WE’RE THE FUTURE MAKERS

ESG PRINCIPLES TO ACHIEVE LONG-TERM SUSTAINABLE RETURNS FOR INVESTORS

ESG Asset Management Company of the Year 2020, Indonesia

Asset Management Company of the Year 2020, Indonesia
Best Islamic Asset Manager of the Year 2020, Indonesia

Fund Launch of The Year 2021

for BNP Paribas Greater China Equity Syariah USD

Best Islamic Fund House 2020, Indonesia

Best Islamic Product 2020 for BNP Paribas CakraSyariah USD Best
Investor Education 2019, Indonesia

PRIYO SANTOSO
JAKARTA / 20 MAY 2021
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SUSTAINABLE INVESTMENT GROWTH
TRENDS

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A Growing Sustainable Investment Market, Led by Europe
Sustainable assets in 2018 (including ESG) and 2016-2018 growth – a USD 31 trillion market

Canada
USD 2.1 tn
+42%
Japan
USD 2.2 tn
+307%
Europe
USA USD 14.1 tn Asia*
+11% USD 52 bn
USD 12.0 tn
+16%
+38%

Australia
USD 734 bn
+46%

Source : Global Sustainable Inv estment Rev iew 2018, March 2019.
*Asia w as not included in the GSIR 2018 report, hence data is from the 2016 report, w ith 2014-2016 grow th.

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BNP Paribas AM & Greenwich Associates Survey, July 2020
ESG Investment as global trend?
Why Sustainable Climate Consumer COVID19,
Investment becomes world change! behavior Wake up!!
trending topic:

81% +20% 79% 42%

Respondents already Increase on Clear Respondents cite Significant barriers to
employ ESG in all or emergence of the social considerations investing because of
part of their portfolios importance of social as having a positive lack of established
considerations since the impact on long-term standard metrics
onset of Covid-19 investment
performance and risk
management

Source: BNP Paribas Asset Management, Greenw ich Associates, 2020

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Integrating ESG Insights Can Help Generate Better Risk-adjusted Returns
Oxford study based on over 200 academic studies showing..

90% 88% 80%

Cost of capital Operational Stock price performance of
performance companies
Sound sustainability Solid ESG practices result in Stock price performance of companies
standards lower the cost better operational performance is positively influenced by good
of capital of companies of firms sustainability practices

ESG is particularly relevant for Emerging Markets, which has the highest positive relation between
ESG and corporate financial performance.

Source: BNPP AM, Univ ersity of Ox ford, “From The Stockholder To The Stakeholder”, March 2015.
*65.4% positiv e; 5.8% negativ e (Univ ersity of Hamburg, Deutsche Bank, “ESG and financial performance: aggregated ev idence from more than 2000 empirical studies”, December 2015)

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Integrating ESG Helps Lower The Risks of Large Drawdowns
Companies with higher ESG ratings are three times less likely to experience a drawdown of more than 95% over the next three years

Idiosyncratic Incident Frequency of Top and Bottom ESG Quintile

Source: MSCI Research, Foundations of ESG Inv esting Part 1, Nov ember 2017. For each month, w e report the number of stocks (MSCI AC World Index global equity univ erse) that realized a more than 95% cumulativ e loss ov er the nex t 3
y ears, taking the price at month end as the reference point for return calculation.

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2
SUSTAINABILITY AT
BNP PARIBAS ASSET MANAGEMENT

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A Pioneer in Sustainable Investment Since 2002
Total AUM for our by Principles for Total AUM for 3 ESG
Our ESG issuer
€92 Bn* Sustainable Plus Rated A+ Responsible >12,000 scoring coverage Rp 4Tn* themed funds in
range Investment Indonesia

2020
• First ESG fund to offer investor
2006 2016 access to China Equities (BNP
• Launched first ESG themed fund Paribas Greater China Equity Syariah
• Founding signatory to the UN USD)
Principle for Responsible (BNP Paribas Cakra Syariah USD)
Investments (PRI) • Total AUM USD 100mln in less than a
year

2002 2006 2012

2016 2019 2020 2021

2012 2019 2020

2002 • Implementation of the United • Local ESG fund based on SRI • Enhanced ESG scoring
Nations Global Compact Kehati index (BNP Paribas SRI
• Launched our firstSRI Fund Principles and sector policies with coverage 12000+
and joined the Institutional of BNP Paribas Group
Kehati) issuers globally
Investors Group on Climate
Change (IIGCC)

GLOBALLY INDONESIA
Source: BNP Paribas Asset Management, as of Dec 2020

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ESG Implementation in BNP Paribas AM (Qualitative + Quantitative)

1 2 3 4

ESG metric & ESG

Sustainability Quant Research weight assessment
Qualitative Final ESG
review score
Center Group selection vs. peers

■ Combines both
BNPP AM ■ Combination of ■ Scoring vs. peer
group on each
■ In-depth qualitative
analysis on key material qualitative and
common and
ESG sector-specific metric selected ESG issues (climate quantitative input to
company scores
Research metrics, sourced
from our data
change, etc.)

providers ■ Exchange with companies ■ Monthly update of

& controversies follow up ESG scores to reflect
the latest data
available

Investment
Teams

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ESG Principles in BNP Paribas Mutual Funds Since 2016
BNP Paribas Cakra Syariah USD (2016)
Principled and ethical investment:
The 1st in 1. ESG :

