NET ZERO: 10 COMMITMENTSBY BNP PARIBAS ASSET MANAGEMENT
MARKETING COMMUNICATION - FOR PROFESSIONAL INVESTORSThe sustainable
Theinvestor
sustainable
for ainvestor for a changing worldchanging world

CONTENTS
FOREWORDTARGET AREAINVESTMENTSSTEWARDSHIPOPERATIONSCONCLUSIONGLOSSARY

03

COMMITMENT
Reduce carbon footprint of investments by 30% by 2025, decreasing to 50% by 2030

07

Align investments with net zero: 60% by 2030, rising to 100% by 2040

07

Exclude coal by 2030 for EU and OECD countries, by 2040 for the rest of the world

08

Increase investment in climate and environmentally themed solutions

08

Engage with clients on the transition to net zero investing

08

Vote for corporate climate action, reporting on carbon emissions

09

Engage with companies on net zero by 2050

09

Advocate for net zero aligned national and international climate policies

09

Reduce our emissions footprint, improve energy efficiency, use more green energy

10Report on progress to stakeholders

10
11
12

-3-

FOREWORD

Sandro Pierri
CEO

Jane Ambachtsheer

At BNP Paribas Asset Management (BNPP AM),
we have put sustainability at the heart of ourbusiness strategy and made it one of our core
investment beliefs. We believe the shift towards
a lower-carbon, environmentally responsible andmore inclusive economy is essential to ensure
the long-term sustainability of not only the world
we live in, but also capital markets. It is thus
fundamental to our mission: to deliver long-term,
sustainable returns to our clients.

– as the sustainable investor for a changing
world – to adapt to the climate change risks andopportunities that lie ahead.

Accordingly, we have been contributing to thefight against climate change for many years. In
2021, we signed up to achieving net zero portfolio
emissions by 2050 or sooner.

Getting to net zero by 2050 will not be easy:
global stakeholders across the investment,
corporate and political worlds must navigate
towards this path in a complex geopoliticallandscape. It will be critical to continue to work
together with clients, companies, governments
and civil society towards this aim. We will riseto the challenge.

To get there, we are publishing this net zeroroadmap. It frames our commitments and theactions we will take.1 This roadmap allows us

Initially, our actions will focus on 50% of ourassets under management – some EUR 250
billion. For these listed equity and corporate bondholdings, we believe we have the tools and thedata to achieve net zero emissions by 2050. We
intend to expand this scope to 100% over time.

Global Head of Sustainability

1. This is a summary of Committed to climate: Our net zero roadmap highlighting our 10 commitments. Read the full document

-4-

OVERVIEW
We have been working on sustainable
investing for 20 years. In 2019, we
crystallised our approach in our Global
Sustainability Strategy. In 2021, wecompleted of our transition to becoming
a sustainable asset manager by changing
our tagline to ‘The sustainable investor fora changing world’. A strong componentof our strategy has been our pledge ‘tomake a substantive contribution to the
low-carbon energy transition’.

OUR NET ZERO COMMITMENTS IN BRIEF

Investments

We have bolstered this pledge by signingup to the Net Zero Asset Managers(NZAM) initiative. In this paper, we
present our net zero commitments,
covering investments, stewardship, andour operations.

1.

Reduce the carbon footprint of selected investmentsa) 30% by 2025b) 50% by 2030

2.

Align investments with net zeroa) 60% to be Achieving, Aligned or Aligning with Net Zero by 2030b) 100% to be net zero aligned by 2040

3.

Exit coal
We will not invest in mining companies that do not have a strategy to exit
thermal coal activities, and power generators that still use coal in energy
generation, in 2030 for EU and OECD countries and in 2040 for the rest of the
world

4.

Substantially increase our climate and environmentally themed investments

5

Engage with our clients on their transition towards net zero investinga) Vote for climate action to encourage companies to report on their

Stewardship

Operations

6.

carbon footprint, and for the largest greenhouse gas emitters toachieve net zero by 2050 or soonerb) Vote for thoughtful shareholder proposals and submit our own
proposals to accelerate corporate action on climate change

7.

