Report on Environmental and Social Responsibility 2008
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Report on Environmental and Social Responsibility 2008 Contents Statement from the Chairman and Chief Executive Officer 02 PRESENTATION OF THE BNP PARIBAS GROUP 03-23 Group presentation 04 Key figures 04 History 05 Presentation of business lines 06-23 THE GROUP’S APPROACH TO CORPORATE SOCIAL RESPONSIBILITY 24-32 Responsibility based on core values and guiding principles 25 A strong commitment to sustainable development 25-26 Combining CSR and economic performance 27-29 Recognition from SRI rating agencies 29-30 Organised dialogue with stakeholders 31-32 SHAREHOLDER RELATIONS 33-45 Share capital 34 Changes in share ownership 34 Listing information 35-36 Key shareholder data 37 Creating value for shareholders 37-38 Communication with shareholders 39-40 Shareholder Liaison Committee 40-41 Dividend 41 BNP Paribas registered shares 42 Annual General Meeting 42-45 Disclosure thresholds 45 HUMAN RESOURCES DEVELOPMENT 46-68 Group values underpinning HR management 47 Human Resources policy framework 47-50 Key challenges of human resources management 50-68 RELATIONS WITH CLIENTS AND SUPPLIERS 69-81 Closely-attuned relationships 70-75 Socially Responsible Investment 75-80 Supplier relations 80-81 IMPACT ON THE NATURAL ENVIRONMENT 82-94 Action areas 83-86 Levers 87-89 Means of action 90-94 A PARTNER IN SOCIETY 95-106 A deeper commitment to microfinance 96-98 Projet Banlieues three years on 98-99 BNP Paribas Foundation: imaginative and active support 100-106 CORPORATE GOVERNANCE 107-150 The Board of Directors 108-110 Report of the Chairman on internal control procedures 111-148 Executive Committee 149-150 COMPLIANCE 151-154 Dedicated staff 152-153 Business continuity 154 NRE Appendices - Social chapter 155-159 NRE Appendices – Environmental chapter 160-164 Review Report by one of the Statutory Auditors 165-166 Table of Concordance 167 Glossary 168-174 Report on Environmental and Social Responsibility 2008 0101 Statement from the Chairman and Chief Executive Officer Over the past 18 months the financial sec- Our economic responsibility stems from tor has gone through an unprecedented our culture of managing risks and serving financial crisis, which started in the US the real economy which constitutes the and immediately propagated to Europe as foundation of our Corporate and Social a consequence of globalisation and which Responsibility and drives the Group’s currently touches all players. overall performance: Until last September the crisis con- • BNP Paribas is the only French bank in cerned mainly speculative transactions the FTSE4Good Environmental Leaders like subprime mortgages and securitisa- Europe 40 Index. tion. Therefore BNP Paribas was able to • BNP Paribas is the first bank to receive weather the storm thanks to our diligent ISO 14001 certification for over half of its risk management procedures, our focus branches in France. on customer service, and an effective, bal- • BNP Paribas is one of the first seven anced business model backed by a robust French companies to receive the retail banking chain. Diversity label. Since September 2008 and the bank- • BNP Paribas is the leading French bank in ruptcy of a major US bank the crisis grew terms of corporate governance (accord- increasingly violent and far-reaching while ing to Riskmetric-Capitalcom) and the a global economic crisis developed. Our only company that includes non-discrim- investment banking business was bat- ination in its risk management policy. tered by extreme market volatility, and BNP Paribas as a whole suffers from the During this time of crisis, difficulty and slowing economy and the difficulties met widespread uncertainty, our CSR efforts by some of our clients. are being appreciated as never before. This shows our credibility and a renewed In this context, we can observe that we are confidence from all of our partners and one of the global banks to best weather awards our employees’ commitment and the crisis. BNP Paribas generated a size- sensitivity particularly evident during the able profit in 2008. Our business model is last Global People Survey which was car- reinforced and our strength renowned as ried throughout all BNP Paribas business is reflected by our ratings which provide us units. access to optimal refinancing conditions. This report on the social responsibility of The Banker magazine recognised our our company presents our CSR effort and solid health by naming BNP Paribas the the main initiatives taken in 2008. 