EXTERNAL, March 2021

BNP Paribas Asset Management
SFDR Disclosure Statement
This statement refers to the REGULATION (EU) 2019/2088 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 November 2019 on
sustainability‐related disclosures (SFDR) in the financial services sector. Related parts of the Regulation can also be found in our Remuneration
Policy.

INTRODUCTION
BNP Paribas Asset Management (BNPP AM) believes that our fiduciary duty is aligned with sustainable investment and that we have aduty to our clients to make well-informed investment decisions: ESG (environment, social and governance) factors are a key element of
this. We also seek to consider the sustainability-related preferences of our clients, and to minimise the adverse impacts of ourinvestments by using our investments, our voice and our leverage to help shape a better future.
As a long-term investor, we understand that a sustainable economic future relies on sustainable investment practices: we have both anopportunity and obligation to take action to help achieve the Sustainable Development Goals and the Paris Agreement. We fully
support the EU carbon neutrality objective alongside the rest of the environmental and social objectives embedded in the EU GreenDeal.
BNPP AM has been active in sustainable investment since 2002, when we launched our first socially responsible investment (SRI) fundand set up a dedicated ESG research team – the precursor of our Sustainability Centre. We were a founding signatory of the Principles
for Responsible Investment (PRI) in 2006. Since then, we have strived to implement all six principles with increasing effectiveness, andcontinue to develop our approach, regularly reporting on our achievements in terms of meeting the goals of the PRI.
In 2011, we established our first Responsible Investment Policy, based on both responsible ownership and the progressive integrationof ESG standards. This included responsible business conduct requirements based on the 10 UN Global Compact (UNGC) Principles
in the selection of issuers, as well as strict in-house sector policies to monitor our investments in sensitive sectors.
In 2019, BNPP AM published its Global Sustainability Strategy (GSS), which establishes a roadmap for putting sustainable investment
at the heart of our investment approach. This includes progressively aligning our global portfolios with the aims of the Paris Agreement,
and sets out the three key thematic pillars of our sustainability efforts, or the ‘3Es’: the energy transition, environmental sustainability
and equality and inclusive growth. These themes inform our thematic investments, corporate engagement and public policy advocacy.
Our approach emphasizes the key systemic frameworks necessary to achieve sustainable and inclusive economic growth.
Since January 2020, we have adopted a sustainable investment approach across our full range of investment strategies. This meansthat they integrate the key pillars of sustainable investment defined in our GSS, a critical component of which is ESG integration, i.e.

2having our analysts and portfolio managers incorporate relevant ESG factors into their evaluation of companies or assets, andinvestment decision-making processes. The other pillars are Stewardship (voting, engagement), Responsible Business Conduct
Expectations (including our exclusion list), and a Forward-Looking Perspective (focusing on shaping a more sustainable future).
While our Responsible Business Conduct (RBC) policy aims to minimise the principal adverse impacts of our investments on society
and the environment, our ESG integration approach also focuses on ESG sustainability risks in our portfolios. The division of ESG
factors into material sustainability risks and adverse impacts is not always clear cut, making it difficult at times to categorise them at
firm-level. The application of ESG analysis and Stewardship activity to a portfolio, for example, can result in improvements to corporate
behaviour, and the exclusion of a company from a portfolio for violation of a RBC Principle may not reduce societal impacts, but may
protect the portfolio from related risks. Ultimately, the materiality of an ESG risk will depend on the investment strategy, timeframe of
the investment, underlying investment universe and other factors.
The first section of this document provides an overview of how we integrate sustainability risks in investment decisions and investment
advice. The second part addresses principal adverse impacts and our due diligence process.

PART 1. SUSTAINABILITY RISKS
We believe that analysing investments using environmental, social and governance (ESG) criteria helps us take into account a wider setof risks and opportunities, which in turn, helps us to make better-informed investment decisions; in other words, our fiduciary duty isaligned with sustainable investment. Sustainability is imperfectly understood, under-researched and inefficiently priced, with inconsistentlevels of disclosure. Against this background, ESG integration helps us achieve better risk-adjusted returns, as systematically andexplicitly integrating ESG factors into our investment analysis and decision-making allows our portfolio managers to identify and assessareas of risk or opportunity which may not be understood by all market participants, thereby providing them with a relative advantage.
This first part of our SFDR Statement gives an overview of:
1.
2.
3.
4.

Our sustainable investment approach
Our ESG scoring process
How we analyse ESG factors and assess their materiality
Asset-class specificities of our ESG integration process

1.1 SUSTAINABLE INVESTMENT APPROACH
BNPP AM adopts a sustainable approach across the range of our investment strategies and when providing financial advice, as
described below:
1. ESG Integration: Our ESG Integration Guidelines apply to the vast majority of our investment processes (and therefore funds,
mandates, and thematic funds). However, they may be ‘non-applicable’ for specific products such as index funds and exchangetraded funds (ETFs) or single-client dedicated product. Some index funds and ETFs do however apply specific sustainable
investment practices such as a low carbon, thematic or Sustainable and Responsible Investment (SRI) approach.
2. Stewardship (proxy voting, engagement and public policy): Shareholder-engagement and public policy advocacy activities
are undertaken on behalf of all of our assets under management, with a strong focus on addressing adverse impacts to society
and the environment from corporations and other market participants. (Governance and Voting Policy - 2021; Voting Report; Public
Policy Stewardship Strategy)
3. Responsible Business Conduct (RBC) policies and sector-based exclusions: Since 2012, we have applied these policies
to our actively managed open-ended mutual funds. We review and update these policies regularly to reflect changing
understanding of science, societal expectations and market realities. During 2020, application of our RBC policy also became

3

the default approach for new mandates, and the process of seeking permission from existing clients to apply the policy to existingmandates is underway.
4. Forward-looking perspective – the ‘3Es’(Energy transition, Environmental sustainability, Equality & inclusive growth): As set
out in Part II of our GSS, we will measure our exposure to a number of key issues across our full assets under management,
and undertake related research and engagement, in support of all investment processes. Our Global Sustainability Strategy
outlines in detail our roadmap and commitments from 2019 to 2022 including our targets for each of the Es.
5. ‘Sustainable +’ solutions: Our ‘Sustainable +’ range of investment strategies includes our enhanced ESG, thematic and impact
investing strategies, enabling investors to allocate specifically to sustainable investment opportunities.
6. Walking the Talk: We also have a strong focus on ‘walking the talk’ – our corporate social responsibility strategy seeks toensure that we exhibit the same commitment to responsible business conduct and the 3Es that we expect from the companies
that we invest in. Our latest Sustainability Report outlines our approach to corporate social responsibility starting on page 44:
https://fr.zone-secure.net/20591/1214204/
We recognise that systemic risks such as climate change or biodiversity loss cannot be fully addressed through ESG integration in
portfolio management. Our Stewardship activities, RBC policies and strategy with regards to the 3Es complement and amplify our efforts
to reduce material risks to investments as well as systemic risks that require collective and urgent action.
Together, these approaches strengthen the way we invest, including how we generate investment ideas, construct optimal portfolios,
control for risk, and use our influence with companies and markets.

