“By choosing to allocate financing to one sector rather than another, by making this financing conditional on the achievement of ESG objectives or the adoption of responsible practices, banks play a very important role in financing a sustainable economy. However, they cannot act alone. In view of the major challenges our world faces, all stakeholders must work together to promote a sustainable and just transition.“
Committing to a net-zero future
Energy, however, is only a small part of BNP Paribas’ loan portfolio. This is why the Group has committed, as part of the Net-Zero Banking Alliance, which it joined in 2021, to aligning the greenhouse gas emissions related to its lending activities with the reduction trajectory required to finance a carbon-neutral economy by 2050. Significant work is therefore being done to align loan portfolios, starting with the hard-to-abate sectors (oil and gas, power generation, automotive, steel, aluminium and cement). In addition, in November 2023, metallurgical coal, intended for the steel industry, was excluded from our project financing. This work will be complemented in 2024 with the aviation, shipping and commercial real estate sectors.
We’re also committed to combatting the loss of biodiversity. In May 2021, BNP Paribas published a public position on biodiversity and made new commitments in the field as part of act4nature, such as:
- establishing a dialogue with clients operating in the commodities sector and in sensitive countries, and asking them to demonstrate their commitment to combating deforestation (long-term action plan, annual reports on volumes traced and monitored, etc.);
- providing support to clients as they transition to more biodiversity-friendly models, through specific financial tools (sustainability-linked loans, green bonds, etc.);
- expanding the budget for direct investments in start-ups working on the ecological transition, with an objective of €250 million by 2025.
The Group has set a target of providing €4 billion in financing for companies contributing to the protection of terrestrial and marine biodiversity, by 2025. This target was exceeded as at the end of 2023. BNP Paribas is also working on methodologies to measure risks and opportunities in relation to biodiversity. Notably, the Group has been a member of the Taskforce on Nature-related Financial Disclosures (TNFD) since its creation. This methodological framework helps businesses to better analyse, manage and communicate their impacts, as well as their dependencies, risks and opportunities in relation to biodiversity. The publication of its final recommendations, in September 2023, marked a key milestone on the path to an economy which holds living beings in greater respect.
Providing support to our clients as part of a large-scale transformation
BNP Paribas’ role goes beyond aligning its loan portfolios with a net-zero economy by 2050. Our desire for positive impact is also reflected in the innovative solutions we provide our clients with, to help them transition towards a low-carbon economy.