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Looking back – A year at BNP Paribas Asset Management
An interview with Jane Ambachtsheer, global head of sustainability, BNP Paribas Asset Management (BNPP AM)
What are BNP Paribas Asset Manage- ment’s ESG and sustainability ambitions? In a fast-changing world, we focus on achieving long-term sustainable invest- ment returns for clients. In line with this, we have committed to having our full range of investment strategies adopt a sustainable investment approach. We believe this is in the financial interest of clients, and of the economy at large. We have also adopted firm-wide targets for measuring and pro- gressively aligning our investment portfoli- os with the key themes underpinning a sus- tainable future. We have bolstered this with active stewardship.
How is BNPP AM working to become a sustainability leader? To transform into a fully sustainable asset manager, we took a holistic approach and launched a firm-wide “Sustainable Trans- formation” Programme in 2018. This is co-sponsored by a member of BNPP AM’s Executive Committee and myself. Its 15 work streams reach across the organisation to embed sustainability and ESG in all investment strategies and research, engagement activities, reporting, product development, as well as marketing, client communications,
acquisition four considera-
tions, and employee training programmes. BNPP AM defines sustainable investment through
pillars: ESG integration;
investor stewardship; investing in compa- nies that conduct business responsibly; and a unique forward-looking focus on three issues underpinning long–term economic performance: the energy transition, envi- ronmental sustainability and equality and inclusive growth. We call these the 3Es.
What have been your biggest achievements since you became BNPP AM’s global head of sustainability just over a year ago? One key achievement has been overseeing
the launch of our Global Sustainability Strategy, published in March 2019. This first-of-its-kind document outlines a blue- print to mainstream sustainability in all that we do, with the goal of having the full range of BNPP AM’s strategies adopt a sus- tainable investment approach by 2020 – setting out clearly what this means. We are positioning BNPP AM as a ‘future maker’. The GSS is a significant milestone, and builds on the expertise that our Sustainabil- ity Centre has developed over the years. The strategy sets out the rationale for focusing on the 3Es, along with a series of commit- ments ranging from engagement targets to metrics that we will measure and report on in future such as our carbon, water and for- est footprints.
A notable development relating to the ener- gy transition is our focus on the carbon intensity of our investments as part of our commitment to align with the Paris Agree- ment by 2025. This includes a greater focus on coal, for both miners and power genera- tors. We released a new, stricter coal policy in March 2019, making us the first asset manager to base exclusions on carbon intensity rather than revenues with the goal to align them with the International Energy Agency Sustainable Development Scenario.
How are you applying sustainability to your investment strategies? We have set formal ESG Integration Guide- lines. However, to avoid the pitfall of having guidelines which are not actually imple- mented, we established an ESG Validation Committee, which I co-chair alongside our Head of Macro Research, Investment Pro- cess and Investment Risk. In early September, we announced that 100% of our flagship range had integrated ESG criteria. Furthermore, I am part of BNPP AM’s Global Investment Committee and Busi-
ness Management Committees, ensuring proper linkages with investment teams.
How are you overcoming the biggest barri- ers to building sustainable portfolios? One of the biggest hurdles to corporate transformation of any kind – be it sustaina- ble or not – lies in changing behaviour. That’s why we have appointed “ESG Cham- pions” across investment teams to ensure full integration. The group is now over 60 strong and acts as an extension of our Sus- tainability Centre. It meets every month for training and to discuss the challenges and opportunities in sustainable investment.
How has BNPP AM’s sustainable strategy changed since it launched its first such fund in 2002?
In 2002, and subsequent years, our ESG research was used primarily for our SRI funds. With the launch of our GSS, we effectively graduated our ESG research from its pure-SRI focus to a “whole-firm” approach that draws expertise from invest- ment teams and our financial engineering department. Simultaneously, our approach to sustainable investment has evolved – from an approach centred around responsi- ble business conduct and exclusion to a broader approach that also encompasses ESG integration, stewardship and a focus on the future. We have set out an ambitious roadmap and made good strides towards putting it in place. However, there is still more work to be done such as making con- crete progress beyond equities and advanc- ing our thinking and practice on public pol- icy engagement. For example, we recently launched our first Public Policy Steward- ship Strategy. This keeps things interesting and we envision another busy year ahead.
Issue 87 | October 2019 | portfolio institutional | 37
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