BNP Paribas EARTH Trust

Product Name

BNP Paribas EARTH Trust

Issuer

BNP Paribas Asset Management Australia Limited

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale, Institutional

Certified Since

2021

Asset Classes

International equities

Markets

New Zealand, Australia

Investment Approaches

Sustainability themed, ESG Integration

It Includes:

  • Riaa icons 32 Green property
  • Riaa icons 11 Impact investments
  • Riaa icons 10 Renewable energy and energy efficiency
  • Riaa icons 15 Social and sustainable infrastructure
  • Tree green background Sustainable land and agricultural management
  • Riaa icons 13 Sustainable transport
  • Riaa icons 31 Sustainable water
  • Investment2 More sustainable companies

It has some level of screening for:

  • Riaa icons 33 Fossil fuels
  • Riaa icons 34 Logging
  • Riaa icons 50 Nuclear power
  • Riaa icons 35 Tobacco

It fully excludes:

  • Riaa icons 52 Human rights abuses
  • Riaa icons 38 Labour rights violations

Overview

The BNP Paribas EARTH Trust invests into BNP Paribas Funds Environmental Absolute Return Thematic Equity (“Underlying Fund”), a sub-fund of the Luxembourg-domiciled SICAV, BNP Paribas Funds (“BNP Paribas Funds”). The Underlying Fund invests in companies that are providing solutions to environmental challenges through their products, services or processes broadly related to energy, material, agriculture and industrial markets whilst going short companies that fail to adapt their business models to the transition towards more sustainable practices. This includes, but is not limited to, renewable energy production across various technologies, raw and intermediate materials that facilitate the green revolution, natural capital sectors like water, land and forestry; sustainable food production as well as industrial and building efficiency, alternative transportation and automation.


Description


The BNP Paribas EARTH Trust invests into BNP Paribas Funds Environmental Absolute Return Thematic Equity (“Underlying Fund”), a sub-fund of the Luxembourg-domiciled SICAV, BNP Paribas Funds (“BNP Paribas Funds”). The Underlying Fund invests in companies that are providing solutions to environmental challenges through their products, services or processes broadly related to energy, material, agriculture and industrial markets whilst going short companies that fail to adapt their business models to the transition towards more sustainable practices. This includes, but is not limited to, renewable energy production across various technologies, raw and intermediate materials that facilitate the green revolution, natural capital sectors like water, land and forestry; sustainable food production as well as industrial and building efficiency, alternative transportation and automation. The Portfolio Managers apply BNPP AM’s Global Sustainability Strategy, which takes into account Environmental, Social and Governance (ESG) criteria in the investment process of the Underlying Fund.

BNP Paribas Asset Management’s Global Sustainability Strategy governs the approach to sustainable investment, which consists of the implementation of ESG integration, responsible business conduct standards and stewardship activities (as defined below) into the investment process applied to the Underlying Fund. The sustainable investment approach is incorporated at each step of the investment process of the Underlying Fund and includes the following elements:
 
Responsible business conduct standards: defined in BNPP AM’s Responsible Business Conduct Policy (“RBC”). They include respecting:
  • Norms-based screens: such as the UN Nations Global Compact principles and OECD Guidelines for Multinational Enterprises. These two shared frameworks are recognised worldwide and applicable to all industry sectors. Companies that violate one or more of the principles are excluded from the Underlying Fund’s investments, and those at risk of breaching them are closely monitored, and may also be excluded;
  • BNPP AM sector policies: BNPP AM has also defined a series of guidelines relating to investments in sensitive sectors, listed in the RBC. Companies from these sensitive sectors that do not comply with the minimum principles specified in these guidelines are excluded from the Underlying Fund’s investments. The sectors concerned include, but are not limited to, palm oil, wood pulp, mining activities, nuclear, coal-fired power generation, tobacco, controversial weapons, unconventional oil and gas and asbestos.
 
ESG integration: It involves the evaluation of the below three non-financial criteria at the level of the companies in which the Underlying Fund invests:
  • Environmental: such as energy efficiency, reduction of emissions of greenhouse gases, treatment of waste;
  • Social: such as respect of human rights and workers’ rights, human resources management (workers’ health and safety, diversity);
  • Governance: such as board of directors’ independence, managers’ remuneration, respect of minority shareholders rights. 

ESG scores, as defined by an internal proprietary framework, can be made available to assist in the ESG evaluation of securities’ issuers. BNPP AM’s proprietary ESG scoring framework aims to quantify ESG considerations by producing both company-level ESG scores (based on a company’s performance on material ESG issues relative to peers) and a portfolio-level ESG score (that aggregates the average company-level ESG scores of the companies in the portfolio). ESG integration is systematically applied to the investment strategy of the Underlying Fund. The Underlying Fund aims to maintain an average portfolio ESG score that is higher than the one of its investment universe. The process to integrate and embed ESG factors in the investment decision-making processes is guided by formal ESG Integration Guidelines. 

Stewardship: It is designed to enhance the long-term value of shareholdings and the management of long-term risk for clients, as part of BNPP AM’s commitment to act as an efficient and diligent steward of assets. Stewardship activities include the following categories of engagement: • Company Engagement: the aim is to foster through dialogue with companies, corporate governance best practices, social responsibility and environmental stewardship. A key component of company engagement is voting at annual general meetings. BNPP AM publishes detailed proxy-voting guidelines on a range of ESG issues; • Public Policy Engagement: BNPP AM aims to embed sustainability considerations more fully into the markets in which it invests and in the rules that guide and govern company behaviour as set out in its Public Policy Stewardship Strategy. 


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