2012 Registration document and annual financial report - BNP Paribas

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7ARESPONSIBLE BANK: INFORMATION ON BNP PARIBAS’ ECONOMIC,SOCIAL, CIVIC AND ENVIRONMENTAL RESPONSIBILITYEnvironmental responsibility: combating climate change7.5 Environmental responsibility: combatingclimate changeIn its environmental policy, formalised in its 2011 “Commitment to theenvironment”, BNP Paribas decided that climate change should be thepriority focus of its efforts. Climate change represents a real challengebecause it may alter the environment radically in the relatively nearfuture, with potential lasting impacts on the social and economicstructure of the world’s communities.All around the globe, the Group thus strives to limit any environmentalimpacts that might flow from its banking activities and from the directconsequences of its own operations. In synergy with this approach,the BNP Paribas Foundation supports scientific research about climatechange.BNP Paribas is therefore taking concrete action to respect its threecommitments:■ commitment 10: define financing policy commitments in sensitivesectors;■ commitment 11: reduce environmental footprint linked to our ownoperations;■ commitment 12: support research aimed at combating climate change.FINANCING POLICY COMMITMENTS IN SENSITIVE SECTORSSupporting corporations as well as individuals, the Group seeks to financeresponsible projects that favour the protection of the environment.BNP Paribas thus manages its financing and investments in sensitivesectors using selection criteria, carefully chosen with the help ofindependent experts. The Group is also developing a range of productsand services to help its customers – both corporate and retail – in theirefforts to produce green energy or to optimise their consumption ofnatural resources.amounting to over USD 10 million undergoes detailed analysis basednotably on the World Bank’s environmental and social standards anddirectives.In 2012, BNP Paribas joined the Equator Principles steeringcommittee for a three-year period, alongside 13 other financialinstitutions.7THE GROUP’S ACTIONS TO SUPPORTBUSINESSESUpholding the Equator Principles on projectfinancingThe Equator Principles are an initiative backed by 79 financial institutionsaround the world. Under this reference framework, financing for projectsIn 2012, BNP Paribas reviewed 13 transactions in accordance with theEquator Principles, compared with 30 in 2011. This reduction was a directconsequence of a slowdown in specific project financing activities in thewake of regulatory tightening.2011 2012Number of transactions reviewed during the year 30 13Number of A-grade transactions during the year 5 2Number of B-grade transactions during the year 20 10Number of C-grade transactions during the year 5 1Category A: projects with potentially significant environmental or socialimpacts; mitigating and remedial measures need to be implemented;Category B: projects with limited or moderate environmental or socialimpacts;Category C: projects with minimal or zero environmental or socialimpacts.4142012 Registration document and annual financial report - BNP PARIBAS
A RESPONSIBLE BANK: INFORMATION ON BNP PARIBAS’ ECONOMIC,SOCIAL, CIVIC AND ENVIRONMENTAL RESPONSIBILITYEnvironmental responsibility: combating climate change7Financing and investment policies in sectors withmajor environmental impactsFour historic sector policies implementedSince 2010, the BNP Paribas Group has published policies for foursectors particularly sensitive on environmental issues: palm oil, paperpulp, nuclear power and coal-fired electricity generation. The policies setmandatory requirements and evaluation criteria for the Group’s financingand investment in these sectors. The introduction of these criteria helpsto pinpoint all the risks related to certain transactions, ensuring thatonly responsible projects are selected. These policies apply to all Groupbusinesses, entities and subsidiaries around the world. They are publishedand are available on BNP Paribas’ website.Two new sector policies in 2012BNP Paribas decided to set out its responsible commitments with regardto two new sectors: non-conventional oil production from oil sands, andmining.Training in the implementation of sector policiesThe sector policies concern all the Group’s employees. Since theirpublications in 2010 and 2011, they have been the subject of severaltraining campaigns for concerned employees in various countries (riskmanagement, compliance, CSR managers, client relationship managers):more than 1,500 employees were trained in 2012 to identify and processsensitive transactions in these sectors. To meet this growing demandfor training in all regions of the world, the Group developed an experte-learning training course on sector