NATIXIS_REGISTRATION_DOCUMENT_2017

6 ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Management of ESG risks in our business lines

In addition to these due diligence procedures, Natixis has launcheda project to measurethe social and environmentalrisks impacting its customers at the beginning of the banking relationship. Developed with the aid of an external consultant, the aim of the project is to build an environmentaland social risk analysistool that can be used to assign customersto appropriate duty of care categories.The tool will be based on questionnaires specific to each sector and gradually rolled out to existing and new customers. E&S risk assessment processes and governance will be defined in 2018 for the purpose of implementingthe new tool. Whistleblowing system Natixis updated its whistleblowingsystem in 2017 to reflect the latest regulatory changes. The global policy is considered to be the minimum standard applied throughout Natixis and at all Natixissubsidiariesand branchesaroundthe world. The whistleblowingsystem is available to any person holding an employmentcontract with Natixis, and to employeesof external serviceprovidersor sub-contractors. Any internal or external employees who believe they have witnessed an illegal activity, unethical behavior, or a breach of our Code of Conduct or applicable policies and procedures is entitledto use this system. Natixis protects whistleblowers. Under no circumstances may they be subject to any disciplinary action or legal proceeding, providedthey have acted impartiallyand in good faith. As a financial institution and major economic player, Natixis is exposed to climate risk in the running of its operations and businessactivities. Incorporatingclimate risk is a key priority for the bank, given its potential impact on our organization and our financing and investmentactivities. Natixis has taken a series of measures to adapt to the consequences of climate change : Climate risks liable to have a direct impact on Natixis are a addressed in the Business Continuity Plan (BCP), which includes the management of extreme weather events (e.g. storms, heatwaves, flooding of the Seine, etc.) that could affect the company’s premises around the world. Maximum impact is estimatedin the operationalrisks map, and results in a VaR figure (95% and 99% Value at Risk) that factors in scenarioanalysesand externaldata, the quality of the BCP and insurance. The environmental/climate risks linked to our business a operations are progressively taken into account insofar as Natixis’ clients can be subject to climate risks: these include physical risks (exposure to physical consequences caused directly by climate change) and transition risks (exposure of certain sectors to the adjustments brought about by the transitionto a low-carboneconomy). CLIMATE RISKS 6.3.5

Pursuant to Article 173 of the French Energy Transition Act, Natixis is required to report on the climate risk management tools it has put in place and on its low-carbonstrategy. Measuring the climate change risks associated with our activities: physical and transition risks Since 2016, Natixis has been part of a workinggroup to improve the incorporationof these risks: Specifically,and in line with the Autoritéde ContrôlePrudentielet de Résolution(ACPR – French Prudential Supervisory Authority for the Banking and Insurance Sector), BPCE and Natixis participated in a working group addressing Article 173, Provision V of the Energy Transition for Green Growth Act of August 17, 2015, with a view to draw up stress test scenarios. The working group reviewed the sectors most exposedto physicalrisk and to transitionrisk. In accordance with Article 173, Provision VI of the Energy Transitionfor Green GrowthAct, establishingnew ESG reporting obligations, certain Natixis subsidiaries have conducted an extensiveeffort to measurethe carbonfootprintof their portfolio. Natixis Asset Management uses the Carbon Impact Analytics (1) method co-developedby Mirova and Carbone 4 to calculate the carbonfootprintof portfolios. This innovativeapproachcovers generatedemissions,prevented emissions and overall contribution to the fight against climate change. It assesses investmentsmade relative to a benchmark scenarioand againstthe principalmarketindices. Applied to the strategiesmanaged by Mirova, the methodology shows that the investmentsmade by the Natixis subsidiary are generallyin line with – if not below – the 2°C scenarioand much better than the main benchmarkindices. Natixis Asset Managementhas also publisheda carbon report in the annual report of its main funds since December 31,2016, in accordancewith the requirementsof the EnergyTransitionAct. Lastly, Natixis Assurance has published its ESG investment policy, which includes the carbon footprintof its investments,as assessed using the “Carbon Impact Analytics (1) ” method. The assessmentsare measuredin metric tons of CO 2 equivalentper million euros invested for each asset class (equities, fixed income) and changes are monitored for each portfolio. The carbon footprint is converted into a temperature increase, used to estimatethe convergencegap relativeto the 2°C target set by the Paris Agreement. According to the last assessment(at December 31,2016), 65% of the Natixis Assurancesportfolio had been subject to a carbon footprint assessment: 85% of fixed income investments and 30%of equity funds (dedicatedfunds). In the interest of assessing physical risks, Natixis and Mirova supported Carbone 4 in the development of the new CRIS method.

Description of the Carbon Impact Analytics method. (1)

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Natixis Registration Document 2017