BNP Paribas Fund Arm to Limit Coal Investment
March 14 2019 - 01:37PM
Dow Jones News
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 maitane.sardon@dowjones.com
(END) Dow Jones Newswires
March 14, 2019 13:22 ET (17:22 GMT)
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