Engage with companies on net zero so that our investments achieve net zero
emissions by 2050 or sooner

8.

Advocate for net zero aligned climate policy and seek to ensure that ourlobbying supports achieving global net zero emissions by 2050 or sooner

9.

Reduce our operational emissions footprint, improve energy efficiency, use
more green energy

10.

Report on progress in TCFD2-aligned reports

2.. The Task Force on Climate-related Financial Disclosures seeks to improve and increase reporting of climate-related
financial information. For more, see Task Force on Climate-Related Financial Disclosures | TCFD) (fsb-tcfd.org))

-5-

Addressing climate change and the energy transition
Over the years, we have worked on multiple initiatives to address climate change and the energy transition

2023+
Founding member of
PRI, Montréal Carbon
Pledge, Portfolio
Decarbonisation Coalition
Joined Climate Action 100+

2020
Implemented our
new coal policy

2002-2018
Brought to market a rangeof climate-focusedstrategies, including
Carbon Offset, Climate
Care and Low Carbon ETFs,
Green Bonds

Introduced 'beat thebenchmark' on carbon
footprint objective
Expanded our
unconventional oil &gas policy
Signed the Net Zero
Asset Managers
initiative
Set 2030 portfolioalignment target

Launched Environmental
Strategies Group (andEnergy Transition
strategy)

2019

Launched our
Global Sustainability Strategy

Source: BNP Paribas Asset Management, as at November 2022

Launch net zeroproducts

2021-2022
Launched Net Zero
Roadmap

Revise net zerotargets every ﬁve
years

-6-

WHAT IS COVERED BY OUR 10 COMMITMENTS
We will focus on listed equities and corporate bonds in the first phase in our
move to net zero portfolio emissions. This translates into about half (50%) of ourassets under management (AUM). This includes Article 8 and 9 funds under the
Sustainable Finance Disclosure Regulation (SFDR). The commitments also apply tothose funds and mandates that are managed in line with our Responsible BusinessConduct (RBC) policy.

businesses and in sub-advised funds. They also do not apply to investments insecurities issued by governments and agencies, derivatives and private assets (seeboxes below).

The commitments do not apply yet to mandates where clients have not signed
up to our RBC policy, as well as money managed by our advisory and affiliate

As a leading proponent of the transition to a net zero future, we are working tocontinuously enhance the tools and metrics to assess exposure to climate risks
and opportunities, and to track and report on our net zero commitments. We
will steadily grow the proportion of our holdings that fall within the scope of ourcommitments to reach 100% by 2050 or earlier.

Sovereign bonds

Private markets

Our net zero commitments do not apply yet to sovereign bonds, partly because we feel measures ofcarbon and temperature alignment are not widely agreed for this asset class and because, as asset
manager, we have less direct influence on climate policy and policy outcomes.

In this segment, most of our corporate, real estate and infrastructure funds are beyond theinitial investment period, limiting our ability to change the emissions trajectory. However,
we have already implemented climate change-related risk assessment methods in our
private markets portfolios and intend to apply our commitments to future fund launches.

Nevertheless, we currently assess the climate performance of sovereigns and aim to enhancethese methodologies, so that we can have full confidence in including sovereign bonds in thescope of our net zero commitments in future. For instance, we use physical climate risk and climate
mitigation policies as part of our ESG scoring model. To improve our assessment, we are working on
estimating the carbon footprint of sovereign issuers.

-7-

OUR COMMITMENTS

INVESTMENTS
1 – R educe the carbon footprint of investments (scope 1 and 2) by 30% by 2025 and by 50% by 2030 (versus 2019)
We believe the emission reductions we are targeting are consistent with the required cuts in global GHG
emissions to achieve net zero emissions by 2050. This commitment includes scope 1 and 2 emissions (seeglossary below). It will be refined or expanded once we evolve our approach to measuring scope 3 emissions.
We started measuring the carbon footprint of our SRI-labelled equity funds and mandates in 2011. In May
2015, we committed to progressively measuring and reporting the carbon footprint of our open-ended funds
as signatories to the Montreal Carbon Pledge. Today, we systematically measure the carbon footprint of both
equity and fixed income portfolios and our ESG Integration Guidelines include the objective for actively managed
portfolios to have a lower carbon footprint3 than that of their benchmarks.
At the end of 2019, the aggregated carbon footprint of BNPP AM’s funds (under the scope of our commitment)
was 91.72 tCO2/m€ invested. This is the baseline for the commitment4 in our net zero roadmap. We will aim to
reduce this number by 30% by 2025 and by 50% by 2030.

