The private sector is of vital importance to adaptation in Africa. Many businesses in Africa take resilience and adaptation action that help them manage climate risks and positively impact productivity and profitability. The benefits of such actions extend along the supply chains and sometimes also to surrounding communities. In this series of GCA Insights, we feature leading businesses and their adaptation and resilience related efforts across Africa.

BNP Paribas Group, France

Based on the interview conducted on September 2nd, 2021 with Mr. Pierre Rousseau, Senior Strategic Advisor for Sustainable Business, Mr. Jerome Ponrouch, Head of CSR and Sustainability for the Middle East and Africa region, Mr. Sebastien Soleille, Head of energy and environment transition.

Introduction

BNP Paribas is a leading international bank and key player which operates in 68 countries and markets. It covers three main operations including retail banking; investment & protection services; and, corporate and institutional banking. BNP Paribas is committed to working with diverse stakeholders and has adopted social and environmental goals aligned with the Sustainable Development Goals (SDGs), the Principles for Responsible Banking and the Principles of Responsible Investment.

Climate risks assessment

The term adaptation is used by BNP Paribas internally referring to building resilience within its own operations and those of its clients, for instance, through incorporation of digital technologies in its processes. The BNP Paribas Foundation is actively engaged in research projects on biodiversity and climate adaptation. As a bank, BNP Paribas also takes part in adaptation projects, for instance, to improve supply chain resilience for its large corporate clients. The bank supports its corporate clients in their transition toto Net-Zero targets by mobilizing financial and advisory capabilities. However, with an increased number of corporate clients taking adaptation action, the bank believes it will also create and facilitate more innovative adaptation programs.

According to BNP Paribas, adaptation in Africa will require nature-based solutions, including the regeneration and rehabilitation of land and water resources, for both the provision of natural assets and for carbon sequestration.

“As a bank, we work closely with our clients and as more clients become aware and engage in adaptation activities, we also develop programs for instance, with blended financing and alternate financing mechanisms, to address adaptation needs.”

“Corporate climate engagement is still largely focused on mitigation due to existing accounting mechanisms. Integrating externalities in performance assessment and adaptation benefits through nature-based solutions should lead to more private sector adaptation projects.”

Climate risks

BNP Paribas recognizes climate risks as systemic risks emerging from climate change which presents important adaptation challenges. Therefore, one climate risk is not more important than another. The situation in Africa is critical due to the already visible impacts of climate change, for instance, including desertification in Northern Africa and increased wildfires. BNP Paribas also highlights the importance of climate migration within and outside Africa. Landscape management programs and biodiversity protection require a consideration of ongoing climate impacts while also ensuring sustainable incomes for populations dependent on various ecosystems. For instance, a new project by BNP Paribas for land rehabilitation in Southern Africa works with local communities to develop economic value through nature-based solutions such as planting commercial crops for re-greening deserts.

Current actions undertaken

BNP Paribas in partnership with United Nations Environment Programme (UNEP) and Yapu Solutions, a German social FinTech company, developed the Microfinance for Ecosystem-based Adaptation (MEbA) project in 2012. The project provides microfinance products and solutions for vulnerable rural and peri-urban populations to improve climate resilience, to increase capacity to manage climate information and risks, and to promote ecosystem-based adaptation options. The project is currently active in Sub-Saharan Africa and Latin America. This project also works with governments and development banks to create supportive environments to expand the microfinance approach.

Along with reducing its own impact on the environment, BNP Paribas aims to further ecological transitions, strengthening sector-specific policies and developing new measurement tools. BNP Paribas and four other major European banks are developing the Paris Agreement Capital Transition Assessment (PACTA) methodology. The open-source solution helps banks to align greenhouse gas emissions in their lending portfolios with the Paris agreement. Moreover, BNP Paribas has been carbon-neutral at the operational level, that is scope I and II, since 2017. The group is also committed to preserving marine ecosystems as part of its biodiversity preservation programme. It has introduced frameworks for sustainable and ethical usage of aquatic ecosystems dedicating 1 billion euros (e.g.., for LNG, hydrogen, wind) for ecological transition of clients in the shipping industry by 2025.

Support provided

BNP Paribas Foundation has been funding climate research since 2010 under its ‘Climate & Biodiversity Initiative’ program aiming to understand and anticipate the impact of climate change on the environment as well as on local populations around the world. The initiative has since supported 27 research teams and has invested 12 million euros in scientific research projects and reached over 400,000 people.

BNP Paribas is also working with governments, development finance institutions (DFIs), philanthropic foundations, etc., to develop alternative finance mechanisms, for instance, to develop biodiversity credits for countries and innovative accounting mechanisms that allow integration of externalities. Similarly, BNP Paribas Group is involved in several landscape management and land rehabilitation projects. The nature-based solutions projects, which include redeveloping forests, mangroves, reefs, etc., also provide companies with additional revenue, for instance through monetizing the carbon credits that these companies generate through their transitioning operations.

“Tropical forests need to be maintained. For maintaining the forests, we need to create resources for people to maintain the forest. It is better to develop a business. So, either we can develop medicinal plants or coffee or cocoa, or bamboo, not by old methods, but new methods. We can do a lot of activities by redeveloping the forest and develop economic activities which help maintain the forest and reduce climate risks.”

Arpan Rachman