BPCE - 2020 Universal Registration Document

NON-FINANCIAL PERFORMANCE STATEMENT

SUPPORTING THE ENERGY, ECOLOGICAL AND SOCIAL TRANSITION IN LOCAL REGIONS

ALIGNING OUR BALANCE SHEETS WITH THE PARIS AGREEMENTS BANQUES POPULAIRES AND CAISSES D’EPARGNE BALANCE SHEETS Financing outstandings: use of the PACTA method This year, GroupeBPCE launcheda new initiative to measurethe alignmentof its portfoliowith the objectivesset by COP21,aimed at limiting the increase in temperature to two degrees by 2050. This work was carried out in collaboration with the think tank 2 Degrees Investing Initiative (https://2degrees-investing.org/) which developedthe PACTA calculationengine (Paris Agreement Capital Transition) already used today by 1,500 financial institutions. The methodology is applicable to the following six sectors: electricity production, automotive construction, mining, steel production and cement production. The PACTA tool is based on the database built by 2 Degrees Investing Initiative which contains the production plans for 2025 and the technological mixes of more than 40,000 companies.By matching the lines of our loan portfolio to this database, we can calculate the technological mix of our portfolio in 2020 for each of the activities analyzed. The change in the technological mix, resulting from the transfer made by our counterpartiesto less emitting technologies, is also calculated for a 2025 horizon. This technological mix is then compared with the scenarios defined by the International Energy Agency (IEA), which can be used as proxies for temperature increases by 2050. The calculation engine also makes it possible to compare, by technology, the alignment of the relative evolution of our portfolio with the market and with the IEA scenarios. The PACTA calculation engine was installed at BPCE and integrated into a visualization tool to calculate the current alignment and technological mix, and will be extended in 2024 to each Group establishment. The exercise focused in particular on electricity production, which represents a total of €14.88 billion, excluding structured financing, of which 71% was matched with the PACTA database. This sector is analyzed on the basis of the following underlying technologies: coal, oil, nuclear, hydroelectric, and renewable (solar and wind). In 2020, after weighting by the technology mix of the PACTA database, 50.63% of our assets under management related to renewable technologies. This proportion, on a constant portfolio basis, remains stable in 2025 and brings our portfolio in line with the IEA’s Beyond 2°C Scenario (B2DS), i.e. limitation of global warming to 1.75° in 2100. The Green Weighting Factor (GWF) implemented in 2019 will enable Natixis to decarbonize its balance sheet and gradually align the impact of its financing with the objectives of the Paris Climate Agreement, i.e. a rise in temperatures of less than 2°C compared to the pre-industrial era. Natixis intends to achieve this long-termobjective while continuing to finance all economic sectors, by increasing the proportion of green in its financing and by supporting the transition of its customers to less carbon-intensive activities (1) . The GWF rating methodology was finalized in 2019 for all sectors financed by the bank, except for the financial sector. Following on from methodological development and a proof-of-concept phase, the GWF was implemented in the NATIXIS BALANCE SHEET Financing oustandings

INCORPORATING ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) CRITERIA INTO PROPRIETARY INVESTMENT ACTIVITIES BANQUES POPULAIRES AND CAISSES D’EPARGNE BALANCE SHEETS BPCE is working with the Banques Populaires and the Caisses d’Epargne to align the management of bond portfolios with ESG criteria. An analysis of bond portfolios has been offered by BPCE to institutions since June 2020. The purpose of these analyses is to provide institutions with information on the ratings assigned by a non-financial rating agency to issuers. This information enables institutions to manage their portfolios from an ESG point of view in addition to financial management and to be able to report on their integration of ESG criteria. Based on data from a non-financial rating agency, a dozen portfolios of institutions have already been analyzed. The aim is to continue these analyses with voluntary institutions and to generalize the process in order to obtain a Group vision of all investment portfolios. Secondly, it will be a question of having a vision of alignment of the portfolioswith the Paris Agreementsand of moving towards the objectives of the 2° trajectory. The indicator “Number of institutions incorporating ESG criteria in their proprietary investment decisions” makes it possible to monitor the commitment of the Banques Populaires and the Caisses d’Epargne. At the end of 2020, eleven institutions included ESG criteria in their analysis of bond portfolios. NATIXIS ASSURANCES Natixis Assurances monitors and reports the proportion of its real estate investments with an environmental label each year. At the end of 2020, 49% (by surface area) of real estate assets under managementmandate were certified (HQE, BREEAM). In 2019, Natixis Assurances extended ESG integration to its real estate portfolio and ultimately aims to fully integrate ESG criteria. To this end, an energy convergence plan and continued certification of its portfolio assets will be implemented. Identifying, monitoring and managing indicators related to sustainable development are part of the asset acquisition policy. In addition to regulations, Natixis Assurances intends to contribute fully to the challenges of ESG for a sustainable city. In 2018, Natixis Assurances made a proactive and concrete commitment to combat global warming by aligning its investment policy with the objectives of the 2°C trajectory set by the Paris Agreement. Each year, Natixis Assurances will devote nearly 10% of its new investments to green assets, with a target of 10% of its total investmentsbeing in green assets by 2030. In 2020, Natixis Assurances achieved its target by October, and more than €880 millionwas invested in green assets during the year. With this policy, Natixis Assurances intends to encourage and favor economic stakeholders contributing to the energy and environmental transition. Its commitment covers all its investment portfolios (excluding unit-linked policies).

(1) See "Introduction of Green Weighting Factor in section 6.4.2.1.

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

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