This case study examines how BNP Paribas Asset Management applied the Finance Sector Supplement to the Natural Capital Protocol to assess natural capital impacts and dependencies within its investment processes. It documents a practical test of how natural capital considerations can be integrated into asset management decision-making, moving beyond high-level commitments towards structured analysis. The case matters for sustainable finance because it demonstrates how investors can use emerging frameworks to better understand environmental risks and opportunities, improve engagement with portfolio companies, and strengthen long-term investment analysis.

Activities relevant to investors / finance audience

• Integration of natural capital considerations into investment analysis
• Testing of the Finance Sector Supplement to the Natural Capital Protocol in an asset management context
• Use of environmental impact and dependency analysis to inform company engagement
• Development of internal understanding and capability around natural capital risks

Together, these activities show how asset managers can operationalise natural capital frameworks within existing responsible investment and stewardship practices.

Scope

The case study focuses on the asset management sector, specifically BNP Paribas Asset Management. It centres on equity investment analysis and stewardship activities, with a geographic focus on European companies. The sustainability theme is natural capital, including environmental impacts and dependencies such as water use and ecosystem services, and how these factors relate to long-term financial performance and risk.

Who is the case study for?

• Investors and asset managers seeking to integrate natural capital into investment decisions
• Sustainability and environmental, social and governance analysts
• Policymakers and standard-setters interested in practical application of natural capital frameworks
• Finance professionals involved in stewardship and company engagement

Tools, data and methods used

BNP Paribas Asset Management applied the Finance Sector Supplement to the Natural Capital Protocol as the primary analytical framework. The process involved identifying relevant natural capital impacts and dependencies for selected portfolio companies, focusing on material environmental drivers such as water management. Qualitative and quantitative information from company disclosures and external data sources were used to assess risks and opportunities. The framework supported a structured approach to prioritising issues, linking environmental factors to business performance, and informing engagement questions. Rather than producing precise monetary valuations, the analysis aimed to improve decision relevance and internal understanding of natural capital considerations.

Findings

The case study found that the Natural Capital Protocol’s finance sector guidance can be applied in an asset management context to enhance environmental risk awareness and support more informed engagement with companies. BNP Paribas Asset Management concluded that while data limitations remain, the structured framework helped clarify where natural capital issues may be financially material and where investor dialogue could add value. A key lesson is that natural capital assessment does not need to result in full valuation to be decision-useful; improved prioritisation, transparency, and internal capability are valuable outcomes in themselves. For sustainable finance decision-makers, the case illustrates how asset managers can begin integrating natural capital into investment and stewardship processes using existing tools, while highlighting the need for better data and continued methodological development.