2 – A lign 60% of investments with net zero by 2030 and all investments by 2040
To measure the net zero alignment of companies, we have opted for a proprietary framework largely inspired by
the Paris Aligned Investment Initiative (PAII) Net Zero Investment Framework.5 This triple-A (NZ:AAA) framework
is based on widely recognized sources.6 It allows us to assess the alignment of each company to net zero. This
classifies companies into three categories:• Achieving net zero: Companies already achieving net zero
• Aligned to net zero: Companies with a pathway compatible with achieving carbon neutrality by 2050
• Aligning towards net zero: Companies in the process of being aligned with a net zero pathway.
Sixty percent of our investments should fall into these categories by 2030 and 100% by 2040. This will put us on
track to achieve full net zero portfolio alignment by 2050.
3. See the glossary in the appendix for details on our carbon footprint methodology

Reducing BNPP AM’s carbon footprint(tCO2e/mEUR)

92

100
80

64

60

46

40
20
0

2019

2025

2030

Source: BNP Paribas Asset Management, October 2022

Breakdown of in-scope corporate assets undermanagement

4%

Achieving net zero21%

Aligned to a net zero pathway

60%

Not aligned

15%

Aligning towards
a net zero pathway

4. Note this reflects our exposures as of year-end 2019 with no re-baselining performed. If our firm-wide assets, region or
sector allocation shifts dramatically over time (e.g. as a result of a merger or acquisition), we may apply a re-baselining
methodology. If we do so, we will be transparent about the rationale and methods used.
5. Net zero investment framework implementation guide https://www.iigcc.org/download/net-zero-investment-frameworkimplementation-guide/?wpdmdl=4425&refresh=61c444d8e6d101640252632
6. See the glossary for details on the sources used

Source: BNP Paribas Asset Management, based on TPI,
SBTi, CA 100+ and CDP data, as at June 2022

-8-

3 – Exit coal-related investment – by 2030 for EU and OECD
countries and by 2040 for the rest of the world

4 – Increase investments in climate and environmentally
themed solutions substantially

Using our existing Responsible Business Conduct(RBC) policy, we are restricting investments in coalto:
• Manage stranded asset risk
• Improve the climate profile of our holdings• Avoid investing in the most climate-damaging
activities.

While the shift to a net zero carbon economy createsrisks, it also generates significant opportunities inexisting technologies such as wind and solar or new
technologies such as clean tech. Trillions of dollars
of investment will be needed, be they for climate
adaptation or mitigation technologies.8

We have progressively strengthened our coal policy
since its inception.
Under this commitment, we exclude mining companies
that do not have a strategy to exit thermal coal
activities and power generators that will still use
coal by 2030 in European Union and OECD countries,
and by 2040 for the rest of the world.7
For now, we will continue to use the aIEA SDS
scenario. We do not plan to adopt the IEA Net Zeroenergy scenario for power producers and segment
our power generation carbon intensity benchmark
regionally.
Our priority is to align investments in other highcarbon intensive sectors not yet addressed and alignportfolios beyond power production.

Today, BNPP AM is one of the leaders in sustainable
thematic investment, with more than EUR 21.4
billion in sustainable thematic funds that focus onenvironmental, climate and social themes.

This engagement will take several forms, such as:• Communicate regularly on our net zero strategy

with periodic updates on developments andprogress• Provide clients with educational and training tools
on net zero
• Publish thought leadership on climate change andnet zero topics• Develop climate & environmentally themed
investment solutions including metrics enablingclients to assess the net zero alignment of theirportfolios• Work with institutional clients to provide themwith tailor-made investment solutions.