The scope of sustainable approach

Note: Similar to ‘Index Funds & ETFs’, some systematic strategy funds may not apply ESG integration at strategy level or RBC exclusions.
Further information on each of these components can be found in the GSS, available at https://docfinder.bnpparibas-am.com/api/files/2818EAAED3CF-4482-A3BA-A2EA898AFD0D

1.2 ESG SCORING PROCESS
Underpinning our sustainable investment approach is our ESG scoring framework. We chose to build our own proprietary ESG scoring
framework to ensure that ESG scores are tailored to our needs and because we believe in the merits of looking beyond a headline ESG
score to evaluate individual metrics and components that can be valuable sources of insight into investment risk and opportunities. We
apply an additional layer of data quality and control to the underlying metrics we source from third parties to narrow our focus to theindicators which we deem to have sufficient coverage, quality and insight. We also implement corrections and qualitative overlays tocorrect data, update it or infuse it with our first-hand knowledge and insights.

4

In 2020, we used the complementary expertise of our Sustainability, Investment and Quantitative Research teams to enhance our ESG
scoring framework.

Covering more than 12 000 issuers of securities, it provides insights that help our portfolio managers pinpoint a company’s performanceon material ESG issues, and integrate these into their investment decisions. Compared to other frameworks, our methodology is markedly
differentiated, with a more focused number of ESG metrics, and a clear preference for ‘performance’ over ‘policy’ type indicators.

1.3 ESG FACTORS ANALYSED AND HOW MATERIALITY IS RATEDOur Sustainability Centre oversees the development and implementation of our sustainable investment strategy. This strategy isgoverned by our Sustainability Committee, which includes members of BNPP AM’s Executive and Investment Committees and ischaired by the CEO.
Our team of ESG analysts and specialists carries out systematic ESG research on issuers in our investment universe. Our sectorspecific ESG research covers a broad range of potentially material risks, including systemic risks to the environment and society, fromclimate change to incidences of bribery and corruption, to consumer privacy breaches.
ESG analysts are in charge of assessing each company’s ESG performance and monitoring compliance with our Responsible
Business Conduct Policy.
Our research culminates in a proprietary ESG performance score for each company. These scores and associated sector reviews areaccessible to relevant portfolio management teams. In addition, investment teams receive updates to the list of issuers that fail to meet
our RBC standards and are therefore ineligible for investment in actively managed portfolios. A ‘watch list’ of names that may become
ineligible for investment following engagement is also shared; these names are ineligible for investment in some of our strategies.
Recognising that ESG risks and opportunities are not always comparable between sectors and regions, our scoring framework divides
the issuers covered into 20 sectors and 4 geographical areas, creating 80 groups of geographical and sector peers.
We apply the precautionary principle when identifying ESG risks in our ESG analysis and rating. If a ‘risk’ is defined as a negative eventthat may or may not occur sometime in the future, then biodiversity loss and climate change should properly be viewed as ‘threats’, not‘risks.’ There is a great deal of uncertainty regarding how these issues may play out, and how negative and far-reaching the outcomes
will be, but it is quite clear that business as usual will lead us to economic and ecological disaster, and we must change course.
In other words, it is highly difficult to obtain evidence of the financial impact that threats to the environment may have before thedamage occurs, primarily due to the vastly different timeframes at play: by the time an environmental risk becomes financially material
to a company, it may be too late to reverse the damage to the environment. The situation is similar for a number of social aspects. The
uncertainty and difficulty in measuring the impact that surrounds – at least today – environmental and social harm should not be used
as an excuse for not taking action to avert related threats.

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To arrive at ESG scores that provide investment useful insights, we select metrics and weights within our ESG scoring framework using
three criteria:
1. Materiality: We reward companies that score highly on ESG issues that are material to their business, based on the expertisefrom our Sustainability Centre as well as frameworks such as SASB and empirical studies
2. Measurability and insight: We give preference to insightful performance or numeric metrics over policies or programmes
3. Data quality and availability: We favour metrics for which data is of reasonable quality and readily available so that we cancompare issuers fairly
Our Materiality Heat Map
We group each individual metric in our ESG scoring framework into 11 common themes, however the underlying metrics used toassess performance under each theme vary by sector. The below materiality Heat Map provides a visual representation of the weights
applied to each theme for each sector in our scoring model. A darker shade of green highlights a higher weight, and a lighter shade ofgreen represents a lower weight.
Environment Pillar
Climate change

Environmentalrisk
management

Use of natural
resources,
Emissions andWaste

Social Pillar
Environmental
incidents

Human capitalmanagement

Health & Safety

External
Stakeholders

Governance Pillar
Socialindicidents

Corporate
GovernanceBusiness Ethics
Prepardness

Governanceincidents

Utilities
EnergyReal estate
Internet, Content, Software & Svces
Infrastructure & Platform Enablers
Financials
Food, Beverage & Tobacco
Household & Personal Products
Food & Staples Retailing
Metals, Mining, Construction
Other Materials (chemicals, …)Commercial & Professional Services
Transportation
Capital Goods
Automobiles
Luxury & Leisure
Retailing
Consumer services
Healthcare
PharmaSovereigns
BNPP AM ESG scoring for sovereigns provides a view on the ESG performance of a country and enables us to compare countries withdifferent levels of economic development. In addition, it assesses countries’ commitments concerning climate change as we aim toengage with countries on this issue. And finally, similar to our company scoring model, it incorporates qualitative inputs from investment
teams’ in-depth knowledge, and from dialogue and engagement with debt management office officials and policymakers.
Our Sovereign ESG data model has an equal weight for each of the E-pillar (14 themes), S-pillar (12 themes) and G-pillar (7 themes),
comprising a total of 225 KPIs structured around 33 key themes.

6

ESG and financial performance
We believe that unmanaged or unmitigated sustainability risks can impact the returns of financial products. Due to the nature ofsustainability risks and specific topics such as climate change, the chance of sustainability risks impacting the returns of financial products
is likely to increase over longer-term time horizons linked to increased incidence of both physical and transition-related risks.
Share prices of companies with strong sustainability practices typically demonstrate less volatility and have fewer large
drawdowns. Specifically, adverse impacts from sustainability risks can affect companies via a range of mechanisms, such as 1) lower
revenue; 2) higher costs; 3) damage to, or impairment of, asset value; 4) higher cost of capital; and 5) fines or regulatory risks1.