Indonesia 2. Sharia:
• Halal sectors
• Non-Halal income< 10%
3. Stock filter  issuer with long term positive value

Best Islamic Product 2020 (Asia Asset Management)

BNP Paribas Greater China Equity

BNP Paribas SRI-KEHATI (2018)
Syariah USD (2020)
• Following performance of equity index SRI Kehati with ESG Criteria Access to one of the largest economy in the world
o Prohibited business: Pesticides, nuclear weapons, cigarettes, Alcohol, 1. All-China Strategy
o “Healthy” Financial ratio and market indicator, M arket Cap & Total Asset min. 1T, P/E 2. Sustainable investing
positive ratio 3. Active bottom-up GARP approach
o Contribution to Yayasan KEHATI

Sustainable Investing in Action award 2021 Fund Launch of the Year 2021 by Asia Asset Management

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Integrating ESG + Sharia principles
The FIRST asset manager to combine ESG Principles with Sharia Principles in Indonesia since 2016

Sharia Principles Responsible Business Conduct standards

(internal BNP Paribas AM standards)

 Elimination of sectors/ companies with destructive 1. The adoption of UN Global Compact principles in the
objectives on mankind and nature selection of issuers
2. In-house sector policies to monitor our investments in
 Linking capital market to real market activities where sensitive sectors
stakeholders become partners and not creditors
IN-HOUSE SECTOR
 Prohibits sectors with products/services related with: a
POLICIES
− Non-Halal sectors (cigarette, alcohol/ liquor, etc)
− Bribery transactions Implementation of
A universal benchmark policies
for assessing companies for sensitive sectors

Controv ersial w eapons

Based on 10 principles Palm oil and Wood Pulp
cov ering: Nuclear
Human rights Coal-fired 19/05/2021
pow er stations 11
Labour Mining
Env ironment Tobacco
Anti-corruption

Source : PT BNP Paribas AM, MSCI, as of Dec 2020. These criteria can modify overtime. ESG: Environmental, Social, Governance.

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We’re The Future Makers

RESILIENCE FUTURE MAKERS

WEALTH
Historically, managed to performed exceeded
benchmarks, even when hit by crisis
better risk-adjusted returns Invest responsibly for
-> help market stability -> long term YOUR future
sustainable return

Together to be the “future makers”

#FUTUREMAKER

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Making an Impact Through ESG Fund (Indeks Sri Kehati)
Food Cultivation Program for Local Residents, SORGUM, in Flores, NTT

150 sorgum farmers as beneficiaries covering more than Inspire local residents to fight nutritional issues through the
200ha program

The project recently awarded by Sustainable Investment in Action Award 2021

Category Basic Needs & Hunger

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Disclaimer
INVESTMENT MANAGER IS REGISTERED AND SUPERVISED BY FINANCIAL SERVICES AUTHORITY (OJK). MUTUAL FUND INVESTMENTS CONTAIN RISK. PROSPECTIVE INVESTORS MUST READ AND COMPREHEND
THE PROSPECTUS PRIOR TO INVESTING INMUTUAL FUND. PAST PERFORMANCE DOES NOT REPRESENT FUTURE PERFORMANCE.

This material is issued and has been prepared by PT. BNP Paribas AssetManagementa member of BNP Paribas Asset Management(BNPP AM)**. This material is issued and has been prepared by the investmentmanagement company.

This material is produced for information purposes only and does notconstitute:
1. an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or
2. any investmentadvice.

This material makes reference to certain financial instruments (the “Financial Instrument(s)”) authorized and regulated in its/their jurisdiction(s) of incorporation.

No action has been taken which would permit the public offering of the Financial Instrument(s) in any other jurisdiction, except as indicated in the most recent prospectus, offering document or any other information material, as applicable, of
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Investors considering subscribing to the financial instrument(s) should read carefully the most recent prospectus and Key Investor Information Document (KIID) and consult the financial instrument(s’) most recent financial reports. These
documents are available on the website

Opinions included in this material constitute the judgment of PT. BNP Paribas Asset Management at the time specified and may be subject to change without notice. PT. BNP Paribas Asset Management is not obliged to update or alter the
information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the Financial Instrument(s) in order to make an
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Given the economic and market risks, there can be no assurance that the Financial Instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the
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results portrayed in this material. Past performance is not a guide to future performance and the value ofthe investments in Financial Instrument(s) may go down as well as up. Investors may notget back the amount they originally invested.

The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes.

* PT BNP Asset Management(address: Sequis Tower, Lantai 29, Jl. Jend. Sudirman Kav. 71, SCBD Lot11B, Jakarta 12190 - INDONESIA).
** “BNP Paribas Asset Management” is the global brand name of the BNP Paribas group’s asset management services. The individual asset management entities within BNP Paribas Asset Management specified herein are specified for
information only and do notnecessarily carries on business in your jurisdiction. For further information, please contact PT. BNP Paribas AssetManagement.

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PT. BNP Paribas Asset Management
Sequis Tower, Lantai 29
Jl. Jend. Sudirman Kav. 71
SCBD Lot 11B
Jakarta 12190

@BNPPAM_ID

bnpparibas-am.co.id