Beyond our existing strategies investing in climate
and environmentally themed opportunities, we willcontinue to innovate and provide solutions for clientsin line with our net zero commitment in multiple asset
classes (equities, fixed income, passive investing,private markets, etc.).

5 – Partnering with our clients on their net zero journey
In our interconnected financial system, we must work
together if we want to have a net zero economy by2050. Accordingly, we will collaborate with clientsand encourage them to join us in our efforts to reachthis common goal.

7. Details of our coal policy are available in the glossary
8. The Energy Transitions Commission estimates that to develop these technologies and others such as bioenergy to decarbonise aviation, heavy goods
transport and agriculture, investment of USD 1 trillion to USD 2 trillion a year is needed. Adoption of low carbon technologies is forecast to growexponentially over the next decades requiring an estimated USD 275 trillion of investment by 2050, according to McKinsey (2021).

-9-

OUR COMMITMENTSSTEWARDSHIP
6 – Vote for climate action
We expect companies to report on their GHG
emissions. We want the world’s largest emitters to
set a goal of net zero emissions by 2050 or sooner,
backed by clear transition plans. We will support
shareholder proposals as well as submit shareholder
proposals of our own to accelerate corporate action
in both areas.
We have incorporated climate change considerations
into our aproxy voting guidelines. Accordingly, we
will use our votes to encourage companies to:• Properly report on all greenhouse gas emissions
related to their activities (scopes 1 and 2 for allcompanies, scope 3 where appropriate)• Communicate or constructively engage with regard
to their business strategy on climate adaptation or
their climate lobbying strategy.
• Set an ambition to achieve net zero emissions by
2050 or sooner.
For companies that do not meet our expectations,
we will oppose resolutions on discharge of the board
and management, board re-elections, and financial
statements. We may consider how a company
performs compared to peers in terms of climate
strategy.
We will seek to apply our policies consistently in all
markets.

9. An initiative focused on reversing nature loss by 2030

7 – Engage companies on net zeroAs a member of the aClimate Action 100+ effort toengage with the main corporate GHG emitters, weare taking a role in dialogues with electric utilities,
oil & gas companies and airlines in Europe, North
America and Asia – three industries that are criticalfor bringing about the energy transition.
We are emphasising corporate climate lobbying in our
engagements, and in particular activities that present
significant risks to investors and our economies.
We have helped launch the aGlobal Standard on
Responsible Climate Lobbying to evaluate corporate
climate lobbying reports.

for net zero investors will shrink. This underlines theimportance of taking a forward-looking perspective
and long-term engagement, also in public policy.
An example of our advocacy is our effort as a signatoryof the aGlobal Investor Statement to Governments n
the Climate Crisis to encourage countries to bolster
their contributions under the Paris Agreement andensure an orderly transition to net zero.
Support for climate-relatedshareholder proposals

To promote sustainability, with a focus on deforestation
and water, we have worked on the launch of aNature
Action 1009 with other institutional investors. Thisis centred on reversing nature loss by engaging
companies and policymakers.
We are also part of several other climate-related
collaborative initiatives

More and more, investors are focusing on theimportance of strong pro-climate public policy andthe role that both investors and companies areplaying in influencing that policy.
The biggest challenge in achieving net zero portfolioalignment is to get the global economy on a net zero
path. Until this is realised, the investable universe

89%

92%

2020

2021

2022
(mid-year)

Source: Sustainability Report 2021 and BNPP AM data asof end-June 2022

8 – Advocate for climate policy
Beyond proxy voting and corporate engagement,
it is critical for investors to engage in public policy
advocacy to ensure everything is done to movesociety as quickly as possible to net zero.

94%

Opposition to management proposals
for social and environmental(incl. climate) reasons

451

550
50

1231

969

1050

66

168

216

2020
2021
2022 (mid-year)
Number of companies
Number of resolutions

Source: Sustainability Report 2021 and BNPP AM data asof end-June 2022

-10-

OUR COMMITMENTS

and recycle IT equipment; we are educating staff on
limiting the impact of digital activity.

