Always a strong candidate in this category, BNP Paribas has made great progress in its ambitious decarbonization commitments this year, in addition to prioritizing high social-impact and inclusive-finance goals.
“We have leveraged on our position of strength to develop structures that would incentivize and reward clients improving their ESG [environmental, social and governance] plans in areas that are untouched by sustainable finance,” says chief sustainability officer and head of company engagement, Constance Chalchat.
Over the last 12 months, the French bank, which topped the sustainable and sustainability-linked bond bookrunner and ESG loan market league tables for 2021, has focused its attention on export finance, shipping and industrial suppliers.
Its net-zero advances towards 2025 targets are demonstrated in its role in several key inaugural green bonds, including Danish shipping company Maersk’s €500 million green bond, for which BNP Paribas was joint green structuring adviser, and Air Liquide’s €500 million green bond, where BNPP was joint bookrunner.
“If you look at the bond market for the shipping industry, it was overwhelmingly populated by sustainability-linked bonds” notes co-head of sustainable finance markets at BNPP, Agnès Gourc.
Like most banks in this field, BNPP is focused on getting clients to go greener, faster. With Maersk, it was about creating a demand for green methanol by financing innovative transportation technology. With French beauty company L’Oréal, the sustainability-linked tranche of the firm’s inaugural bond offering included ambitious circular economy key performance indicators targeting decarbonization and sustainable packaging.
BNPP encouraged L’Oreal to look down its supply chain, with the aim of reaching zero absolute scope 1 and 2 greenhouse gas emissions at its operated sites by 2025 and a 14% reduction of scope 1, 2 and 3 emissions per unit sold by 2025.
The bank was also joint bookrunner on the UK government’s £10 billion inaugural sovereign green bond, launched in the run up to the United Nations COP26 climate conference.
The French bank has a sustainable finance strategy that goes beyond decarbonization targets to include social justice and inclusive economic development principles in its transactions.
In the debt capital markets, BNPP facilitated an export finance social loan with the Swedish export credit agencies EKN and SEK, and Scania, to provide financing for a transportation network in Burkina Faso.
Alongside the European Investment Fund, Groupe Caisse des Dépots, Inco and the French government, BNPP signed its 11th social impact bond for Médecins du Monde to finance a jail diversion housing programme.
We have leveraged on our position of strength to develop structures that would incentivize and reward clients improving their ESG plans in areas that are untouched by sustainable finance
Constance Chalchat
In the aftermath of COP26, conversations around biodiversity protection have become central to sustainable finance and BNPP has put effort into bringing natural capital protection to the forefront of its sustainable strategy.
It has participated in several global biodiversity initiatives, including the Taskforce on Nature-related Financial Disclosures, and strengthened its exclusion policy to protect the Arctic region and the Amazon.
“Today, we have to address both the positive impact P&L, as well as the revenue P&L, to consider doing the transaction,” says Chalchat.
