Responsible BusinessConduct Policy
August 2023

BNP Paribas Asset Management

In a fast changing world, our focus is on achieving long-term sustainable investment returns for our clients. In line with this, we arecommitted to adopting a sustainable approach. We believe this is in the financial interest of our clients, and of the economy at large.
We have a six pillar approach to sustainability, one of which is Responsible Business Conduct (RBC) and sector-based exclusions.

We are committed to incorporating RBC standards into our investment criteria and stewardship activities and this document details
how we do this in practice.
This Policy is consistent with BNP Paribas Asset Management’s adherence to the UN Principles for Responsible Investment (PRI) in
2006 and BNP Paribas Group’s commitment to corporate responsibility and sustainable development.

2

1. APPROACH TO RESPONSIBLE BUSINESS CONDUCT (RBC)
We are aware that RBC impacts the ability or license to operate and reputation of entities in which we invest, which in turn can impact
their value. We expect companies to meet their fundamental obligations in the areas of human and labour rights, protecting theenvironment and ensuring anti-corruption safeguards, wherever they operate, in line with the UN Global Compact Principles andOECD Guidelines for Multinational Enterprises (OECD MNEs Guidelines). These are shared frameworks, recognised worldwide andapplicable to all industry sectors, based on the international conventions in the areas of human rights, labour standards, environmental
stewardship and anti-corruption. We aim to engage with companies where they fall short, and exclude the worst offenders.
We also have a series of sector policies that set out the conditions for investing in sensitive sectors, and guide our screening
requirements and stewardship activities. These criteria are based on relevant international conventions and regulations, BNP Paribas
Group CSR Policies, and voluntary industry standards. In each sector, we highlight mandatory sector RBC requirements which haveto be met by issuers in order for BNP Paribas Asset Management to invest. We do this because if the activities in question are notconducted properly, then they could cause serious social or environmental damage. In addition to the mandatory requirements, wehave also developed additional criteria that we encourage companies to comply with. The latter provides a good framework for further
analysis and dialogue with companies.
We have another set of policies that can lead us to exclude particular sectors or activities (tobacco, coal, or controversial weapons),
when we view them to be in violation of international norms, or to cause unacceptable harm to society and/or the environment, without
counterbalancing benefits.
RBC should be considered as an enhanced risk management tool that can help avoid reputational, regulatory and stranded asset risk.
Overview of BNPP AM’’s responsible business conduct and sector-based solutions approach32. SCOPE
This policy applies to the following:•

All active and passive open-ended funds managed or delegated by BNP Paribas Asset Management entities. There are
exceptions of some portfolios which replicate the composition of indices/systematic investment strategies (e.g. ETFs andindexed funds). For these portfolios, this policy’s exclusion list may be applied in the framework of optimized replication
when it is possible or when the index family/provider incorporates the same requirements as BNPP AM’s exclusion list. In
cases of synthetic replication, this policy’s exclusion list is at least part of the minimum requirements implemented at thelevel of the substitute basket physically held by the fund.

•In 2020, this policy became the default approach for new client segregated accounts, mandates and dedicated funds.
Clients may however choose to opt out of this Policy. We work with existing clients to seek their approval to apply this Policy
to existing segregated accounts, mandates and dedicated funds.

•

In the case of products implementing buy and hold strategies, such as fixed maturity plans, we will apply the version of thisPolicy in force at the time of investment. Should one of the holdings in such a product subsequently (i.e. post-investment) beadded to our exclusion list, the holding will be grandfathered (that is, no obligation to sell or otherwise divest such holding),
given the fixed structure of the portfolio and the potential impact of such trades on the portfolio’s target yield based on whichclients may have based their investment decision, as well as other potential fund accounting implications.

•

Joint ventures over which BNP Paribas Asset Management or the BNP Paribas Group do not have operational control areencouraged to adopt and implement this Policy.

•

Where BNP Paribas Asset Management entities in Emerging Markets manage and sell local funds within their domestic
markets, we have been progressively working with them to apply this Policy. They will have until 31 Dec 2022 to fullycomply with it, with the exception of Indonesia, which will have until 31 Dec 2023 to apply this Policy.

•

Where we use external investment managers for our open-ended funds, we ask them to incorporate Responsible BusinessConduct policies in line with our sustainable investment philosophy. Subject to legal and technical constraints, we use thispolicy in the evaluation of external managers in funds of funds and buy lists.

3. IMPLEMENTATION PRINCIPLES
The following principles govern our implementation of this Policy within our investment processes:
1.

Investment universes are periodically screened with a view to identify issuers that are potentially in breach of UN Global Compact
Principles and OECD MNEs guidelines and/or mandatory requirements applicable to sensitive sectors. This assessment isconducted within our Sustainability Centre on the basis of internal analysis and information provided by external experts, and in
consultation with BNP Paribas Group CSR Team.

2.

As a result of this process, BNP Paribas Asset Management establishes and maintains two lists:•

An exclusion list of issuers that are associated with serious and repeated breaches of UN Global Compact Principles
and/or mandatory requirements related to sensitive sectors.

•

A watchlist of issuers with whom we are engaging to encourage improvements, or that are at risk of breaching thestandards set out in this Policy.

3.

The exclusion list and watchlist are communicated by the Sustainability Centre to CIOs and investment teams on a regular basis.
As a result, investment teams should not initiate new investments in excluded companies with immediate effect. Existing
investments should be divested from relevant portfolios based on market conditions but not later than three months after
communication. Exceptions may be granted in cases where exclusions from actively managed portfolios would result insignificant market risk versus the benchmark.

4.

The exclusion list and watchlist apply to all types of securities (equities, bonds, convertible bonds…) issued by aforementioned
companies, as well as bonds issued by related financial vehicles. It also applies to participation notes and derivatives issued bythird-parties on such securities. These restrictions apply to securities negotiated on primary and secondary markets, as well as
OTC instruments.
45.

This Policy, including the exclusion list and watchlist, does not apply to short sales of securities, in respect of products
implementing short positions within their investment strategies.

6.

Pre-trade and post-trade compliance checks are conducted by Investment Compliance teams to ensure that exclusions lists are
implemented by all relevant portfolios.

7.

In applying this Policy, we take into account specific circumstances as they relate to the environmental, social and governancepractices of individual issuers. We base our judgments on data gathered from issuers and third-party research providers, and we
do our best to gather and assess relevant information. However, this assessment depends on the quality, accuracy andtimeliness of the information collected.

8.

We implement this Policy in the best interest of our clients and operate at arms’ length from the BNP Paribas Group and its
subsidiaries or affiliate companies.

9.

This Policy is publicly available on BNP Paribas Asset Management’s website and is reviewed regularly in order to reflect theevolution of ESG standards and market practices. Changes to this policy are tracked in the Policy Revision History table at theend of this document.

54. NORMS-BASED SCREENINGTHE GLOBAL COMPACT PRINCIPLESThe Global Compact is the world’s largest corporate sustainability initiative which aims to "embrace, promote and ensure compliancewith" universal principles in the area of human rights, labour, the environment and the fight against corruption.
These ten principles are inspired by the Universal Declaration of Human Rights, the International Labour Organisation’s Declaration
on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations
Convention Against Corruption.
HUMAN RIGHTS•

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and•Principle 2: make sure that they are not complicit in human rights abuses.

LABOUR STANDARDS•

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective
bargaining;•

Principle 4: the elimination of all forms of forced and compulsory labour;•

Principle 5: the effective abolition of child labour; and•Principle 6: the elimination of discrimination in respect of employment and occupation.

ENVIRONMENT•

Principle 7: Businesses should support a precautionary approach to environmental challenges;•

Principle 8: undertake initiatives to promote greater environmental responsibility; and•Principle 9: encourage the development and diffusion of environmentally friendly technologies.

ANTI-CORRUPTION•

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

THE OECD GUIDELINES FOR MULTINATIONAL ENTERPRISESThe OECD Centre for Responsible Business Conduct’s Guidelines for Multinational Enterprises uses RBC standards andrecommendations to shape government policies and help businesses minimise the adverse impacts of their operations and supply
chains. Through RBC, businesses can make a positive contribution to economic growth and development and become a powerfuldriver for achieving the SDGs.
I. Concepts and Principles
The first chapter of the Multinational Enterprise (MNE) Guidelines sets out the concepts and principles that put into context all of therecommendations in the subsequent chapters. These concepts and principles (e.g. obeying domestic law is the first obligation ofenterprises) are the backbone of the Guidelines and underline the fundamental ideas behind the Guidelines.
II. General Policies
This chapter is the first to contain specific recommendations to enterprises in the form of general policies that set the tone andestablish a framework of common principles for the subsequent chapters. It includes important provisions such as implementing due
diligence, addressing adverse impacts, engaging stakeholders, and others.
III. Disclosure
Clear and complete information on the enterprise is important to a variety of users. This chapter calls on enterprises to be transparent
in their operations and responsive to increasingly sophisticated public demands for information.
6

IV. Human Rights
Enterprises can have an impact on virtually the entire spectrum of internationally recognised human rights. As such, it is important thatthey meet their responsibilities. This new chapter of the Guidelines draws on and is aligned with the UN “Protect, Respect andRemedy” Framework and the Guiding Principles on Business and Human Rights that operationalise that framework.
V. Employment and Industrial Relations
The ILO is the competent body to set and deal with international labour standards and to promote fundamental rights at work as
recognised in the ILO 1998 Declaration on Fundamental Principles and Rights at Work. This chapter focuses on the role the
Guidelines have in promoting observance among MNEs of the international labour standards developed by the ILO.
VI. Environment
The environment chapter provides a set of recommendations for MNEs to raise their environmental performance and help maximise
their contribution to environmental protection through improved internal management and better planning. It broadly reflects theprinciples and objectives of the Rio Declaration on Environment and Development and Agenda 21.
VII. Combating Bribery, Bribe Solicitations and Extortion
Bribery and corruption are damaging to democratic institutions and the governance of corporations. Enterprises have an important roleto play in combating these practices. The OECD is leading global efforts to level the playing field for international businesses byfighting to eliminate bribery. The recommendations in the Guidelines are based on the extensive work the OECD has already done inthis field.
VIII. Consumer Interests
The Guidelines call on enterprises to apply fair business, marketing, and advertising practices and to ensure the quality and reliabilityof the products that they provide. This chapter draws on the work of the OECD Committee on Consumer Policy and the Committee on
Financial Markets, and of other international organisations, including the International Chamber of Commerce, the International
Organisation for Standardisation and the UN.
IX. Science and Technology
This chapter recognises that MNEs are the main conduit of technology transfer across borders. It aims to promote technology transfer
to host countries and contribution to their innovative capacities.
X. Competition
This chapter focuses on the importance of MNEs carrying out their activities in a manner consistent with all applicable competition
laws and regulations, taking into account the competition laws of all jurisdictions in which their activities may have anti-competitiveeffects. Enterprises need to refrain from anti-competitive agreements, which undermine the efficient operation of both domestic andinternational markets.
XI. Taxation
The Guidelines are the first international corporate responsibility instrument to cover taxation, contributing to and drawing upon asignificant body of work on taxation, most notably the OECD Model Tax Convention and the UN Model Double Taxation Convention
between Developed and Developing Countries. This important chapter covers fundamental taxation recommendations.

