BPCE - 2020 Universal Registration Document

NON-FINANCIAL PERFORMANCE STATEMENT

SUPPORTING THE ENERGY, ECOLOGICAL AND SOCIAL TRANSITION IN LOCAL REGIONS

CORPORATE & INVESTMENT BANKING: ESR SCREENING TOOL Natixis is also working on a new system, called ESR Screening, adapted to its Large Corporate clients. This new system aims to systematically integrate the analysis of ESG risks into the systems for entering into relationships and granting credit, through a two-tiered mechanism: the first classifies customers in due-diligence categories • according to their operating context, the maturity of their CSR risk management system, the controversies to which they may be subject, and the business relationship they maintain with Natixis; the second, focused on counterparties identified as the most • sensitive, enables in-depth analysis of the most material ESG risks. Launched in 2020, this system involves all business lines, the Risk division, compliance, and CSR, and is accompanied by significant training and acculturation work. It will be fully rolled out across all geographies in February 2021. A POLICY FOR FINANCING AND INVESTMENTS IN SENSITIVE SECTORS Natixis has set up a risk monitoring team to supervise policies in sensitive sectors. ESG principles are factored into all these policies and exclusion criteria apply. These policies cover the following sectors: coal, defense, tobacco, oil and gas. They are published on the Natixis website. https://www.natixis.com/natixis/jcms/ala_5415/fr/gestion-des-ris- ques-environnementaux-et-sociaux Internal CSR policies also cover the nuclear, mining and metals and palm oil sectors. Coal In June 2019, then in October 2020, Natixis revised its coal policy by tightening its exclusion criteria. Natixis has set up a timetable for the total phase-out of thermal coal with a deadline of 2030 for the activities of its customers in the European Union and within the OECD area, and by 2040 for the rest of the world. In addition, Natixis has committed to no longer support companies developing new coal-fired power plants or thermal coal mines. Shale oil & gas Natixis also made a commitment in May 2020 to no longer finance shale oil & gas exploration and production projects worldwide, as well as any company whose business is more than 25% based on oil & gas exploration and production using this technology. In its project financing activity, regardless of its business sector, Natixis applies the Equator Principles . Since October 1, 2020, the launch date of the new “EP IV” amendment, Natixis has been implementing stricter assessment conditions, particularly with regard to respect for human rights and the analysis of physical and transition climate risks.

In 2020, a prototype called Clim’Ap was developed to assess the exposure of a geographic area, at the scale of a French urban area, to extreme climatic hazards that could affect economic players in the area considered. The purpose of this tool is to provide the Risk and Commitments division, as well as the Development departments and business managers, with information on the degree of their clients’ exposure to climate risks at the time of contact, as well as in the context of risk monitoring. In 2020, the tool was tested at the scale of an urban area in the Languedoc-Roussillon region concerning the risk of flooding. The methodology and deployment are detailed in the Climate Risk section of Chapter 6 – Risk Management. First climate pilot exercise This is an unprecedentedand ambitious exercise, carried out by the ACPR with the aim of raising the awareness of French banking and insurance institutions about the risks of climate change. This exercise involves the Group for the banking part as well as its insurance activities, and is managed by the BPCE Risk division. The ACPR’s results are scheduled for publication in April 2021. The methodology is detailed in the Climate Risk section of Chapter 6 – Risk Management. Regulation & taxonomy Banking regulators and supervisors increased their consultations and publications on climate, environmental, and more general ESG matters in 2020. In France, the French Prudential Control and Resolution Authority (ACPR) published a report on “best practices in climate risk governance and management.” At the European level, the European Banking Authority (EBA) and the European Central Bank (ECB) launched consultations, the first for its report on ESG risk management and supervision under Article 98(8) of the CRDV, and the second for its guide to climate and environmental risks. Groupe BPCE took part in two market initiatives on the application of the Taxonomy: the European Banking Federation (EBF) and the United • Nations Environment Program Finance Initiative (UNEP FI) launched a project to assess the extent to which the European Union taxonomy on sustainable activities could be applied to banking products. A working group of 25 banks, including Groupe BPCE, is involved in the project; the European Banking Authority’s (EBA) recent work program • on sustainable financing led it to develop a specific climate-related stress test. In 2020, the first step was underway, consisting of a voluntary sensitivity analysis focusing on transition risks. This sensitivity analysis will provide a better understanding of the vulnerabilities of European banking operators to these risks. The Group volunteered to carry out the analysis of its “large corporates” exposures. Groupe BPCE is now preparing for application of the European taxonomy and is working on the integration of precise criteria and thresholds specific to the activities currently covered in the information systems used within the Group. The regulations specific to the taxonomy and the methodology for these exercises are detailed in the Climate Risk section of Chapter 6 – Risk Management.

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CLIMATE RISK ANALYSIS TOOLS A new Clim’Ap tool

Physical climate risks were analyzed according to the geographical areas in which the Group’s activities are located. The results show the heterogeneous nature of the impacts of climate hazards and a complex assessment of the economic players financed by the Group.

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE