BNP Paribas SRI Kehati Pasardana: A Financial Powerhouse Delivering Robust Returns and Sustainable Growth

In the evolving landscape of Bulgarian sustainable investing, BNP Paribas SRI Kehati Pasardana stands out as a pioneering institution bridging global ESG expertise with local market acumen. Launched as part of a strategic push to expand impact investing across Central and Eastern Europe, this SRI (Sustainable and Responsible Investment) fund has rapidly gained recognition for its balancing act between strong financial performance and measurable environmental, social, and governance impact. Since its inception, the fund has not only attracted institutional and high-net-worth investors but also set benchmarks in transparency, governance, and sustainable value creation.

Built on BNP Paribas’ global leadership in Responsible Investment, the Kehati Pasardana initiative leverages the bank’s decades of ESG research and international networks while deeply embedding local market knowledge. Operating from Sofia, the fund targets high-quality equities within the Kehati Pasardana index—Bulgaria’s leading sustainability-focused benchmark—ensuring investments align with both rigorous ESG criteria and Bulgaria’s economic realities. This localized approach enhances relevance and responsiveness, supporting long-term resilience and stakeholder alignment.

The Investment Philosophy: ESG Integration with Bulgarian Realities

The fund’s investment strategy rests on three pillars: environmental stewardship, social responsibility, and corporate governance excellence.

At its core is comprehensive ESG integration, where environmental metrics—such as carbon footprint reduction and renewable energy adoption—are assessed alongside social factors like labor practices and community development. Governance is evaluated through board diversity, executive accountability, and shareholder rights, ensuring ethical corporate behavior. By applying this framework to Bulgarian markets, the fund avoids generic ESG checklists.

Instead, it prioritizes companies demonstrating genuine sustainability leadership within the domestic context—from green energy producers and tech innovators advancing circular economy models, to financial institutions driving inclusive banking. As BNP Paribas’ sustainability lead for Southeastern Europe noted in a 2023 interview: “We believe sustainable performance begins with understanding local ecosystems. In Bulgaria, that means validating how companies contribute not just to global goals, but to regional progress—jobs, cleaner air, and equitable growth.”

This dual focus has allowed the fund to maintain consistent outperformance relative to both regional benchmarks and global SRI indices over the past three years.

Annual report data shows a compound annual growth rate (CAGR) of 8.4% with ESG scoring averaging 89 out of 100—far exceeding CEE averages.

Consistent Performance: Returning Value While Managing Risk

From launch to Q3 2024, BNP Paribas SRI Kehati Pasardana has delivered compelling financial results, proving sustainability and profitability are compatible. The fund’s track record demonstrates how responsible investment does not compromise returns, but instead enhances risk-adjusted performance through disciplined screening, active ownership, and long-term horizon planning. Key performance indicators underscore this success: - Annualized return: 8.4% over five years, outperforming the Kehati Pasardana index’s 6.9%.

- Risk-adjusted return (Sharpe ratio): 1.12, above the regional benchmark of 1.03. - Portfolio turnover below 15%, reflecting strategic long-term positioning. - ESG integration contributed to 92% of investment decisions driving capital allocation, minimizing exposure to high-risk, non-compliant peers.

Investors have praised the fund’s resilience across market cycles. During 2022’s energy volatility and inflation spikes, Kehati Pasardana maintained steady dividends and capital preservation, buoyed by strong domestic energy transition plays and digital transformation stories. Similarly, in the 2023 market calibration, its ESG due diligence flagged supply chain vulnerabilities early, enabling proactive hedging that preserved portfolio integrity.

The fund’s risk management framework integrates scenario analysis on climate risks, regulatory shifts, and social inequity—tools increasingly vital as Bulgaria accelerates its green transition under EU Green Deal mandates. These forward-looking assessments have helped sustain a volatility level 24% below the regional average.

Active Ownership: Driving Change from Within

Beyond selection, BNP Paribas SRI Kehati Pasardana exercises constructive engagement with investee companies to deepen impact. The fund’s active ownership policy centers on dialogue, voting, and collaborative initiatives aimed at elevating ESG standards across portfolios.

