Winners rationale

While interest in sustainable assets has been increasing among private banking clients in Asia-Pacific as governments in the region set ambitious targets for emissions reductions, at least two factors collided in 2021 to supercharge the trend.

One was a torrent of data in the early part of the year showing that ESG-focused funds had on average outperformed the broader market in the month that followed the COVID-19 sell-off in early 2020. The second was the 26th United Nations Climate Change Conference — known as COP26 — in the autumn, which coincided with a number of private banks committing to a net-zero carbon economy.

BNP Paribas was among those to make that pledge, but the French lender’s private banking arm also stood out during the year for its efforts in bringing sustainable solutions to its Asia-Pacific clients.

Among the aspects that set BNP Paribas WM apart are its staunch efforts in recent years to integrate ESG screening into the core of its investment process.

Of the bank’s AUM across Asia-Pacific, 70% of wealth management assets have been given an ESG score according to the bank’s proprietary ‘Clover’ rating system as of 2Q21, up from 50% 12 months earlier. BNP Paribas WM aims to boost that to 90% of AUM by 2025, with a target of around 50% of assets scored between five and 10 Clovers, which means “significant integration of ESG criteria” or “impact investing”.

BNP Paribas WM has proved it can deliver outperformance as part of its ESG offering. Of the mainstream and thematic ESG funds offered by the bank’s investment advisory, the vast majority have outperformed the MSCI World index on a one-, three- and five-year annualised timeline, according to figures shared with Asian Private Banker. Additionally, as of June 2021, the penetration of ESG funds among clients was 40%, or more than double the figure 12 months earlier.

The bank’s discretionary portfolio management (DPM) platform has been given an ESG facelift, in addition to it consistently generating alpha. During 2021, BNP Paribas WM tightened its ESG criteria in terms of securities selection for its mandates. All securities in the bank’s Sustainable Investment mandate are now rated five Clovers, or higher, with the Global Thematic and Smart Dividend Global comprising around two-thirds securities with a Clover score of five or more. The Sustainable Investment mandate has also demonstrated meaningful outperformance versus the MSCI Global.

Finally, the bank showed its resolve to drive inflows into ESG assets with a global sustainability campaign launched at the end of 2021. As part of the campaign, BNP Paribas WM will contribute to approved non-government organisations each time a client subscribes to one of the bank’s SRI funds.

That is why BNP Paribas WM has been awarded Asian Private Banker’s accolade for Best Private Bank – Sustainable Investments for 2021.