BNP Paribas Asset Management (BNPP AM) announced today the launch of BNP Paribas Inclusive Growth, a fund aiming to generate returns through investment in companies with a proactive approach to reducing inequalities in income, education, gender, ethnicity, geographic origin, age or disability. The new fund was created through the restructuring and renaming of the BNP Paribas Human Development fund, and refocusing on a strategy focused on inclusive growth.
BNPP AM stated that the new fund is based on the strong conviction that inclusive growth creates sustainable financial performance and better management of long-term risk. The strategy invests in companies that contribute positively to diversity and inclusion, based on five key social challenges identified as major causes of inequalities. These include protecting the most vulnerable members of society, promoting social mobility, developing a quality offering accessible to the greatest number of people, respecting business ethics, and promoting decarbonisation and biodiversity.
Delphine Riou, ESG Analyst at BNP Paribas Asset Management, said:
“The BNP Paribas Inclusive Growth fund is a continuation of BNPP AM’s work on the social theme and responds to the demands of our clients. We believe that companies that implement the best practices of diversity and inclusion with their employees, their customers or their suppliers can achieve better financial results. This finding resonates all the more strongly during the Covid-19 crisis, which accelerated the emergence of social considerations in investment decision-making.”
BNP Paribas Inclusive Growth builds a high conviction portfolio of 40-60 stocks out of a universe of approximately 1,000 companies. Company selection is based on an ‘inclusion score,’ rating companies based on a specific range of inclusion criteria, ranging from, working conditions, to equal pay, employee diversity, and percentage of female managers, among others. According to BNPP AM, the fund meets all of the UN Sustainable Development Goals, with priority given to SDG 1 (no poverty), SDG 5 (gender equality), SDG 8 (decent work & economic growth) and SDG 10 (reduced inequalities).
Maria Luz Diaz Blanco and Anne Froideval, Portfolio Managers of the Inclusive Growth fund, comment:
“By integrating specific performance indicators, such as employee turnover rate or board diversity, our proprietary model allows us to filter the investment universe to identify the leaders. Our selective approach means that we can build a high conviction equity portfolio of 40-60 stocks from around 1,000 companies initially analysed. This allows us to meets the expectations of our clients who are looking to generate a positive impact on tomorrow’s society while generating long-term value.”