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CASE STUDY: BNP Paribas

‘Pioneering Carbon Markets’

Relevant Principle: 2.6 Investment Banking and Markets

Opportunity

There several areas of banking included in the principles. Each provides the finance sector with a unique opportunity to provide innovative ways to grow the low carbon economy.

Action

BNP Paribas has a dedicated Carbon Team focussed on supporting global environmental markets though emission trading. It is one of the largest liquidity providers in emission allowance markets under the European Union Emissions Trading Scheme (ETS), and also participates significantly in international carbon futures markets, clearing approximately 20 percent of all emissions contracts on the European Climate Exchange.

Impact

Notable activities of the group’s Carbon Team include:

  • Its involvement in the first ever Joint Implementation (JI) project in Russia with an oil and gas company. These projects will generate Emission Reduction Units (ERUs) that can be traded on the EU ETS.
  • BNP Paribas is also one of the first financial institutions to become active in the forest carbon market, including Reduced Emissions from Deforestation and Degradation (REDD) projects.  For example, in September 2010, BNP Paribas announced an agreement with Wildlife Works Carbon to develop a portfolio of large scale REDD projects in Africa. The facility provides funding for Wildlife Works’ efforts to source, develop, implement and manage REDD projects in Africa. BNP Paribas will have the option to purchase avoided emission credits created from the portfolio.