Achieving Sustainability—Sooner Than Later

Shaving 1.5 degrees off the global thermometer by 2050 is crucial to containing damage to important ecosystems, and as such, moving from fossil fuels to renewable energy sources sooner than later is imperative, as the longer we stall, the more difficult the transition will be.

But to a growing number of experts, mid-century is too late to achieve carbon-reduction targets; instead, many believe that addressing feedback loops responsible for melting glaciers and other environmental hazards must be reconciled by decade’s end. Should we fail to cut existing carbon-dioxide levels by one-half immediately, the opportunity to contain global warming will grow increasingly slim, say experts, putting coral reefs, fish populations and other crucial habitats at risk.

Nor are environmental issues limited to carbon mitigation. In the wake of the eye-opening 2016 film A Plastic Ocean by filmmaker and BNP Paribas sustainability partner Craig Leeson, data revealed the extent of plastics contamination throughout global populations: it’s estimated that some 80 percent of table salt contains plastic particles, as does the vast majority of shellfish. And the presence of tiny airborne plastic microfibers resulting from years of under-regulation means that we are ourselves repositories for these invisible pollutants.

Responding to increased public awareness around sustainability and health, the EU issued new standards ensuring plastic products are properly tested for safety prior to their release. For its part, in 2015 BNP Paribas became the world’s first corporation to take single-use plastics out of the workplace, and since that time more than 160 countries have either taxed, levied or imposed an outright ban on such products. Still, in many other markets (including the US), plastics manufacturing remains largely unregulated.

Stepping it up

When it comes to addressing climate change, banks continue to wield enormous power, including the ability to not only finance carbon-reduction initiatives but also divest from major carbon-producing sources that fail to align with a Paris agreement trajectory. Leading by example, in May BNP Paribas announced its “Climate Analytics and Alignment Report,” intended to align the bank’s portfolio objectives with its ongoing commitment to achieving net-zero status. Key to this effort is reducing exposure to primary carbon emitters including upstream oil and gas/refining, automotive, as well as power generation (the latter by some 30% through 2025).

The war in Ukraine, along with domestic issues such as rising inflation and interest rates, have led some corporates to push back on ESG goals, claiming that priorities have since shifted. But as noted in the report, such turbulence should encourage faster uptake of fuel and product alternatives, rather than imposing further delays.

In the current geopolitical context, it is even more essential that we maintain an ambitious course towards a net-zero economy and finance the acceleration of renewable energies.

said Jean-Laurent Bonnafé, Director and Chief Executive Officer, BNP Paribas.

Accordingly, the bank encourages all major financial participants to follow their lead by aligning portfolios with net-zero commitments, measuring carbon-related risks, while also supporting clients through sustainable financing to help them achieve low-carbon targets.