On September 2, 2019, we visited BNP Paribas Asset Management (BNP Paribas AM), the asset management division of the BNP Paribas Group, the world’s leading financial institution in sustainable finance, and Vigeo EIRIS, a global ESG assessment organization, in Paris, France, where we held overseas stakeholder dialogue, the third such event for NRI.
During this dialogue, Kenji Yokoyama, Senior Corporate Managing Director of NRI and a number of NRI staff together with experts from each company exchanged views on the trends in sustainable global finance and the assessment of corporate initiatives in SDGs.
(Affiliation and position as of September 2019)
Sheila ter Laag
BNP Paribas Asset Management Global Head of ESG Specialist, Sustainability Centre
Sheila ter Laag is the Global Head of ESG specialists within the Sustainability Centre. She is in charge of communicating with clients and externally on the Centre’s innovative research, policy, investment stewardship and industry engagement activities. She also supports investment teams in integrating and reporting on ESG factors. BNP Paribas AM is an important player in this space having a full range of sustainable investment strategies.
Previously, Sheila held roles as Investment Specialist for convertible bonds and European equities, and prior to that, developed the client base in the Netherlands and Belgium. Before joining BNP Paribas AM in 2005, Sheila worked for Fortis Investments in client facing and marketing roles since 1997. She started her career at Banque de Neuflize and holds a Bachelor degree from Oxford University.
Vigeo Eiris Chief Operating Officer
Emilie Béral has 15 years’ experience in the ESG industry. After an experience as a QHSE consultant for Bureau Veritas, she joined Vigeo in 2005 as an ESG analyst specialized on environment and on industrial sectors, before taking over responsibilities for quality and management of research for the Energy & Utilities sector. As Vigeo Rating Research Director, member of Vigeo Eiris Executive Committee, Emilie has then managed for 9 years the Agency research activities, supervising the expansion of the ESG analysts teams, the development of new research lines and the integration of methods and teams of Eiris in 2015 before taking the role of Chief Operating Officer role in 2018. From 2020 on, she is Vigeo Eiris Executive Director in charge of developing the Issuers’ business activities within the Agency on sustainable finance and solicited corporate ratings and in charge as well of Methods, Innovation and Quality for the Group.
Emilie graduated as a Chemical engineer and specialized afterwards on Environmental Measurement Techniques (Chalmers University, Sweden) and in Sustainable Development Management (HEC business school).
Vigeo Eiris Institutional Affairs Manager
Elise Attal is Institutional Affairs Manager at Vigeo Eiris. She joined Vigeo Eiris Sustainable Rating Agency in September 2016 and is managing outreach and stakeholder engagement through the development of strategic partnerships. She is also coordinating public affairs activity related to regulatory affairs monitoring and consultations (EU and National European Member States policy). She also responsible of the Secrétariat of Vigeo Eiris Scientific Committee and the academic partnership programme.
Elise started her career as a junior policy analyst within the French Embassy to the UK producing research papers and policy briefs for the French Treasury.
Vigeo Eiris Head of Sustainability Rating
Nicolas Moriceau-Gomez joined Vigeo Eiris in July 2019 after a 15-year experience in the banking and consulting sector. Nicolas previously worked in particular on audit throughout most of BNP Paribas activities across the world and held various positions within CEO’s Offices on Asset Management and Investment Banking businesses. Nicolas came to Vigeo Eiris from a manager position within a consulting firm servicing diversified banks and insurance companies and is now in charge of structuring and developing Vigeo Eiris’ solicited rating offer to issuers.
Vigeo Eiris Head of Sustainability bonds & Loans
Paul Courtoisier has extensive experience in the field of sustainability bonds and especially in Second Party Opinions. He oversees internal and external coordination of such projects managed by Vigeo Eiris.
Paul is specialized in environmental and stakeholders dialogue issues as well as analysis, definition and implementation of CSR/SRI policies and strategies and led projects through a very diversified range of sectors with particular expertise in agriculture and food, financial institutions and investment industry, waste and water management and public administration.
Paul worked in both public and private sectors and holds a Master degree in public policies and companies’ strategies and a Master degree in Environment.