1.4 ESG INTEGRATION PROCESS: OVERVIEW AND ASSET-CLASSSPECIFICITIESAs a component of our investment processes2, analysts and portfolio managers integrate a consideration of relevant ESG factors into
their company, asset and sovereign evaluation and investment decision-making or financial advice. The process to integrate and embed
ESG factors is guided by formal ESG Integration Guidelines, a set of common guidelines, and then by tailored approaches by asset-class
and/or investment strategy. This process is overseen by an ESG Validation Committee (see below).
An example of a typical investment process








Investment Philosophy: Investment strategies are guided by an investment philosophy - a set of underlying beliefs that
influence investment teams when they are managing their funds. Relevant ESG considerations have been systematicallyintegrated into investment philosophies across BNPP AM to ensure consistency.
Idea Generation: At the idea generation stage, investment teams think broadly about future investment opportunities.
Integrating ESG factors allows investment teams to include or discard opportunities based on ESG considerations. For
example, some strategies identify the highest rated ESG names in a universe as a priority for additional financial analysis.
Portfolio Construction: ESG factors can be used in a number of ways at the portfolio construction stage: to screen companies,
or overweight or underweight positions, or to tilt portfolios – such as our Multi-Factor portfolios that have a systematic tilt awayfrom carbon intensive names and towards high ESG performers.
Risk Management: We have a fiduciary duty to our clients to take all risks into consideration, including ESG or sustainability
risks.
Voting & Engagement: Proxy voting activity is led by our Stewardship team, who liaise with portfolio managers to seek input
on strategic votes. Engagement on governance and sustainability topics is typically led by our stewardship team, while
investment teams also include ESG topics in their ongoing company meetings.
Performance: As per our ESG Integration Guidelines, we monitor the ESG score and carbon footprint of investments versus
their benchmarks with the aim of outperforming on each. During the fourth quarter of 2020, we started to progressively reporton these two KPIs to clients.

1 For more information on transmission mechanisms and channels of impact see: 1) NGFS First comprehensive report « A call for action », 2019; 2) The

Sustainability Accounting Standards Board (SASB); 3) Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
2 Exceptions may exist when the process doesn’t lend itself to ESG Integration (e.g. ETFs), see table on scope included in this document and our GSS.

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The process to integrate and embed ESG factors is guided by formal ESG Integration Guidelines, outlined below.
Common ESG Integration Guidelines

In 2018, BNPP AM set up an ESG Validation Committee to support the process of ESG integration and ensure that the majority ofinvestment strategies managed by BNPP AM are managed in line with our ESG Integration Guidelines. By the end of 2019, we hadvalidated all of our existing strategies by having each investment team present its proposed ESG Integration Process for review andvalidation by the Committee. Today, when a new strategy is launched, the Sustainability Centre carries out a review that is validated aspart of the Global Product Committee approval process.

1.5 SCOPE OF ESG INTEGRATION PROCESSOur ESG Integration Guidelines apply across our investment processes (funds, mandates and thematic funds), with the exception of
specific products such as single-client products, mandates where clients have chosen to opt out of some elements of the ESG Integration
Guidelines, and index funds and exchange-traded funds (ETFs) replicating non-ESG related indices. However:-For Index funds and ETFs using the full replication method and tracking ESG indices, the following elements are analysed,
including, but not limited to: source and quality of ESG data used, legitimacy and expertise of the ESG data and/or index
provider(s), ESG index methodology including ESG sector exclusions & integration of ESG criteria for securities’ selection andweightings, portfolio diversification across sectors & countries, scalability and liquidity of the index, EU BMR compliancy, ESG
rating of the index versus the relevant investment universe, requirements of the relevant benchmark in terms of ESG disclosure,
Paris Aligned Benchmark (PAB) or Climate Transition Benchmark (CTB) classification.

-

Index funds and ETFs using the synthetic replication method or specific products structured with forward financial instruments
will integrate ESG at least in the assets physically held by the products through the exclusion of one or several low scoring
deciles (they will at the very least exclude companies that fall into the 10th decile – worst performers – based on our ESG
scoring).

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1.6 A PRACTICAL EXAMPLES OF ESG INTEGRATION ACROSS ASSET
CLASSES
Our common ESG Integration Principles apply across geographies and asset classes (e.g. equities, fixed income, private debt and real
assets, multi-asset and quantitative solutions). Following the ESG validation process, each investment team’s investment processintegrates ESG in line with our common ESG Integration Principles. We have included the below examples to illustrate this.

EXAMPLE OF ESG INTEGRATION IN EQUITIES – GREATER CHINA EQUITIES

Source: BNP Paribas Asset Management, January 2021

EXAMPLE OF ESG INTEGRATION IN PRIVATE DEBT AND REAL ASSETS (PDRA) – REAL ASSETS
1

2

3

4

Preliminary ESG
Review

ESG Assessment

ImpactAssessment

Portfolio Review& Reporting■ Qualitative assessmentof the ESG performanceof the project based onshared and sector
specific ESG indicators■ Environmental andclimate impact
assessment elaborated
by, I-Care, a recognized
and independent expert■ Annual ESG portfolio
reporting based on
Environmental and climate
impact and ESG
questionnaires■ Qualitative overlay
reflecting more in-depth
study on the key
material ESG issues
identified■ Assessment of theinduced and avoided
emissions and thecontribution of the
project to the energy
and ecological transition■ ESG reporting■ Group and BNPP AM
framework■ Project classificationaccording to a specifictaxonomy of activities
with an environmental
and social added value

Source: BNP Paribas Asset Management, January 2021

■ Engagement with sponsors
through a dedicated ESG
questionnaire

9PART 2. PRINCIPAL ADVERSE IMPACTS
The following Statement relates to how BNP Paribas Asset management (BNPP AM) considers Principal Adverse Impacts at the entitylevel.
BNPP AM considers principal adverse impacts of its investment decisions on sustainability factors. The present statement is theconsolidated principal adverse sustainability impacts statement of BNPP AM.
This principal adverse impacts statement covers the reference period from 1st January 2020 to 31st December 2020.

2.1 A SUMMARY OF THE PRINCIPAL ADVERSE IMPACTS STATEMENT
As a broadly diversified global asset manager, BNPP AM’s adverse impacts are primarily indirect, through the entities in which we invest.
We are therefore heavily dependent upon issuer and third-party reporting, in addition to our own research. More than twenty years since
the launch of the UN Global Compact Principles that lay out fundamental corporate responsibilities in the areas of human rights, labour,
environment and anti-corruption, and more than ten years since the adoption of the UN Guiding Principles on Business and Human
Rights, the state of corporate social and environmental due diligence remains insufficient and has room for progress. We seek to address
this issue in part through engagement with companies, by supporting shareholder proposals asking companies to adopt meaningful socialand environmental due diligence programmes, and through public policy advocacy. Nevertheless, as relatively few entities in our large
investable universe conduct meaningful due diligence and/or disclose the results of these efforts, we are not yet at the stage where we
can identify all “principal” adverse impacts that may be related to the companies, assets or sovereigns we are investing in.
As corporate reporting requirements generally focus on financial information, most issuer-provided information on adverse impacts isvoluntarily produced. This, combined with the lack of due diligence programmes, means that many of the most significant adverse impacts
are generally not identified or disclosed. In addition to a lack of reliable information, our ability to influence outcomes is limited by a variety
of factors including the limited leverage available to a minority investor. This is particularly true for sovereigns.
Nevertheless, we embrace our responsibility to identify and mitigate our principal adverse impacts. Our framework for identifying andaddressing adverse impacts is briefly outlined below, and then at greater length in the following sections.