75. SECTOR-SPECIFIC ESG STANDARDS SCREENING
In addition to the OECD MNEs Guidelines and UN Global Compact Principles, we have a series of sector policies that set out theconditions for investing in particular sectors, and guide our screening requirements. We do this because if the activities in question are
not conducted properly, they could cause serious social or environmental damage.
We have another set of policies that commit us to excluding particular sectors or activities (such as tobacco, unconventional oil andgas, coal or controversial weapons), as we deem them to be in violation of international norms, or to present unacceptable harms tosociety or the environment, without counterbalancing benefits. These are generally sectors where engagement makes little sense.
Our sector policies cover the following areas:•

Agriculture: The objective of this policy is to address some major environmental, social and governance issues of the
agriculture sectors and to establish guidelines to conduct business in a responsible manner.

•

Coal: We continue to implement significantly tighter exclusion criteria on companies that are engaged in the mining ofthermal coal and the generation of electricity from coal.

•

Controversial weapons: We do not invest in companies involved in the production, trading and storage of controversial
weapons. These include cluster ammunition and antipersonnel landmines, chemical and biological weapons, andnuclear/depleted uranium weapons. Most of these weapons are covered by international conventions and investments are
already prohibited by some jurisdictions.

•

Mining: The objective is to ensure that we do not invest in companies that use Mountain Top Removal (MTR) technics or
exhibit poor ESG standards and practices.

•

Nuclear: This policy aims at addressing the ethical issues of the nuclear power sector and at establishing guidelines for
conducting business in a responsible manner. The objective is to ensure that we invest in companies that operate incountries with a proper legal framework, use appropriate technologies and adopt adequate health & safety monitoring andaccident prevention measures.

•

Oil and gas: We continue to tighten exclusion criteria for companies involved in the exploration, production, trading and/or
pipeline distribution of shale oil or gas, oil sands, and oil and gas resources located in the Arctic and Amazon regions.

•

Palm oil and Wood Pulp: Our aim is to encourage the production of sustainable palm oil and wood pulp by investing only incompanies that meet minimum environmental and social standards. Consequently, we will not invest in companies that do
NOT adhere to such minimum standards (e.g. by converting protected areas into palm oil and wood plantations, or using
child/forced labour).

•Tobacco: We do not invest in companies that manufacture tobacco as part of our commitment to Tobacco Free Portfolios.

In the following pages, we provide a comprehensive overview for each policy, including a description of the two types of criteria –compulsory and recommended - that we apply to our investments:•

Mandatory requirements are to be understood as sine qua non: those that have to be met without exception for BNP Paribas
Asset Management to invest in a company.

•

Evaluation criteria provide a framework for further contextual analysis and dialogue with companies, based on which BNPParibas Asset Management may decide not to invest even if mandatory requirements are met.

8

PALM OIL
Background
Development of palm oil plantations can have several adverse impacts on local communities, climate change and ecosystems.
However, the environmental and social issues in the palm oil sector mainly depend on the way palm oil is produced and milled.
Responsible palm oil can indeed limit these impacts. By contrast, palm oil production is a major source of income and provides a
livelihood to millions of people in developing countries. It also serves as an important source of nutrition for families in many countries
worldwide1.
Companies ConcernedThis policy applies to companies directly involved in the upstream and downstream palm oil value chain and companies for which it
represents a significant part of their activities:• “Upstream” refers to crude palm oil production (plantations and/or mills).
• “Downstream” refers to crude palm oil refining and/or trading.
Other companies further down the value chain (producers or traders of palm oil derivatives, or manufacturers and retailers ofingredients and products containing palm oil) are not in the scope of this policy.
UPSTREAM PALM OIL COMPANIES
Mandatory Requirements
BNP Paribas Asset Management requires that Upstream Palm Oil Companies (plantations and mills):•••

Be RSPO members (or have a time-bound plan to become RSPO members);
Have published an up-to-date communication on progress;
Have a time-bound plan for full RSPO certification of their operations.

In addition, BNP Paribas Asset Management requires that Upstream Palm Oil Companies:
•
•
•
•
•
•
•
•

•

Have a policy in place prohibiting the use of child or forced labour;
Have a human resources policy in place covering key labour issues of the sector – incl. no human trafficking, payment ofminimum wage, maximum working hours, and the right to freedom of association and collective bargaining – covering all
workers including contract, temporary, casual and migrant workers (as applicable);
Have a policy in place to protect workers’ health and safety conditions, and disclose their safety track record (work
accidents, fatalities…);
Have a policy in place to obtain the free, prior and informed consent (FPIC) of indigenous and local communities, prior todeveloping new oil palm plantations;Have a formal grievance mechanism in place to identify and address concerns from their internal and external stakeholders;Have a policy in place to conduct High Conservation Value (HCV) assessments before developing new oil palm plantations,and to protect the HCV areas identified within their concessions;Have a policy in place to conduct High Carbon Stock (HCS) assessments before developing new oil palm plantations 2, andto protect the HCS forests identified within their concessions.
Do not develop new oil palm plantations on:o UNESCO World Heritage Sites;o Wetlands on the Ramsar list;o Alliance for Zero Extinction sites;o IUCN Category I-IV areas.
Have the following policies in place, in order to minimise GHG emissions:o No-burning for the development of oil palm plantations;

1 See for example: “Key Sustainability Issues in the Palm Oil Sector – A Discussion Paper for Multi-Stakeholders Consultations”, Cheng Hai Teoh, for the World Bank

Group, 2010.

2 As of the publication date of this Policy, the HCS Approach resulting from the convergence process that ended in November 2016 is considered as the best available

methodology: http://highcarbonstock.org/agreement-on-unified-approach-to-implementing-no-deforestation-commitments/

9

•
•
•
•

o No development of new oil palm plantations on peatlands, regardless of depth;o Implement best management practices for existing oil palm plantations located on peatlands;o Minimise the use of artificial fertilisers;
o Reduce GHG emissions from palm oil mills3.
Do not use, except in very specific and exceptional situations, pesticides that are categorised as WHO Class Ia or Ib, or thatare listed by the Stockholm or Rotterdam Conventions;Have a policy in place to minimise the use of pesticides, and have a time-bound plan to terminate the use of paraquat;
Have a time-bound plan to ensure that all their third-party suppliers of fresh fruit bunches are compliant with theirsustainability commitments and policies.
Have a time-bound plan for public reporting on the implementation of their sustainability commitments, and for the
independent verification of such reporting.

Engagement Criteria
When engaging with Upstream Palm Oil Companies (plantations and mills), we may focus our discussion on company performance inthe following areas:
•
•
•
•
•
•
•

Have a time-bound plan for full RSPO certification of their fresh fruit bunches supply base (or similar verification mechanism
for smallholders4);
Have a policy to increase yields of oil palm plantations;
Are working with smallholders on good agricultural practices, yield improvement and RSPO certification (or similarverification mechanism), through the provision of technical assistance and training;
Have adopted the necessary tools and practices to monitor implementation of their no deforestation commitments, notably
throughout their supply chain5;
Have submitted to the RSPO concession maps for all the countries in which they operate, where permitted by law;
Have a policy in place covering fire prevention, monitoring and suppression on the land they manage and in the vicinity of
their estates;
Have been regularly and repeatedly criticised for their environmental, social or governance performance on material issues,
including through complaints submitted to the RSPO Complaints System, and whether they have taken actions to address
such issues.

DOWNSTREAM PALM OIL COMPANIES
Mandatory requirements
BNP Paribas requires that Downstream Palm Oil Companies (i.e. refiners and traders):•••

Be RSPO members (or have a time-bound plan to become RSPO members);
Have published an up-to-date communication on progress;
Have a time-bound plan to achieve full RSPO certification of their operations.

Engagement Criteria
When engaging with Downstream Palm Oil Companies (i.e. refiners and traders), we may focus our discussion on company
performance in the following areas:•••

Have a time-bound plan to trade and/or process only RSPO-certified palm oil;
Are working to improve the traceability of their palm oil supply;
Have a time-bound plan to ensure that their palm oil suppliers are compliant with the following standards:
o No development in HCS forests;

3 Such as through (i) the implementation of methane (CH4) capture from palm oil mill effluent (POME) and (ii) the reduction of fossil fuel use through implementation of

more efficient processes and/or substitution with other energy sources (e.g. residues such as fibre and shell, methane captured from POME).

4 According to the RSPO, smallholders are “farmers who grow oil palm, alongside with subsistence crops, where the family provides the majority of labour and the farm

provides the principal source of income, and the planted oil palm area are is less than 50 hectares”
5 E.g. through aerial surveys (satellite imagery, use of drones) or field surveys.

