BNP Paribas Asset Management has published its Equality Roadmap, which it calls its pathway to ‘addressing inequality’ across its investments, stewardships, and operations.
The firm said in a statement that Equality Roadmap was the third in its ‘3Es’ series, following its Biodiversity Roadmap and its Net Zero Roadmap, which were respectively published in 2021 and 2022.
Sindhu Janakiram, ESG analyst and equality lead at the company, said: “Unlike climate change, there is no Paris Agreement for inequality. In this roadmap, we explain how inequality underpins and reinforces social risks, and how it threatens stability, growth, and long-term investment. As an asset manager, we seek to deliver sustainable long-term returns.”
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He added: “By ‘sustainable’, we mean both returns that can be sustained over the long term and returns that are in balance with society and the environment. These two meanings of sustainable are inseparable – we cannot deliver long-term returns without helping to achieve the energy transition, healthy ecosystems, and greater equality in our societies.”
The 43-page roadmap states that it establishes a framework to evaluate the impact of corporate actions on inequality. The firm also believes it can help investors shape behaviours that promote equality and social inclusion. With this framework, BNP Paribas Asset Management said it will assess how companies operate, how their governance works, and how ‘social’ their products and services are. After this, it said would then promote best practices and identify areas for improvement.
It is also stated within the roadmap that it is built on six pillars: a forward-looking perspective, responsible business conduct (RBC), ESG integration, stewardship, sustainability in its product range, and ‘walking the talk’.
Perhaps the most-interesting aspect of the roadmap is Responsible Business Conduct (RBC), which BNP Paribas Asset Management defined as: “[…] a constructive role to play to help companies transition their business models onto a more sustainable path. But we do also exclude companies from our actively managed portfolios where we believe the company’s behaviour or business model poses unacceptably high risks to investors, society or the environment.”
It added: “We view our Responsible Business Conduct policy as an enhanced risk management tool that can help avoid reputational, regulatory and stranded-asset risk. Company and industry exclusions are one of the oldest – and most debated – elements of sustainable investment. […] Although we view RBC exclusions as a last resort, we do believe they are important, as they uphold international norms as standards for corporate behaviour and incentivise compliance with them, identifying lines that must not be crossed; and protect our portfolios from a wide variety of risks, including asset stranding, stemming from corruption, human rights violations and environmental degradation.”
The firm said that it was adopting the United Nations Global Conflict (UNGC) and OECD MNE guidelines, alongside sector-specific requirements as the baseline for its RBC standards.
A key aspect of this, it said, would be to track the existence and severity of norms-based controversies, using a data provider that tracks compliance with the UN Guiding Principles.
