BNP Paribas delivers One Bank approach for major carbon offset fund

Three BNP Paribas business lines collaborated to introduce an innovative carbon offsetting mechanism for the Group’s insurance arm.

BNP Paribas Cardif , in collaboration with BNP Paribas Global Markets and BNP Paribas Asset Management, has initiated a carbon offsetting mechanism on one of its largest equity-dedicated funds, with €600m AUM to date. This transaction illustrates BNP Paribas Cardif’s recent commitment to contribute to the global objective of net-zero greenhouse gas emissions by 2050.

Similar to the THEAM Quant Climate Carbon Offset Plan[1] [2] range of funds, this carbon offsetting mechanism follows three diligent steps:

  1. BNP Paribas Asset Management selects stocks based on their ESG[3] criteria in order to reduce the carbon footprint of the equity investment
  2. BNP Paribas Asset Management measures the carbon footprint of the portfolio
  3. At the periodic request of BNP Paribas Asset Management, BNP Paribas Global Markets provides the Verified Emission Reduction (VER) to offset the residual emissions through the Kasigau Corridor REDD+ carbon-offsetting project.

Recognised as one of the most robust and transparent carbon offset projects, the Kasigau Corridor REDD+ is the first in the world to issue REDD+ (Reduction of Emissions due to Deforestation and forest Degradation) carbon offsets under the international supervision of the Verified Carbon Standard (VCS) and CCB (Climate, Community & Biodiversity) programmes, and audited by a third-party independent auditor.

Its focus on biodiversity protection and restoration including the protection of important populations of IUCN Red List species such as Grevy’s Zebra, Cheetah, Lion, African Wild Dog as well as 2,000+ African elephants.

Not only does it offset 100,000 tons of CO2 per year, it also extends to biodiversity protection and restoration, as well as a wide range of social benefits such as the creation of more than 300 jobs, with 30% of the workforce being women, income paid back to 4,500 landowners involved in the project, and positive impact on communities.

Denis Panel

Sustainable investing is at the heart of our strategy and we are proud to be involved in this specific project. It is pioneering nature conservation and offers carbon credits of a commensurate quality to the high standard requirements of BNP Paribas Asset Management.

Denis Panel, Chief Investment Officer Multi Assets, Quant & Solutions, BNP Paribas Asset Management

This is another example of how sustainability can be integrated across BNP Paribas’ different businesses. VERs are increasingly being used and we believe that this project could inspire other clients to further innovate with us, using available tools to contribute to more impact.

Francois Carré, Carbon Portfolio Manager, BNP Paribas Global Markets
Marielle Desnier

We need to understand nature loss as This project meets two of our main extra-financial objectives: limiting climate change and preserving biodiversity while delivering sustainable development benefits on local populations. This initiative expands and completes our actions on reducing the GHG emissions of our investments.

Marielle Desnier, Head of SRI[4] and Equity Investments at BNP Paribas Cardif

The transaction illustrates BNP Paribas’ ability to industrialise successful products (adapting THEAM Quant range of funds) complemented by a recognised experience in sustainability. It also perfectly highlights the synergies between the different businesses of the bank, collaborating to decarbonise investment solutions.

[1] Risk related to Environmental, Social, and Governance (ESG) investment:

An extra-financial approach may be implemented in a different way by management companies when setting ESG investment management objectives for financial products, in particular in view of the absence of common or harmonized labels at European level. This also means that it may be difficult to compare strategies integrating ESG and sustainability 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 have different underlying meanings. In evaluating a security based on the extra-financial criteria, the Management Company may also use data sources provided by external ESG research providers. Given the evolving nature of extra-financial field, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards as well as extra-financial criteria in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the Sub-fund’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards. For further information, and in particular the risks of the products, please refer to the prospectus and KIIDs of the funds.

[2] The THEAM Quant Climate Offset Plan funds are classified “Article 9” with sustainable investment objective under the Regulation (EU) 2019/2088 (Sustainable Finance Disclosure Regulation “SFDR”).

[3] Environment, Social and Governance

[4] Sustainable and responsible investing