BPCE - 2018 Registration document

NON-FINANCIAL PERFORMANCE REPORT A range of services to meet the challenges facing our customers

maintaining employment in underprivileged areas and revitalizing their economic activity. The areas are selected based on strict criteria: poverty levels (the top one-third postcode areas with the highest ● poverty rates in mainland France); or unemployment rate (area with an unemployment rate among the ● highest one third of areas in mainland France); and the business creation rate (regions with a business creation ● rate below the median of all French regions). Groupe BPCE also published a general framework for sustainable development bonds on July 20, 2018, which was subject to a second party opinion published by ESG rating agency Vigeo Eiris on July 26, 2018. This framework reflects Groupe BPCE’s commitment to promoting social and environmental development initiatives and describes the three types of bonds that finance sustainable development. 1 Green bonds: environmental protection; ● 2A Social bonds – Human development: economic systems, ● infrastructure and services that foster human development and that benefit underprivileged persons (key areas: education, healthcare, social development, social housing and activities provided by local authorities); 2B Social bonds – Local Economic Development: development of ● economically or socially deprived regions by financing SMEs, local authorities and non-profit organizations. Application of the Green Weighting Factor at Natixis Natixis announced the Green Weighting Factor (GWF) at Climate Finance Day in Paris in December 2017 and has been gradually rolling it out since January 2018 to align its financing activities with the goals of the Paris Agreement on climate change. The GWF is an internal capital allocation model that encourages financing solutions with the most positive impact on the environment and climate change while anticipating changes in regulations. It adapts the expected return on different financing solutions depending on their impact on the environment and climate change by using a favorable or adverse adjustment to weighted assets ( i.e. the amount of capital required depending on the risk). The model awards a color rating, thereby encouraging green businesses and penalizing those with a brown rating. The GWF methodology is open and scalable and it will incorporate the criteria included in the EU classification system on what can be considered an environmentally sustainable economic activity – the so-called taxonomy – as progress is made by the European Commission’s group of experts. It will gradually apply to all of Natixis’ new corporate financing, asset financing and project financing activities around the world. The Green Weighting Factor applies to the sectors to which the bank has the biggest exposure, in particular transport, infrastructure, real estate, energy, and commodities trading. Natixis has set criteria for each sector to classify each financing project in terms of its environmental and climate impact. The model provides a view of its exposure to climate transition risks arising from a rapid loss in value of assets that cause the most pollution.

the second level of assessment, focusing on clients identified as ● being the most sensitive to risk, will involve an in-depth, qualitative analysis of the latter’s E&S governance. This generally requires making direct contact with the client in order to specify the systems required for identifying and mitigating the main E&S risks. This client assessment process is to be built into the bank’s existing systems for establishing new client relationships and granting loans, involving the business lines, as well as the Compliance, Risks and ESR departments. The process is to be implemented following a test phase in 2020. ANTICIPATING OPPORTUNITIES IN A RESILIENT ECONOMY An ambitious green and social bond policy After issuing its first green bond in December 2015 to finance renewable energy projects, Groupe BPCE doubled down on its green bond activity with two additional issues in 2017. In June 2017, BPCE sold the first JPY-denominated social bond on the Japanese market. This inaugural issue totaling JPY 58.1 billion (approximately € 470 million) is intended to refinance loans granted to the customers of Groupe BPCE’s Banque Populaire banks and regional Caisses d’Epargne in the education, healthcare and social sectors. In July, the Group issued a healthcare bond via a private placement with life insurance company Nippon Life, a Japanese leader in the field of socially responsible investment, aimed at refinancing loans granted in the healthcare sector. The private placement totaled $50 million (roughly € 44 million) with a 10-year maturity. The healthcare bond received an award (1) on September 7, 2017. Drawing on these three success stories, Groupe BPCE fully intends to move forward with its sustainable bond strategy on different markets, having set a goal of issuing two green or social bonds per year from now to 2020. This led to the publication of a green and social bond issuance framework in 2018: https://www.groupebpce.fr/fr/Investisseur/Dette/ Cadre-d-emission-des-obligations-vertes-ou-sociales and the launch of a project to identify the Group’s green assets. In line with the 2018-2020 strategic plan, Groupe BPCE met its aim of issuing two green or social bonds per year in 2018, even exceeding its goal with three issues. After completing a human development social bond issue in yen and a healthcare issue in US dollars in 2017, Groupe BPCE issued the following bonds in 2018: a human development samurai bond for JPY 26 billion in senior ● preferred and senior non-preferred securities (January 2018); a human development samurai bond for JPY 106 billion in senior ● non-preferred securities (July 2018); a local development bond for JPY 1.25 billion in senior preferred ● securities (September 2018). The local economic development format of this issue observes a new framework for selecting assets established in 2018 and published on the BPCE website. The loans selected are intended for small businesses (with revenues equal to or less than € 3 million) or non-profit organizations (with an annual budget equal to or less than € 3 million) with the aim of

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Registration document 2018