OUR OPERATIONS

On waste reduction, we are implementing a multiyear action including switching out of singleuse plastic, running paperless competitions andestablishing recycling streams for specialised waste.
We are working to ensure that employees have thelatest knowledge on sustainability issues. We offer
training programmes such as the CFA Certificate
in ESG Investing and a course on sustainability
and finance developed by BNP Paribas and theaCambridge Institute for Sustainable Leadership.

9 – Reduce our operational footprint
As a sustainable asset manager, our corporate
practices and disclosures should match, or exceed,
the standards that we expect from the entities inwhich we invest. This will reduce our negative impact
on society and build a culture that is consistent with
our investment philosophy.
We encourage employees to incorporate sustainability
principles into their day-to-day activities, whether
that is in investments, sales or operational roles.
To reduce our footprint, we have a three-pronged
strategy called Mission Zero:• Cut emissions by improving our operations• Buy green energy where possible• Offset any remaining residual emissions.
To address the emissions intensity of our footprint,
a number of our offices are powered by green or low
emissions energy. Moving to flexible working andnew ways of working will require less office space,
reducing our footprint. Where we move offices, wewill prefer green certified office space.
On our digital operations, we are engaging with
suppliers on our environmental goals and adjusting
contracts; we are converting old data centres into
state-of-the-art facilities; we are striving to reuse

We have integrated sustainability goals withperformance assessments, financial rewards andprofessional development. We have added to ESG
targets to investment decisions. We will look at how
these can be incorporated further in our remuneration
philosophy.

10 – Report on progress
We will produce aTCFD-aligned reporting, by bothcontributing to the aBNP Paribas Group TCFD reportand including a TCFD-aligned section in our annual
aSustainability Report.
Similar to our expectation that the entities weinvest in report transparently and extensively asa necessary step towards a sustainable financial
system, we are committed to reporting regularly on
our sustainability and climate-related activities andpractices.
In the coming years, we will continue to work on
improving our reporting for clients and regulators,
notably on our climate and net zero capabilities.

Worldwide office buildings
Energy consumption (millions of kWh)

15

14.6

10

9.3

10

2020

2021

5
0

2019

Green gas emissions (TCO2EQ)

2.5
2
1.5
1
0.5
0

2.1

2019

1.4

1.5

2020

2021

Source: Sustainability Report 2021

-11-

CONCLUSION
This document presents the inaugural commitments by BNP Paribas Asset Management as part of our signing-up
to the a
Net Zero Asset Managers (NZAM) initiative. These commitments build on the work done over prior years:a
Measuring and reducing the carbon footprint of portfoliosaIntegrating climate in our ESG scoring frameworka
Using our voting rights actively and engaging with the biggest contributors to climate changea
Advocating for climate-aligned policya
Providing clients with a broad range of climate-oriented investment solutions.
We aim to increase the amount of our assets under management included in our net zero commitments andstrengthen our targets to ensure we reach net zero by 2050 or earlier. We look forward to working with clients,
the companies in which we invest, peers and governments on achieving mission critical: a net zero economy by
mid-century.

BNP Paribas Asset Management’s 2021-2050 climate roadmap
2040
100% of corporate
holdings: ‘achieving’
under NZ:AAA

31

2025

Joined the Net Zero
Asset Managers
initiative

Cut carbon
footprint offunds by
30% vs. 20192021-2022

First net zero
milestone

2050

Launch Net Zero
Roadmap;
tighten coal policy;
enhance proxy voting
policy regarding
climate changeIntermediary net
zero milestones
Revise net zerotargets every
ﬁve years

2023+

Launch net zero investment products
Engage with companies, policymakers
on their net zero ambition

Source: BNP Paribas Asset Management, as at September 2022

Cut carbon footprintof funds by
50% vs. 20192030

60% of corporate holdings:‘net zero achieving’,‘aligned ‘or ‘aligning’
under NZ:AAA

Reach net
zero portfolio
emissions

You can read more about these topics
in our complete Roadmap to net zero
as well as our latest
aSustainability Report

