2012 Registration document and annual financial report - BNP Paribas

A RESPONSIBLE BANK: INFORMATION ON BNP PARIBAS’ ECONOMIC,SOCIAL, CIVIC AND ENVIRONMENTAL RESPONSIBILITYEconomic responsibility: financing the economy in an ethical manner7In ItalyAlong the same lines, BNL gave a voice to its clients in a campaign coveredin the press, on television and online in October 2012. A website wascreated for corporate clients to submit their questions and suggestions.At the same time, to meet the demand for information, the “EduCare”programme, which aims to further the “financial education of individualsand companies”, took on a new dimension in 2012 by moving out of thetraditional setting of the branches.In TurkeyTEB responded to suppliers’ and clients’ need for information in theareas of CSR and the sustainable use of resources. A conference washeld where experts shared their knowledge of CSR, climate change andenergy efficiency.In IndiaA programme was set up to raise young people’s awareness ofstockmarket investments. By explaining how investments work, the aimis to inform them of the risks and rewards attached to the choices theymake.CONTROL THE IMPACT OF FINANCIALPRODUCTS AND SERVICES ON SOCIETYBNP Paribas extends financing to sensitive industries and operates incountries whose legal and governance environments have not all reachedthe same level of maturity. The Group thus faces a wide variety of ethicalchallenges that require increased vigilance when making financing andinvestment decisions.Defence, a particularly sensitive sectorThe BNP Paribas Group has a responsible financing and investment policyfor the defence sector. This policy, published in 2010, strictly rules outcertain types of weapons (controversial weapons) in certain geographicalregions (areas affected by armed conflict, or the violation of children’srights) of the bank’s financing and investment universe.Under the “defence” policy, 148 sensitive transactions required aspecific review by the Group’s CSR correspondents in 2012.Clear position on essential agriculturalcommoditiesBNP Paribas is aware of the critical impact of higher prices for essentialagricultural commodities on the diet of most fragile populations. InJuly 2011, the Group made a formal public commitment not to sellderivative products to external operators whose objectives are solelyfinancial, i.e. not related to the need to protect a physical activity fromprice fluctuations. Similarly, the Group undertakes to offer its clients onlyinvestment products designed for the medium and long term, and to limitits exposure to essential agricultural commodities.At end-2012, assets invested in food commodities on behalf of thirdparties amounted to EUR 411 million, or 0.08% of total Group assetsunder management.Having closed two ETFs (exchanged-traded funds) mainly exposedto essential commodities in 2011, BNP Paribas continued itsinventory work and closed a further ETF in 2012, while decidingto suspend marketing of a fourth fund.In addition, BNP Paribas decided to extend the application ofits precautionary principle by suspending the marketing of theonly medium/long-term fund in its range that still has majorityexposure to agriculture.BNP Paribas won the Commodity Business Award in the Corporate SocialResponsibility category in 2012.This prize acknowledges excellence in the commodities industry andrewards companies that have a significant impact on sector practices interms of social responsibility. BNP Paribas’ success reflects the Group’svigilance, particularly with regard to food commodities.Integration of ESG criteria into lending policiesThe ability to detect and integrate extra-financial risks in its lending isof major concern to the group.To this end, in 2012, Group Risk Management started to progressivelyinclude environmental, social and governance (ESG) issues in its creditrating policies, which define the main characteristics of the counterpartiesand transactions acceptable to BNP Paribas.The first steps concerned rating policies for the shipping, largecorporations and insurance sectors.ESG criteria were also introduced into lending policies for leveragedbuyout and real estate activities.72012 Registration document and annual financial report - BNP PARIBAS 385