1
BNPP AM
Due
Diligence
Process

PolicyFramework to
Address
Adverse
Impacts2

3

Identifying
actual andpotential
adverse impacts
and actions
taken

Actionstaken onengagement
andescalation

4
References tointernational standards
and participation inindustry or multistakeholder initiatives

5

Reporting

Step 1 – Policy Framework to Address Adverse Impacts
We have implemented a policy framework to identify industries and behaviours that present a high risk of adverse impacts in violationof international norms.
Our sector policies provide a tailored approach to identify and prioritise adverse impacts given the nature of the economic activity, andin many cases, the geography. These policies set criteria for the exclusion of certain types of businesses that present an unacceptablerisk to society or the environment, such as tobacco or thermal coal production, and establish criteria for evaluating other business lines,
such as palm oil production, that are not strictly excluded but require closer scrutiny. They identify general areas where the risk of

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adverse impacts is more significant, and therefore help us assess investee companies within those sectors against pre-defined criteria.
The sector policies guide risk evaluation prior to and during investment.
Our Responsible Business Conduct (“RBC”) policy establishes a common framework across investments and economic activities
through the implementation of the UN Global Compact (UNGC) Principles. As the Global Compact establishes broad, aspirational
principles, a risk-based approach is taken at the issuer-level to assess potential breaches of international standards based on available
data. This analysis may result in the exclusion of a company from our actively managed portfolios, or it may result in direct engagementwith the issuer to obtain more information or to attempt to influence the company’s behaviours.
Step 2 – Identifying actual and potential principal adverse impacts and actions taken
We use a third-party research provider to update us on specific incidents that may breach one or more UN Global Compact Principles.
We evaluate these reports and draw our own judgment about whether a company is in violation – or at risk of violation – of the UNGC
or of any of our sector policies. These judgments are approved by our Sustainability Committee including our most senior executives,
twice a year. Once a company is excluded, a company must meet certain criteria to be re-incorporated into our investment universe.
In addition, our Stewardship team regularly identifies adverse impacts through ongoing research and through consultation with NGOs
and other subject matter experts.
Step 3 – Engagement and escalation
We take a holistic view in our engagements, focusing on issues that may be financially material as well as those that present the mostsalient risks to society or the environment, consistent with our obligations under the UN Guiding Principles on Business and Human
Rights, the OECD’s Guidelines for Multinational Enterprises, and the set of international treaties and laws that underpin the UN Global
Compact Principles. It is also consistent with our obligations, as fiduciaries, to do what we can to mitigate systemic risks that impact ourclients and future investment opportunities, such as climate change, biodiversity loss and inequality. These systemic risks are often thefocus of our long-term thematic engagements. See our Global Sustainability Strategy for a discussion of the 3E’s (Energy Transition,
Environmental Sustainability and Equality) that we believe are necessary conditions for a sustainable economic system.
Our stewardship approach includes provisions for escalation when we are unable to make progress, including the submission ofshareholder proposals. Where we identify severe adverse impacts that we do not believe we can address through corporate
engagement, we may also choose to divest.
Step 4 – References to international standards and participation in industry or multi-stakeholder initiatives
BNPP AM adheres to a series of recognised standards such as the Principles for Responsible Investment (PRI).
BNPP AM recognises that addressing principal adverse impacts on society and the environment requires in many situations acollective effort. We also acknowledge that we can be far more influential when working with others, and that we can benefit frompartnering with organisations dedicated to the analysis, research or advocacy of individual ESG issues. We are active participants in a
number of industry groups and collaborative engagement initiatives as outlined in our Stewardship Policy and annual sustainability
reports. These include, but are not limited to, members in the Institutional Investor’s Group on Climate Change (IIGCC), Climate Action
100+, Task Force on Climate-Related Financial Disclosures (TCFD) and the Global Network Initiative.
Step 5 – Reporting
Our RBC Policy is publicly available to inform our clients and the markets of our expectations for corporate behaviour. We do not publicly
report the names on our exclusion list.
We publish information about our stewardship activities as part of our annual sustainability report (supplemented by more frequent
information on our website). All of our reporting can be found on our public website: https://www.bnpparibas-am.com/en/sustainability/asan-investor/

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2.2 DESCRIPTION OF POLICIES TO IDENTIFY AND PRIORITISE PRINCIPAL
ADVERSE SUSTAINABILITY IMPACTS
Policy Framework to Address Adverse Impacts
Our RBC due diligence process – including the development of policies – is an ongoing process which we review and update periodically,in an effort to improve over time. We consider these policies to be valuable enhanced risk management tools, as potential adverse
impacts to the environment and society impact our ability to deliver long-term value to our clients. Because these impacts are underreported and often occur in areas of the world without effective regulatory oversight, only the most severe and well-publicized impacts
have been likely to become financially material in the past (although this is changing with growing access to technology and media
platforms). We therefore require a normative framework to help us identify and address impacts that would not normally be incorporated
in traditional portfolio management techniques or financial analysis.
We first implemented a Responsible Business Conduct (RBC) policy in 2012 with the integration of the UN Global Compact Principles inall our open-ended actively managed funds. Since then, we have significantly expanded our RBC policy in content and in scope.
Responsible Business Conduct
We expect companies to meet their fundamental obligations in the areas of human and labour rights, protecting the environment andensuring anti-corruption safeguards, wherever they operate, in line with the UN Global Compact Principles and the original ten principlesof the OECD Guidelines for Multinational Enterprises (OECD MNEs Guidelines). These frameworks are recognised worldwide, applicable
to all industry sectors, and based on the international conventions in the areas of human rights, labour standards, environmental
stewardship and anti-corruption. The OECD Guidelines for Multinational Enterprises have been evolving over the past few years to reflect
the growing expectations from governments for responsible business conduct. They have expanded to cover areas such as information
disclosure, consumer interests, science and technology, competition, and taxation. Our RBC policies do not cover these specific areas
which deserve a sectorial analysis. Many of these topics are included in our ESG scoring methodology. Relevant subjects will be analysed
across investee companies as a part of our ESG risk assessment (in parallel to a company’s assessment against our RBC policies).
Sector and product-specific policies
We believe that some products or activities cause significant and unacceptable harm to society and/or the environment, without
counterbalancing benefits. We have developed a set of policies that address these particular products or activities (such as tobacco,coal, controversial weapons, unconventional oil and gas or asbestos) and result in an exclusion list of companies we choose not toinvest in. These are generally companies operating in industries where engagement makes little sense.
We have also developed another set of sector policies that lay out the conditions for investing in particular economic activities which, if
not conducted responsibly, could significantly harm the environment or society. These sector policies guide our screening requirements
and stewardship activities. These criteria are based on relevant international conventions and regulations (including the supplemented
criteria provided by the OECD for sensitive sectors such as responsible agricultural supply chains or conflict minerals), BNP Paribas
Group financing and investment policies3, and voluntary industry standards. In each sector, we outline mandatory requirements whichmust be met by issuers in order for BNPP AM to invest. In addition to the compulsory standards, we have also developed additional
criteria that we encourage companies to comply with. The latter provides a framework for further analysis and dialogue with companies.