10

No development in HCV areas;
No burning for the development of new plantations;
No development on peat, regardless of depth.
No use of child/forced labour
Respect land tenure rights, incl. the free, prior and informed consent of indigenous and local communities
Have a human resources policy covering all workers (no human trafficking, payment of minimum wage, maximum
working hours, and the right to freedom of association and collective bargaining)
Have been regularly and repeatedly criticised for their environmental, social or governance performance on material issues,
including through complaints submitted to the RSPO Complaints System, and whether they have taken actions to address
such issues.
o
o
o
o
o
o

•

Sector Glossary
The following definitions apply in this policy:
ASEAN Policy on Zero Burning: In response to the land and forest fires that affected the ASEAN region in 1997/98, the ASEAN
Environment Ministers agreed to adopt the policy on zero burning at the 6th ASEAN Ministerial Meeting on Haze in April 1999,
and to promote its application by plantations in the region. Guidelines for the implementation of this policy have been developed
to provide advice to plantation owners, managers, supervisory staff and contractors on the application of the zero burningtechnique for oil palm plantations development (http://haze.asean.org/?wpfb_dl=163).
Free, Prior and Informed Consent (FPIC): The principle that a community has the right to give or withhold its consent toproposed projects that may affect the lands they customarily own, occupy or otherwise use 6.
According to the RSPO Principles & Criteria 7.5: “No new plantings are established on local peoples’ land where it can bedemonstrated that there are legal, customary or user rights, without their free, prior and informed consent. This is dealt withthrough a documented system that enables these and other stakeholders to express their views through their own representative
institutions”.
Greenhouse gas (GHG) emissions: In the palm oil sector, GHG emissions are mainly the result of:•••Land use change (deforestation, peatlands drainage, vegetation burning), and the use of fossil fuels in palm oil mills,
leading to emissions of carbon dioxide (CO2);
Production, transport and application of artificial fertilisers, leading to emissions of CO2 and nitrous oxide (N2O);
Anaerobic decomposition of organic material in palm oil mill effluents, leading to emissions of methane (CH4).

High Carbon Stock (HCS) Forests: Initial work on the HCS methodology started in 2011 through multi-stakeholder field-based
research in Indonesia and Africa, with the objective to identify land that is forest and should be conserved, and land that isdegraded and can be developed. HCS forests are those identified as High, Medium, Low Density and Young Regenerating
Forests under the following vegetation strata characteristics:
•
•
•
•
•
•
•

High Density Forest: Remnant forest of advanced secondary forest close to primary condition;
Medium Density Forest: Remnant forest but more disturbed than High Density Forest;
Low Density Forest: Appears to be remnant forest but is highly disturbed and recovering;
Young Regenerating Forest: Mostly young regrowth forest but with occasional patches of older forest;
Scrub: Recently cleared areas with some woody regrowth and grass-like ground cover;
Cleared/Open Land: Very recently cleared land with mostly grass or crops and few non-crop woody plants;
Scrub and Cleared/Open Land areas may be developed.

Following 12 months of discussions, in November 2016 the two different HCS methodologies that had been developed in parallel
have been merged into the High Carbon Stock Approach (HSCA).
High Conservation Value (HCV) areas: The areas necessary to maintain or enhance one or more High Conservation Values
defined as follows7:• Concentrations of biological diversity including endemic species, and rare, threatened or endangered species, that are
significant at global, regional or national levels (e.g. the presence of several globally threatened bird species);
6 http://www.forestpeoples.org/guiding-principles/free-prior-and-informed-consent-fpic
7 HCV Resource Network (http://www.hcvnetwork.org/about-hcvf/the-six-high-conservation-values).

11

•

•
•
•

Large landscape-level ecosystems and ecosystem mosaics that are significant at global, regional or national levels and that
contain viable populations of the great majority of the naturally occurring species in natural patterns of distribution andabundance. (e.g. a large tract of Mesoamerican flooded grasslands and gallery forests with healthy populations of Hyacinth
Macaw, Jaguar, Maned Wolf, and Giant Otter, as well as most smaller species);
Rare, threatened, or endangered ecosystems, habitats or refugia (e.g. patches of a regionally rare type of freshwater
swamp); Basic ecosystem services in critical situations, including protection of water catchments and control of erosion ofvulnerable soils and slopes (e.g. forest on steep slopes with avalanche risk above a town);
Sites and resources fundamental for satisfying the basic necessities of local communities or indigenous peoples (forlivelihoods, health, nutrition, water, etc.), identified through engagement with these communities or indigenous peoples (e.g.
key hunting areas for communities living at subsistence level);
Sites, resources, habitats and landscapes of global or national cultural, archaeological or historical significance, and/or of
critical cultural, ecological, economic or religious/sacred importance for the traditional cultures of local communities orindigenous peoples, identified through engagement with these local communities or indigenous peoples (e.g. sacred burial
grounds within a forest management area or new agricultural plantation).

Key Biodiversity Area: KBAs incorporate information from the IUCN Red List of Threatened Species, BirdLife International’s
Important Bird Areas, Plantlife International’s Important Plant Areas, IUCN’s Important Sites for Freshwater Biodiversity, and sites
identified by the Alliance for Zero Extinction. KBAs are identified at the national, sub-national or regional level by local stakeholders
using the two globally standard criteria of vulnerability and irreplaceability, and therefore must contain:••••

One or more globally threatened species;
One or more endemic species which are globally restricted to the site or surrounding region;
Significant concentrations of a species (e.g. important migratory stops, nesting sites, nurseries or breeding areas); and/or
Globally significant examples of unique habitat types and species assemblages.

For more information, please see http://www.biodiversitya-z.org/content/key-biodiversity-areas-kba
Local communities: People living in or near a site intended to be converted into a palm oil plantation, and who can be adversely
affected by such a development.
Paraquat: The trade name for one of the most widely used herbicides. It is quick-acting and non-selective, killing green plant tissue on
contact. It is toxic to animals and human beings, and linked to development of Parkinson's disease. In the United States, paraquat isclassified as "restricted use”, which means that it can be used by licensed applicators only. In the European Union, paraquat has been
forbidden since 2007.
Palm oil mill / palm oil mill effluent: A palm oil mill processes fresh fruit bunches coming from oil palm plantations and produces
crude palm oil (CPO). The CPO is usually then sold to traders or refiners (i.e. downstream palm oil companies) for further processing.
Palm Oil Mill Effluent (POME) is the liquid waste resulting from the CPO production process, highly acidic and with high biological andchemical oxygen demand.
Peatland: A soil that contains at least 65% organic material, is at least 50 cm in depth, covers an area of at least 1 ha, and is acidic innature (Driessen, 1978; Wösten & Ritzema, 2001).
Rotterdam Convention: The Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals andPesticides in International Trade is a multilateral treaty to promote shared responsibilities in relation to importation of hazardous
chemicals, signed in 1998 and effective in 2004. The convention promotes open exchange of information and calls on exporters ofhazardous chemicals to use proper labelling, include directions on safe handling, and inform purchasers of any known restrictions orbans. Signatory nations can decide whether to allow or ban the importation of chemicals listed in the treaty(http://www.pic.int/TheConvention/Chemicals/AnnexIIIChemicals/tabid/1132/language/en-US/Default.aspx), and exporting countries
are obliged to make sure that producers within their jurisdiction comply.
RSPO Principles and Criteria (2018): The RSPO Principles and Criteria for Sustainable Palm Oil Production are the standard
against which palm oil producers can be certified. Each of the following seven principles is declined into criteria (https://rspo.org/wpcontent/uploads/RSPO_PC_Metrics_Template_Guidance_V2_ENG1.pdf):• Principle 1: Behave ethically and transparently• Principle 2: Operate legally and respect rights• Principle 3: Optimise productivity, efficiency, positive impacts and resilience
12

•
•
•
•

Principle 4: Respect community and human rights and deliver benefits
Principle 5: Support smallholder inclusion
Principle 6: Respect workers’ rights and conditions
Principle 7: Protect, conserve and enhance ecosystems and the environment

Stockholm Convention: The Stockholm Convention on Persistent Organic Pollutants is an international environmental treaty, signed
in 2001 and effective from May 2004, that aims to eliminate or restrict the production and use of persistent organic pollutants (POPs).
The list of such substances can be found below: http://chm.pops.int/TheConvention/ThePOPs/ListingofPOPs/tabid/2509/Default.aspx
UNESCO World Heritage Sites: Designated cultural and natural heritage areas around the world that are considered to be ofoutstanding value to humanity and which are listed under the World Heritage Convention (http://whc.unesco.org/en/list).
Wetlands on the Ramsar list: These wetlands are defined as “Sites containing representative, rare or unique wetland types” or “Sites
of international importance for conserving biological diversity” listed in the Convention on Wetlands adopted in Ramsar, Iran in 1971(http://www.ramsar.org/).
WHO Class Ia or Ib pesticides correspond to the pesticides that pose the greatest risks to human health according to the World
Health Organisation’s Recommended Classification of Pesticides by Hazard
http://www.who.int/ipcs/publications/pesticides_hazard/en/), Ia being “extremely hazardous” and Ib being “highly hazardous”.

13

WOOD PULP
BackgroundThe demand for paper product is set to increase significantly over the coming years and this development is likely to have significant
impacts on the sustainability efforts of the sector. Regarding the pulp and paper production chain, most of these impacts arerecognised to be concentrated in the forestry management phase and wood pulp production process. BNP Paribas AssetManagement, in accordance with BNPP Group, identifies five main sustainability issues linked to the wood pulp industry:•

Environmental and biodiversity issues linked to the deforestation and the industrial wood plantations to supply wood
resources to the pulp mills;•

Social issues linked to the development of a pulp mill or an industrial wood plantation project; (respect of local people rights,
involvement of local communities, job development...)•Water and wastewater management in the pulp process, particularly dioxin emissions from bleaching;•Occupational health and safety in wood plantations and pulp mills;•

Environmental management in pulp mills (including air emissions and waste management).