policies, which is available toall employees. Containing a wealth of information, it helps users tounderstand the issues in sensitive sectors, to identify BNP Paribas’response and to know where to obtain information within the Group.Available in seven languages (French, English, Italian, Dutch, Turkish,Polish and Ukrainian), the modules are also accessible to visuallyimpaired people or people with reduced mobility.Impact of sector policiesCoal-fired powerIn order to obtain financing from the BNP Paribas Group, electric powerplants must meet minimum energy efficiency criteria.New power plants that are exclusively coal-fired must employsupercritical technology with a net energy efficiency of at least 43% forprojects in high-income countries and at least 38% in other countries.For other projects, the Group will finance only those that have aCO 2intensity of below 550 CO 2/kWh for high-income countries and660 CO 2/kWh for other countries.For old coal-fired power plants, the Group will finance upgrading projectsonly if the power plant conforms with the IFC Environmental, Healthand Safety Guidelines Directives for thermal power plants and if theresulting net energy efficiency is 1) at least equal to that required for anew coal-fired power plant and 2) increased by at least 10% comparedwith the initial level.Since its coal policy came into force in September 2011, the Grouphas refused to participate in the financing of around ten power plants,representing annual CO 2emissions of more than 80 million tonnes,mainly because of the application of the policy’s energy efficiency criteria.Nuclear powerThe nuclear sector policy mainly addresses questions of security, safetyand protection of people and the environment. It consists of mandatorycriteria relating to the host country, the track-record of industrialcompanies working on the project and the technological characteristicsof the power station itself.To confirm that a nuclear power station project conforms to its policy,BNP Paribas can rely on on-site audits by independent experts who arein charge of obtaining as detailed and reliable as possible information onthe project. The Group asks the client to publish the main conclusions ofsuch expert reports. By comparing their conclusions with the criteria inits policy, the Group can then decide whether to participate in the project.The decision-making process is justified and completely transparent.Under this policy, BNP Paribas has not provided financing for any nuclearpower plant since 2006.The nuclear policy is being reviewed on the basis of stress tests conductedin various countries, drawing on the lessons of the Fukushima accident.Palm oil and paper pulpThese two policies contain precise environmental criteria. Projectfinancing in these sectors is, for example, dependent on the followingrequirements:■ not convert UNESCO World heritage sites or sites in the Ramsar List ofWetlands of International Importance into plantations;■ not transform high conservation value forests (HCVFs) into plantations;■ establish a no-burn policy;■ establish precise and strict peatland management procedures to bedrawn up before exploiting any new plantation.For the palm oil sector, BNP Paribas, a member of the Roundtable onSustainable Palm Oil (RSPO) since 2011, encourages industrial companiesto join this initiative (or equivalent). Under the sector policy, producersmust undertake to achieve RSPO certification before 2015, whileprocessors, traders and refiners must set up policies that require theirsuppliers either 1) to be RSPO-certified by 2015 or 2) to establish thetraceability of their oil supply sources.The Group regularly enters into dialogue with its clients to encouragethem to commit to improving their environmental performance. Thisconstructive approach, based on a precise study of their practices andaction plans, is producing promising results. BNP Paribas has successfullyconcluded several deals in Asia with new clients active in palm oilproduction, while guaranteeing the sustainability of these new clients’activities.72012 Registration document and annual financial report - BNP PARIBAS 415
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2012REGISTRATION DOCUMENTAND ANNUAL
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2012 Registration documentand annua
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1GROUP PRESENTATION1.1 Group presen
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1GROUPPRESENTATION1282012 Registrat
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5RISKSAND CAPITAL ADEQUACY5.6 Count
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6INFORMATIONON THE PARENT COMPANY F
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Page 448: HEAD OFFICE16, boulevard des Italie
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