CONTACT YOUR LOCAL CLIENT
REPRESENTATIVEFOR MORE INFORMATION-12-

GLOSSARY
Carbon footprint:
We started measuring the carbon footprint of
our SRI-labelled equity funds and mandates in2011. In 2015, we committed to progressively
measuring and reporting the footprint of ouropen-ended funds.
Today, we measure the footprint of both equity
and fixed income portfolios. In 2022, weupdated our formula to align it with the EU
PAI definition for carbon footprint, using theformula:Wptf,i: Portfolio weight in company i
CO2ei: sum of Scope 1 & 2 CO2 equivalent emissions
expressed in tons for company iEnterprise value: sum, at fiscal year-end, of themarket capitalisation of ordinary shares, the market
capitalisation of preferred shares, and the bookvalue of total debt and non-controlling interests,
without the deduction of cash or cash equivalents10• Carbon offsetting – A carbon offset refers to a

reduction in GHG emissions – or an increase incarbon storage, e.g., through land restoration ortree planting – that is used to offset emissions
that occur elsewhere. A carbon (offset) credit is atransferrable, certified instrument to represent anemission reduction of one metric tonne of CO2. The
purchaser of an offset credit can ‘retire’ it and thenclaim the underlying reduction towards their own
GHG reduction goals.11• Coal policy - In 2020, BNPP AM introduced

significant updates to its RBC policy which brought
into effect a restrictive approach to coal investing.
The goals are to manage stranded asset risk while
improving the climate profile of our holdings
and avoid financing the most climate-damaging
activities. The RBC policy addresses companies
engaged in mining thermal coal and using thermal
coal to generate electricity, and we note that wehave progressively strengthened our coal policy
since its inception.

BNPP AM excludes mining companies that meet anyof the following criteria:• Are developing or planning to develop thermal coal
extraction capacities (new mines or expansion ofexisting ones)• Derive more than 10% of their revenues from themining of thermal coal
• Produce more than 10 million tonnes of thermal
coal per year
• Do not have a strategy to exit thermal coal activities
by 2030 in European Union and OECD countries andby 2040 for the rest of the world.

BNPP AM excludes power generators that meet anyof the following criteria:• Are adding operational coal-fired power generation
capacity to their power portfolio• Have a carbon intensity above 420 gCO2/kWh. This
exclusion will be further tightened following the
trajectory for the sector as determined by the IEA’s
Sustainable Development Scenario (SDS). Thismeans power generators’ carbon intensity willneed to fall to 346 gCO2/kWh by 2025, or they will
be excluded from our investment portfolios.
In addition, we will systematically exclude any power
generators that still have coal capacity in theirgeneration mix in 2030 in European Union and OECD
countries, and by 2040 for the rest of the world.

• ESG – The term covers the wide range of environ-mental, social and governance criteria and standards applied to sustainable investing, as well as
the management of related topics by companies.

• EU taxonomy – The official EU classification of

economic activities and the conditions under whichthese activities can be considered sustainable.
It aims to help investors, companies, issuers andproject promoters navigate the transition to a lowcarbon, resilient and resource-efficient economy
and offer transparency to end-investors on thealignment of different investment portfolios.12• Greenhouse gases – Seven GHGs are included in the

Kyoto protocol: carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PCFs), sulphur hexafluoride (SF6)and nitrogen trifluoride (NF3).4

10. Source: Measuring carbon footprints, www.bnpparibas-am.com/en/measuring-carbon-footprints/. Also watch the video at Introducing new ESG and carbon footprint reporting(bnpparibas-am.com)
11. Source: www.offsetguide.org/understanding-carbon-offsets/what-is-a-carbon-offset/
12. Source: Using the EU taxonomy as a guide to sustainable recovery (bnpparibas-am.com). Further information https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/200309-sustainable-finance-teg-final-report-taxonomy_en.pdf

-13-• Net zero alignment methodology (NZ:AAA) – BNPPAM uses a framework to measure the alignmentof its investments in corporates inspired by theParis Aligned Investment Initiative (PAII) Net Zero
Investment Framework.13 This triple-A (NZ:AAA)framework is set out below, and is based on various
sources: Transition Pathway Initiative (TPI)14,
Science Based Targets initiative (SBTi)15, Climate
Action 100+16 and Carbon Disclosure Project (CDP).17
Most are publicly available, and have goals linked

to classifying companies in categories depending on
their level of alignment with net zero. We intend
to further enhance our alignment assessment
methodology in the future.

