Frédéric Janbon, CEO of BNPP AM:
“Substantial progress has been made since the signing of the Paris Agreement but it is essential that we intensify the global momentum. The EU Green Deal establishes a clear framework for accelerating towards a decarbonised economy: emissions will need to halve by 2030 to attain carbon neutrality by 2050. This requires not just a transition, but real transformation, where the use of technology will be key. More than ever, investors and financial institutions have a critical role to play in supporting companies and governments in driving the initiatives that will achieve this.”
Jane Ambachtsheer, Global Head of Sustainability at BNPP AM:
“The Paris Agreement marked an historic turning point in the fight against climate change. Five years later, the spirit of the Paris Agreement is stronger than ever: we see an acceleration in new business strategies, technologies and tangible government targets to make the ‘race to zero’ a reality. Investors are strategically focused on two things: reducing emissions in portfolios, and increasing the push for progress by companies and public authorities. The announcement by Carbon Action Tracker that recent global net zero targets put the world on the path for 2.1°C is, in part, a reflection of their efforts."
BNPP AM fund range evolves in line with Paris Agreement
The goal of the Paris Agreement – to contain global warming to well below 2°C above pre-industrial levels and to continue efforts to limit the rise in temperatures to 1.5°C – is imperative. As early as 2015, BNPP AM was one of the first asset managers to commit to progressively aligning its portfolios with this goal, subsequently helped by our tighter coal exclusion policy.
- Well before the Paris Agreement we launched, in 2008, Europe’s first low-carbon exchange-traded fund (ETF), which is aligned with the Paris-Aligned Benchmark and currently has assets of over EUR 840 million.
- Our ETF range also includes funds focused on the circular economy (launched in 2019) and the blue economy (launched in 2020).
- In 2017 we launched one of Europe’s first green bond funds, which recently surpassed the EUR 1 billion mark.
- In 2019 we added to our range of actively-managed, thematic equity funds with the launch of the Energy Transition fund, which recent reached EUR 1.5 billion of AUM.
- In 2020 we launched an innovative environmental equity long/short fund, Environmental Absolute Return Thematic (‘EARTH’), investing in companies that are addressing environmental challenges in energy, materials, agriculture and industrial markets.
- Our range of sustainable and thematic funds includes a strong focus on low-carbon and environmentally-themed investments and represents 15% of our overall AUM, the fastest growing area of our business.
- We also have helped clients to purchase carbon offsets to cover the emissions in their portfolios.
Driving corporate change through collective engagement
As a founding member of the Institutional Investors Group on Climate Change (IIGCC) and of the Climate Action 100+ initiative, we actively encourage investee companies to align their businesses with the Paris Agreement. In line with our long-term commitment to constructive management of our clients' assets, we do this through voting, engagement and public policy advocacy. We are also encouraging greater accountability and action on material climate change issues, in line with the EU Taxonomy and the Task Force on Climate-related Financial Disclosures (TCFD).
- This year we have supported more than 90% of climate-related shareholder resolutions, and in the US we filed four shareholder resolutions during the AGM season, gaining significant backing, including 53.5% support for our climate lobbying resolution at Chevron.
- As part of Climate Action 100+, investors have so far reached agreements with 16 European companies, with BNPP AM leading the negotiations with Total and Repsol, both of whom have committed to adopting more ambitious climate targets.
- Our collaboration with the Church of England and AP7 pension funds to develop investor expectations on corporate climate lobbying laid the foundations for a series of shareholder proposals and corporate engagements in Europe and North America.
Progress has been considerable, but needs to be more rapid
The influence exerted through individual and collaborative engagement efforts has been significant, reflecting considerable progress and the investment of time and effort by many investors. However, we must not take our foot off the pedal. Where commitments exist, investors and companies must work together to put them into practice with the appropriate governance, strategy, reporting and risk management frameworks. Where net zero commitments are yet to be made, the conversations must continue – this is an environmental as well as economic imperative.
Global Head of Sustainability
Jane Ambachtsheer is Global Head of Sustainability at BNP Paribas Asset Management, where she oversees the firm’s ambitious approach to sustainable investment. This...