Contracts fully repaid or sold during the period (9,888) 8 (2,069) 9 (184) 34 (62) 1 (12,202) 53
Impairment in value (write-off) (c) (667) 664 (33) 33 (700) 697
Variations linked to changes in exchange rates (2,336) 2 (823) 5 (173) 72 (19) 3 (3,352) 82
Comprises unimpaired financial assets for which value adjustments are calculated based on 12-month expected credit losses (Stage 1) or lifetime expected (a) credit losses (Stage 2). Impaired financial assets (Stage 3) are assets for which a default event has been identified as defined in Article 178 of the EU Regulation of June 26, 2013 on (b) regulatory requirements for credit institutions.
Value adjustments for credit losses (5) (142) (146) (1) (147) (148)
Comprises unimpaired financial assets for which value adjustments are calculated based on 12-month expected credit losses (Stage 1) (a) or lifetime expected credit losses (Stage 2). Impaired financial assets (Stage 3) are assets for which a default event has been identified as defined in Article 178 of the EU Regulation of June 26, 2013 (b) on regulatory requirements for credit institutions.
Contracts fully repaid or sold during the period (306) (101) 0 (26) 2 (111) 13 (543) 15
Variations linked to changes in exchange rates (148) (23) (8) 6 (179) 6
Transferred financial assets that are not derecognized are essentially composed of the following instruments: repurchased securities;V
securitization for which the counterparties to the associated debtsV have recourse only to the transferred assets.
These instruments are considered transferred assets because they are the underlying assets of transactions that organize a transfer between Natixis and the assignee of ownership of the assets and the attached cash flows.
Financial assets at fair value through profit or loss 8,898 8,677 9,208 8,989
Financial assets at fair value through profit or loss 3,089 4,255
The fair value of the financial assets received as security that were resold or reused as security was €167 billion at December 31, 2020, versus €177 billion at December 31, 2019.
Financial assets that are past due but not impaired7.7.4 The table below provides, by type of financial instrument, a breakdown of the age of financial assets which were past due but not individually impaired at the reporting date. It does not take into account impairments based on any portfolios that may have been created.
Past due assets are assets in arrears (i.e. missed principal or interest payments), but which have not yet been impaired.
TOTAL SOURCES OF DEFERRED TAX THROUGH PROFIT OR LOSS 3,335 1,323 379 3,083 1,350 476
Sources of deferred tax on non-recyclable OCI 269 67 49 274 45 (24)
Positive amounts represent sources of deferred tax giving rise to deferred tax assets, while negative amounts represent sources giving rise (a) to deferred tax liabilities. Deferred tax related to the tax amortization of goodwill in the United States.(b)
The amount of deferred taxes on tax losses recognized at December 31, 2020 was €758 million, of which €580 million capitalized on the tax consolidation (a) group in France. The base of the tax loss recognized for the tax consolidation group in France amounts to €2,254 million, out of a total stock of tax loss carryforwards of €4,176 million. At December 31, 2020, Natixis conducted tests to measure the potential impact on deferred tax assets of the assumptions applied when implementing its tax business plans. These tests, which notably measure the impact of a +/- 10% change in the GDP growth assumptions applied, confirm the likelihood of Natixis being able to deduct tax losses, used to calculate the deferred taxes assets, from future taxable profits; Except for tax losses that arose prior to January 1, 2018 (limited to 20 years).(b) Concerning the federal deficit, the “State” and “City” portions may be activated over longer periods (limited to the legal time limit).(c)
Of which €119 million in contract liabilities (prepaid expenses) at December 31, 2020 versus €129 million at December 31, 2019.(a) Coface contributed €396.3 million to “Accruals and other liabilities” as of December 31, 2019.(b) Amounts restated in relation to the financial statements published in 2019 (see Note 5.4).*
Rights of use in respect of lease agreements (lessees) 1,241 (342) 898 1,232 (209) 1,023
Rights of use in respect of lease agreements (lessees) 1,232 175 (13) (151) 1,241
Rights of use in respect of lease agreements (lessees) 1,216 1,216 63 (56) 9 1,232
Of which +€11.4 million in goodwill recorded on the acquisition of Azure Capital Holdings Pty Ltd.(b) Of which +€10.2 million in goodwill recorded on the acquisition of Titres Cadeaux.(c) The disposal of the SFS division’s retail banking entities also altered the presentation of the Natixis CGUs. Within the former SFS CGU, the Payments entities (d) now belong to the “Payments” CGU. The Group reallocated €126 million in goodwill to the Payments CGU, predominantly comprising goodwill recognized on the recent fintech acquisitions in the aforementioned business lines. Natixis Interépargne was reassigned to Asset & Wealth Management (€31 million in “historical” goodwill reallocated).
Furthermore, goodwill on entities consolidated using the equity method amounted to €3.4 million at December 31, 2019.
carrying amount of the goodwill and its tax value. This difference in treatment generated a deferred tax liability of €320.9 million as at December 31, 2020, versus €346.6 million as at December 31, 2019.Certain goodwill recorded for the United States gives rise to a tax amortization over 15 years due to the difference between the
Including €4,156 million for the insurance entities at December 31, 2020, versus €1,509 million at December 31, 2019; Coface contributed €451.7 million (a) to Credit institutions as of December 31, 2019. The fair value of debts due to banks is provided in Note 7.5.4.
