Climate change is an existential threat to humankind, and it is our responsibility to find ways to prevent it. Coinciding with the annual UN General Assembly meeting, ClimateWeekNYC saw policymakers, business leaders and activists share their insights on how we can best work together toward achieving the UN Sustainable Development Goals (SDGs) and accelerate positive change. As part of its PositiveBanking agenda, BNP Paribas outlined its top five takeaways from this year’s ClimateWeekNYC.
1. Global Banks Are Committed to a Sustainable Economy
By deploying more funds and redirecting greater amounts of capital toward sustainable programs, banks could have a transformative impact on the future of climate change. On September 22, 130 banks from 46 countries – accounting for $48 trillion in assets – signed the UN’s Principles for Responsible Banking (PRB), an initiative that commits banks to strategically aligning their businesses with the objectives outlined in the Paris Agreement on Climate Change and the UN’s SDGs.
“The PRB are universal and can be applied to all banks whatever their location, size, business model or starting point in sustainability. This is really key because at the end of the day what we are aiming for is not to be a leader in sustainability, but to join forces with all financial institutions in order to have an impact and collectively contribute to building a more sustainable world,” said Jean-Laurent Bonnafé, CEO at BNP Paribas, which is among the PRB signatories.
2. ESG Business Models Are a Short-Term Investment for Long-Term Results
Environmental, social, governance (ESG) policies at major corporations will play an integral role in mitigating climate change risk. However, in order for the shift to ESG business models to be socially impactful and commercially successful, urgent action and long-term commitment are required. To facilitate this, banks need to help clients adjust to a low carbon economy. In 2018, BNP Paribas financed more than €15 billion in renewable energy projects and is one of the top three issuers of euro denominated green bonds.
Speaking at the “Corporate Sustainability, Is It Sustainable?” event at the Museum of American Finance, Jean-Yves Fillion, CEO of BNP Paribas USA and Chairman of CIB Americas, said: “Sustainability is a process. We need to influence more companies to get on the path to becoming green.” Fillion also noted that BNP Paribas became carbon neutral in 2017 across all its offices in 72 countries and more recently stopped financing oil and shale gas programs, tobacco, and will never finance any projects in the Arctic.
3. Transition Finance Is the Next Frontier of Sustainable Investment
The financial services community is starting to acknowledge the world will not be fully decarbonised by 2050 solely through “green” companies or projects like wind turbines, solar farms and electric vehicles. Instead, a much larger number of sectors must participate in this transition – namely industries that are “brown” today and will require a long-term process to shift to sustainability. There is investor interest in participating in opportunities within this area of “transition” finance.
What we are aiming for is not to be a leader in sustainability, but to join forces with all financial institutions in order to have an impact and collectively contribute to building a more sustainable world
Hervé P. Duteil, Chief Sustainability Officer at BNP Paribas, said: “Put simply, transition finance is for sectors that are not green today and cannot become green tomorrow, yet can and need to get greener (by which we mean ‘less brown’) faster; at a pace likely in line with recognized sustainable development scenarios.”
At a recent Environmental Finance conference on ESG in Fixed Income, leaders in the sustainable investment space discussed some of the criteria investors are looking at when evaluating impact securities for their portfolios and how issuers must put their sustainability projects into a big picture context to indicate a transformational effect within their “brown” sectors.
4. Ocean Conservation Is at the Forefront for CSR Policies
The preservation of our oceans is critical to the preservation of our planet. Right now, more than eight million tons of plastic is dumped into the ocean each year, causing irreparable damage to marine ecosystems and to people’s health.
“When I first saw a Center for Disease Control study that was done in America, it showed that 92.7 percent of all Americans had chemicals associated with plastic in their blood and urine. I was horrified.” said Craig Leeson, BNP Paribas Global Sustainability Ambassador and director of the film “A Plastic Ocean”.
A failure to protect the oceans could have long-lasting consequences. As part of its adherence to UN SDG #14 – “Life Below Water,” BNP Paribas announced it is now making financing conditional on the end borrowers’ commitment to oceanic biodiversity. Elsewhere, the Bank has pledged €1 billion in financing by 2025 to support the ecological transitioning of shipping fleets. And finally, BNP Paribas will ban all petrochemical sourced single-use plastics from its workplace by 2020.
5. Workforces Are More Engaged in Purpose-Driven Businesses
People nowadays want to work for organizations that take CSR seriously and support positive causes. A study by Deloitte, for example, found that 73 percent of employees who feel that they work for a purpose-driven company said that they are engaged. Organisations are taking note. A number of International companies endorsed World Cleanup Day on September 21, a global initiative in which people were encouraged to combat the scourge of solid waste and pick up litter. BNP Paribas was no exception, with volunteers from the Bank participating in the Partnership for Parks Program in New York whereby our employees removed overgrowth and waste and planted trees at Rockaway Beach.
“We are not here to help our bank get greener. We are here to help the world get greener.” said Antoine Sire, Head of Company Engagement at BNP Paribas.