lobbying

2022

X

IIGCC Chemical Sector Investor Expectations

2023

Investor Position Statement on Corporate Net Zero
Transition Plans (IIGCC)

2021

Investor Statement (FAIRR)

2021

Investor Statement in Support of the Maintenanceand Expansion of the Bangladesh Accord

2021

X

Investor Statement on Tobacco Control

2023

X

Statement of Support for Extended Producer
Responsibility Schemes for Packaging (Ellen
MacArthur Foundation)

2021

Equality

X
X
X
X

X
X
X

X

Other

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 4 1 -Memberships and initiatives we participate in

Supporter
since

Energytransition

Healthy
ecosystems

Access to Medicine Index

2016

X

Access to Nutrition Initiative (ATNI) - (Investor
Expectations on Nutrition, Diets and Health)

2014

X

Align (European Commission, WCMC Europe,
Capitals Coalition, Arcadis, ICF, UNEP-WCMC)

2021

Asia Investor Group on Climate Change (AIGCC)

2018

Association Française de la gestion financière
(AFG)

10+
years

CDP

2012

X

X

Ceres

2019

X

X

Climate Action 100+

2017

X

Council of Institutional Investors (CII)

2018

X

Eumedion

2018

X

European Fund and Asset Management Association(EFAMA)

10+
years

X

Farm Animal Investment Risk and Return Initiative(FAIRR)

2021

Forum pour l’investissement responsable (FIR)

10+
years

Global Network Initiative (GNI)

2018

X

GNI Principles on Freedom of Expression andPrivacy (GNI)

2018

X

Green Bond Principles (International CapitalMarkets Association)

2017

Hong Kong Principles of Responsible Ownership(Hong Kong Securities and Futures Commission)

2019

Inevitable Policy Response (IPR)

2021

X

Institutional Investors Group on Climate Change(IIGCC)

10+
years

X

International Corporate Governance Network(ICGN)

10+
years

Investidores Pelo Clima (Brazil)

2022

Equality

Other

X
X
X

X

X
X

X

X
X

X
X

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 4 2 -Memberships and initiatives we participate in

Supporter
since

Energytransition

Investor Agenda (AIGCC, CDP, Ceres, IICC, IIGCC,
UNPRI, UNEP-FI)

2018

X

Initiative on Hazardous Chemicals

2023

Investors Against Slavery and Trafficking (IAST)

2023

Investors’ Policy Dialogue on Deforestation (IPDD)

2023

Malaysian Code for Institutional Investors(Securities Commission Malaysia)

2019

Montréal Carbon Pledge (PRI, UNEP-FI)

2015

Nature Action 100

2022

Net Zero Engagement Initiative by IIGCC

2023

X

Net Zero Asset Managers initiative

2021

X

New Plastics Economy Global Commitment (Ellen
MacArthur Foundation, UNEP)

2018

Operating Principles for Impact Management(International Finance Corporation)

2019

Partnership for Biodiversity Accounting Financials(PBAF)2021

PRI Advance2022

Principles for Responsible Investment (PRI)

Healthy
ecosystems

Equality

X
X
X
X
X
X

X
X

X

X

X
X

Founding
memberSPOTT Palm oil, Timber, Pulp and Paper (ZoologicalSociety of London)

2018

Sustainable Trading

2022

Task Force on Climate-related Financial
Disclosures (TCFD)

2017

Task Force on Nature-related Financial Disclosures(TNFD)

2021

Tobacco-Free Finance Pledge (Tobacco-Free
Portfolios)

2018

Transition Pathway Initiative

2018

UK Stewardship Code2022

UN Environment Programme Finance Initiative(UNEP-FI)

10+
years

Other

X
X
X
X
X
X
X
X
X

X

Please refer to our latest sustainability report available here, for the latest list available.

G LO B A L S U STA I N A B I L I T Y ST R AT E G Y - 4 3 -AT A G L A N CE
LATEST SUSTAINABILITYREPORT

NET ZERO ROADMAPNET ZERO:
10 COMMITMENTS

BIODIVERSITY ROADMAPBIODIVERSITY FOOTPRINTRESPONSIBLE BUSINESSCONDUCT (RBC) POLICYESG INTEGRATION GUIDELINESPROPRIETARY ESG SCORINGFRAMEWORKSTEWARDSHIP POLICY

Endnotes[i] Whelan, T, Van holt, T, and Clark, C. “ESG AND FINANCIAL PERFORMANCE: Uncovering the Relationshipby Aggregating Evidence from 1,000 Plus Studies Published between 2015 – 2020”, NYU Stern/
Rockefeller Asset Management. NYU-RAM_ESG-Paper_2021-Rev-1.pdf (rockco.com)[ii] Khan, M,G. Serafeim and A. Yoon: “Corporate Sustainability: First Evidence on Materiality”,
Harvard Business School, https://dash.harvard.edu/bitstream/handle/1/14369106/15-073.
pdf?sequence=1.

BNP PARIBAS ASSET MANAGEMENT France, “the investment management company”, is a simplified
joint stock company with its registered office at 1 boulevard Haussmann 75009 Paris, France, RCS Paris319 378 832, registered with the “Autorité des marchés financiers” under number GP 96002.
This material is issued and has been prepared by the investment management company. It contains
opinions and statistical data that are considered lawful and correct on the day of their publicationaccording to the economic and financial environment at the time. This document does not constituteinvestment 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 of an investors’ situation. Prior to any subscription,
investors should verify in which countries the financial instruments referred to in this document refers
are registered and authorised for public sale. In particular financial instruments cannot be offered or soldpublicly in the United States. 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 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/
Investors are invited to consult the most recent financial reports, which are also available on thewebsite. 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, anddoes not include subscription-redemption fees, exchange rate fees or tax. Past performance is not aguarantee of future results.

“The sustainable investor for a changing world” reflects the objective of BNP PARIBAS ASSETMANAGEMENT France to integrate sustainable development into its activities, although not all funds
managed by BNP PARIBAS ASSET MANAGEMENT France fulfil the requirement of either Article 8, fora minimum proportion of sustainable investments, or those of Article 9 under the European Regulation
2019/2088 on sustainability-related disclosures in the financial services sector (SFDR). For more
information, please see www.bnpparibas-am.com/en/sustainability.

December 2023 - Design: Creative Services - P2312018

You can obtain this by clicking here: www.bnpparibas-am.fr/investisseur-professionnel/synthese-desdroits-des-investisseurs a summary of investor rights in French. BNP PARIBAS ASSET MANAGEMENTFRANCE may decide to discontinue the marketing of the financial instruments, in the cases covered by
the applicable regulations.

The sustainable
investor for achanging world