Companies ConcernedThis policy applies to companies directly involved in the upstream or downstream wood pulp value chain:••

Upstream refers to the industrial wood plantations and forest harvesting activity of pulp producers, whereas downstream
refers to wood pulp producers, including for their own use, and traders.
Other companies further up or down the value chain (paper making companies which do not produce their own pulp,
chemicals manufacturers and machinery manufacturers as well as paper retailers and distributors) are not within the scopeof these guidelines.

Mandatory Requirements for Forestry Management
BNP Paribas Asset Management requires that upstream pulp companies:•

Comply with existing social and environmental laws, at a local or state/provincial level, as well as with international
regulations ratified by their operating countries.

In order to ensure that basic social requirements are met and to limit negative impacts on climate change and biodiversity, BNP
Paribas Asset Management requires that upstream pulp companies:•

Do not use child or forced labour manpower;•

Will not develop a new plantation on land owned or occupied by local communities without having (and in line with the FSC
or PEFC principles and criteria):-

Conducted a free, prior and informed consultation process,-Achieved an acceptable compensation arrangement, and-Implemented an efficient grievance mechanism.

•

Do not use illegally harvested wood8;•

Do not convert UNESCO World Heritage Sites into industrial wood plantations•

Conduct a High Conservation Value (HCV) assessment before developing a new plantation;

8 Illegal logging definition for this policy is the list of illegal logging acts given by the FAO Committee on Paper and Wood Products in their study Defining illegal logging:what it is, and what is being done about it? (2003).

14

•

Do not convert High Conservation Value forests (HCVF) into new plantations. In case a company’s plantation is located onland formerly occupied by HCVF, the clearing must have occurred no later than 2001, and the company shall certify (and to
the extent feasible demonstrate) that it is not responsible directly or indirectly for such conversion;•

Have a clear peat land management procedure in place for any new plantation located on peat land;•

Have a no-burn policy, in line with the recommendations of the ASEAN policy on zero burning or other regional bestpractice;•

Provide a monitoring plan of the workforce health & safety conditions on a regular basis.

Engagement Criteria for Forestry Management
BNP Paribas Asset Management encourages upstream pulp companies to move towards higher standards of sustainability.
Concerning forest management, BNP Paribas Asset Management believes FSC and PEFC are currently the best available set ofcriteria for sustainability in this industry and encourages upstream pulp companies:•

To become an active member of their national FSC or PEFC multi-stakeholders governance systems (or any equivalent
forest management initiative that may emerge);•

In the case of pulp producers buying wood from external parties, to ask to their suppliers to have their forest or plantation
FSC or PEFC certified or to design and implement action plans to have the forest or the plantation certified within a fiveyears period9;•

In the case of forest and plantation managers, to have their forest or plantation FSC or PEFC certified or to design andimplement action plans to have the forest or the plantation certified within a five-years period10.

•

BNP Paribas Asset Management also encourages upstream pulp companies to present a clear and stringent environmental
management procedure for existing plantations. This procedure will clearly indicate how the project is dealing with agrochemicals, water and biodiversity management. In case of an external supply of wood for the pulp mill, the company mustask such procedure to its suppliers.

•

BNP Paribas Asset Management strongly encourages upstream pulp companies to develop alternatives to plantations onpeat lands, as peatlands are valuable for the various and crucial ecosystem services they provide. These functions andvalues include biodiversity maintenance, carbon and water storage, as well as water regulation and quality.

•

To not convert Wetlands on the Ramsar list into industrial wood plantations

Mandatory Requirements for Pulp Production
BNP Paribas Asset Management requires that pulp producers:••

Comply with existing social and environmental laws, at a local or state/provincial level, as well as with international
regulations ratified by their operating countries.
Concerning wood supply, pulp producers must verify that their wood sourcing respect the mandatory requirements
applicable to Forestry Management.

BNP Paribas Asset Management is aware that Absorbable Organic halogens (AOX) may be emitted in the water when the processuses a bleaching step. This particular type of pollution coming from pulp mills has been pointed out by NGOs and healthorganisations. Over recent years, chlorine and hypochlorite have largely been phased out as primary bleaching chemicals. Indeed,
Elementary Chlorine Free (ECF) and Totally Chlorine Free (TCF) processes allow obtaining concentrations of dioxins and furans in
the effluents that are under the detections limits. BNP Paribas believes that ECF and TCF are so far the best available techniques tomanage sustainable bleaching.
As a result BNP Paribas requires that pulp producers:•

Will develop new pulp mills using ECF or TCF technology if the bleaching process is necessary;

9 This five-year period will start at the official publication date of this policy.
10 ibid15

•Will make the transition of their process towards ECF or TCF technology in case of already existing plants;•

Will present a management plan to monitor and control various water effluents level and air emission indicators listed by theapplicable IFC Environmental, Health, and Safety (EHS) Guidelines for Pulp and Paper Mills. As of the publication date ofthis policy, these parameters are the followings: Flow, pH, TSS, COD, BOD5, AOX, Total N, Total P 11 ;•Provide a monitoring plan of the workforce health and safety conditions on a regular basis.

Engagement Criteria for Pulp Production
BNP Paribas Asset Management encourages downstream pulp companies to move towards higher standards of sustainability. BNPParibas Asset Management believes that FSC and PEFC are currently the best available set of criteria for fibre sourcing sustainability
in the pulp industry and encourages downstream pulp companies (i.e. pulp producers and traders):••

To obtain the FSC or PEFC Chain of Custody (CoC) certification for their activities. They are also encouraged to set up
policies requiring that their suppliers (i) have their own plantations FSC or PEFC certified within a five-year period as well as(ii) encourage the traceability of sources of wood for the pulp industry by securing FSC or PEFC CoC certification for theiractivities. In any case, downstream pulp companies should present a credible sourcing plan for wood (at the beginning of
the project in case of new pulp mills); mentioning if needed an external supply of wood and specifying what is this externalsource;To become an active member of their national FSC or PEFC multi-stakeholders governance systems (or any equivalent
forest management initiative that may emerge);

Concerning water and air emissions, BNP Paribas Asset Management encourages pulp producers:••

To ensure that emission levels at all their pulp mills are under or equal to the levels presented in the IFC EHS Guidelines for
Pulp and Paper Mills (Annex B on “Effluents and Emissions Guidelines”). In the case they are higher than such emission
levels, BNP Paribas encourage pulp producers to develop efficient action plans to correct these deviations and decrease
emissions until they are below the IFC’s levels.
To present (at the beginning of the project in case of a new pulp mill) a credible energy sourcing plan and the impact of thisenergy mix on CO2 emissions.

In relation to Environmental & Social Management Systems (ESMS) and Health & Safety Management Systems (HSMS), BNP
Paribas Asset Management believes that ISO 14001 and OHSAS 18001 are currently the best available sustainability certificates forindustrial processes and BNP Paribas Asset Management encourages pulp producers:•

To set up and implement an EMS dealing with air, water emissions, waste management, soil and groundwatercontamination and to develop a plan to have their activities ISO 14001 (or equivalent EMS certification scheme) certified
within a five-years period12;•

To set up and implement a HSMS and to develop a plan to have their activities OHSAS 18001 (or equivalent HSMS
certification scheme) certified within a five-year period13.

Key Definitions
The following definitions apply in these guidelines:
AOX: Absorbable Organic halogen is a group of halogenated organic substances that are able to absorb onto activated carbon.
ASEAN no burn policy: In response to the land and forest fires that affected the ASEAN region in 1997/98, the ASEAN Environment
Ministers agreed to adopt the policy on zero burning at the 6th ASEAN Ministerial Meeting on Haze in April 1999, and to promote its
application by plantations in the region. The guidelines for the implementation of this policy have been developed to provide advice to
11 More specifically, such indicators are listed in the Annex B “Effluents and Emissions Guidelines / Resource Use Benchmarks” of the IFC EHS Guidelines on Pulp andPaper Mills.
12 This five-year period will start at the official publication date of this policy for companies.
13 Ibid.

16

plantation owners, managers, supervisory staff and contractors on the application of the zero burning technique for development of oilpalm plantations14.
BOD: Biological Oxygen Demand measures the amount of dissolved oxygen needed by aerobic biological organisms in a body ofwater to break down organic material.
COD: Chemical Oxygen Demand measures the amount of organic compounds in water.
ECF: Elementary Chlorine Free is the process for bleaching the pulp. It allows obtaining concentrations of dioxins and furans in theeffluents that are under the detections limits.
EMS: Environmental Management System. It can be recognised by an ISO 14 001 certification or equivalent.
FSC Principles and Criteria established in 1993 (as reported in the Sustainable Forest Finance Toolkit of the WBCSD). FSC is asystem of national and regional standards consistent with 10 principles of SFM that cover the following issues:
1. Compliance with laws and FSC principles
2. Tenure and use rights and responsibilities
3. Indigenous people’s rights
4. Community relations and workers’ rights
5. Benefits from the forests
6. Environmental impact
7. Management plans
8. Monitoring and assessment
9. Special sites – high conservation value forests (HCVF)
10. Plantations
These principles were developed by a global partnership of stakeholders convened by FSC. The principles apply to all tropical,
temperate and boreal forests and are to be considered as a whole. All national and regional standards are derived in-country from the
10 principles. The principles are expected to be used in conjunction with national and international laws and regulations, and incompatibility with international principles and criteria relevant at the national and sub-national level (FSC Policy and Standards;
principles and criteria of forest stewardship) (FSC, 1996). There is variation in regional standards and in interim standards adopted byauditing bodies.
High Conservation Value Forests (HCVF): are defined as follows (from the Forest Stewardship Council, reported in the Sustainable
Forest Finance Toolkit of the WBCSD15):▪ Forest areas containing globally, regionally or nationally significant concentrations of biodiversity values (e.g. endemism,
endangered species);▪

Forest areas containing globally, regionally or nationally significant large landscape level forests, contained within, or
containing the management unit, where viable populations of most if not all naturally occurring species exist in natural
patterns of distribution and abundance;▪

Forest areas that are in or contain rare, threatened or endangered ecosystems;▪

Forest areas that provide basic services of nature in critical situations (e.g. watershed protection, erosion control);▪

Forest areas fundamental to meeting basic needs of local communities (e.g. subsistence, health);▪

Forest areas critical to local communities’ traditional cultural identity (areas of cultural, ecological, economic or religious
significance identified in cooperation with such local communities).

