30 June 2020
In August 2018, Jane Ambachtsheer stepped down as chair of responsible investment at consultancy Mercer to take on the position of global head of sustainability at BNP Paribas Asset Management (BNPP AM).
The change of role saw her move from advising companies about sustainability strategies, to getting involved in the finer details of developing and implementing them.
"A lot of work at Mercer was coming up with the strategy, but not going through the nitty-gritty of implementing it," says Ambachtsheer. "There's a lot of heavy lifting involved in creating new processes and governance, which is the hard stuff. Writing the strategy is easy in comparison!"
She says she was attracted to BNPP AM because of the strength of its commitment to becoming a sustainable asset manager.
"The sustainability centre and sustainability work had been a bit separate from the day-to-day work of managing money," she adds. "I was brought in to push our ambition and connect sustainability with the rest of the organisation."
Nearly two years on, the work of Ambachtsheer and her rapidly growing team is already bearing fruit. In March 2019, the asset manager launched its Global Sustainability Strategy, through which it committed to incorporate sustainability considerations across all of its investments, covering all asset classes and geographies, by the end of 2020.
The strategy has five pillars, the first four of which are applied across its investment processes:
1) ESG integration (a process that is guided by formal ESG Integration Guidelines and overseen by an ESG Validation Committee);
3) investing in companies that display responsible business conduct (ie. exclusions); and
4) a 'forward-looking focus' on three key issues underpinning long-term economic performance – energy transition, environmental sustainability, and equality and inclusive growth, which it refers to as the "Three Es"
5) a €60 billion 'Sustainable +' range of thematic, SRI and impact funds.
With regards to the energy transition, it has focused on the carbon intensity of its investments, to help meet BNPP AM's target of aligning its investments with the Paris Agreement by 2025. BNPP AM released a new, stricter coal policy in March 2019, making it the first asset manager to base its exclusions on carbon intensity rather than revenues.
To implement this ambitious strategy, BNPP AM initiated a firm-wide "sustainable transformation" programme, co-sponsored by Ambachtsheer, which recently reached completion. The programme, which had 15 work streams at its height, worked to embed sustainability and ESG across all operations, including all investment strategies and research, engagement activities, product development and training.
The sustainability team can claim numerous achievements and milestones. The size of the team has grown dramatically, with 15 members appointed since Ambachtsheer joined, bringing the total to 25. New arrivals include respected climate change and utilities researcher Mark Lewis as global head of sustainability research, and heads of stewardship in Asia (Gabriel Wilson-Otto) and Americas (Adam Kanzer).
This expansion has allowed the number of companies covered by its proprietary ESG scores to grow from 3,000 to 12,000, she said.
Meanwhile, more than 60 'ESG Champions' have been appointed across investment teams.
Ambachtsheer was the first woman to join the investment committee, and says it is significant that the sustainability function has a seat at the table. She has worked with the committee to finalise the firm's sustainable investment philosophy, Sustainable Investment Beliefs (which are included in the Global Sustainability Strategy), and ESG Integration Guidelines.
To help implement the guidelines, an ESG Validation Committee was established, which she co-chairs. In 2019, 295 investment strategies and 945 products went through the ESG Validation Committee. As a result, in September, BNPP AM had the confidence to announce that its flagship range (BNP Paribas Funds) was 100% sustainable.
BNPP AM is ramping up its engagement with policymakers. In September 2019 it launched a public policy stewardship strategy, which Ambachtsheer believes is the first of its kind.
"Policymakers need to hear more from the investment community about the importance of effectively implementing the Paris Agreement," she says. "We are committed, as 'future makers', to use our influence to push for outcomes."
The €408 billion asset manager is also becoming more actively involved in climate-related shareholder resolutions. Its resolution with Chevron got 53% shareholder support, which Ambachtsheer suggests is "unheard of for a first-time climate resolution when management wasn't supportive".
The firm also filed similar climate lobbying resolutions with United Airlines, Delta and ExxonMobil.
In addition to driving BNPP AM's sustainable investment work, Ambachtsheer oversees the firm's internal sustainability work, with a focus on reducing carbon emissions, waste, driving employee training & engagement and supporting disadvantaged youth. She also plays an active role in the industry, including as a member of the Task Force on Climate-related Financial Disclosures and a trustee at CDP. EF