3 The Group’s Sector Policies act as the foundation and minimum standard for our activities. In certain cases, they are augmented and adapted to better suit AM

activities. The Group’s policies can be found here: https://group.bnpparibas/en/financing-investment-policies

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PolicyInternal approval body

Approval / last approved
date

Agriculture

General Management

2015, updated in 2021

Defence

General Management

2010, updated in 2017

Coal-fired power generation

General Management

2011, updated in 2020

MiningGeneral Management

2013, updated in 2020

Nuclear power

General Management

2011

Palm oil

General Management

2010, updated in 2017

Pulp and paper

General Management

2011

TobaccoGeneral Management

2017

Unconventional oil and gas

General Management

2017

Responsibility for the implementation of
the policies within organisational
strategies and proceduresGroup CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)
Group CSR (strategy)
Business Line (implementation)

2.3 DESCRIPTION OF ACTIONS TO ADDRESS PRINCIPAL ADVERSESUSTAINABILITY IMPACTS
Step 1 – Screening, identification and monitoring of breaches to our RBC policies
We have contracted with Sustainalytics, an ESG data provider, to help us analyse and monitor corporate compliance with the UN
Global Compact Principles. Sustainalytics covers more than 25 000 companies and they provide us with a detailed list of all notable
incidents, along with their analysis of the level of severity of these potential violations on a quarterly basis. Sustainalytics identifies

13companies that they believe are in breach of a UNGC principle and why, and also flags companies that are at risk of violating one ormore of the principles.
Our ESG analysts, together with our Stewardship team, analyse these cases. They consider the differences between the Sustainalytics
list and our own research and our other policies and, based on this analysis, occasionally supplemented by information gleaned fromdirect engagements with the companies, they recommend additions to, or removals from, our Exclusion or Watch Lists.
We maintain two lists of companies that we have deemed to be at risk, or in breach, of one or more of the UNGC Principles:An Exclusion List of issuers that are associated with serious and/or repeated breaches of UN Global Compact Principles.
A Watch List of issuers that raise serious concerns about their alignment with the UNGC Principles. These companies
may appear on the Watch List for a variety of reasons, including the need for further research or our belief that direct
engagement may lead to improvements. While there are no global restrictions on investing in companies on the Watch
List, a number of strategies prohibit investment in names on this list.

If there is a recommendation to add a company to the Exclusion List, the Sustainability Centre will discuss this with the investmentteam(s) with the largest active holding(s). This discussion usually takes place with the portfolio manager and head of the investment
team.
Decisions to include or remove companies from our Exclusion or Watch lists focus on the following factors:
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Severity of the impact to affected parties, including individuals, communities, investors and/or the environment, dependingon the violation;
Whether the violation(s) is unusual or severe in comparison with the company’s industry peers;Whether the violation(s) appears to represent a pattern of behaviour that is likely to reoccur;
An evaluation of the likelihood of success through engagement, including whether the violations relate to the company’s
core business, and whether the company’s governance and ownership structures facilitate or obstruct investor
engagement; andThe company’s response.

To be removed from our Exclusion List, a company must meet the following criteria:

The company has put in place appropriate management systems and initiatives to manage risks linked to the controversy;
andThese new management systems and initiatives should normally have been in place for at least 12 months with noadditional controversies or issues

Our Sustainability Committee, which includes our most senior executives and is chaired by our CEO, must approve all changes to the
Exclusion List. The list is updated (at least) twice a year. The Sustainability Committee must also approve the implementation of all
new or updated CSR sector policies of BNP Paribas Group, as well as the initial exclusion list or changes to the existing exclusion list
as a result of these policies.
The table below provides the list of international frameworks, initiatives or standards either included in our policies or that have served
as the basis for their development.
Policies
General RBC standards for all
investments across sectors
Agriculture

International references UN Global Compact
 OECD MNEs Principles
Group:
 Alliance for Zero Extinction
 IUCN

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Policies

Asbestos
Coal-fired power generation
Defence

MiningNuclearPalm oil and Wood Pulp

TobaccoUnconventional Oil & Gas

International references Convention on International Trade in Endangered Species of Wild Fauna or Flora (CITES)
Asset Management:
 OECD Agricultural supply chains policy Business Benchmark of Farm Animal Welfare
NA
Asset Management:
 International Energy Agency’s Sustainable Development Scenario
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Ottawa Convention
Convention on Cluster Munitions (Oslo Convention)
Nuclear Non-proliferation Treaty (NPT) of 1968
Biological and Toxin Weapons Convention (BTWC) of 1972
Chemical Weapons Convention (CWC) of 1993
UNESCO
Ramsar list
Alliance for Zero Extinction
IUCN
ILO C 176 Safety and Health in Mines Convention (1995)
International Atomic Energy Agency
Roundtable on Sustainable Palm Oil
Soft Commodities Compact
FPIC
UNESCO
Ramsar list;
Alliance for Zero Extinction
World Health Organization’s Framework Convention on Tobacco Control
International Labor Organization (ILO) Conventions C138 Minimum Age (1973), C182 Worst Formsof Child Labor (1999), and C29 Forced Labor (1930).
UNESCOIUCN

In terms of how we develop the exclusion lists, this varies for the overall RBC standards vs. sector specific policies.
RBC Standard exclusion list development: Our RBC exclusion list is developed by BNPP AM, and Sustainalytics provides the service that screens our investment universe
against the 10 UNGC principles. The analysis is then supplemented by research undertaken by the BNPP AM Sustainability
Centre.
Sector policy exclusion list development:
 BNP Paribas Group develops its lists based on internal analysis, in line with criteria of the relevant sector policy. See more
information here: https://group.bnpparibas/en/financing-investment-policies
 In addition to the Group’s exclusion list, BNPP AM may use additional criteria to expand the nature of the exclusion list and/or theuniverse of issuers covered. For example, in compiling our coal exclusion list we have developed a machine-learning tool thathelps us to scan the investment universe and implement our exclusion thresholds based on our policy requirements and theInternational Energy Agency’s SDS thresholds.

