To what extent are institutional investors fully aware of ESG risks?

The study Novethic carried out among institutional investors, with the support of BNP Investment Paribas Partners, whose results were presented at the opening of the session constituted the first element of the response to this question. The second part came from the accounts delivered by representatives of three prestigious financial institutions on their ESG practices: the European Investment Bank on long-term investment, BNP Paribas on risky sectors and KLP on exclusion.

Introduction

Philippe Marchessaux, Chief Executive Officer, BNP Paribas Investment Partners (France) « Over the years, Novethic's conference has become a key forum for French and European institutional investors. The current crisis shows once again the limits of weak governance and a short term approach to investment, and it is therefore crucial to meet together to debate questions linked to ESG risks and their impacts on investments in the long term. »

Presentation of the survey: « Perceptions and practices of ESG integration »

Anne-Catherine Husson Traore, Chief Executive Officer, Novethic (France) Novethic published the results of its second annual survey “European Institutional Investors' ESG perceptions and integration practices”, carried out with the support of BNP Paribas Investment Partners. 259 institutional investors (private and public pension funds, private and mutual insurance companies, not-for-profit organisations- foundations and NGOs- banks, public financial institutions, religious organisations) with EUR 4540 billion under management in 11 countries (Germany, Belgium, Denmark, Spain, Finland, France, Italy, Luxembourg, Netherlands, United Kingdom, Sweden) were questioned on their perception of the integration of ESG criteria in asset management and their view of ESG risks.

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Novethic's European study shows a growing recognition of the notion of ESG integration and the need to identify ESG risks by big European institutional investors. In order to better understand their practices, three speakers gave accounts of three approaches to integrating extra-financial criteria into investment policies.

Recognition of ESG risks and long-term investment

Remy Jacob, Director General, Strategy and Corporate Centre, European Investment Bank A European institution, founded in 1958, the EIB integrates ESG criteria into the financing of its projects. It is one of the founding members of the Long Term Investors Club whose charter equally constitutes a commitment to sustainable development.

Investment policy for risky sectors

Laurence Pessez, Corporate Social Responsibilty Director, BNP Paribas (France) BNP Paribas Group has developed investment policies that exclude sectors exposed to key ESG risks such as nuclear, palm oil, arms or carbon. The investment policies clearly outline the required conditions that must be satisfied for the company to consider investing.