Could you introduce yourself and tell us about your role at BNP Paribas Asset Management (BNPP AM)?

I joined BNPP AM in 2016. I am Head of the Quantitative and Index team. Our team includes more than 45 professionals based in Paris, Munich and Milan, with various areas of expertise (portfolio management, structuring, sales and marketing). We offer a wide range of market access (ETFs1 -/funds/index mandates) and smart beta solutions (single and multi-factor strategies) covering various asset classes.



How prevalent is sustainability in our industry nowadays?

WE BUILT
A MECHANISM THAT
REDUCES BY 50% THE
CARBON FOOTPRINT
OF OUR PORTFOLIOS

When I joined, there was a growing appetite from our clients. New regulations were introduced, bringing more sustainability into our portfolios, but also our clients' ones. We were well positioned to address this transformation - BNPP AM had developed the first low carbon ETF, in 2008, to offer a product that helped our clients decarbonize or minimize the carbon footprint of their portfolios. This pioneering ETF has grown from strength to strength, reaching EUR 844 million of AUM this year2. I progressively realized that this move towards ESG3 was going to be a one-way journey, for us and for our clients. At BNPP AM, we wanted to be driving the change, in terms of thinking ahead, in our position, our product offering. We integrate ESG in our portfolios, while lowering their carbon footprint, aiming toward better ESG ratings. For example, on the quant side, we adopted a similar approach for our fixed income and equity strategies. We built a mechanism into our portfolio construction that allows us to reduce the carbon footprint of our portfolios by 50% compared to their investment universe and exclude 20% of the worst ESG rated companies. Since 2019, in collaboration with the Sustainability Centre4 and specialized ESG index providers, we have launched a range of innovative thematic ESG ETFs focused on circular economy and the blue economy. Through the development of these products, and through obviously, the day-to-day work we do with our clients, we contribute to creating awareness around these new themes, which are very important from an environmental and climate risk perspective.

WE BUILT
A MECHANISM THAT
REDUCES BY 50% THE
CARBON FOOTPRINT
OF OUR PORTFOLIOS

The
interview

How do you bring long term sustainable investment returns to our clients as “the sustainable investor for a changing world”?

WE ARE
MORE AND MORE AWARE
OF THE IMPACT CARBON
EMISSIONS AND POLLUTION
HAVE ON OUR DAY-TO-DAY
LIVES

I've been in this industry for more than 25 years and for a long time, I've heard clients saying “I'm not investing in ESG because it's always underperforming the market”. Then clients came to realize that by not taking into account extra financial criteria in the selection of stocks, you're adding risk into your portfolio and you might also be adding volatility to it. The valuation of listed companies could decrease in a very violent manner, due to controversies, the fact that as regulation is evolving, policymakers are more likely to fine companies not respecting environmental criteria… As an investor, do you want to invest into those companies that at some stage will run the risk of losing a lot because they didn't think about the environmental aspect into their day to day decision? So the whole purpose is to really demonstrate to our clients that they're not going to lose in terms of performance, quite the contrary, by adding ESG consideration into their portfolio construction, while bringing awareness around these specific thematics. Because we are more and more aware of the impact carbon emissions and pollution have of our day to day lives. As a parent, I want to help build a better world for our children, and I’m convinced that proposing and investing into companies that are the best in class and that are really putting ESG and environmental consideration at the center of their decision making process is key.
We are part of an overall commitment from the BNP Paribas Group and their clients. We work hand in hand on a number of key topics, such as new investment themes. For example we have developed a full range of innovative solutions, in partnership with BNP Paribas CIB, and we have recently launched a European climate fund that includes a mechanism to offset the fund’s carbon footprint. And it has a significant impact. For example, EUR 500 million raised in the fund would avoid the equivalent of 30,000 diesel cars running for a year.
It’s reassuring to see this alignment between all entities of BNP Paribas Group for our common clients gives credibility to what we do at BNPP AM as well, because every action taken by the group has a positive impact on all of us.

WE ARE
MORE AND MORE AWARE
OF THE IMPACT CARBON
EMISSIONS AND POLLUTION
HAVE ON OUR DAY-TO-DAY
LIVES

How does being part of a leading banking group impact your work as an asset manager?

EUR 500M IN
A BNP Paribas
CLIMATE FUND HELPS
AVOID AN EQUIVALENT
OF 30,000 DIESEL CARS
running for A YEAR

We are part of an overall commitment from the BNP Paribas Group and their clients. We work hand in hand on a number of key topics, such as new investment themes. For example we have developed a full range of innovative solutions, in partnership with BNP Paribas CIB, and we have recently launched a European climate fund that includes a mechanism to offset the fund’s carbon footprint. And it has a signicant impact. For example, EUR 500 million raised in the fund would avoid the equivalent of 30,000 diesel cars running for a year.
It’s reassuring to see this alignment between all entities of BNP Paribas Group for our common clients gives credibility to what we do at BNPP AM as well, because every action taken by the group has a positive impact on all of us.

EUR 500M IN
A BNP Paribas
CLIMATE FUND HELPS
AVOID AN EQUIVALENT
OF 30,000 DIESEL CARS
running for A YEAR

What is the specificity of BNPP AM?

I feel like a lot has been done at the company level, like our Global Sustainability Strategy or the creation of the Sustainability Center. But at the core of everything, our people are driving this change. There is a very strong commitment of the firm towards their employees. Talented people, expert in their field, bringing aspiration and motivation around them, making others willing to know more about sustainability, about the impact we could make as an asset manager, towards a better world. Our ESG Champions embodies that idea because they always come up with new ideas and get everyone involved into the ESG process. It is very inspiring professionally, but also personally.

AT THE CORE OF EVERYTHING, OUR PEOPLE
ARE DRIVING THE SUSTAINABILITY CHANGE

1 Exchange Traded Funds
2 As at 31 December 2020
3 Environment, Social and Governance
4 In 2017, we created the Sustainability Centre, which is now a 25-person, multi-disciplinary expert group which provides investment teams with sustainability research, analysis and data. The Sustainability Centre also supports teams in developing sustainability-themed products and fully integrating sustainability-related risks and opportunities into investment strategies.

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