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Step 2 – Implementation and scope
As noted in our RBC policy, the exclusion list applies 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 by third-parties on such securities. These restrictions apply to securities negotiated on primary and secondary markets, as well
as OTC instruments. The Policy, including watchlists and exclusion lists, does not apply to short sales of securities, in respect of
products implementing short positions within their investment strategies.
Asset class scope
We apply our RBC policy to actively managed equity and fixed income funds, irrespective of their size.

For sovereign debt, we also apply the BNPP Group controversial countries framework4.
In the context of Private Debt and Real Assets (PDRA), most PDRA strategies require compliance with our RBC standards. Somestrategies can have more stringent criteria with the exclusion of a whole sector or the application of a green taxonomy (e.g. infrastructure)
but the sector policies represent a common standard that all strategies need to comply with. As most of the strategies are based on a
buy and hold approach, the application of our RBC cannot be retroactive but is applied for all the new issuers in which we invest.
Physical index funds and ETFs using the full replication method and tracking ESG indices will integrate RBC considerations, although
there may be discrepancies in the approach used by index providers and BNPP AM. In addition, a number of index funds, ETFs or
funds applying the synthetic replication method will apply our RBC policy to the basket of equities held in the fund.
Mandates and dedicated single-client products
Following the rollout of our Global Sustainability Strategy, we enhanced our efforts to extend the application of our RBC policies to as
many of our institutional mandates as possible worldwide. Since January 2020, our RBC policies have been applied systematically to
new mandates. While clients have the possibility to opt-out, they need to explicitly inform us of their decision to do so.
For those mandates and single-client products that had been contracted prior to 2020, we developed an ambitious client outreachprogramme to encourage clients to adopt our policies. Throughout 2020, and after having trained our client-facing staff and developed
educational materials, we have been contacting our clients with the aim to obtain their consent to apply our RBC policies to theirinvestments. This effort has initiated fruitful exchanges with our clients, some of which were encouraged to consider what RBC policies
they should apply to their broader investment portfolios.

4 Sensitive countries framework: BNP Paribas has implemented internal policies and procedures to ensure that the Group complies with international regulations –notably in terms of the fight against Money Laundering, Terrorism Financing and Financial Embargoes – and controls the associated risks. BNP Paribas Group’s
internal framework includes risk mitigation measures on certain countries and / or activities that are considered as being particularly exposed to money laundering
and/or terrorism financing related risks. BNP Paribas Group’s risk assessment mainly relies on official lists (e.g. FATF list of jurisdictions having strategic deficiencies
in their AML/CFT regime; EU list of high-risk third countries with AML/CFT deficiencies; “States Sponsor of terrorism” and “Terrorist Safe Havens” lists from the US
Department of State, etc.) or list of countries under embargo.

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STEP 3 – COMMUNICATION TO INVESTMENT TEAMS AND COMPLIANCE
Investment teams are prohibited from initiating new investments in companies that have recently been added to the Exclusion List andexisting investments in companies newly added to the Exclusion List must be divested from relevant portfolios no later than 3 months
after communication of the update.
To ensure that exclusion lists are implemented by all relevant portfolios, pre-trade and post-trade compliance checks are conducted by
the Investment Compliance team. Pre-trade controls will block any attempt made by portfolio managers to buy a security linked to an
excluded company. In addition, any security linked to an excluded company will automatically raise a recurrent alert until the position is
sold.

STEP 4 – OUTCOMES AND REPORTING
The application of our RBC policies as of 31st December 2020, identified a total of 1679 companies (not including subsidiaries). The
largest contributor to this list are our energy policies, followed by controversial weapons and UN Global Compact related exclusions.
Our RBC Policy is publicly available to inform our clients and the markets of our expectations for corporate behaviour. We do not publicly
report the names on our exclusion list, but they are available for our clients upon request.
We publish information about our global stewardship activities as part of our annual sustainability report (supplemented by more
frequent information on our website, and quarterly reports to our clients).

ENGAGEMENT POLICIESOur Stewardship Policy is fully in accordance with Article 3g of Directive 2007/36/EC* (Shareholders Rights Directive). We have adetailed Voting Policy and a Conflicts of Interest Policy. We publish an annual Stewardship Report and a Voting Report.
In the table below we have mapped our key engagements against the principal adverse impacts identified in the regulation. For moredetails on each one, or a broader view on all the areas of engagement, please refer to our Annual Stewardship reports.

ISSUE

CORPORATE ENGAGEMENTVOTING

Climate Change mitigation - emissions
scope 1, 2 and 3; carbon footprint, carbon
emissions intensities- and exposure tocompanies active in the fossil fuel sector,
Share of non-renewable energy
consumption and production, energy
consumption intensity per high impact
climate sector.

We are a member of the Climate Action 100+
(CA100+) initiative, a collective effort byinstitutional investors to engage the world’s
largest corporate greenhouse gas emitters. We
lead on 7 companies worldwide, and we sit on
the advisory group at IIGCC.

We may decide not to approve the financial
statements/director and auditor reports (insome geographies we will not approve thedischarge of board and management orapprove the board nomination) if:-

BNPP AM, AP7, and the Church of England
Pensions board created the corporate climate
lobbying initiative: in 2018, we published theEuropean Investor Expectations on Corporate
Climate Lobbying, which formed the basis fora series of on-going engagements conducted
in 2019 and 2020 with the 57 European
companies that are part of CA100. Since
2019, we helped to lead collaborative
engagements on this topic with US companies
included in the CA100+, including thesubmission of shareholder proposals.
Engagement related to our Coal Policy: weengage individually with portfolio companies to-the company does not report properly on
their carbon footprint (scope 1, 2 and 3,
when appropriate),or does not communicate nor does it
want to constructively engage in relation
to its business strategy to mitigate andadapt to climate change, or its climate
lobbying strategy.

We have voted in favour of shareholder
proposals when they were in line with thelong-term interests of the company andrequested action that was warranted given thepractices of the company. However, weabstained when the proposal was not

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ISSUE

Biodiversity

CORPORATE ENGAGEMENTVOTING

confirm the emissions intensity of their power
generation and evaluate the potential for us towork with companies to enhance theirdecarbonisation ambitions. We also engage
with those companies whose carbon
intensities are close but still not in line with the
IEA’s Sustainable Development Scenario as
per our policy.

appropriate for the company or if the request
was already applied in practice.

We have been an active member of the PRI
and Ceres-led Investor Initiative for
Sustainable Forests for several years, andhave taken the lead with a number ofcompanies. Through this initiative, we areengaging key companies on their policies andprocedures for sourcing commodities linked todeforestation, including soy, palm oil, cattle
and timber products.

We may choose not to approve the financial
statements/director and auditor reports (insome geographies we will not approve thedischarge of board and management orapprove the board nomination) if the company
does not provide adequate disclosure on
environmental and social issues either in its
annual report or elsewhere.

