The tighter exclusion policy on companies engaged in mining
\nthermal coal1 and generating electricity from coal will come into effect at the start of 2020. It will
\napply to all of BNPP AM\u2019s actively managed open-ended funds, as well as becoming the default policy
\nfor segregated mandates.<\/p>\n
The policy represents a significant step towards BNPP AM\u2019s 2025 target of aligning its portfolios with the
\nParis Agreement goal of keeping temperature rises well below 2\u00b0C above pre-industrial levels. It will also
\nreduce the economic risk in portfolios as coal becomes increasingly uncompetitive as a fuel for power
\ngeneration.<\/p>\n
BNPP AM will exclude companies that derive more than 10% of their revenue from mining thermal coal
\nand\/or account for 1% or more of total global production. The global production limit will capture those
\ncompanies whose share of revenue from coal is below 10%, but which nonetheless account for a
\nmeaningful level of production on an absolute basis.<\/p>\n
Power generators whose carbon intensity is above the 2017 global average of 491 gCO2\/kWh will also be
\nexcluded, with BNPP AM subsequently following the Paris-compliant trajectory for the sector as
\ndetermined by the International Energy Agency (\u2018IEA\u2019) in its Sustainable Development Scenario (\u2018SDS\u2019).
\nThe IEA\u2019s SDS requires power generators\u2019 carbon intensity to fall to 327 gCO2\/kWh by 2025, and BNPP AM
\nwill therefore demand that companies reduce their carbon intensity between 2020 and 2025 at a rate
\nconsistent with this, excluding those that fail to do so.<\/p>\n
BNPP AM acknowledges the importance of encouraging companies to reduce their dependence on coal
\nmining and coal-fired power generation in order to align their activities with the Paris Agreement. It will
\ntherefore consider exceptions for those miners and power generators that make credible commitments to
\nreducing their coal-based activities to levels consistent with the Paris Agreement within the required
\ntime frame. The credibility of commitments will be determined using quantitative and qualitative criteria,
\nincluding disposal plans for coal assets or acquisition plans for lower-carbon generation capacity, and the
\nextent to which management are prioritising a lower-carbon business model. Exemptions will be granted
\non a half-yearly basis, with those companies demonstrating their commitment to the policy expected to
\ncomply within two years.<\/p>\n
Coal combustion is the largest single source of global warming, while the power sector itself is the largest
\nsingle source of coal combustion. Reducing emissions from coal is therefore the most effective way of
\nmoving towards an energy system consistent with the Paris Agreement. According to the IEA\u2019s SDS,
\nalmost all of the emissions reductions from the energy sector required by 2025 to align the global
\nemissions pathway with the Paris Agreement – 2.8Gt out of a total 3Gt – come from cutting back on the
\nuse of coal in power generation.<\/p>\n
Since 2015, BNP Paribas has committed to ensuring that its financing and investment activities in the
\nenergy sector would evolve in line with the objectives of the Paris Agreement to keep global warming
\nsignificantly below the 2 \u00b0 C threshold. BNPP AM’s new coal policy is fully in line with this Group
\ninitiative.<\/p>\n
Mark Lewis, Global Head of Sustainability Research at BNP Paribas Asset Management, comments: BNP Paribas Asset Management (\u2018BNPP AM\u2019) announces its plan to implement an enhanced coalexclusion policy, accelerating its commitment to tackle climate change by divesting from the single
\n\u201cFrom an investment perspective the outlook for the coal industry looks increasingly uncertain as less
\ncarbon-intensive fuel sources, in particular renewables, become ever more competitive. The main
\nrenewable technologies already compete favourably with fossil fuel power generation,4 and in the best
\nlocations for wind and solar globally, new build costs are actually below those of existing fossil-fuel
\nplants. The trend will continue as costs for all renewable technologies continue to fall.\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"
\nlargest source of carbon emissions.<\/p>\n","protected":false},"author":20,"featured_media":78564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1470],"tags":[1655,1826,1682,1651,2007,1774,1453,1685],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/78566"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=78566"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/78566\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/78564"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=78566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=78566"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=78566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}