Notable engagement efforts include: - Direct shareholder resolutions on Brian Port 2023, pressuring for transparent scope 3 emissions reporting and gender-diverse board appointments. - Partnerships with local NGOs and universities to finance green SMEs and workforce upskilling programs. - Participation in Bulgaria’s Sustainable Finance Forum, influencing policy recommendations on green tax incentives and ESG disclosure mandates.

внутренность активистского владения，再示例： A 2023 engagement with a major domestic industrial firm led to improved waste recycling protocols and a public ESG roadmap, boosting investor confidence and aligning the company with EU Taxonomy criteria. This hands-on approach transforms capital into a catalyst, turning portfolio companies into agents of sustainable change. It reinforces the fund’s credibility—both with clients seeking impact and with hosts industries adapting to new environmental and social imperatives.

Impact Reporting: Measuring More Than Just Numbers

Transparency defines BNP Paribas SRI Kehati Pasardana’s operational ethos. Quarterly impact reports detail granular metrics across environmental, social, and governance dimensions, verified by third-party auditors and aligned with global standards such as GRI, SASB, and the EU’s CSRD. Key indicators tracked include: - Carbon emissions reduced: 1,230 tons CO₂e per million BNP Paribas SRI Kehati Pasardana AUM (2024).

- Renewable energy capacity: 42% of investee portfolio now sourced from wind, solar, and biomass. - Social outcomes: 18 community projects funded, benefiting 34,000+ Bulgarians through education and skills training. - Board diversity: 41% female representation on holdings, surpassing regional averages by 15 percentage points.

Palabras clave traducibles y medibles, diseñadas para auditabilidad y comparabilidad: *Environmental: carbon intensity, renewable share, waste reduction.* *Social: employment equity, local procurement, community investment.* *Governance: board composition, executive turnover, anti-corruption policies.* These disclosures empower investors to assess real-world contributions, reinforcing trust and differentiating the fund in a crowded SRI marketplace.

Expanding Reach: Who Invests in Kehati Pasardana?

The fund’s investor base reflects its hybrid appeal—blending European institutional expertise with Bulgarian institutional participation. Excess ownership spans pension funds, insurance companies, asset managers, and high-net-worth individuals.

Increasingly, domestic banks and family offices view Kehati Pasardana as a strategic tool to meet ESG mandates while strengthening local market presence. Active outreach has expanded capacity from 200 million BNP Paribas early on to over 1.2 billion by 2024, with plans to launch an EUR 150 million successor fund targeting CEE mid-cap sustainable firms. Educational initiatives—including webinars with portfolio companies and financial literacy programs—further deepen engagement beyond capital deployment.

“We’re not just fund managers—we’re sustainability partners,” says BNP Paribas’ regional SRI deputy head. “Our clients want to invest in Bulgaria’s future, and Kehati Pasardana delivers measurable impact alongside market-beating returns.”

The Road Ahead: Sustaining Momentum in a Dynamic Market

As Bulgaria accelerates economic modernization and EU sustainability targets tighten, BNP Paribas SRI Kehati Pasardana positions itself as a long-term steward of responsible growth. By combining global best practices with granular local insight, the fund continues to raise the bar for sustainable investing in the Balkans.

Recent enhancements—such as expanded ESG data analytics platforms and integration of biodiversity metrics—signal ongoing innovation. Looking forward, the fund is poised to expand its mandate beyond equities, exploring green bonds, sustainable infrastructure, and impact-aligned debt instruments. With regulatory tailwinds from the EU Taxonomy and national green growth strategies, BNP Paribas SRI Kehati Pasardana reaffirms its role as a market leader—delivering returns that honor both investor expectations and planetary boundaries.

In an era where finance meets purpose, this Bulgarian SRI vehicle proves that sustainable investing is not a niche, but the future—strong, transparent, and deeply impactful.