Alongside our efforts to better understand ourown dependencies and impacts on nature,and to integrate these insights into ourinvestment decision-making, we are engaging
with portfolio holdings on several of the key
drivers of biodiversity loss, including climatechange and deforestation, in addition to
engagements focused on water issues andpesticide use. We are also working with otherinstitutional investors to develop a
collaborative corporate engagement program
designed to mitigate corporate impacts onnature.

Water

Our focus is to improve the water efficiency of
our investment portfolios, in particular inwater-stressed areas, as well as to measureand disclose the water footprint of ourportfolios. We also committed to encouragewater-intensive sector companies operating inwater-stressed areas to significantly improvetheir water efficiency while ensuring water
access to local communities. To achieve this,we will be engaging priority companies on the
topic. We have also been engaging mining
companies on their tailing management.

Waste

We have met several mining companies in Q42020 following the publication of the Global

5 For more information see our 2020 Voting Report.

We file or co-file climate-related resolutions in
the context of our climate engagements aspart of our escalation policy (see section I.4.
on conduct of dialogues and escalation of our
Stewardship Report). We publish as part ofour voting annual report a description of allenvironmental shareholder proposals and therationale of our voting for those we supported
and those we did not. In 2020, we supported
94% of the environmental and climate-relatedshareholder proposals we voted on.5

We tend to vote favourably on environmental
shareholder proposals, as evidenced by ourvoting record.

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ISSUE

Social and employee matters – UNGC
and OECD MNEs violations

CORPORATE ENGAGEMENT
Industry Standard on Tailings Management todiscuss how these changes will impact theirstrategy and to identify what are the main
challenges for the implementation of these
new standards. Most of the companies that we
met were part of the Global Tailings Review
that occurred after the dam collapse in
Brumadinho operated by Vale in 2019.
Consequently, they were fully aware of the
future changes in the governance (internaland external lines of defence) and supportiveof these stringent standards in order to restore
confidence from all the stakeholders of themining sites. It should lead to a moretransparent environment for waste
management and should ease theassessment of the risk exposure bycompanies for investors’ worth.
Human rights – we address concerns on thisissue through our participation in The Global
Network Initiative, seeking to implement the
GNI Principles on freedom of expression andprivacy (we serve on the GNI board). We also
work on supply chain human rights issues inpartnership with the Interfaith Centre on
Corporate Responsibility and the Investor
Alliance for Human Rights and otherinstitutional investors. We have been utilizing
the findings of the Know the Chain benchmark
to identify corporations with inadequate
policies and procedures to address forced
labour in their manufacturing supply chains.
We are also engaging companies on a rangeof other social issues, including the treatmentof the workforce during the COVID-19
pandemic.
We strive to engage with those companies
that are at risk of violation of one or more of
the principles of the UN GC or OECD MNEs.
We exclude the worst offenders and, unlessthey fall under the scope a collective
engagement initiative we are members, we do
not engage with those once excluded.
We strive to factor Food & Beverage
manufacturers’ nutrition practices into our
responsible ownership activities andinvestment analysis, incorporating both resultsfrom Access To Nutrition Index (ATNI) andinformation from companies’ public reporting.
We also encourage other investors to consider
ATNI’s findings and we provide input into theongoing development of ATNI.

VOTINGWe may choose not to approve the financial
statements/director and auditor reports (insome geographies we will not approve thedischarge of board and management orapprove the board nomination) if the company
has engaged in serious violation of the UN
Global Compact Principles. Note that while we
exclude those companies that do violate wemight still have some minimal exposure
through some of our ETFs, we might also
include those that are on our watch list.
In 2020, we opposed 451 resolutions at 66
companies because either the companies weredeemed at risk of breaching one or moreprinciples or they publish insufficient social orenvironmental information.

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ISSUE

CORPORATE ENGAGEMENTVOTING

Board Gender diversity

We engaged with companies which were notin line with our new policy and where we had
important exposure.

We will vote against a board candidate if thecandidate is not a woman and:Our target list in 2020 was composed of 23
companies (12 in Europe and 11 in North
America) held in our active portfolios, which
we contacted explaining our new voting policy
and asking for an engagement. Out of 23
companies, we conducted a deeper
engagement with 14 companies (61%) withcalls and exchanges of emails.
We had a 30% success rate, with sevencompanies adopting changes in line with ourvoting policy (e.g. companies were notrespecting our threshold in 2019 but reachedmore than 30% of female director for theirannual general meeting in 2020, and we
supported their board election).

- Fewer than 30% of directors are female (forEurope, North America, Australia, New
Zealand and South Africa)- Fewer than 15% of directors are female(forthe other markets)6
Note that starting in 2025, we will apply athreshold of 40% of women on the board.
As a result of our engagement with 14
companies, seven companies improved theirgender diversity ahead of their AGM. We
voted against male board nomination for thenine companies that did not respond to ourcall for engagement and the seven for which
engagement was not fruitful.

Note on controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons): we do not
engage with companies active in this space as we exclude them from our investment universe.
In addition, we aim to dialogue with sovereign issuers as a way to improve our understanding of their ESG issues, encourage betterdata transparency and share with governments our responsible investor expectations.

ESCALATION
Our approach to stewardship provides for a variety of escalation strategies. In addition to voting against a company’s financial
accounts, or members of the board, our engagement tactics include public questions at general meetings, the submission ofshareholder proposals, making public statements such as periodically announcing our voting intentions ahead of time and, in raresituations where appropriate, additional legal strategies.
The decision to escalate an engagement is taken on a case by case basis. For more information on our escalation approach pleasesee section 1.4. on conduct of dialogue and escalation of our Stewardship Report.

ADHERENCE TO INTERNATIONAL STANDARDSBNPP AM was a founding signatory of the Principles of Responsible Investment (PRI). We respond every year to the PRI detailed
report and we have received A or A+ rating, the highest possible, on a continuous basis. We also report every year on our progressagainst the six principles of the PRI in our annual Sustainability Report.
BNPP AM is an active member of the following industry, multi-stakeholder or public initiatives and networks in relation to sustainablefinance, environmental, social or governance issues:
On climate change and environmental issues:
 TCFD – Task force on Climate-related Financial Disclosures (https://www.fsb-tcfd.org/)
6

If the percentage of women is below the threshold (between 20-30% for Europe, N. America, Australia, New Zealand and South Africa or 10-15% forother markets), we could support male directors if, the company has made important improvements, in the case of a small board (8 directors maximum),if there is a commitment to reach our threshold within a short time, or the CEO or Chair is a woman.

