BNP Paribas (EU:BNP)
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By Maitane Sardon
BNP Paribas Asset Management, the fund arm of BNP Paribas SA (BNP.FR), will stop investing in companies that derive more than 10% of their revenue from mining thermal coal or account for more than 1% of total global coal production, it said Thursday.
The step will come into effect at the start of 2020 and affect less than 0.25% of its portfolio of 399 billion euros ($451 billion).
BNP Paribas Asset Management said the measure will apply to all its actively managed open-ended funds and will become the default policy for other accounts it runs on behalf of institutional investors.
Power generators with carbon intensity above the 2017 global average of 491 grams of carbon dioxide per kilowatt hour of electricity generated will also be excluded from portfolios, the asset manager said.
"From an investment perspective the outlook for the coal industry looks increasingly uncertain as less carbon-intensive fuel sources, in particular renewables, become ever-more competitive," said Mark Lewis, Global Head of Sustainability Research at BNP Paribas Asset Management.
However, the group will consider exceptions for miners and power generators that, within a two-year period, make "credible commitments" to reducing their coal-based activities to levels consistent with the Paris climate-change agreement.
"We are trying to exclude companies that are clearly engaged in coal activities to an extent which is incompatible with the Paris Agreement but to allow for exceptions where companies are trying to change their business models," Mr. Lewis said.
He said there are companies that are "trying to change their business models as the pressure ramps up," although he declined to be specific.
BNP Paribas said the move is part of its objective of aligning portfolios with the Paris Agreement goal of keeping the global rise in temperature below 2 degrees Celsius above pre-industrial levels.
Write to Maitane Sardon at firstname.lastname@example.org
(END) Dow Jones Newswires
March 14, 2019 13:22 ET (17:22 GMT)
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