Coface contributed €301.9 million to “Amounts due to customers” as of December 31, 2019.(a) The fair value of customer deposits is presented in Note 7.5.4.
The main features of the subordinated note issues are outlined in Chapter [14] of the Pillar III report.
(in millions of euros) 31/12/2019 Issues Redemptions Translation adjustments Changes in scope (b) Other (a) 31/12/2020
Other changes mainly pertained to the revaluation of debts subject to hedging and variations in intra-group securities held by Natixis Funding for the purposes (a) of market making with respect to Natixis’ debt on the secondary market. Concerns Coface, which is now treated using the equity method.(b)
The table below does not include value adjustments for credit losses on financial assets at amortized cost (see Note 5.1.3) and at fair value through other comprehensive income (see Note 5.1.4), as well as financing and guarantee commitments given (see Note 5.20).
Assets at fair value through profit and loss – excluding trading derivatives 1 0 0 1 1 154 157 0 0 2 1 165 168
Loans and receivables due from credit institutions 10 3 14 8 10 1 45 7 4 16 10 10 1 48
Debt instruments at amortized cost 0 0 1 0 1 0 2 0 0 0 1 0 2
Assets at fair value through profit and loss – excluding trading derivatives 0 0 0 0 1 26 28 0 0 2 0 2 19 23
Less than 1 month months months to 1 year 1 to 5 years
Financial liabilities designated at fair value through profit or loss 9 0 0 2 12 135 158 12 1 0 1 11 133 159 o/w senior debt o/w senior debt
EONIA – Euro OverNight Index Average Euro Short-Term Rate (€STER) 1,578 1,305 188,369
LIBOR – London Interbank Offered Rate – USD Secured Overnight Financing Rate (SOFR) 16,319 6,096 1,410,984
LIBOR – London Interbank Offered Rate – CHF Swiss Average Rate Overnight (SARON) 125 0 28,635
LIBOR – London Interbank Offered Rate – EUR Euro Short-Term Rate (€STER) 187 0 2,901
In accordance with ANC recommendation No. 2017-02, Natixis presents its insurance businesses separately on the balance sheet and income statement.
The other balances related to the insurance business are aggregated with the balances related to the other balance sheet items by type.
changes in fair value of investments at fair value through profit orV loss, as well as gains and losses on the sale of investments, including investment property; impairment charges and reversals on investments at amortizedV cost or at fair value through other comprehensive income; amortization of acquisition costs;V
Financial assets under IAS 398.2.1 At initial recognition, financial assets and liabilities are measured at fair value, corresponding to their acquisition price at that date. Their subsequent accounting treatment depends on their balance sheet classification. In accordance with IAS 39, financial assets are classified in one of the four categories of financial assets set out below: Financial assets measured at fair value through profit and loss These are instruments held for trading purposes or designated at fair value through profit or loss on initial recognition in accordance with the fair value option amendment to IAS 39 (published by the IASB in June 2005 and adopted by the European Union on November 15, 2005).
Securities valued under this option fall into one of the following three categories: hybrid instruments that contain one or more significant andV separable embedded derivative features; instruments belonging to a group of financial assets valued andV managed on a fair value basis; instruments that present an inconsistency in accounting treatmentV with a related financial liability/asset
Held-to-maturity financial assets These are non-derivative financial assets with fixed or determinable payments and fixed maturities that Natixis has the clear intention and ability to hold through to maturity, other than those that are designated on initial recognition as at fair value through profit or loss (fair value option) or available-for-sale, and those that meet the definition of loans and receivables.
Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market, other than those designated as at fair value through profit or loss or available-for-sale. This excludes assets for which the holder cannot recover the majority of the initial investment other than because of a credit deterioration, which should be classified as available-for-sale.
Available-for-sale financial assets Available-for-sale financial assets include non-derivative financial assets that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Securities classified in this category are initially recognized at their market value. At the reporting date, they are remeasured at their market value determined based on the market price for listed instruments.
Fair value of financial instruments8.2.3 The general principles of fair value of financial instruments are the same as those presented in Note 5.6.
Reinsurance transactions8.2.4 Transfers Insurance transactions are recognized before reinsurance transfers. Reinsurance transfers are recognized in accordance with the terms of the different reinsurance treaties.
Reserves for unearned premium income are prorated separately for each insurance policy. They correspond to the portion of premium income remaining between the fiscal year-end and the premium due date.
Pursuant to paragraph 30 of IFRS 4, insurance policies and investment contracts with discretionary participation (life insurance) are measured using shadow accounting, which consists in recognizing the portion of unrealized gains or losses potentially attributable to policyholders as a deferred profit-sharing reserve. The deferred profit-sharing reserve thus reflects the potential entitlement of policyholders to unrealized gains for financial investments or their portion of unrealized losses. Considering the pay-out ratio in the 2019 budget and in accordance with the pay-out ratio recorded for 2019, the deferred profit-sharing rate adopted at December 31, 2020 was 87% compared with 89% at December 31, 2019.
