It has been a pivotal 12 months for sustainability the world over. At the UN's Paris climate conference (COP21) in December 2015 leaders of 195 countries adopted the first global climate deal, which binds them to keep global warming less than two degrees Celsius above pre-industrial levels. Many banks quickly announced their commitment to help reach this ambitious target, including BNP Paribas.
The Banker magazine has named BNP Paribas "Most Innovative Bank for Climate Change and Sustainability 2016".
"At last year's COP21 conference, we decided to double our financing to renewable energy by 2020" says Virginie Pelletier, head of sustainable finance, corporate and institutional banking at BNP Paribas. The French bank has long been a proponent of sustainability, but over the past year it has taken that to a whole new level. "As well as direct lending, we've rolled out more green capital markets products and launched a reporting tool integrating ESG [environmental, social and governance] criteria for investors," says Ms Pelletier. "We've made excellent progress in developing services that support clients in integrating sustainability through their value chain, and will continue to expand our sustainability programme."
The bank has a dedicated sustainable capital markets team and its recent green bond
credentials are unrivalled. In May 2016 it was joint lead manager on Turkiye Sinai Kalkinma Bankasi's $300m green bond, the first out of Turkey, which will help fund private sector investments tackling greenhouse gas emissions. Two months prior it was joint arranger of the first green schuldschein, a €550m deal by German wind turbine producer Nordex.
""At last year's COP21 conference, we decided to double our financing to renewable energy by 2020""Virginie Pelletier, head of sustainable finance, corporate and institutional banking at BNP Paribas
It has also continued its pioneering work with multilaterals. In November 2015, BNP Paribas helped the European Investment Bank (EIB) launch a new sustainable investment solution that allows French institutional investors to align their financial objectives with their energy transition goals. Known as Tera Neva, it consists of a €500m equity index-linked bond, issued by the EIB in its climate awareness bond format, which dedicates proceeds to renewable energy and energy efficiency projects. Last year the bank continued to help the World Bank with its sustainable development bond issuances.
Of particular note is a $165m sustainable development bond that supports member country efforts to end poverty and inequality across all sectors.
BNP Paribas has also recently expanded its suite of indices based on ethical and sustainability criteria. One of these, the Ethical Europe Climate Care Index which is sponsored by Solactive, features large-cap European companies based on both their carbon footprint and energy transition strategy.
This article appeared in the October 2016 issue.