Extra-financial factors are at the heart of BNP Paribas Asset Management’s (BNPP AM’s) investment philosophy. Environmental, social and governance (ESG) criteria are fully integrated in our investment decision process for our infrastructure and commercial real estate debt funds.
Our ESG policy is implemented by a dedicated team within BNPP AM, the Sustainability Centre. The Sustainability Centre is composed of 10 recognised and sectorial experts with respect to social and responsible investment (SRI), which has a 16-year history in covering ESG matters (Source: BNP Paribas Asset Management, as of 24/05/2018). Our ESG research is independent. It is based on various sources that are not limited to ESG data suppliers, and complemented by regular contact with issuers.
At BNP Paribas Asset Management, we are convinced that taking into account ESG issues in our analysis and investment decisions is an integral part of our fiduciary duty to our investors. As such, the implementation of BNP Paribas Asset Management’s responsible investment policy follows a strict framework.
BNP Paribas Asset Management applies several exclusionary, normative and sectorial exclusion policies to all investment decisions.
BNP Paribas Asset Management is one of very few asset managers promoting ESG integration in alternative debt solutions. This means we are committed to participating in local initiatives designed to promote good practices in this area, encouraging businesses to be more transparent by ensuring their data is reliable, accessible and up-to-date.
With this in mind, BNP Paribas Asset Management’s ESG analysts initiated dialogues in 2017 with the Principles for Responsible Investment (PRI) working group on private debt and equity investments in infrastructure: “the PRI Infrastructure Workstream”.
Our real asset debt funds follow a proprietary Socially Responsible Investment (SRI) strategy. This means that ESG is embedded in our investment process through an assessment of the ESG performance of each investment by our Sustainability Centre, the measurement and the reporting of the environmental and climate impact of each property or project, and through portfolio construction driven towards green or sustainable assets.
Our approach involves identifying the issues related to sustainable development, to determine the risks and opportunities that could impact the value of a project and to support sustainable and value-creating growth. For example, no matter how ‘green’ a project is, it can be challenged in court by local residents and be blocked or even shelved. By assessing extra-financial elements like the licence to operate or the environmental implications of the project, we can identify those risks and favour the more responsible projects.
 As a leading global asset manager, BNP Paribas Asset Management is committed to becoming a responsible investor in all aspects of its business. Because we believe in responsible practices for ourselves, but also for entities in which we invest, and consistent with our fiduciary responsibilities to act in the best long-term interests of our clients, we are committed to incorporating ESG standards into our investment criteria and ownership practices. This policy is consistent with BNP Paribas Asset Management adherence to the UN PRI in 2006 and BNP Paribas Group’s commitment to corporate responsibility and sustainable development.
ESG is part of BNP Paribas Asset Management’s DNA. With a 15-year history in ESG, we were among the first asset managers to address investment-related ESG issues. We have been rewarded for our engagement and approach to responsible investing by a first-in-class ranking (A+) by the Principles for Responsible Investment (PRI). Our membership of several advisory committees at an international level is also a token of our performance and commitment. We thus find it entirely natural that we strive to replicate such high standards in the universe of real asset finance, as we believe this is key to having access to the best-quality assets in tomorrow’s world.
This article was written by Pauline Fiastre, Senior Fund Manager (Energy & Telecoms), and Philippe Deloffre, Head of Real Estate Debt in the Alternative Debt Management team.