What are BNP Paribas’ Three New Sustainability Commitments?
Banking and financial services giant BNP Paribas has made three ambitious new sustainability pledges as part of its 2024 Climate Report.
The company, which has US$2.9tn in assets and employs 190,000 people, has made commitments in three sectors with high CO2 emissions: air transport, maritime transport and commercial property.
What are the targets?
In 2022, the Group committed to decarbonising its portfolio in three key sectors: oil and gas, power generation and automotive.
In 2023, new targets were set for the steel, aluminium and cement production sectors.
This year, BNP Paribas is extending its commitments to aviation, shipping and commercial real estate.
By 2030, it is targeting:
- An 18% reduction in its portfolio emissions intensity for air transport compared with the 2022 baseline
- A reduction of at least 23% for maritime transport
- At least a 31% reduction for commercial property compared with 2022.
The report says: “Determined to align its credit portfolio with net zero trajectories and to support the economy in its transition to low-carbon, BNP Paribas is committed to significantly reducing the greenhouse gas emission intensity of its financing to sectors with the highest emissions.
“In addition, the 2023 commitment to achieve 80% low-carbon financing for the Group’s energy production by 2030 has been brought forward by two years, to 2028. The target for 2030 is now 90%.”
Agriculture and real estate
BNP Paribas has not yet set net zero targets for agriculture and real estate – but it says there is mitigation.
“As far as the residential real estate sector is concerned, decarbonisation is largely dependent on the local energy mix, which varies from one European country to another, and on regulatory changes that are still uncertain.
“Local regulations are still evolving and the national implementations of the European directive on the energy performance of buildings have yet to be determined.”
In a post on LinkedIn, BNP Paribas wrote: “No bank can drive renovation alone; it requires a collective effort from policymakers, financial actors, industry experts and consumers.
“This does not mean we are not doing everything in our power to support our clients’ energy transition – our My Sustainable Home initiative continues to promote financing for efficient properties, support renovation with dedicated loans and work with experts to offer comprehensive renovation solutions.”
In terms of agriculture, it added: “Agriculture is highly fragmented, with different emission profiles based on the crop, country, weather, soil conditions and farming practices.
“This diversity, combined with the lack of detailed climate data at the client level, makes aligning our portfolio especially hard.
“Other technical obstacles include still-developing methodologies and the absence of appropriate scenarios for target-setting.
”While statistical methods could estimate emissions across the portfolio, they lack the granularity to assess individual clients or farms accurately.”
Jane Ambachtsheer, Global Head of Sustainability at BNP Paribas Asset Management, said: “While we see progress towards net zero, the path is bumpy and not moving quickly enough.”
Oil and gas
In its Climate Report, BNP Paribas has also included a 70% reduction target for its financed emissions in the oil and gas sector (from 27.3 million tonnes of CO2e at the end of September 2022 to 8.2 MtCO2e in 2030).
It says the indicator has been developed to provide a “more comprehensive evaluation of the impact of the Group’s strategy of exiting oil and gas exploration and production activities”.
According to Bloomberg, in 2023 and for the second year running, banks will have generated more profits from financing low-carbon energy than from oil and gas.
Meanwhile, the CDP (formerly the Carbon Disclosure Project) awarded BNP Paribas the highest score (A) in 2023, placing the Group at the top of the ranking of major banks responding and among the 346 companies worldwide to have received this score (out of 23,000).
The post concludes: “Overall, decarbonisation is a humbling journey. This is just as true for us as it is for other banks across the globe.
“In fact, aiming for zero carbon emissions is a first for everyone involved. And though the journey is challenging, we at BNP Paribas are committed to one major purpose: to support our clients’ transition, giving them the tools and opportunities to accelerate it to collectively reach a carbon-free, sustainable economy that benefits everyone.”
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