H&S: Health and Safety Management System. It can be recognised by an OHSAS 18 001 certification or equivalent.
Local community: broad group of people living in or near a forest or plantation, with significant level of dependence on it. The term
includes forest dwellers, indigenous forest-adjacent populations and recent immigrants. (Source: IFC Operational Policy on Forestry).

14 http://www.rspo.org/?q=page/864
15 https://www.pwc.co.uk/assets/pdf/forest-finance-toolkit.pdf

17Peatlands: Wetland in which substantial peat accumulation--at least one foot (30 cm)--has taken place16. The peatland substrate is anorganic structure built by biological activity. Peatlands are valuable for the various and crucial ecosystem services they provide.
These functions and values include biodiversity maintenance, carbon and water storage, solute detention and water regulation andquality.
▪

Firstly, undrained peatlands are unique natural resources forming distinct ecosystems of great biodiversity importance forthe maintenance of genetic, species and habitat levels.

▪

Peatlands are also water catchments. They modify water quality and quantity, act as sinks for some substances, produce
others, and influence the temporal pattern of water supply to rivers and lakes. The role of peatlands in water regulation
depends on maintaining the integrity of their unique hydrology that is independent of but linked to that of adjacent wetlands
and the wider landscape.

▪

Finally, peatlands have been major global carbon stores for millennia. Peatlands also emit CO 2 and CH4, the amounts being
influenced by temperature and water level, both of which are likely to be affected by removal of vegetation, drainage andfuture climate change. Agriculture on drained peatlands leads to substantial emissions of carbon dioxide and nitrous oxide(N2O)17.

PEFC Principles and Criteria established in 1999 (as reported in the Sustainable Forest Finance Toolkit of the WBCSD).
PEFC is a mutual recognition mechanism for national and regional certification systems. Endorsed certification systems are to beconsistent with internationally agreed environmental, social and economic requirements such as the Pan-European Operational Level
Guidelines (PEOLG), the African Timber Organisation (ATO) and International Tropical Timber Organisation’s (ITTO) Guidelines, aswell as intergovernmental processes on criteria and indicators for SFM. The elements of SFM covered by these requirements mayvary to fit the circumstances of the areas for which they were developed. For instance, the Pan-European Operational Level
Guidelines cover the following:• Maintenance and enhancements of forest resources and their contribution to global carbon cycles• Maintenance and enhancement of forest ecosystem health and vitality• Maintenance of productive functions of forests• Maintenance, conservation and enhancement of biodiversity• Maintenance and enhancement of protective functions in forest management• Maintenance of socioeconomic functions and conditions
Endorsed certification systems are expected to be consistent with international agreements such as ILO core conventions, as well as
conventions relevant to forest management and ratified by the countries such as the Convention on Biological Diversity (CBD), CITES
and others. There is variation among member certification standards, with some standards exceeding PEFC requirements (PEFC,
2006A).
pH: In chemistry, pH is a measure of the acidity or basicity of an aqueous solution.
Ramsar sites: “Sites containing representative, rare or unique wetland types” and “Sites of international importance for conserving
biological diversity” listed in the Convention on Wetlands adopted in Ramsar, Iran in 1971 (Ramsar convention).
TCF: Totally Chlorine Free process for bleaching the pulp replace totally the chlorine by an oxygen bleaching process.
Total N: Total quantity of Nitrogen.
Total P: Total quantity of Phosphor.
TSS: Total Suspended Solids is a water quality measurement, measuring the non-filterable solids concentration in the water.
UNESCO World Heritage areas: Designated cultural and natural heritage areas around the world that are considered of outstanding
value to humanity and which are listed under the World Heritage Convention18

16 Charman, D. 2002. Peatlands and environmental change. J. Wiley & Sons, London & New York, p. 301
17 Sources: Assessment on Peatlands, Biodiversity and Climate change, UNEP-GEF 2007, Strategy for responsible peatland management, IPS 201018 http://whc.unesco.org/en/list/

18

NUCLEAR POWER GENERATION
Background
BNP Paribas Asset Management, as a financial institution, may provide financial products and services to governmental entities
supporting and / or to companies developing civil nuclear power. BNP Paribas Asset Management considers that it is essential - bothfor the countries under consideration and for the international community as a whole - that any country undertaking a nuclear power
program or developing additional nuclear power plants is not only willing but also capable of meeting essential requirements regarding
safety, security, non-proliferation, protection of populations and of the environment for future generations.
BNP Paribas Asset Management has defined the present sector policy to identify specific requirements to select companies that take
into account the above-mentioned considerations.
This policy may evolve over time. BNP Paribas Asset Management will especially consider and take into account studies and policies
regarding best practices for nuclear plants for electricity generation and may update this document based on new information andparallel initiatives.
Companies Concerned
These guidelines apply to companies involved in a Nuclear Power Plant (NPP) as owner or operator of the nuclear island, and tocompanies involved in the nuclear fuel cycle (defined as uranium enrichment, fuel fabrication, used fuel recycling and/or storage anddisposal of nuclear waste).
BNP Paribas Asset Management expects Nuclear Companies to comply with existing local laws and licensing arrangements as wellas with international conventions ratified by their operating countries. In addition to compliance with these regulations, these guidelines
set additional criteria to be respected by Nuclear Companies.
Mandatory Requirements applicable to Companies involved in a Nuclear Power Plant (NPP)The Nuclear Company only owns or operate NPPs whose nuclear reactors have a design which is similar to reactors operated in a
Reference Nuclear Country or which has been validated by the NSA of a Reference Nuclear Country,
The Nuclear Company has a global policy ensuring radiation monitoring (both on site and around the site) and the protection ofworkers.
There is an independent chain of control to monitor the safety of the nuclear operations.
The following requirements have to be applied to the incorporation country of the Nuclear Company and of its parent company(i)

Proper legal framework:•

An official approval by the government and the supervising bodies of the civil nuclear power sector has been obtained for
the NPP project;•

Protection of workers is required in the regulatory framework;•

Existence of a plan for the development of long-term solutions for the management of high and intermediate level nuclear
waste;•

Existence of a plan for the dismantling of NPPs.

(ii)

International cooperation:•

Host country is signatory to the Non Proliferation Treaty (or an equivalent bi-lateral agreement on nuclear energy safety andproliferation with a Reference Nuclear Country);19

•The last available Comprehensive Safeguards Agreement Report by the IAEA doesn’t mention any specific issues or any
lack of information that would hinder the monitoring of the nuclear facilities of the host country;•

The NPPs of the host country dedicated to producing electricity are used for peaceful purposes4;•

Participation in the IAEA Incident Reporting System (IRS) (in case of a country with no prior nuclear facility, this participationis planned before the commissioning of the first NPP in such new entrant country).

(iii)

Nuclear Safety Agency:•

Existence of a Nuclear Safety Agency (NSA) or an equivalent state agency that covers at least the control of Nuclear Power
Plants throughout its life cycle;•

The NSA has the statutory power to run inspections that can lead to sanctions.

(iv)

Political stability and country security:

Host country offers a satisfactory level of stability allowing visibility over a safe and long-term operation of the NPP. This level ofstability and security is assessed against the following criteria:•

Host country is not subject to international sanctions;•

NPP project is not located in a conflict zone5;•

Existence of national and/or local prevention and emergency plans adapted to the geographical specifics, including external
hazards (such as flooding or earthquake risks).

Evaluation Criteria applicable to Companies involved in a Nuclear Power Plant (NPP)
In addition to the above mandatory requirements, BNP Paribas Asset Management will consider further evaluation criteria to assess
the standards of Nuclear Companies against those of the main Nuclear Companies of a Reference Nuclear Country (for those
involved in a NPP). The objective of these criteria is to evaluate the capacity of the Nuclear Company to effectively monitor andmitigate environmental and social impacts.
BNP Paribas Asset Management will therefore evaluate their long-term financial strength as well as their experience (including
experience of their top management) and track record regarding safety, security and the environment. BNP Paribas AssetManagement will also evaluate the thoroughness of their subcontractor selection process, their transparency, as well as theircooperation with peers and supervisory bodies (in particular those from Reference Nuclear Countries).
Mandatory Requirements applicable to Companies involved in the Nuclear Fuel Cycle
The mandatory requirements detailed above for NPPs have to be applied to the incorporation country of the Nuclear Company and ofits parent company.
Operating licenses of the Nuclear Company are not suspended in the host country, nor in any Reference Nuclear Country.
There is an independent chain of control to monitor the safety of the nuclear operations.
The Nuclear Company has put in place policies and procedures to prevent and limit any radiation emission.
Evaluation Criteria applicable to Companies involved in the Nuclear Fuel Cycle
In addition to the above mandatory requirements, BNP Paribas Asset Management will consider further evaluation criteria to assess
the standards of Nuclear Companies against those of the main Nuclear Companies of a Reference Nuclear Country (for those
involved in the nuclear fuel cycle). The objective of these criteria is to evaluate the capacity of the Nuclear Company to effectively
monitor and mitigate environmental and social impacts.
20

BNP Paribas Asset Management will therefore evaluate their long-term financial strength as well as their experience (including theexperience of their top management) and track record regarding safety, security and environment. BNP Paribas Asset Management
will also evaluate the thoroughness of their subcontractor selection process, their transparency, as well as their cooperation withpeers, supervisory bodies (in particular those from Reference Nuclear Countries), and international research programs.
Key Definitions
Comprehensive Safeguards Agreements: “Safeguards are activities by which the IAEA can verify that a State is living up to its
international commitments not to use nuclear programs for nuclear-weapons purposes” (Extract from IAEA FAQ). Comprehensive
Safeguards Agreements are set between countries and the IAEA to enable the latter to pursue various such verifications.
IAEA: International Atomic Energy Agency. The IAEA is the United Nations’ centre of cooperation in the nuclear field. It was set up in1957 and works with its Member States and multiple partners worldwide to promote safe, secure and peaceful nuclear technologies.
INES Scale: International Nuclear and Radiological Event Scale. It is a tool for communicating to the public in a consistent way, thesafety significance of nuclear and radiological events (including events from industrial and medical use of radiation sources,
operations at nuclear facilities and transport of radioactive material).
Events are classified on the scale at 7 levels:▪ Levels 1–3 are called "incidents"▪

Levels 4–7 are called "accidents".

