Keynote Jean Lemierre - Chairman, BNP Paribas

Good afternoon. Good to see you, good to be with you in Paris in this building where I was a trainee — I won't tell you when, it was in 1970, not yesterday, but it's always good to be here. You've had two days of very intense discussions, panels, exchange of views about climate finance. I'm one of the last speakers, so I'll focus my comments on three points. First, I should tell you from which point of view I make these points. I make them from the point of view of a chairman of a European bank, a French bank, BNP Paribas. But I may also use my previous experience as president of a multilateral institution, the EBRD, having spent a lot of time and dedication on these questions. So I'll try to share views based on these experiences and what I see today. The work undertaken by UNEP FI and 28 banks building principles for responsible banking shows the deep, serious transformation of the industry. We haven't seen this before. This is new, and I want to stress that this is very important from my point of view. I hope it largely addresses the expectations of society. There is a demand, expectations are high, and I think we share them and try to address them. From this view, there are mainly three questions: what's happening, what does it mean, and how to move forward. I want to give my view on these three questions.

What's happening? I think it's quite clear: the financial sector is no longer neutral; it has become a key actor in the energy transition. This is what we want to do at BNP Paribas and what my colleagues in the financial industry want to do. It means encouraging through our choices the production and consumption of non-carbon energy instead of fossil fuels. After the 2015 Paris Agreement, BNP Paribas committed to aligning our activities with the IEA's two-degree scenario. We immediately adapted our policies and practices. In 2015, we decided to stop financing coal-fired power plant projects, and we subjected the financing of energy companies to a reduction in the share of coal in their energy mix. We also made a strong commitment regarding hydrocarbons by ceasing to finance projects involving oil and gas from shale and tar sands. Between 2015 and 2017, we increased funding of renewable energies by 70 percent. In concrete terms, between 2016 and 2017, the share of fossil fuels in the electricity mix we financed decreased from 56% to 52%, and the share of renewable energy rose from 23.5% to 26%. You may think it's not a lot, but the inertia of bank portfolios takes time. What we saw in one year is sizeable and shows our real commitment. Energy transition is a priority for us and for all European banks. It's the role of NGOs and governments to ask for more, and we have no difficulty with that. We share the same willingness to contribute to complying with the Paris Agreement, and we shall continue year after year to make new commitments. We are all moving in the same direction; we can have a debate about the speed, but we move in the same direction.

Now, what does it mean? Let me use my experience to be clear. Transition means moving from one world to another, from a set of rules and behaviors to others. It is about making efforts to adapt, but it's not about stopping living. People on the planet need to move, work, keep warm, communicate — communication today uses a lot of energy. We need to keep this in mind. The French Minister of Finance asked banks to design solutions to enable more people to buy electric cars. Similar considerations are underway for energy efficiency of buildings. BNP Paribas already offers a one-person loan for electric cars and is proactive in discussions with authorities. But the Paris Agreement does not provide for a certain exit from coal or any other fossil-based energy; it relies on the principle of progressivity and differentiation, especially for developing countries. Asia has three-quarters of the world's coal and three-quarters of the power plants, yet Asian countries are fast moving their renewable energy capacities, starting with China. The world is stunned by the scale of their efforts. Most emerging market countries are on the right track, but their people may still need some sources of energy and need adaptation to make progress. That is the challenge: we would like more speed, but we need to move forward firmly and clearly while taking into account the needs of people.

How can we manage this? First, we need to get the priorities right. Experts agree that the two-degree scenario (and probably 1.5 degrees) is not possible to deliver with current technology. So it is by supporting innovation that the financial world may have the largest impact. The best way to reduce CO2 emissions is to create energies, machines, organizations, and organizational frameworks that do not yet exist. We have to finance invention and creativity. That's why BNP Paribas not only allocates significant resources to financing green technology but also joined the Breakthrough Energy Coalition founded by Bill Gates and Jeff Bezos, as well as Bertrand Piccard's Solar Impulse Foundation. These organizations seek out the innovation to make the energy transition a reality. We are already seeing breakthroughs that could be game-changing, but it requires more effort and funding. We also need to measure our impact. We are working on analytical tools to measure the impact in our portfolio and share them with our banking peers. This technical work will have considerable impact and provide a definitive answer to methodology discussions. There is no investment or policy without measurement. It's not about PR; it's about efficiency and delivery for people. We have to be accountable, and to be accountable we need to measure.

Innovation also means working differently and working together for the common good. Through our program with the UN Environment and Sustainable Finance Facilities, we have found it is possible to bring together willing players: banks, investors, multilateral development institutions, governments, businesses, scientists, and NGOs. Together we can carry out major programs that enable transition to agroecology or restoration of biodiversity at national level. The United Nations provides an excellent framework. I want to take this opportunity to pay special tribute to Satya Tripathi, Deputy Secretary-General of UN Environment. He is a man of vision and delivery. He has taken initiative, set visions, and brought people together. We are proud to work with him. We have delivered a project in Indonesia to restore biodiversity and provide work for 16,000 people, providing a tire company with rubber that meets high environmental and social standards. This is a breakthrough and an excellent example. It was partially funded by large investors and backed by multilateral development bank guarantees. We are developing similar blended finance projects elsewhere. We are also working on projects in India and elsewhere. This is great. I insist not only on technological innovation but also on partnership innovation. This process of teaming up, measuring what we do, is probably the best service we can give to energy transition and improvement of the planet. The 17 Sustainable Development Goals provide a good framework; they combine all features of an inclusive environment with progress for all. My favorite goal is number 17, which invites us to forge partnerships to succeed in the transition processes before us. If we want to give our children the world they deserve, we must first learn to work together. I would like to finish with a strong personal commitment: I do believe in this. I do not believe that finance is passive or cynical. That is not the way to build a sustainable world. I believe in committed finance, in good and decent business having a positive social and environmental impact. In my career, I have spent time on this, and I have no doubt that those who say it is not compatible are wrong. It is compatible. You need very skilled people to do it, but they can do it, and when it is done it is very moving. It is a great incentive to deliver more, and that is what we are committed to. Thank you for listening. I wish you a nice evening in Paris.