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Latin America’s best bank for sustainable finance 2023: BNP Paribas

BNP Paribas’s sustainability strategy for Latin America continues to mature, underpinning the bank’s strong position across the continent. The bank has made considerable efforts to deepen its focus on the three most important sustainability issues in Latin America: protecting biodiversity, promoting social development and decarbonizing hard-to-abate industries.

Protecting and leveraging Latin America’s natural capital is now a central pillar in BNP Paribas’s approach to sustainable finance in the region. The bank has a 'zero deforestation' target of 2025 for its production and supply chains covering the Brazilian Amazon and Cerrado. The policy prioritizes at-risk biomes and seeks 100% traceability from clients on supply chains.

Achieving this goal is an uphill battle, given Brazil’s tumultuous political and legislative landscape. Brazilians are still awaiting a supreme court decision on a controversial bill approved by the chamber of deputies that would reduce the land area currently governed by indigenous groups.

© Matt Greenslade
Anne van Riel
Photo: Matt Greenslade

BNPP has also been integrating biodiversity conditions into its lending in the region. In September 2022, it helped Klabin, Brazil’s largest paper manufacturer and exporter, issue an $800 million sustainability-linked loan, with a key performance indicator measuring the reintroduction and reinforcement of wild species in the ecosystem.

“This type of work sends a signal to others in the market on our stance regarding deforestation and biodiversity,” explains Anne van Riel, head of sustainable finance capital markets, Americas at BNPP.

Across its Latin American exposure, BNPP is also very good at identifying the important structural issues and adapting the group-level sustainability strategy to meet local needs. This is particularly evident in efforts to increase social lending.

The bank has been involved in important projects related to mobility and reducing congestion across Latin America’s transportation networks. It was financial adviser to Spanish engineering firm Acciona on the construction and operation of a metro line in São Paulo, one of the region’s largest public-private infrastructure projects. The bank was co-sustainability coordinator in the R$1 billion ($209 million) loan and the R$950 million equity bridge loan.

Protecting and leveraging Latin America’s natural capital is now a central pillar in BNP Paribas’s approach to sustainable finance in the region

In November 2022, it was mandated lead arranger and green loan coordinator for Scania’s 10-year $46.3 million green term loan financing. The loan will be used for the acquisition of buses for Santiago de Chile’s transit system.

“Mobility is key for social development,” adds van Riel.

In the most carbon-intensive industries, BNPP continues to impress by getting heavy-emitting sector clients to tap into the green and sustainability-linked capital markets.

In March of this year, it supported Mexican cement group Cemex in its first green hybrid bond issue, a $1 billion deal. The bond followed a €500 million sustainability-linked loan in October 2022, with KPIs on net CO₂ emissions per tonne of cementitious product, power consumption from clean energy and the rate of use of alternative fuels.