BPCE - 2018 Registration document

2 NON-FINANCIAL PERFORMANCE REPORT A CSR strategy aimed at incorporating sustainable development in our business lines and decision-making processes

A CSR strategy aimed at incorporating 2.2 sustainable development in our business lines and decision-making processes

2.2.1

Identifying our priorities: analysis of ESG risks and opportunities to

build a relevant, ambitious CSR strategy

a method for ranking CSR risks by frequency and severity; ● a method for assessing the corresponding Risk Management ● Systems. The ranking of CSR risks was based on interviews with internal experts and tests carried out in four pilot regional banks (BRED Banque Populaire, Banque Populaire Alsace Lorraine Champagne, Caisse d’Epargne Loire-Centre, and Caisse d’Epargne Ile-de-France), BPCE and Natixis. The analysis found that Groupe BPCE is exposed to thirteen major risks. These risks are either covered by specific commitments in the TEC 2020 strategic plan or addressed in the business line action plans described in this document. * **

The Group drew on work completed in 2017 for the TEC 2020 strategic plan and an analysis of the main ESG (Environmental, Social and Governance) risks carried out in 2018 to identify its most strategic CSR issues. The ESG analysis used the risk assessment methodology followed by the Group Risk, Compliance and Permanent Control division to define: 21 CSR risks broken down into three types: governance, products ● and services, and internal operations. These risks were identified in accordance with regulations, financial center practices, rating agency assessment criteria, and CSR and reporting standards ( e.g. the Task Force on Climate-Related Financial Disclosures). Each risk was clearly defined;

Business ethics (L) Data security (O) Lasting customer relations (F) EET* funding (F)

Regional footprint (R) Voting rights (F) Financial inclusion (R) Customer protection (L) Employee diversity (R)

Working conditions (H) Employability and job transformation (O)

FREQUENCY > 3 years < 3 years

Senior management diversity (O) Shareholder rights** (R) Responsible procurement (R) Environmental footprint (R) Physical climate risks (O)

Executive pay (R) Cooperative relations (O) Employer appeal (O)

ESG risks (F) Funding of regional economies (R)

Medium

High

Critical

Low

SEVERITY

Trend

(F) inancial (O) perational (L) egal (R) eputational (H) uman Main impact

Risk category

Higher severity More frequent Both

Governance Products & Services Internal Operations

Energy and ecological transition * Issue related to Natixis **

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Registration document 2018