2008 Bank of the Year. Report on Environmental and Social Responsibility 2008 02 Presentation of the BNP Paribas Group Report on Environmental and Social Responsibility 2008 03 Group presentation BNP Paribas is a European leader in banking and financial services. The Group has one of the largest international banking networks, a presence in over 80 countries and more than 170,000 employees, including 130,000 in Europe. BNP Paribas enjoys key positions in its three activities: • Retail banking, which includes the following operating entities: - French Retail Banking (FRB), - BNL banca commerciale (BNL bc), Italian retail banking, - BancWest, - Emerging Markets Retail Banking, - Personal Finance, - Equipment Solutions; • Asset Management & Services (AMS); • Corporate and Investment Banking (CIB). BNP Paribas SA is the parent company of the BNP Paribas Group. Key figures Results 2004 (*) 2005 (**) 2006 (**) 2007 (**) 2008 (**) Revenues (in millions of euros) 18,823 21,854 27,943 31,037 27,376 Gross operating income (in millions of euros) 7,231 8,485 10,878 12,273 8,976 Net income Group share (in millions of euros) 4,668 5,852 7,308 7,822 3,021 Earnings per share (in euros) (***) 5.51 6.96 8.03 8.49 3.07 Return on equity (****) 16.8% 20.2% 21.2% 19.6% 6.6% (*) Under French GAAP. (**) Under International Financial Reporting Standards (IFRS) as adopted by the European Union. (***) Adjusted for the impact of the 2006 rights issue on years 2003 to 2005. (****) Return on equity is calculated by dividing net income Group share (adjusted for interest on undated super-subordinated notes deemed equivalent to preferred shares issued by BNP Paribas SA and treated as a dividend for accounting purposes) by average equity attributable to equity holders at 1 January and 31 December of the period concerned (after distribution and excluding undated super-subordinated notes deemed equivalent to preferred shares issued by BNP Paribas SA). Long term credit ratings 31/12/03 31/12/04 31/12/05 31/12/06 31/12/07 31/12/08 Market capitalisation (in billions of euros) 45.1 47.2 57.3 76.9 67.2 27.6 Source: Bloomberg. Notations long terme Standard and Poors: AA, negative outlook – rating revised on 28 January 2009 Moody’s: Aa1, negative outlook – outlook revised on 16 January 2009 Fitch: AA, negative outlook – outlook revised on 3 February 2009 Report on Environmental and Social Responsibility 2008 04 1966: Creation of BNP 1998: Creation of Paribas The merger of BNCI and CNEP to form On 12 May 1998, the merger between BNP represented the largest restructuring Compagnie Financière de Paribas, History operation in the French banking sector Banque Paribas and Compagnie Bancaire since the end of the Second World War. was approved. 1968: Creation of Compagnie 1999: A benchmark year for the Financière de Paris et des Pays-Bas Group 1982: Nationalisation of BNP and Following an unprecedented double ten- Compagnie Financière de Paris et der offer and a stock market battle waged des Pays-Bas at the time of the over six months, BNP was in position to nationalisation of all French banks carry out a merger of equals with Paribas. In the 1980s, deregulation of the bank- For both groups, this was the most impor- ing sector and the growing tendency of tant event since their privatisation. At a borrowers to raise funds directly on the time of economic globalisation, the merger financial market transformed the banking created a leading player in the European business in France and worldwide. banking sector, poised to compete on a global scale. 1987: Privatisation of Compagnie Financière de Paribas 2000: Creation of BNP Paribas With 3.8 million individual shareholders, Merger of BNP and Paribas on 23 May Compagnie Financière de Paribas had 2000. more shareholders than any other com- Building on strong banking and financial pany in the world. Compagnie Financière services businesses, the new Group’s de Paribas owned 48% of the capital of objectives, are to create value for share- Compagnie Bancaire. holders, clients and employees by building 1993: Privatisation of BNP the bank of the future and becoming a benchmark player in the global world. BNP’s return to the private sector rep- resented a new start. During the 1990s, 2006: Acquisition of BNL in Italy new banking products and services were BNP Paribas acquired BNL, Italy’s 6th-larg- launched and financial market activities est bank. This acquisition transformed BNP were developed. At the same time, the Paribas, providing it access to a second Bank expanded its presence in France domestic market in Europe. In both Italy and internationally, and prepared to reap and France, all of the Group’s businesses the full benefits of the introduction of can now draw on a national banking net- the euro. Privatisation also significantly work to develop their activities. boosted the Bank’s profitability – in 1998, it led the French banking industry in terms of return on equity. Report on Environmental and Social Responsibility 2008 05 Presentation Retail Banking In 2008, BNP Paribas generated 60% • promoting the Group’s expansion in of business of its revenues from retail banking. It has these businesses, both through acqui- a strong international presence in retail sitions and organic growth. lines banking, with 4,000 of its 6,000 branches To support Retail Banking in its expansion, outside France, and 250,000 points of con- six central missions have been created to tact with customers in its specialist busi- provide operating units with the benefit of nesses of Personal Finance and business their expertise in cross-functional activities equipment loans.