The scale is designed so that the severity of an event is about ten times greater for each increase in level on the scale. Events without
safety significance are called “deviations” and are classified Below Scale / Level 0.
IRS: Incident Reporting System. IRS is a joint initiative of IAEA and NEA (OECD Nuclear Energy Agency). This worldwide systemcollects and analyses information provided by operators. Its ultimate objective is to enhance the safety of NPPs by reducing thefrequency and severity of safety significant unusual events at NPPs worldwide.
OECD: Organisation for Economic Cooperation and Development. High income OECD countries are those with a Gross National
Income (GNI) per capita of $12,196 or more, based on the World Bank Atlas method.
NPP: Nuclear Power Plant. Power plant based on nuclear fission designed and operated for the production of electricity.
NPT: Non-proliferation treaty. The NPT is an international treaty whose objective is to prevent the spread of nuclear weapons andweapons technology, to promote co-operation in the peaceful uses of nuclear energy and to help in achieving nuclear disarmamentand general and complete disarmament.
NSA: Nuclear Safety Agency. The NSA is a generic term for the administrative authority in charge of ensuring nuclear control andsafety. It regulates nuclear safety and radiation protection in order to protect workers, patients, the public and the environment. It also
contributes to informing the citizens.
Nuclear fuel cycle: for the purpose of this policy, the nuclear fuel cycle comprises the following activities: uranium enrichment, fuelfabrication, used fuel recycling and/or storage and disposal of nuclear waste.
Reference Nuclear Country: Defined as any country having demonstrated a high level of nuclear safety and reliability in theoperation of a large NPP fleet. BNP Paribas defines Reference Nuclear Countries as high income OECD countries with top tierexperience in operating NPPs (measured in reactor-years) and no nuclear accidents – as defined by the level 4 and above of the
INES scale – recorded on a NPP during the last five years.

21

AGRICULTURE
BNP Paribas Asset Management identifies the following key environmental and social stakes linked to the agriculture sector:• Ecosystem and biodiversity• Water use and water pollution, GHG emissions, use of agrochemicals• Working conditions and human rights• Health and safety• Land tenure and local community rights• Global food security• Food safety and traceability• Animal welfare
Scope
Agriculture activities covered in this policy are production of seeds/grains, farming, origination & collection operations and/or primaryprocessing of agricultural products as defined below:• Production of seeds/grains covers the selection and multiplication of seeds/grains for the purpose of distribution, storage orsale;• Farming covers the cultivation of soil, production of crops and raising of livestock and poultry (breeding, feeding, and generalcare) and forest management (forestry);• Origination & Collection operations cover the sourcing, the transport and storage logistics of agricultural products from
where they are produced to a point where they are stored or undergo primary transformation. This includes activities ofPhysical agricultural products merchants and traders;• Primary processing is the first transformation of raw agricultural products - e.g. oil crushing, cocoa grinding, sugar extraction,
milk drying and slaughtering.
Agriculture activities not covered in this policy:• Manufacturers or distributors of agricultural machinery, pesticides and fertilisers;• Manufacturers of processed food and beverage; (secondary or further processed products, packaged food)• Retailers of food and beverage;• Fish, seafood and aquatic products;• Palm oil and wood pulp related activities (please refer to their dedicated sector policies).
Mandatory requirements
BNP Paribas will only invest in agriculture companies which comply with the following requirements.
•
•
•
•
•
•
•

•

Have a water management plan and disclose water consumption.
Do not use child or forced labor9;
Have a grievance mechanism in place through which workers’ concerns can be raised and addressed;
Respect the rights of workers to organise in a trade union or ensure workers’ interest and voice can be heard within thecompany10;
Do not discriminate against employees and applicant for employment11.
Have a Human Resources policy or a Code of Conduct.
Have a policy in place to protect worker’s health and safety conditions and disclose health and safety track record.
Have a policy in place to obtain the Free, Prior and Informed Consent (FPIC) of the local communities impacted by new
agriculture projects and have a grievance mechanism in place through which local communities’ concerns can be raised andaddressed;
Do not engage in land grabbing practices.

Engagement criteria
During our engagements with companies in the beef or soy value chain operating in the Amazon and Cerrado regions, we will focus
on issues related to deforestation and traceability.

22

COAL
REQUIREMENTS
Thermal-coal mining exclusions:
BNPP AM will exclude mining companies that meet any of the following criteria:• are developing or planning to develop thermal coal extraction capacities (new mines or expansion of existing ones)• derive more than 10% of their revenues from the mining of thermal coal
• produce more than 10 million tonnes of thermal-coal per year
• do not have a strategy to exit from thermal coal activities by 2030 in European Union and OECD countries and by 2040 for the
rest of the world.
Electricity production exclusions:
BNPP AM will exclude all power generators that meet any of the following criteria:• are adding operational coal-fired power generation capacity to their power portfolio• have a carbon intensity above 400 gCO2/kWh. This exclusion will be further tightened following the Paris-compliant trajectory forthe sector as determined by the International Energy Agency (‘IEA’) Sustainable Development Scenario (SDS). This means
power generators’ carbon intensity will need to fall to 346 gCO2/kWh by 2025, otherwise they will be excluded from ourinvestment portfolios.
• still have coal capacity in their generation mix in 2030 in European Union and OECD countries, and by 2040 for the rest of theworld.
Thermal-coal mining and electricity production monitoring:
BNPP AM acknowledges the importance of encouraging companies to reduce their dependence on coal mining and coal-fired power
generation in order to align their activities with the Paris Agreement. Miners and power generators that fulfil any of the exclusion
criteria but make credible commitments to reducing their coal-based activities to levels consistent with the Paris Agreement may be
added to a watchlist.
When considering whether to add a company to our watchlist, we will consider whether the company has:• committed to no new coal; companies developing new coal mines or power projects cannot be placed on our watchlist• committed to phasing out coal (2030 for EU/OECD countries and 2040 for the rest of the world)• a net-zero commitment by 2050 commitment in place, including supplemented by clear GHG reduction targets in the short,medium and long term
• a downward trend in fossil fuel capacities and upward trend in renewables capacity, or a relative growth in renewables higher
than growth in gas• a CAPEX plan oriented towards renewables; and/or• how far their current CO2 intensity is from the CO2 intensity of their local SDS.
Once a company is on the watchlist, our stewardship team or portfolio managers will engage directly with these companies on theabove criteria. Companies on the watchlist will be engaged with and reviewed at least once per year to assess their commitment to
the goals of our policy. No exemptions will be made for companies that develop either new thermal coal mining or power capacity.
For existing captive coal power plants used for energy intensive processes such as steel, aluminum and cement plants in emerging
countries, if they represent a very limited installed capacity of less than 500 MW, and if the company is diversifying its energy supply
away from coal, we may consider putting the company in the watchlist. If the company is involved in building new captive coal power
plants, it is ineligible for inclusion in the watchlist and will be automatically be excluded.
Policy implementation and definitions:
Data: We use a number of sources to understand if companies meet the requirements of this policy, including publicly available data
(CDP, Urgewald, TPI, Benchmarking Air Emissions, company reports, Global Energy Monitoring) as well as data we purchase fromexternal data providers such as Trucost and Sustainalytics.
23

CO2 intensity: the ratio between carbon dioxide (CO2) emissions of a power plant and the quantity of electricity generated by thissame power plant, during a given timeframe (typically one year). This ratio is expressed in gCO 2/KWH, for example.
BACKGROUND
There are three reasons why we have decided to exclude coal from our portfolios.
•

To tackle climate change

Keeping temperature rises well below 2°C requires a massive and rapid reduction of greenhouse-gas (GHG) emissions. The current
use of coal worldwide is incompatible with this target. Indeed, coal combustion is the largest single source of global warming, while thepower sector itself is the largest single source of coal combustion. Reducing emissions from coal is therefore the most effective wayof moving towards an energy system consistent with the Paris Agreement. According to the IEA’s SDS, almost all of the emissions
reductions from the energy sector required by 2025 to align the global emissions pathway with the Paris Agreement – 2.8Gt out of a
total 3Gt – come from cutting back on the use of coal in power generation.
•

To reduce air pollution and improve human healthThe policy also responds to an increasing concern over air pollution and the impact on human health. According to the World
Health Organisation, approximately 4.2 million people die every year from outdoor air pollution.19 This is caused by:o 75% of SO2 emissions linked to power generation are due to coal combustiono 70% of NOx emissions linked to power generation are due to coal combustiono 90% of PM 2.5 (particulate matter) linked to power generation are due to coal combustion•

To avoid stranded asset risk

Finally, the policy also responds to the need to manage the risk of fossil-fuel assets becoming stranded in a strong climate-change
mitigation scenario. Owing to its high carbon content and the fact that 73% of coal consumption is in power generation – where
increasingly cheaper alternatives exist – coal is at greater risk of being stranded in the near term than oil and gas.
▪

Policy risk: coal phase-outs have been announced in a number of EU countries (UK, Netherlands, France, Finland, Italy,
and most recently Germany), and compensation policies will not necessarily cover all costs. Other jurisdictions are likely to
go down this path over the next decade for both climate and public-health reasons (in total 24 countries or other jurisdictions
have already committed to phasing out coal in power generation).20 Carbon pricing is likely to be more widely adopted overthe next decade as well.