Vigeo Eiris ESG Analyst, VE Connect Manager
Julie Quiedeville joined Vigeo Eiris in 2013. As an ESG analyst and then as Research Manager, she specialised in the analysis of ESG performance of companies from the Energy & Utilities sectors, notably Waste and Water utilities as well as Oil and Gas supermajors.
In addition to the oversight of analysts’ sector and thematic expertise development, she was in charge as Research Manager to validate methodological developments, answer to ad-hoc client requests and produce sector reports.
As expert of her sectors of specialisation, Julie represented Vigeo Eiris for post-graduate classes and has led transversal projects such as the launch of the VE Connect platform, a dialogue tool between companies rated by Vigeo Eiris and their analyst.
Senior Corporate Managing Director, NRI
Mr. Yokoyama leads initiatives for promoting sustainability and solution for social issues through NRI business, based on middle- and long-term perspective. He is in charge of sustainability, global operation planning, corporate communication, administration, operations and control, and procurement, accounting and finance.
Other participants from NRI
Kenji Honda, Manager of Sustainability & Responsibility Group
Shigeru Fujisawa, Manager, Sustainability & Responsibility Group
Hiroshi Ishida, Executive Director, Caux Round Table Japan
CSR Dialogue with BNP Paribas Asset Management
How does BNP Paribas AM approach sustainable management or sustainable strategies?
Ms. Sheila ter Laag :
BNP Paribas AM has been committed to initiatives in the area of sustainability since 2002, and last March launched a Global Sustainability Strategy setting out the roadmap to make all the assets we manage sustainable by the end of 2020 with the strong support of our top management. The strategy is to ensure sustainable long-term investment returns for our customers through sustainable investment.
Our intention is to favour those companies whose businesses are prepared to adapt to a sustainable low carbon economy without plundering the earth’s resources. As a company we are keen on training all our staff, including those not directly involved with investments, to adhere to our strategy, and we also communicate with our clients on the implementation of sustainable investing in our product range.
What kind of organization does BNP Paribas AM have for executing its sustainability strategy?
Ms. Sheila ter Laag :
BNP Paribas AM made the commitment to seek to manage the 427 million euros it had in assets under manage as of June 30, 2019 in a sustainable way. The Sustainability Centre, established within BNP Paribas AM in 2017, will play a vital role in executing this sustainability strategy.
At present, the Sustainability Centre has 24 ESG specialists with an average experience of over 10 years on average. The Sustainability Centre staff has experience in diverse business areas including consulting, public policy, NGOs, international organizations, and business.
Its main role is to foster an environment that will enable BNP Paribas AM to invest in entities that have undergone an ESG analysis. The Sustainability Centre, which depends on the Sustainability Committee chaired by the CEO, oversees sustainability globally and, is at the centre of a framework for deploying sustainability within the various business divisions such as the investment teams, sales teams and communication and marketing. The centre prepares education and training programs and ensures employees have a sound understanding of sustainable investment. We seek to enable our employees to engage in their day-to-day business with sustainability in mind.
Going forward, our goal is to increase the number of companies we analyse to 14,000 global corporations. To achieve this, we have a team of specialised ESG analysts, and we are seeking to enhance the sustainability skills of our investments teams. Today we also cooperate with academia through our sponsorship of GRASFI, the Global Research Alliance for Sustainable Finance and Investment, made up of 25 global research universities, each with expertise in this emerging field.
What kind of framework and processes does BNP Paribas AM have for corporate ESG assessments in sustainable investment?
Ms. Sheila ter Laag :
As described in our Global Sustainability Strategy document,for us sustainable investment incorporates four pillars:
- ESG integration across all investments to improve risk-adjusted returns.
- Stewardship（Voting, Engagement) to protect company value; influence sound regulatory framework; promote better social and environmental outcomes.
- Responsible business conduct expectations and product-based exclusions to avoid reputational, regulatory and stranded asset risk.
- Forward-looking Perspective: the “3Es” to enhance investment decision-making; preserve long-term market performance by monitoring our portfolios and investee companies from the viewpoint of Energy Transition, Environmental Sustainability, and Equality & Inclusive Growth.
