Assets invested by BNP Wealth Management through socially responsible investments (SRI) and impact investing have grown by 50% a year since 2010, and currently stand at €6.5bn. They cover sectors as varied as energy efficiency, water treatment, social entrepreneurship and green bonds.
BNP Paribas Wealth Management’s SRI and impact investing segment was launched in 2007 to respond to investors’ growing interest in combining financial performance with social and environmental concerns, and has built a range of products based on a strategy that combines open architecture selection and innovation.
Elisabeth Karako (pictured), head of corporate social responsibility (CSR), individual philanthropy and SRI offerings, said that the international economic and financial context, the performance record of responsible products, as well as the major future challenges addressed during Responsible Investment Week ahead of the 2015 Paris Climate Conference (COP 21), are strengthening investor appetite for these products.
To support this growing demand, diversify its product range and identify the best products on the market, from “best-in-class” funds to thematic funds and responsible products (impact investing products, structured products, etc.), BNP Paribas Wealth Management has rolled out a rating tool, SRIness Rating, which evaluates SRI funds by taking into account the quality of the extra-financial investment process and the responsible approach of the asset management firm.
“We observe a keen interest in SRI products amongst our European clients, especially in Belgium, the Netherlands and France,” said Eléonore Bedel, who is in charge of SRI and impact investing at the bank’s wealth management arm.
According to Bedel, responsible products are an expanding market and a major source of innovation in the US market where investors are finding responsible investments increasingly appealing with BNP Paribas’s retail arm in the US market Bank of the West Wealth Management developing a platform of responsible products to meet this demand.
BNP Paribas Wealth Management, said Bedel, will continue to expand its range of responsible products to include new social and environmental impacts as related financial products arrive on the market.
BNP Paribas Wealth Management was the first private bank to sell the first structured index-linked green bond, a 10-year play linked to the Ethical Europe Equity Index developed by German index provider Solactive, which was launched by the World Bank and BNP Paribas in 2014 raising nearly €100m. In Belgium, BNP Paribas Fortis launched an open architecture SRI fund-of-funds in 2014 with a minimum initial investment requirement of €10,000. It has already gathered nearly €1bn in inflows.
In the US market, UBS Wealth Management Americas partnered with the French bank to distribute the index-linked green bond structured notes to US retail investors. Speaking to SRP earlier this year, Jean Eric Pacini, head of structured products sales, equities and derivatives at BNP Paribas in London, said that BNPP has developed variations of the index-linked green bond for private banking and wealth management clients.
Pacini said that, depending on the target market, the product features may vary. He said that green bonds have become a core investment theme that reflects the broader mindset of the bank and that the hope would be to have them available in all markets that BNP covers.
According to Pacini, the bank is leveraging its existing sales and structuring capabilities to cover the SRI segment, because it is effectively tapping into the same client base as with any of the bank’s other structured solutions.
The green bonds linked to the Solactive Ethical Europe Equity index have sold more than €2bn, according to Pacini.
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