▪

Technology risk: Renewables are becoming ever more competitive, and in certain jurisdictions wind and solar are not only
already cheaper than new coal capacity but are also close to being cheaper than existing coal capacity. This will become amuch more widespread feature of power markets across the world over the next decade as renewable costs continue to falland carbon pricing becomes more widespread.

▪

Virtuous feedback loop between policy and technology: With strong support from public policy in the form of subsidies,huge amounts of capital have been deployed in renewables over the last decade, enabling economies of scale and hence
more ambitious targets which then drive further cost economies of scale in renewables. This feedback loop could be
replicated with the ramp-up of energy-storage technologies.

▪

Commodity-price risk: In some jurisdictions – most notably the US – cheap gas has already largely priced coal out of themarket.

▪

Carbon capture and storage: Carbon-capture and storage technology has long been held out as the saviour of coal, but it
has simply not attracted the investment necessary to drive economies of scale and has probably missed its window as alarge-scale solution at global scale given the renewables revolution and the improving economics of energy storage.

19 See WHO, Air Pollution, 2019.
20 See Greenpeace Global Shift, October 2017. This reports list 22 political jurisdictions (10 nation states, 7 US states, and a number of cities such as Beijing and New

Delhi) that have committed to phasing out coal in power generation, and since then Italy and Germany have joined the list.

24

OIL AND GAS
BackgroundThe energy sector is a significant contributor to global greenhouse gas emissions, responsible for almost three-quarters of theemissions produced since the pre-industrial age, according to the International Energy Agency. But energy is also essential to support
economic and social progress as well as to help other sectors decarbonize their activities. The transition to low-carbon sources ofenergy is at the heart of the global response to climate change and the goal of this policy is to support oil and gas companies with theirtransition while screening out those that are not adapting quickly enough.
Scope
This policy applies to:• Companies involved in unconventional oil and gas: companies that own or operate unconventional oil and gas explorationand production assets, pipelines transporting unconventional oil or gas, and/or LNG export terminals supplied withunconventional gas. Trading companies involved in unconventional oil and gas are also covered.
• Companies linked to sensitive areas as defined below.
Mandatory requirements (general)
We will invest in energy companies that:• Have their headquarters located in countries that are not under financial sanctions from France, the European Union, theU.S.A., or the United Nations;• Do not use child or forced labour as defined in the International Labour Organization (ILO) Conventions 21;
We also expect companies to:• Have a policy in place on workers’ health and safety and disclose or provide their track record regarding health and safety atcompany level;• Disclose or provide information at company level on their water use, waste generation, energy consumption, GHG emissions
including scopes 1 & 2 (reporting on scope 3 is highly encouraged), and land reclamation strategy.
Mandatory requirements related to unconventional oil and gas activities
We will only invest in energy companies that derive less than 10% of their activities in Unconventional Oil and Gas. This ratio will beassessed as follows:• For pure upstream oil and gas players, on the basis of their reserves: we will only invest in upstream companies having lessthan 10% of unconventional reserves.
• For diversified energy companies, on the basis of the Unconventional Ratio (defined as share of total revenues from their
upstream activities, multiplied by the share of non-conventional reserves): we will only invest in diversified Energy
companies with an Unconventional Ratio below 10%.
OR
• Energy companies that generate less than 10% of their revenues from Unconventional Oil and Gas.
In addition to the above, we will exclude from our investment universe trading companies for which unconventional oil and gas
resources represent more than 30% of their business as well as companies that own or operate pipelines or LNG export terminals
supplied with more than 30% of their volume in unconventional oil and gas.
Mandatory requirements related to operations in sensitive areas
We will only invest in companies deriving less than 10% of their exploration and production activities from the Arctic region, with thisratio computed as follows:• Pure oil and gas players will be assessed based on their reserves in this area as a percentage of their total reserves;• Diversified oil and gas companies will be assessed based on an Arctic Ratio. This ratio will be calculated as the percentage
of total reserves in the Arctic multiplied by the share of total revenues from upstream activities.
OR• Energy companies that generate less than 10% of their revenues from activities in the Arctic Region.

21 C 138 Minimum Age Convention, 1973 ; C 182 Worst Forms of Child Labor Convention, 1999 ; C 29 Forced Labor Convention, 193025

We will not invest in companies with oil and gas reserves in the Amazon (see Definitions below), as well as the ones actively
developing related infrastructure in these areas.
Transition plan assessment
Companies that do not meet the above criteria may be added to our monitoring list, meaning they are eligible for investment subject toregular review, if they have credible climate commitments and realistic transition plans. When assessing whether to add a company toour monitoring list, we will consider whether the company has:
• Public commitment to align with a 1.5°C or net zero strategy by 2050;• Board supervision of company’s climate strategy and climate commitments;• Intermediary GHG reduction targets (2030 at a maximum) if possible a) in absolute value and b) addressing Scope 1, 2 & 3
emissions aligned with NZE pathway;• GHG emissions measured and reported annually;• Consistent capex program to support the company’s transition strategy towards a low carbon business model.
Engagement criteria
Where the above expectations are not met, these topics can inform the engagements we may undertake with oil and gas companies
to encourage them to establish and strengthen long term plans and targets towards sustainable and low carbon business models. We
will also use the below criteria to inform the engagements we may undertake with Energy companies.
General criteria• the company has public policies and targets on key environmental, social and governance issues and discloses its related
performance;• if the company is subject to regular and repeated criticism or controversies about its environmental, social, security(including the use of security forces), or governance performance on material issues, the actions taken by the company toaddress such issues.
Health, Safety, Security and Environment criteria• the company is involved in research or multi-stakeholders efforts (such as OGCI) to monitor and address key environmental
and social issues ;• the company has a convincing environmental, social, health and safety track record;• the company has a flaring and venting policy in place ;• the company considers biodiversity issues when developing projects;• the company’s oil and gas activities (existing operations or new projects) are in line with the IFC Performance Standards andthe applicable World Bank Group Environmental, Health, and Safety Guidelines (both General and Industry Sector EHS
Guidelines).
Human rights and governance criteria• The company has committed to respect human rights in the way it conducts business;• The company has implemented a stakeholder engagement plan, which includes a consultation process for communities
affected by the development of new oil and gas projects;• The company has a grievance mechanism in place through which stakeholders’ concerns can be raised and addressed;• The company discloses payments made to host governments (such as royalties, taxes and profit sharing);• The company has a policy in place to support the sustainable development of local communities.
Definitions
Energy companies: all companies active in the upstream oil and gas sector, whatever the share of oil and gas produced.
Unconventional oil and gas resources: encompasses shale oil or gas, oil sands as well as extra-heavy oil with a density above
1kg/L corresponding to an API gravity below 10° and coal bed methane.
Arctic region: BNP Paribas is extending its definition of the Arctic and adopts the Arctic Monitoring and Assessment Program(AMAP22) definition, which is the broadest. An exception is made for Norwegian operated areas based on the fact that Norway has
developed the most constraining environmental and operational laws, regulations and monitoring processes in the world.
22 The Arctic Monitoring and Assessment Program (“AMAP”) is the working group of the Arctic Council [intergovernmental forum including 8 Arctic States (Canada,

Denmark, Finland, Iceland, Norway, Russia, Sweden, US) and indigenous peoples’ organizations (Inuit, Aleut, Sami and a few others)].

26

Amazon region: the Amazon River basin region extends to terriroties belonging to Brazil, Ecuador, Bolivia, Colombia, Guyana,
Venezuela and Peru. The area known as the Sacred Headwaters of the Amazon covers parts of Ecuador and Peru and is formed by
the Napo, Pastaza and Marañón river basins. As part of this policy, restrictions will be applied to all protected Category I to IV regionsof the classification established by the IUCN (International Union for Conservation of Nature), sites included on the list maintained by
the RAMSAR Convention (Convention on Wetlands), sites in the Amazon region classified as World Heritage, sites linked to the
Alliance for Zero Extinction (AZE) and the Sacred Headwaters of the Amazon.

27

CONTROVERSIAL WEAPONS
Background
Controversial weapons have indiscriminate effects and cause undue harm and injuries. Certain controversial weapons, namely cluster
munitions, antipersonnel mines, chemical and biological weapons and nuclear weapons are regulated by international conventions.
The potential for the irresponsible end-use of military, security or police equipment is an important issue in this sector. Finally, we
recognise that international trade in weapons is particularly exposed to the risk of corruption and money laundering.
Companies Concerned
Controversial weapons is a concept subject to change over time. At the date of publication of this Policy, BNP Paribas AM considers
the following to be controversial weapons:• Anti-personnel mines: the Ottawa Convention, which took effect in March 1999, bans the use of antipersonnel mines;• Cluster weapons: the Convention on Cluster Munitions (Oslo Convention) adopted in 2008 prohibits the use, stockpiling,
production and transfer of cluster munitions;• Nuclear weapons: the Nuclear Non-proliferation Treaty (NPT) of 1968, which took effect in 1970, aims at inhibiting theproliferation of nuclear weapons23;• Biological and chemical weapons: the Biological and Toxin Weapons Convention (BTWC) of 1972 and the Chemical
Weapons Convention (CWC) of 1993 outlaw biological and chemical weapons;• Depleted uranium munitions: no current international convention exists, but BNP Paribas recognises the concerns of certain
stakeholders concerning depleted uranium munitions.
• White phosphorus munitions: no current international convention exists, but BNP Paribas recognises the indiscriminate
impact effects and disproportionate harm that white phosphorus munitions can have.

