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BNP Paribas AM tightens coal investment policy

Coal News - Published on Mon, 18 Mar 2019

Image Source: RFI
Business Green reported that the asset management arm of BNP Paribas has moved to strengthen its policies on high-carbon investments, tighter exclusions on companies engaged in coal mining and power generation. The French banking giant, which manages EUR 399 billion of assets, said coal combustion was the single largest source of global warming and must be curbed to keep the Paris Agreement on track. It also stressed that coal is becoming "increasingly uncompetitive" in the face of less carbon-intensive fuel sources such as renewables. Reducing its role in BNP Paribas' portfolios will therefore "reduce the economic risk."

Under the new policy, which will come into force next year, BNP Paribas AM said it will exclude companies from its investments that derive more than 10 per cent of their revenue from mining thermal coal, and/or account for one per cent or more of total global production. It will also exclude power generators with a carbon intensity above the 2017 global average of 491 grams CO2 per kWh. Thereafter BNP said it will follow the Paris Agreement-compliant trajectory for the coal sector determined by the International Energy Agency.

Under its Sustainable Development Scenario - an emissions pathways for the energy sector in line with Paris targets - the International Energy Agency says power generators' carbon intensity must fall to 327 grams of CO2/kWh by 2025.

BNP said that "BNPP AM will therefore demand that companies reduce their carbon intensity between 2020 and 2025 at a rate consistent with this, excluding those that fail to do so."

However, the French bank said it would still consider exceptions to the policy for miners and power generators that "make credible commitments to reducing their coal-based activities to levels consistent with the Paris Agreement within the required time frame".

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Posted By : Rabi Wangkhem on Mon, 18 Mar 2019
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