BNP Paribas AM, the asset management subsidiary of the BNP Paribas Group, has just published an update to its responsible investment policy. The asset manager has indicated that it will end its bond investments in companies in the oil and gas sector, in recognition of the scientific imperative to halt the expansion of oil and gas production (1). Reclaim Finance welcomes this measure, which brings the subsidiary into line with the practices of BNP Paribas. The NGO calls on the BNP Paribas Group to now apply the same approach to its other subsidiaries, including BNP Paribas Cardif, and for the Crédit Agricole Group to do the same, starting with its subsidiary Amundi.

BNP Paribas Asset Management has announced a new version of its oil & gas restrictions, indicating that it will no longer invest in bonds issued on the primary market by oil and gas exploration and production companies. This makes BNP Paribas AM the first major asset manager in the world to adopt such a measure (2).

"This is a historic step that confirms and reinforces the transformation underway within the BNP Paribas Group. For the first time, a giant in the asset management sector is acknowledging the scientific imperative of halting the expansion of oil and gas production by taking action on bond investments. This measure is crucial, as bonds are one of the most important modes of financing for companies in the fossil fuel sector today." Lara Cuvelier, Sustainable Investment Campaigner at Reclaim Finance

With almost EUR 600 billion in assets under management, BNP Paribas AM is already one of Europe’s top five asset managers. The potential takeover of AXA IM, announced for 2025, would propel BNP Paribas AM into 2nd place in Europe, behind Amundi and ahead of Legal and General Investment Management. This new measure on bonds issued on the primary market could therefore have significant consequences, as these issues are the main source of financing for companies developing new fossil fuel projects. (4).

This decision, which has been applied to both corporate and investment banking as well as asset management, but which has yet to be applied to the insurance subsidiary BNP Paribas Cardif, is an important turning point, given the close ties between BNP Paribas and the oil and gas majors (5). BNP Paribas AM, for example, was involved when TotalEnergies raised US$ 4.25 billion on the bond market last April (6).

Reclaim Finance urges other financial players to follow suit, in particular the Crédit Agricole Group, which has applied this measure to its banking activities but not yet to its asset management activities carried out by Amundi.

While this measure represents a major step forward in the fight against climate change, it should be noted that it does not extend to companies involved in transporting oil and gas, or the development of new liquefied natural gas (LNG) export terminals, which are also excluded from the International Energy Agency’s Net Zero by 2050 scenario, which outlines a trajectory to limit global warming to 1.5°C.

Notes:

1. BNP Paribas Asset Management, Responsible Business Conduct Policy, November 2024 
2.  BNP Paribas is the 4th French asset manager to take such a step, following small and medium-sized investors such as Ofi Invest AM, Tikehau Capital and Eurazeo. 
3. Reclaim Finance, BNP Paribas and Crédit Agricole say no to bonds for the oil and gas sector, Mayi 2024 
4. Of the 166 transactions in 2024 involving banks and aimed at companies developing new fossil fuel projects, 143 were bond issues. See the Reclaim Finance report here. 
5. The corporate and investment bank was among the top five biggest financiers of BP, Eni, Shell, TotalEnergies and Saudi Aramco (between 2021 and 2023), and Group Chairman Jean Lemierre sits on the board of French major TotalEnergies. 
6. Reclaim Finance, Who are the investors funding TotalEnergies? July 2024 

This press release was originally posted on Reclaim Finance's website.