The UN’s World Environment Day (WED) brings together governments, companies and individuals around the world to promote awareness of the environmental crisis and spotlight innovative solutions to it.
WED 2022 borrows its slogan and focus from the 1972 Stockholm Conference: “Only One Earth”. 50 years on, its significance still rings true with nature facing myriad threats.
The environmental crisis
Nature is the foundation of most industries and livelihoods. The water we drink, the air we breathe, the soil from which we consume our food.
However, most natural systems are under extreme pressure, driven by population growth, rising incomes and urbanisation. It’s estimated, for example, that we consume our natural capital 1.75 times faster than Earth can regenerate it.
We, therefore, need to act now to shape a better, more sustainable world. If we do not, we will devastate nature and be unable to maintain the levels of growth and prosperity much of the developed world enjoys today, let alone extend them to developing countries.
What we’re doing to help
At BNP Paribas Asset Management, we want to use our investments as a force for good. This means we:
- Integrate environmental, social and governance (ESG) considerations across our strategies
- Practice stewardship through shareholder engagement and public policy advocacy activities
- Apply responsible business conduct policies and product-based exclusions
- Focus on key sustainability issues including energy, equality and the environment
- Promote awareness about the role finance can play in achieving a more sustainable world
Specifically, in 2021, we launched our Biodiversity Roadmap, which details our plan to embed biodiversity considerations across the pillars of our sustainable investment approach, including funding a project with the Carbon Disclosure Project (CDP) to develop common biodiversity reporting metrics.
Our proxy voting and engagement activities also reflect our ambitions for greater environmental sustainability. For example, in 2021, we engaged 296 companies through 528 interactions, with 35% of our discussions focused on environmental issues.
How you can help
By allocating capital towards sustainable strategies or those that seek to effect change, investors can target attractive financial returns while making a positive contribution to the environment, society or both.
Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), 2019
WWF, Earth Overshoot Day, 2019
EARTH = Environmental Absolute Return Thematic
Past performance is not indicative of current or future performance.
Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
Following the new Sustainable Finance Disclosure Regulation (SFDR) that came into force on March 10th 2021, BNP Paribas Energy Transition, BNP Paribas Ecosystem Restoration and BNP Paribas Environmental Absolute Return Thematic Equity are categorised under Article 9.
Under this new regulation, financial entities such as BNP Paribas Asset Management who sell products into the EU are required to classify the products they manufacture or advise into three categories: Products with sustainable investment objective (Article 9), Products promoting environmental or social characteristics (Article 8) and Non-sustainable products (Article 6).
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
BNP Paribas Asset Management seeks to integrate environmental, social and governance (“ESG”) factors into all of our portfolios as a means to mitigate certain short, medium and long-term financial risks, identify better long-term investments, and encourage more responsible corporate behaviour. We will never subordinate our client’s interests to unrelated objectives. Certain issuers and industries are excluded from our actively managed portfolios based upon our view of their ESG performance and risk profile. As a result, we may pass up certain opportunities when these excluded issuers or industries are in favour. Due to significant gaps in disclosure regimes around the world, we may need to rely upon voluntary disclosures by issuers, which are often not audited. We therefore may not have consistent access to complete, accurate or comparable information about the ESG performance of our holdings. Please consult the applicable offering document for more information about the specific ESG strategy employed by each investment strategy since a given strategy may not have specific ESG guidelines, and investments are not limited to securities that are ESG compatible.