Mandatory Requirements
BNP Paribas Asset Management does not wish to invest in companies involved in the manufacture, trade or storage of controversial
weapons, or any other activity involving controversial weapons 24.
BNP Paribas Asset Management considers that a company is involved in controversial weapons when the company:• Produces, trades, or stores controversial weapons or components that are specifically designed for these weapons(dedicated components) and which represent a critical component required for the functioning of the weapon (keycomponent) and /or;
• Provides assistance, technologies or services dedicated to controversial weapons.
Furthermore, BNP Paribas Asset Management will not invest in companies involved in the following types of equipment and activity:•

Companies which have been identified by the UN, EU, United States or France, as having deliberately participated in theviolation of embargos on arms and internal repression equipment imposed by these authorities.

Engagement Criteria
In addition to the above, if engaging with companies, we will discuss with them whether they produce, sell or buy equipment on the EU
list of goods which have no practical use other than for the purpose of “capital punishment, torture or other cruel, inhuman ordegrading treatment or punishment”.25
Definitions
Anti-personnel mine: A mine that is designed to be exploded by the presence, proximity or contact of a person and that will
incapacitate, injure or kill one or more persons (definition from Ottawa Convention, 1997).

23 BNP Paribas AM makes an exception for government controlled nuclear weapon programs in NATO countries that are authorised to possess nuclear weapons under

the Nuclear Non-Proliferation Treaty.
24 An exception is made for companies that only contribute to government controlled nuclear weapon programs in NATO countries that are authorised to possess

nuclear weapons under the Nuclear Non-Proliferation Treaty.
25 COMMISSION IMPLEMENTING REGULATION (EU) No 775/2014 of 16 July 2014 amending Council Regulation (EC) No 1236/2005 concerning trade in certain

goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment.

28

Biological weapon: Are defined in line with the multilateral Convention on the Prohibition of the Development, Production andStockpiling of Bacteriological (Biological) and Toxin Weapons and on their destruction (1972):(a) Microbial or other biological agents, or toxins whatever their origin or method of production, of types and in quantities thathave no justification for prophylactic, protective or other peaceful purposes;(b) Weapons, equipment or means of delivery designed to use such agents or toxins for hostile purposes or in armed
conflict.
Chemical weapon: are defined in line with the multilateral Convention on the Prohibition of the Development, Production, Stockpilingand Use of Chemical Weapons and on their Destruction (1993):(a) Toxic chemicals and their precursors, except where intended for purposes not prohibited under this Convention, as longas the types and quantities are consistent with such purposes;(b) Munitions and devices, specifically designed to cause death or other harm through the toxic properties of those toxic
chemicals specified in subparagraph (a), which would be released as a result of the employment of such munitions anddevices;(c) Any equipment specifically designed for use directly in connection with the employment of munitions and devices
specified in subparagraph (b).
Cluster munitions: A conventional munition that is designed to disperse or release explosive submunitions each weighing less than
20 kilograms, and includes those explosive submunitions (definition from the Convention on Cluster Munitions, 2008).
Controversial weapons: Controversial weapon is a dynamic concept likely to change in time. As of the publication date of this policy,
BNP Paribas Asset Management considers the following as “controversial weapons”:(a) Anti-personnel mines: the Ottawa Convention, effective since March 1999, bans the use of anti-personnel mines;(b) Cluster weapons: the convention on Cluster Munitions (Oslo Convention) adopted in 2008 prohibits the use, stockpiling,
production and transfer of cluster munitions;(c) Nuclear weapons26: the Nuclear Non-proliferation Treaty (NPT) of 1968, effective since March 1970, aims at inhibiting theproliferation of nuclear weapons;(d) Biological and chemical weapons: the Biological and Toxin Weapons Convention (BWC) of 1972 and the Chemical
Weapons Convention (CWC) of 1993 outlaw biological and chemical weapon;(e) Depleted uranium ammunitions: no current Convention exists, but BNP Paribas Asset Management acknowledges thesociety’s general concern over depleted uranium ammunition.
(f) White phosphorus munitions: no current international convention exists, but BNP Paribas recognises the indiscriminate
impact effects and disproportionate harm that white phosphorus munitions can have.
Military equipment: All equipment covered by EU Council Common Position 2008/944/CFSP defining common rules governing thecontrol of exports of military technology and equipment as indicated on the most recent Common Military List of the European Union.
Nuclear weapon: A device that is capable of releasing nuclear energy in an uncontrolled manner and which has a group ofcharacteristics that are appropriate for use for warlike purposes (definition from Treaty for the Prohibition of Nuclear Weapons in Latin
America and the Caribbean, 1967).
Security and Police equipment: Security and police equipment are the goods and services – including weapons, technology, or
training - that enable security and police forces to function. This includes small arms and light weapons, ammunition, riot control
equipment, police vehicles, surveillance equipment as well as training that security and police forces receive.
Weapons: A weapon is generally defined as being a device for use in attack or defence in combat, fighting, or war. Equipment suchas radars, binoculars, unarmed trucks are not considered as a weapon.

26 An exception is made for companies that only contribute to government controlled nuclear weapon programs in NATO countries that are permitted to possess nuclear

weapons under the Nuclear Non-Proliferation Treaty.

29

MINING
Background
The mining sector provides mineral resources which are essential inputs to most sectors of the economy. World population growth,
combined with the expectations of developing countries populations for higher levels of infrastructures, services and goods
comparable to those enjoyed by the populations of most developed countries, are two factors that contribute to the increasing demand
for mineral resources, while available mineral reserves get progressively scarcer and more difficult to access.
The mining sector also represents a significant share of national revenue in a wide range of countries and the responsible
development of the mining industry is absolutely crucial in terms of revenue generation, employment and infrastructure development.
These considerations should however be balanced against the specific environmental, social, and governance risks associated to themining industry. These cover water use and quality (especially in areas subject to water scarcity), waste generation, local air pollution
and greenhouse gases emissions, land use and impacts on biodiversity, human rights impacts (land reclamation, working conditions,
local communities’ health and safety, population influx, physical or economic resettlement, impacts on indigenous people’s livelihoodand cultural identity), as well as governance (revenue transparency, environmental and social policies) and benefit sharing issues
such as local job creation and contribution to local economic and social development.
Companies ConcernedThis policy applies to companies, groups or joint-ventures owning mining assets (which represent a significant share of their total
assets) and which are involved in exploration, development or operation of such mining assets.
Mandatory Requirements
BNP Paribas Asset Management does not want to invest in companies that:•Have their headquarters located in countries under financial sanctions from France, the European Union or the USA, or
the United Nations;•Use child or forced labour as defined in the International Labour Organisation (ILO) Conventions27;•

Cannot provide a track record regarding health and safety at company level;•

Cannot disclose or provide on demand information at company level on their performance related to water use, waste
and GHG emissions as well as strategies regarding land reclamation.

We will implement BNP Paribas Group’s exclusion list related to companies involved in asbestos extraction and Mountain Top
Removal (MTR). Please see the Coal section of this document for additional requirements related to thermal coal mining.

27 C138 Minimum Age Convention, 1973; C182 Worst Forms of Child Labour Convention,1999; C29 Forced Labour Convention, 193030

TOBACCO
BackgroundSome 180 countries have signed the World Health Organisation’s Framework Convention on Tobacco Control, which aims to cut
consumption by 30% by 2025 through new regulations and tax increases that will make tobacco less affordable. In September 2017,
the UN Global Compact – a cornerstone of our responsible investment policy – officially announced its decision to exclude producers
and/or manufacturers of tobacco. Worth noting is that this decision was made in direct support of the UN’s Sustainable Development
Goal number 3 – ‘Ensure healthy lives and promote well-being for all at all ages’. Given our accountability as an asset manager for
financing companies having a severe public health impact, BNP Paribas Asset Management decided in late 2017 to exit the tobacco
sector. Tobacco was already excluded from all our SRI funds but we consider that it is now crucial to divest from tobacco
manufacturers in all our mainstream investments. This decision is aligned with BNP Paribas Group’s decision to cease financing andinvestment activities related to tobacco companies.
Mandatory Requirements
We will not invest in companies that:• Derive 5% or more of their revenues from activities related to the production of tobacco• Derive 30% or more of their revenues from tobacco-related products or the retailing of these products

31

32

6. POLICY REVISION HISTORY
Date
August 2023
January 2023

September 2022
February 2021
November 2020
October 2020
May 2020

Revision• Update to Oil and Gas Policy (defintion of Amazon Sacred Headwaters)• Update to Controversial Weapons Policy (added white phosphorus munitions to exclusions)• Clarification of mandatory and engagement criteria within sector policies• Update to Oil and Gas Policy (including name change from Unconventional Oil and Gas)
• Update to Tobacco Policy exclusion thresholds• Clarification of Scope and Implementation Princilples sections• Update to Coal Policy (annual review of emission intensities and transition plan assessment)• Update to Coal Policy (annual review of emission intensities)• Update to section 2 regarding affiliate entities• Update to Coal Policy• Update to Unconventional Oil and Gas Policy• Update to section 3 regarding short selling• Addition of Policy Revision History table• Addition of Unconventional Oil and Gas Policy to replace Oil Sands Policy

33

DISCLAIMER
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 Paris 319 378 832, registered with the “Autorité des marchés
financiers” under number GP 96002.
This material is issued and has been prepared by the investment management company.
This material is produced for information purposes only and does not constitute:•an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment
whatsoeveror•investment advice.

Opinions included in this material constitute the judgement of the investment management company at the time specified and may besubject to change without notice. The investment management company is not obliged to update or alter the information or opinions
contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile andtax advice prior to investing in the financial instrument(s) in order to make an independent determination of the suitability andconsequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material,
involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or
profitable for an investor’s investment portfolio.
Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its/their investment
objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) andmaterial market and economic conditions, including interest rates, market terms and general market conditions. The different
strategies applied to the financial instruments may have a significant effect on the results portrayed in this material.
All information referred to in the present document is available on www.bnpparibas-am.com.

34