Our Jet & Yacht Finance Team speed up the superyacht industry environmental transition
Climate scientists predict that increasing CO2 levels in the atmosphere will lead to more acidic oceans, loss of Arctic ice, making dry regions drier and wet regions wetter, rising sea levels.
Therefore, delivering on Sustainability is a license to do business in the 21st century. Since the international community became aware of the need for urgent action to limit global warming, the world has tentatively aligned to act together for a better future.
Remember in 2018, hurricanes, flooding the US East Coast led the insurance companies to apply a sharp uplift in the insurances premium in January 2019. CEO of Axa Insurance says that the world is not insurable if the temperature increases by 4 degrees. I would add that the world would not be bankable either.
“There is no Planet B” and COP24 in December 2018 rings the bell of the end of the Business as Usual. Transition to the low carbon economy is inevitable, irreversible.
Amazingly, the Monaco Yacht Show 2019 took place simultaneously with the United Nations Climate Week organized in New York. This year, I had the impression that the right place to be, was in New York to meet the young generations, Millennials and Young Billionaires committed to change the world. In the same time, the old world had meetings in Monaco.
Of course, this statement is provocative, but the yachting industry needs to speed up also its ecological transition. The yachting industry’s development has its roots in the XIXe Century industrial revolution and this cycle comes at the end. This capital and human intensive industry is at risk.
Still recently, Mark Carney states that companies and industries that are not moving towards zero-carbon emissions will be punished by investors and go bankrupt.
However, he considers that there will be industries, sectors and firms that do very well during this process because they will be part of the solution; which means that there is also opportunities for the ones who will be able to move and change first.
In that context, the banks are ready to support the transition and help corporates and private clients with identified key performance indicators related to their positive impact on the Planet.
In that respect, BNP Paribas took the opportunity of the United Nations Climate Week in September 2019 to state its public statement on the Oceans.
“With climate change and ocean pollution, it's imperative for us to take action if the yachting industry wants to continue to move in the right direction,”
Head of Jet and Yacht Finance at BNP Paribas wealth management
The Bank can help to speed-up the transition requested
Our goal is not to exclude but rather to accompany our clients on their own sustainable journey. As our CEO, Jean-Laurent Bonnafé was saying at our last European Sustainable Future Forum: “if our clients are willing to evolve and gradually transform their business model into a more sustainable one, we are there to accompany them.”
Banks are obviously the leverage to accelerate the change by providing the financial means to channel the financial resources, nurture the discussions with clients by factoring in extra-financial criteria.
It is an exciting opportunity to remain agile and be attractive for talents who now also consider a company’s ESG (environmental, social and governance) commitments when choosing an employer.
We believe in our vital role to play in supporting the transition because of our ability to bring together all players in the private Jet and Yacht ecosystem. This is how we develop actions for sustainable finance linked to our Jet and Yacht Finance offer.
Because we are talking to UHNWIs for financing or advisory purposes, we have a unique door opener to convince and giving them the possibility to accelerate the transition for legacy purposes.
In that respect, we have been working for 18 months with maritime professional organizations (e.g., SYBAss, the Superyacht Builders Association) on the production side to promote green certifications, fuel efficiency and design circularity. We are proud of the shift to a responsible approach with leaders of the shipyard industry tackling the subject seriously. It has led to the creation of Water Revolution Foundation in July 2019, an independent organization that takes the lead to neutralise the superyacht industry's ecological footprint. The best-in-class shipyards support the work of the foundation to assess the ecological footprint of superyacht production and to define the best practices of the industry through training courses and a code of conduct.
We have worked with ClimateSeed, a social business and a BNP Paribas spin-off, over the last months to deliver a carbon offsetting solution to neutralize the emissions of the fuel consumption of the asset financed by purchasing carbon credits on projects that have also some social benefits. Strong from many interactions with people of the industry, we have defined an assessment methodology of the footprint and run some models to budget our future needs in carbon credits.
Throughout a holistic approach, we include within our Jet and Yacht Finance offer a “Tick and donate” mechanism, to donate to NGOs stamped by BNP Paribas, with a positive impact on the Oceans or on good health and well-being. We collaborate with 2 foundations linked to Oceans namely: Fondation Pacifique and Race for Water and 2 related with aviation namely: Aviation Without Borders and Orbis.
Finally yet importantly, since our Jet and Yacht franchise is linked to a private banking relationship with, we offer the client to invest his assets in positive impact funds, giving further flexibility of the loans side.
At BNP Paribas, we are convinced that companies that embed ESG criteria into their strategy are more likely to deliver a sustained performance.
Our goal is to support and encourage those who decide to build, buy and charter innovative yachts reducing their pollution impact on the earth and/or agree to offset their carbon print through our existing solutions/projects identified by BNP Paribas ( www.climateseed.com).