BNPP AM’s NZ:AAA framework for assessing companies’ net zero alignment•

Achieving net zero•••

Aligned to a net
zero pathway••

Companies with at least 50% of their turnover aligned with EU Taxonomy Climate Change
Mitigation OR
Companies with at least 50% of their turnover aligned with climate-mitigation-linked
SDGs18 and with no more than 20% of their turnover misaligned with any SDGs OR
Companies committed to net zero and whose current carbon performance is at (or close) tothe one needed for its sector by 2050 to reach Net Zero global emissions
Companies committed to net zero emissions by 2050 AND that have a carbon reduction
target assessed as </=1.5°C19 OR
Companies with at least 20% of their turnover aligned with EU Taxonomy Climate Change
Mitigation OR
Companies with at least 20% of their turnover aligned with climate-mitigation-linked SDGs20
and with no more than 20% of their turnover misaligned with any SDGs.

Aligning towards
a net zero pathway•

Companies that have a carbon reduction target assessed as below 2°C and not otherwise
considered Achieving or Aligned.21

Not aligned•

All other companies.

• Scope 1, 2, and 3 emissions – Emissions

are broken down into three categories. 1:
Direct emissions from sources that are
owned or controlled by the company. 2:
Indirect emissions linked to the company’spurchased or acquired electricity, heat,steam and cooling. 3: All other indirectemissions, including those related to theuse of its products• SFDR – The Sustainable Finance Disclosure

Regulation is part of a set of EU regulations
seeking to clarify which activities meetsound ESG criteria and what the impact ofinvestments is on stakeholders including
the environment and society22

13. https://www.iigcc.org/download/net-zero-investment-framework-implementation-guide/?wpdmdl=4425&refresh=61c444d8e6d101640252632
14. Overview of the TPI – Transition Pathway Initiative
15. About Us – Science Based Targets
16. About Climate Action 100+ | Climate Action 100+
17. About us – CDP
18. SDG target numbers: 7.2, 7.3, 7.a, 7.b, 9.4
19. 1
 .5DC temperature alignment is determined based on a variety of different inputs:• SBti or SBTi tool using CDP data produces a </=1.5DC output for any assessed time frame• Companies assessed by TPI as having a Management Quality Level 4 & a short & medium or long term carbon performance at or below 1.5°C• Companies passing indicator 1 to 6 in the CA100+ benchmark (Structure and Methodologies | Climate Action 100+)
20. SDG target numbers: 7.2, 7.3, 7.a, 7.b, 9.4
21. 1.5DC to 2.0DC temperature alignment is determined based on a variety of different inputs:• SBti or SBTi tool using CDP data produces a </=1.5DC output• Companies assessed by TPI as having at least a Management Quality Level of 3 & a short, medium or long term carbon performance between 1.5°C and 2DC.
• Companies passing indicator 1 to 3 in the CA100+ benchmark (Structure and Methodologies | Climate Action 100+)• Companies committed to net zero emissions by 2050 and that are below 2°C as per BNPP AM’s enhanced ITR (which is currently under development)
22. Source: SFDR – Understanding and implementing it (bnpparibas-am.com)

DISCLAIMER
Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views
expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio
management teams may hold different views and may take different investment decisions for different clients.
This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors
will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be
subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due togreater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international
developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.
Investments in funds are subject to market fluctuations and the risks inherent in investing in securities. The value of investments and the income they generate may go
down as well as up and it is possible that investors will not recover their initial outlay, the funds described being at risk of capital loss. For a complete description anddefinition of risks, consult the latest prospectus and KIID of the funds.
Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at the
EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG andsustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name, but havedifferent underlying meanings. In evaluating a security based on ESG and sustainability criteria, the investment manager may also use data sources provided by external
ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible businessconduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, fund performance may at times be better or worse
than the performance of relatable funds that do not apply such standards.

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