Sustainability is the newest business opportunity for the banking sector

As the world economy bounces back from severe crisis, major players are working hard to combine business opportunity with social responsibility, heralding the dawn of a new era


Europe’s recovery has fallen far short of the expectations set out by optimistic analysts and over-ambitious politicians in years past, although this isn’t to say the business climate has suffered as a result – far from it in fact. Many companies in Europe today recognise that sustainability is as important as profitability in determining their success in the long-term, and the growing popularity of CSR programmes is testament to this development.

World Finance spoke to Gianpietro Giuffrida, Head of Private Banking at BNL-BNP Paribas, about how the bank has evolved in this changed European landscape, and how the bank’s commitment to philanthropy and CSR sets it apart from the rest.

As the economic recovery in Europe continues to disappoint, how is it that BNL-BNP Paribas can offset these challenges?
BNL is part of the BNP Paribas Group, ‘the bank for a changing world’. Change does not frighten us and, indeed, is seized on as an opportunity to innovate and improve our delivery model.

BNL-BNP Paribas’ private banking arm aims to build a partnership with our customers, being at their side and taking care of their investment needs. We have expanded and diversified our offer, not only through banking products and services but also by widening the range of solutions to answer our customers’ needs and expectations, always using a diversified approach to investment and taking into account risk profiles.

A concrete example is our wealth planning service, where we have taken into account tax and legal issues and supported our clients even in managing inheritance. Other opportunities are also available with art advisory, wine, properties and alternative investment solutions.

All this has been made possible, at least in part, because of the ability of BNP Paribas to leverage the expertise of more than 6,000 professionals in wealth management, despite the fact that many operate in entirely different sectors and markets.

Which services are offered to clients to protect their wealth in post-crisis years?
Generally speaking, the approach to financial investments advisory has evolved by focusing more than ever on the clients’ and products’ risk profiles. On the client side, any financial advice we provide is based on the client’s risk profile, their investment horizon, their risk tolerance, their knowledge and experience of financial markets, and the purpose of their investments.

On the product side, the financial risk of investment products is categorised and quantified through synthetic risk indicators. These are calculated and maintained over time for all securities traded by BNL.

Once you have identified the risks for both clients and products, you can then perfectly match your investment proposal to each client’s needs. In order to facilitate this process, BNL-BNP Paribas Private Banking has developed an IT tool that enables bankers to identify the measures they need to take in order to align clients’ portfolios to their risk profile.

If we can’t prevent new financial crises in the future, we can at least optimise our clients’ wealth protection in those circumstances.

Can you explain the importance of philanthropy in the world of business?
Corporations can lead the process of transition from traditional philanthropy to a public philanthropic attitude. The direct involvement of corporations may improve the global perception of poverty, environment, education and many other important causes.

Ultra high-net-worth individuals (UHNWI) are today playing a key role in the development of this modern, forward-thinking approach, and philanthropy can be one of the most important tools to hand. With this in mind, the modern concept of philanthropy is about conditioning different ways of doing business, and it is thanks to this evolution that today it is very common to hear about ‘impact investing’ in financial instruments. In other words, investment activities that aim to create not only an economic return for investors, but also achieve a positive and relevant social impact.

Combining business and philanthropy means that the time horizon of medium-term and long-term investments will coexist with primary needs

Combining business and philanthropy means that the time horizon of medium-term and long-term investments will coexist with primary needs such as these. Launching your own philanthropic initiative and guaranteeing its sustainability is a lifelong project in itself.

That is why it is essential to have support and guidance along the way, whether it be establishing impact measurement methodology, creating structures to guarantee the viability of your initiative, or finding those who could take over from you.

Giving meaning to your wealth requires a global approach and a wider consideration of wealth planning issues. That is why it is important to seek the advice of philanthropy experts as well as wealth planning advisors. When well thought out, a philanthropic project will meet the needs of those you wish to help. If well analysed, your financial commitment will be optimised; this is our goal at BNL-BNP Paribas Private Banking and we support our customers in their philanthropic journey with our dedicated teams.

What corporate social responsibility programmes does BNL-BNP Paribas have in place?
Corporate social responsibility (CSR) is the adaptation of sustainable development to the corporate world. It is the best way for companies to integrate environmental, social and corporate governance (ESG) criteria into their strategy and general policy.

As part of the BNP Paribas Group’s global philanthropy mission, BNL supports non-profit activities in the areas of culture, solidarity, education and the environment. In Italy, the group invests in a large number of initiatives in support of the community, ranging from BNL’s financial education courses to raising awareness of the choices available (Educare Project) and its initiatives targeted at young people, and the Arval Ecopolis project for a sustainable city.

Moreover, BNL is also involved in promoting socially beneficial solidarity projects all over the world through the BNL Foundation. For over 20 years, BNL has been actively working with the Telethon Foundation in support of scientific research. The aim is to integrate the bank further into the social fabric, and to bring it closer to the needs of the community, not only in the field of business. We can say that today, a form of socially responsible investing is not a utopia but something extremely concrete.

BNL-BNP Paribas Private Banking wants to go further in offering its customers sustainable and responsible investments (SRIs), focusing on the way in which investors integrate sustainable development and CSR into their investment choices. Poverty, inequality, exclusion, pollution, global warming and the rarefication of natural resources are all major challenges for the economy, and ones for which each investor has the power to take action. Investing is a responsibility and a means of meeting these huge challenges in the long-term.

SRIs represent a concrete way to support a responsible economy, while taking advantage of the investment opportunities offered by sustainable development. Our customers have a wide range of SRI funds available to them, as well as impact investments in selected instances.

Our in-house fund provider, BNP Paribas Investment Partners, was one of the first fund managers to promote SRI-compliant funds, having done so since 1997, and one of the first to promote the UN Global Compact. Our group is proud to certify that 100 percent of BNP Paribas’ investment partners’ portfolios respect ESG criteria – a guarantee for all our customers.

How is Private Banking BNL-BNP Paribas different from other European banks?
The assistance we offer to our clients is not limited to the simple management of wealth, but extends to the excellence of BNP Paribas Wealth Management and its 600 specialists spread over 30 countries. Our financial offers are the result of an attentive knowledge of our clients’ needs and expectations, which allows us to tailor the proper solution for them.

To reach this goal we can take advantage of synergies with other companies within our group, such as BNP Paribas Investment Partners (funds), CIB (certificates and M&A), Cardif (insurance) and Servizio Italia (fiduciary services) for dedicated products but also for totally tailored creations.

We also provide non-financial high-level services such as rural properties advice, which gives guidance on investing in wine throughout Europe, or art advisory services to help build your private collection, manage it, and even work with the most important museums in loaning your masterpieces.

For 2016 and beyond, what does Private Banking BNL-BNP Paribas have planned?
More than 500 professionals are dedicated to assisting clients in more than 40 private banking centres, with two dedicated offices for UHNWI in Rome and Milan. Our assets under management total €32bn, with an annual increasing ration of 13 percent, double the average ratio of the market. We have a 5.8 percent market share and we are fifth place in the Italian private banking sector, and reasonably confident that by the end of 2017 we will be third.

We will continue to grow our network of private bankers, thanks to our recruiting activity. In addition to these figures, we want to continue to improve in terms of quality by innovating and diversifying our offer to create better tailor-made solutions for our customers.