Thank you very much for your valuable views. Your explanation has helped us to understand the sustainable strategy of a financial institution that is leading the world in the area of sustainable finance, and its view of investee companies. This information will also serve as a valuable reference in the education and training of our officers and staff. We at NRI also intend to continue to raise the awareness of our officers and staff. We would like to put more effort into promoting initiatives for CSV (Creating Shared Value) and respond to the challenge of solving social issues through NRI services.
CSR dialogue with Vigeo Eiris
As an ESG assessment organization, what kind of information do you intend to focus on in the ICT industry in the future?
Ms. Elise Attal:
In our rating framework, we at Vigeo Eiris focus on six areas: human rights, human resources, business behavior, corporate governance, the environment, and community involvement. Each area is divided into a number of sustainability criteria, 38 in total.
In the ICT industry in particular, not all the 38 generic criteria from our ESG assessment methodology are applied : based on the materiality assessment carried at sector level, we select a number of criteria to activate. In the ICT sector, we pay considerable attention in particular to the following emerging issues:
- The issue of privacy
- The decline in employment due to the emergence of AI – Artificial Intelligence (not only negative factors such as unemployment but also positive factors such as new job creation).
Mr. Nicolas Moriceau-Gomez:
Our approach to assess companies’ performance for each criterion under examination is to systematically analyze the following three components.
- Leadership: how does a company management engage in this specific issue, through specific policies?
- Implementation: is a company implementing concrete measures and initiatives, and to what extent do they cover the issues at stake? Also to what extent does it incorporate it in the scope (business area)?
- Results: in this component, we assess companies’ quantitative results (KPIs) as well as trends over the years. We also consider under the results’ analysis the controversies faced by the company, based on feedbacks from stakeholders and we analyze companies ‘responsiveness to controversies as by dealing with negative aspects, a company can eventually win the trust of stakeholders and may even gain business opportunities.
What methods does Vigeo Eiris use to assess CSV (Creating Shared Value) activities in a company you are to assess?
Ms. Emilie Beral:
At Vigeo Eiris, we assess a company capacity to create shared value by assessing the products and services it brings to the market. We classify the company’s products and services into nine business areas and match it on a matrix according to applicable SDGs. We call this research line Sustainable Goods & Services (SGS) research.
More than anything, our SGS research focuses on the viewpoint of how the actual behavior of a company affects society through its products and services.
How should a company view the SDGs?
Ms. Elise Attal:
When a company takes action under an SDG framework, Vigeo Eiris first divides criteria into the four categories of practices, prosperity, people and planet, and then sets eight themes: business ethics, governance, healthy lives, development tools, social welfare, human capital, climate change and natural capital.
By organizing information according to whether a company’s behaviors, products, and services contribute to these eight themes in this way, the social issues raised in the SDGs become more specific to business areas.
Ms. Julie Quiedeville:
Vigeo Eiris uses three approaches to measure a company’s contribution to the SDGs.
- Acting responsibly
We accurately identify the positive and negative impacts a company has on society in the course of performing business. We ask that company to take optimal measures for preventing and minimizing negative aspects in particular. We also ask the company to foster the development of a corporate culture that practices compliance and adopts a sincere attitude.
- Mitigation and remediating harm
Furthermore, to avoid disputes with stakeholders, our methodology includes a screening to determine whether the company is exposed to critical or recurrent controversies as well as its responsiveness to them. The assessment also takes into account the fact that companies are involved in products or services considered as having harmful impact on stakeholders and on the company’s capacity to contribute positively to the SDGs.
- Finding opportunities: the assessment finally takes into account companies’ ability to create new sustainable opportunities by being involved in products and services playing a role in solving social issues required by the SDGs.
Thank you very much for your valuable views. We realized once again that ICT companies must understand CSV and SDGs correctly, and integrate these into sustainability management. After formulating a sound policy, we would also like to address issues related to privacy and human rights which are specifically significant for the ICT industry, and we would like to take initiatives in regard to opportunities in positive aspects after drafting a story and priority items for proposing social solutions that NRI know-how can offer.
(Published in 25, Mar. 2020)