Climate Report 2023: Tracking (and extending) our progress

What do your home, the city around you, and the device you are reading this on have in common? They all rely on three common materials that shape our daily lives: steel, cement, and aluminum. But there’s an unfortunate twist: these three heavyweights are also among the most carbon-intensive industries worldwide. What are the prospects for decarbonising this trio, and how fast can this transition happen?

• With a whopping 7% of the energy sector’s global emissions, steel production is a highly-emissive industry. And it is still on the rise: from 1,952 Mt in 2021, global crude steel production is expected to reach 2,030 Mt by 2030. Cleaner steel production methods, like switching from blast furnaces to electric arc furnaces, offer promising leads, as does the replacement of metallurgical coal with hydrogen. But these transitions are bound to take time. Such is also the case when it comes to aluminum (3% of the world’s direct CO2 emissions, +4% in 2021 vs. 2020), a key component in many essential transition technologies. Our third culprit, cement (7% of the world’s CO2 emissions) is also bound to remain in high demand in the medium and long term, as developing countries continue to build new infrastructure.?
• As BNP Paribas endeavors to bring its portfolio in line with its net zero trajectory, we are setting bold, new alignment targets in these three sectors, in line with the International Energy Agency (IEA) 's "net-zero 2050" (IEA NZE) scenario. For steel, we are aiming for a -25% reduction in our emission intensity by 2030, compared to our 2022 baseline. With aluminum, we’ve decided to go one step further than the IEA NZE scenario by setting a target (-10%) that exceeds the net zero ambition. And with cement, we aim to cut emission intensity by 24% from our 2021 baseline.?
• Setting ambitious energy transition goals is only one part of the equation; the other is checking we remain on track with these goals as we work to decarbonise our portfolio. In our new Climate Report 2023, we confirm the decarbonisation trajectories announced in our 2022 Climate Analytics & Alignment Report for power generation, oil & gas, and automotive sectors.
• And we follow up on our January 2023 decision to withdraw from oil and gas exploration and production activities by pledging no longer to provide any financing dedicated to the development of new oil fields, regardless of the financing methods (project financing, reserve-based lending, FPSO). We will also phase out financing to non-diversified oil exploration and production players which is intended to support oil production, as well as reduce the share of the general corporate-purpose facilities allocated to oil exploration and production. Additionally, we are excluding all financing dedicated to the development of new capacities in the areas of gas production and exploration. The amount of financing for these two areas will be reduced by over 30% by 2030, compared to the end of September 2022.

• Decarbonisation is a gradual and complex process, but we are getting there – surely and steadily. Want to see how we are faring in just one quick glance? It’s all here:

New frontiers?

Earlier this year, we told you about a powerful financial inclusion tool that has lifted millions out of poverty: micro-loans.

• In 2022, through its partner microfinance institutions (MFIs), BNP Paribas provided over €332 million to 12.4 million beneficiaries. One of them, Jani, tells us how her microloan helped her move her pasteis shop out of her home and into a lovely new space!

• While microfinance has been around for decades, it is not always easy to assess its social impact on the ground. Compiling and analysing this data is a daunting yet crucial task, and it is exactly what our new Microfinance Social Performance Report sets out to do. Come along for a thorough analysis of our MFI partners’ social impact across the world and progress over time.

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Explorers

Can a building’s energy consumption intensity be predicted by machine learning? According to a new study conducted by BNP Paribas expert Imène Ben Rejeb-Mzah and her team of data scientists, the answer is a resounding “yes”!

• The team set out to address the lack of accessible energy performance data in the French real estate sector, an obstacle to implementing successful decarbonization strategies. In fact, energy performance certificates (EPCs) are only widely available in open source format for 20% of addresses in France!
• By using state-of-the-art machine learning techniques, Imène Ben Rejeb-Mzah and her team were able to predict the missing EPCs, a significant step towards decarbonizing a sector responsible for 37% of greenhouse gas emissions worldwide. We sat down with Imène to learn more about this groundbreaking work.

• Want more details? Head over here.?

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Milestones

The circular economy is not a gimmick; it is integral to reaching carbon neutrality globally by 2050. BNP Paribas is committed to supporting this sector through an array of services, from equipment financing or leasing to support for social entrepreneurs and subsidised loans.

• Six years after formalizing our circular economy commitments in 2017, we are now taking an extra step to make them even more accessible and transparent, by publishing them on the #Ambition4Circularity platform.
• Launched in January by the French Association of Private Enterprises ( Afep ), this online platform showcases 143 circular economy commitments made by 39 companies. An effective way to track the tangible actions taken towards collectively fulfilling our promises.

From the observation post

Virtual World Explorer, Knight of Decarbonization… Characters in a heroic fantasy novel? No, very real jobs held at BNP Paribas! Curious about our #UnexpectedJobs? Dive in!