UN Sustainable Development Golas supported by the Bank under environmental responsibility
Managing environmental responsibility
Care for the natural environment is one of the key commitments of BNP Paribas Bank Polska S.A. Therefore, since 2019, we have been implementing the “Bank of Green Changes" programme, which aggregates the Bank's initiatives with regard to the UN's environmental Sustainable Development Goals (SDGs).
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Commitments of the Bank with regard to environmental responsibility – one of the four major areas of our CSR and Sustainability Strategy
- Enabling our Customers to transition to a low-carbon economy respectful of the environment
- Reducing the environmental impact of our operations
- Advancing awareness and sharing of best environmental practices
To achieve the above, the Bank:
- Limits financing high-emission sectors,
- Supports the energy transition by offering „green” products and services,
- Limits the negative impact of its operations on the environment,
- Promotes environmentally friendly attitudes among its employees and Customers,
- Establishes partnerships and promotes climate justice.
The Sustainability Area
The units responsible for sustainability and ESG initiatives (environmental, social, governance) until the end of 2021 were: the CSR and Sustainability Office and the Office for Sustainability Programmes. On January 1, 2022, the Sustainability Area began operations. The creation of this new unit emphasises the role and commitment of the Bank with regard to building a sustainable economy. Jarek Rot, the Chief Sustainability Officer, became the Executive Director of the new Area.
For more information, see the Management Foundations chapter, ESG Risk Management section.
Our commitments lead to the implementation of the UN’s global Sustainable Development Goals.
In 2021, we continued the implementation of the Fast Forward Strategy for 2018-2021 and its key component, the CSR and Sustainability Strategy. The Management Board supervised the associated initiatives. Simultaneously, in 2021, we developed a strategy for 2022-2024, which will place great emphasis on sustainability. The strategy was published in the first quarter of 2022. The Bank’s environmental commitments reflected in the new strategy include:
- Further development of sustainable financing (including green financing, Sustainability Linked Loan products, green bonds – sustainable investment products),
- Strengthening ESG risk management practices,
- Reduction of CO2 emissions,
- Reduction of energy, water and gas consumption,
- Development of an eco-fleet,
- Reduction of resource consumption (including paper),
- Strengthening climate education.
Climate risk management
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The Bank analyses the possible impact of trends related to climate change – we identify opportunities and threats to our operations and development prospects. To this end, the Bank distinguished climate-related risks and opportunities in the short, medium and long term.
- The high energy consumption of the Polish coal-based industry (over 70% of energy production is dependant on coal) reduces its competitiveness on the world market.
- Construction in Poland is obsolete and characterised by high energy consumption, which generates a large demand for energy.
- Rising energy prices lead to a decline in the competitiveness of the economy and a deterioration of living standards.
- Climate change (particularly droughts) disrupts business operations.
- The Bank’s Customer portfolio contains a significant number of entities that are sensitive to climate change, e.g. to rising energy prices (energy-intensive companies) or droughts (agri-food sector).
- The Bank’s Customers may be affected by the economically unfavourable effects of climate-protection regulations (especially in the short and medium term).
- Regulatory uncertainty as to possible future mechanisms which may affect the activity of enterprises (e.g. emission charges, waste management, additional taxes).
Short and medium-term perspective
- New global/EU/local regulations which necessitate the implementation of assessment and reporting systems for climate-related operations of the Bank and its Customers.
- New risk of market-share loss if the Bank implements more stringent requirements than its competition.
- Operational risk related to investment projects focused on innovative, environmentally beneficial solutions due to the relatively early development stage of the new technologies.
Long-term perspective
- The Agro Customer segment is among the industries most exposed to climate risks, which increases the Bank’s credit risk.
- The disruption of Customers’ activities and liquidity in the corporate segment due to climate change and high temperatures as well as the need to limit exposure to all high-emission industries affects the financial stability of enterprises.
- Moderate increase in demand (companies, individuals) for energy transition investments. In the medium and long term, this demand is likely to increase in the wake of rising energy prices and the need to switch to cheaper energy sources and improve energy efficiency. Commercial banks will substantially contribute to financing these investments.
- Increased role of financial institutions in the transfer of national and EU funds for energy transition. The Bank’s experts estimate that c. 30% of national and EU funds will pass through financial institutions.
- Implementation of the European Union’s “Farm to Fork” policy which supports sustainable food production.
Short-term perspective:
- Strengthening the Bank’s reputation and brand.
- Using the Bank’s unique engagement in climate-related issues as a distinguishing factor on the market.
Medium-term perspective:
- Introduction of new green products due to a strong position as both a beneficiary and intermediary of EU funds for energy transition and climate change.
Long-term perspective:
- Development of the business and assumption of a leadership role when it comes to a positive transformation of the economy, while maintaining profitability.
Method of presenting indicators:
- For the purposes of the present analysis, BNP Paribas Bank Polska S.A. has assumed that the short-term perspective is 1 year, the medium-term perspective is 1 – 5 years, while the long-term perspective is over 5 years.
The BNP Paribas Group is committed to aligning its loan portfolio with global climate objectives by supporting the objective described in Article 21(c) of the Paris Agreement: „Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”
The Bank monitors the level of ESG (environmental, social and governance) risks among its Corporate Customers. Additionally, as a member of the BNP Paribas Group, the Bank focuses particularly on financing sectors that are considered sensitive in terms of ESG risk.
As a responsible financial institution, the Bank consciously limits its involvement in industries deemed harmful and inconsistent with the principles of sustainable development. Simultaneously, it supports eco-investments and finances renewable energy sources.
Sectors related to environmental, social and governance risks are described in the Management Foundations chapter, ESG Risk Management section.
The coal energy sector is a good example. Since 2015, the Bank has not provided new financing to coal-based energy groups. In 2017, we ceased financing the construction of new coal power plants and coal mines. Since then, the Bank has only supported enterprises from the coal-based energy sector that are transitioning to other energy sources. In 2019, the Group adopted deadlines (2030 for the European Union and OECD; 2040 for the rest of the world) for the Bank’s cooperation with Customers involved in coal-based energy, mining and coal infrastructure. They will no longer be able to maintain a relationship with the Bank if they continue to use coal.
The Bank has pledged that it will not commence cooperation with Customers if coal-related activities generate over 25% of their revenues. In addition, the BNP Paribas Group maintains its commitment to terminate cooperation with any Customer who chooses to depend on coal for their new production activities. Moreover, all current and potential Customers of the Bank operating in the harmful industries are informed about our CSR policies and receive an explanation of the analysis process.