ESG investment initiative of the year, Europe: BNP Paribas Asset Management

BNP Paribas Asset Management (BNPP AM) has snapped up ESG investment initiative of the year for its "refreshing focus on social issues" in its Inclusive Growth strategy.

The strategy, which looks to invest in companies with an 'inclusive growth mindset', selects 40-60 companies from the MSCI World universe, based on five main pillars of action:

  • Creating safety nets for the most fragile: decent pay, job security, profit sharing, pensions and healthcare schemes;
  • Investing in social mobility: training, broadening access to education;
  • Giving access to primary goods: being able to give access to healthcare, water, sanitation, energy, housing, quality products and affordable services for all;
  • Respecting business ethics: corporate governance, transparency on tax practices, alignment of lobbying practices with public claims;
  • Promoting decarbonisation: energy efficiency, clean electrification, respecting the natural limits of the planet.

Delphine RiouBNPP AM said that, on average, its strategy uses 14 social metrics, 4 governance metrics and 4 environmental metrics per sector, as well as screening out those involved in controversies across the five thematic 'pillars' listed above. The final 'Inclusive Growth' score from 0 to 100 emphasizes the predominance of the social dimension with a 65% weighting, while governance weighs 20% and environment 15%. BNPP AM said its ESG analysts and portfolio managers engage with companies for which social data is not available.

Environmental Finance Awards judges said the strategy has a "refreshing focus on social issues and inequality in a sector that is too often focused on a specific social issue – [such as] aging of the population, well-being or education. Addressing broader social issues while considering the different sources of inequality allows for a greater total social impact."

Delphine Riou, an ESG analyst and Inclusive Growth lead at BNPP AM, commented: "It is really important to emphasise the need for a just transition alongside environmental indicators.

"We cannot leave people behind that are affected by a changing business model."