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IIGCC - International Investors Group on Climate Change (http://www.iigcc.org/)
AIGCC - Asia Investor Group on Climate Change (https://www.aigcc.net/)
CERES - Coalition for Environmentally Responsible Economies (https://www.ceres.org/)
TPI - Transition Pathway Initiative (https://www.transitionpathwayinitiative.org/)
CDP - Carbon Disclosure Project (https://www.cdp.net/fr)
CBI - Green Bonds & Climate Bonds (https://www.climatebonds.net/)
ICMA - Green Bond Principles (International Capital Market Association)
TNFD – Task Force on Nature-related Financial Disclosure* (https://tnfd.info/)

On governance issues: ACGA - Asian Corporate Governance Association (https://www.acga-asia.org/)
 CII - Council of Institutional Investors (https://www.cii.org/) ICGN – International Corporate Governance Network (https://www.icgn.org/) Eumedion - Group of Institutional Investors on Corporate Governance and sustainability performance (https://en.eumedion.nl/)
 Harvard Institutional Investor Forum ( http://www.pii.law.harvard.edu/harvard-institutional-investors-forum.shtml)
On social issues:
 GNI – Global Network Initiative (https://globalnetworkinitiative.org)
 HCMC - Human Capital Management Coalition (http://uawtrust.org/hcmc)
 ATMI- Access to Medicine Index (https://accesstomedicinefoundation.org/access-to-medicine-index)
 ATNI – Access to Nutrition Index (https://accesstonutrition.org/)
 Benchmark for Farm Animal Welfare (https://www.bbfaw.com/)
On sustainable finance:
 UNPRI - United Nations-supported Principles for Responsible Investment (https://www.unpri.org/) TEG – Technical Expert Group on Sustainable Finance at the European Commission(https://ec.europa.eu/info/publications/sustainable-finance-technical-expert-group_en)
 EU Platform on Sustainable Finance* (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainablefinance/overview-sustainable-finance/platform-sustainable-finance_en ) Comite Climat et Finance Durable de l’AMF (https://www.amf-france.org/en/amf/our-organization/climate-and-sustainablefinance-commission)
 EFAMA ESG and Stewardship Committee (https://www.efama.org/) AFG - Association Française de la Gestion financière (http://www.afg.asso.fr/index.php/fr/isr/presentation)
 FIR - Forum pour l'Investissement Responsable. (http://www.frenchsif.org)
 HKGFA - Hong Kong Green Finance Association (www.hkgreenfinance.org/) IMAS - Investment Management Association of Singapore (http://www.imas.org.sg/)
 ICCR - Interfaith Center on Corporate Responsibility (https://iccr.org/) MAAM - Malaysian Association of Asset Managers (https://maam.org.my/) ASEAN Capital Markets Forum (https://www.theacmf.org/initiatives/sustainable-finance)
 IFC - Operating principles for impact management(https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/development+impact/principles/opim)*We are members through BNP Paribas Group.
As part of the BNP Paribas Group, we are committed to observe the following standards:
Universal principles
For many years, BNP Paribas’ actions have followed the framework of: United Nations Global Compact (Advanced level); United Nations Women’s Empowerment Principles.

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Financial industry principles
BNP Paribas actively participates in designing and implementing long-term social and environmental solutions within the framework of: Equator Principles; UNEP FI’s Principles for positive impact finance;
 Principles for Responsible Banking
 Principles for Responsible Investment (PRI)o BNP Paribas Asset Managemento BNP Paribas Capital Partnerso BNP Paribas Real Estate Investment Managemento BNP Paribas Cardifo BNP Paribas Securities Services
Commitments specific to the environment
BNP Paribas’ environmental commitments:
 Banking Environment Initiative (BEI) and its Soft Commodities Compact; Roundtable on Sustainable Palm Oil (RSPO);
 Science Based Target initiative;
 Breakthrough Energy Coalition;
 Task Force on Climate-related Financial Disclosures (TCFD); Katowice Agreement;
 Act4nature initiative; Afep’s commitments to the circular economy;
 Medef’s Business Climate Pledge
Policies and procedures related to ethical business practices
BNP Paribas holds itself to the highest ethical standard and is committed to responsible business conduct through a suite of policies
and procedures, including: Employee Code of conduct Statement of BNP Paribas on human rights;
 Anti-Corruption Policy;
 Charter for responsible representation with respect to public authorities;
 Sustainable Sourcing Charter for BNP Paribas suppliers;
 BNP Paribas Responsible Business Principles.
The above policies can be found on the Group’s website at: https://group.bnpparibas/en/publications
Aligning our portfolios with the objectives of the Paris Agreement
Our objective is to make a substantive contribution to the transition to carbon neutrality by 2050. We have three targets to structure ourwork towards this objective:
1. To progressively align our investment portfolios with the goals of the Paris Agreement.
2. To encourage our investee companies and countries to align their strategies with the goals of the Paris Agreement.
3. To encourage policymakers to adopt measures that align with the goals of the Paris Agreement.
Aligning our portfolios
We aim to align our portfolios, firstly, by reducing our exposure to fossil fuels in line with the well-below 2ºC International Energy
Agency (IEA) Sustainable Development Scenario (SDS). Of all the scenarios in line with the objectives of the Paris Agreement, this is
the most reliable and widely used.
As part of that commitment, we have introduced enhanced policies on coal and unconventional oil & gas, further strengthening ourexisting approach.

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We are assessing how companies are managing climate-related risks and opportunities; but more concretely, we are examining how
carbon intensities (current and expected) within the seven most carbon-intensive sectors compared to the IEA SDS. Our assessments
will allow us to benchmark companies’ emissions trajectories against the international target defined by the Paris Agreement and will
inform our active engagement with these issuers. We aim to align our investments in those seven sectors to the global target, startingwith the electric utilities sector.
Carbon footprint of our funds
We started measuring the carbon footprint of our “Sustainable +” equity funds and mandates in 2011. In May 2015 we were among thefirst signatories of the Montreal Carbon Pledge, and committed to progressively measure and report the carbon footprint of our openended funds. Today we measure the carbon footprint of both equity and fixed income portfolios.7 An internal dashboard is prepared forthe Investment Committee on a bi-weekly basis tracking the performance of a range of funds versus their investible benchmarks on
ESG and Carbon performance. BNPP AM factsheets are evolving to include two new indicators – ESG Global Score and the carbon
footprint of the fund versus the benchmark.8
Green share of our investments
We have committed to measure our ‘sustainable economic’ investments, in line with the forthcoming EU taxonomy, once available andto the extent possible. In March 2019 ahead of the approval of the Taxonomy Regulation and the publication of the Delegated Acts on
climate change mitigation and adaptation, we committed in our GSS to start working towards measuring the green share as a percentage
of our total assets under management or total green investments defined as the sustainable economic activities in the forthcoming EU
Taxonomy.

7 A detailed explanation of the methodology can be found at https://www.bnpparibas-am.com/en/measuring-carbon-footprints/
8 For further explanation please see https://docfinder.bnpparibas-am.com/api/files/5785D9F3-6515-4BE5-9DAC-B4336F93F989

For regulatory reasons the fund factsheets are available through our country websites only in the countries where those fund are registered. In France, for example, they are available at
BNP Paribas Asset Management - France - Particulier (bnpparibas-am.fr)

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Published on March 10th, 2021
Version History: Future updates will be referenced.