The long road toward ESG integration

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Helena Viñes, BNP Paribas Asset Management

BNP Paribas Asset Management took different steps before deciding to integrate ESG factors into the investment process, according to Helena Viñes, head of sustainability research.

It first established an ESG research team in 2002, but that team was responsible for socially responsible investment funds, which invest in companies that have a social and environmental impact.

In 2012, the firm developed a responsible investment policy, with the goal of strengthening engagement with the companies a fund invests in and eliminating companies that have repeatedly violated one or more UN responsible investing principles.

However, the earlier initiatives are really not integration, Viñes said, adding that the firm implemented ESG factors into fundamental research last year.

Like Franklin Templeton and Pictet, ESG integration is different across investment teams. For equities, some teams have assigned an ESG scoring system that will help them identify problems and if they would need to engage more with the companies they invest in.

A separate scoring system determines the weighting of investments, Viñes added, noting that the scoring may vary from one team to another.

“In some teams, they will not invest in a certain score. For others, it may be an indicator for more engagement to encourage them to improve on their practices,” she said.

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