In the event of net unearned losses, a deferred profit-sharing asset is recognized up to the amount for which future deferred profit-sharing of policyholders is estimated to be highly probable.
Application of the shadow accounting mechanism resulted in the recognition of a deferred profit-sharing liability on December 31, 2020 as on December 31, 2019.
Prospective analysis of the deferred profit-sharing asset’s recoverability is therefore carried out to demonstrate the ability and intention of companies to meet liquidity requirements over the remaining recoverability period without selling investments in unrealized losses. This process corresponds to a forward-looking view of future cash flows, built following regulatory and contractual conditions applied to contracts and with the help of economic scenarios based on historical probability.
Capital gains and losses on disposal of investments (net of reversals, write-downs and amortization) 131 205
Change in fair value of investments carried at fair value through profit or loss 306 1,833
At December 31, 2019, Coface contributed +€849.8 million to net income from insurance businesses.(a)
Transition between the presentation applicable to insurance companies and to banks8.3.1 The following table shows a reconciliation between insurance companies’ financial statements as presented and how they would translate into the banking format.
Change in write-downs on investments (176) (176) 0 0 (176) 0 0 0 (176)
Investment income (net of expenses) 1,590 1,512 90 (12) 1,590 0 0 0 1,590
Income and expenses net of reinsurance transfers 215 207 8 0 215 0 0 0 215
Other non-recurring operating income and expenses (13) 0 (13) 0 (13) 0 0 0 (13)
Share in income of associates (64) 0 0 0 0 0 0 (64) (64)
Income and expenses net of reinsurance transfers (14) (36) 23 0 (14) 0 0 0 (14)
Other recurring operating income and expenses (324) 0 (73) (253) (327) 0 0 2 (324)
Other non-recurring operating income and expenses (7) 0 4 (11) (7) 0 0 0 (7)
Financial assets at fair value through profit or loss 8.4.1 27,905 23,360
Share held by cedents and retrocessionaires in liabilities relating to insurance policies and financial contracts 16,504 15,218
As of December 31, 2019, Coface contributed +€3,987.4 million to “Insurance business investments”.(a)
Loans and receivables at fair value through profit and loss 8.4.1.1 0 0
Conditions for classification of financial 8.4.1.1 assets under the fair value option
Financial assets designated at fair value through profit or loss mainly consist of financial assets representative of unit-linked policies from insurance activities.
Debt instruments in the form of securities 2,257 553 1,704 2,670 622 2,048
Available-for-sale financial assets8.4.2 The table below shows available-for-sale financial assets by type of instrument (fixed-income securities, variable-income securities). It discloses the gross value before impairment, the amount of impairment and the net value after impairment.
Including mutual fund units.(a) At December 31, 2020, permanent impairment of variable-income securities stood at €168 million, compared with €53 million at December 31, 2019. (b) This expense is offset by an amount of 87% respectively, taking into account the profit-sharing mechanism (89% at December 31, 2019). The 2020 expense can be broken down into an additional impairment loss on previously impaired securities for €144 million (€16 million at December 31, 2019) and an allowance for newly impaired securities for €25 million (€37 million at December 31, 2019). Coface contributed €2,911 million to “Available-for-sale financial assets” as of December 31, 2019.(c)
Investment property – At historical cost 40 (14) 26 40 (14) 26
Fair value of financial assets and liabilities carried at fair value in the balance sheet8.4.4 Financial assets and liabilities measured at fair value are categorized based on the fair value hierarchy presented in Notes 5.6 and 7.5.
Income securities held for trading 5,668 5,668 0 0 2,286 2,202 84 o/w debt instruments in the form of securities 0 0 0 0
Available-for-sale securities – Equity investments 96 0 0 96 240 0 0 240
Financial assets at fair value measured using Level 3 of the fair value hierarchy
o/w debt instruments in the form of securities 2,534 (4) (4) (8)
Derivative instruments not eligible for hedge accounting (positive fair value) 0 o/w currency derivatives 0 o/w equity derivatives 0 o/w other 0
Financial assets designated under the fair value option through profit or loss 1,238 87 (3)
Other available-for-sale securities 2,267 (11) 51 3 o/w debt instruments in the form of securities 2,218 (11) (4) 3 o/w equity instruments 49 55 o/w other available-for-sale financial assets 0 TOTAL FINANCIAL ASSETS RECORDED AT FAIR VALUE 3,713 76 48 14
Financial assets at fair value through profit or loss 513 160 0 0 0 0 31
Available-for-sale financial assets 279 351 317 401 825 685 0 572
Fair value of financial assets valued at amortized cost on the balance sheet8.4.7
As of December 31, 2019, Coface contributed €2,022.3 million to "Liabilities related to insurance policies".(a)
Financial liabilities designated at fair 8.5.1 value through profit or loss
Information to be disclosed about the temporary exemption 8.6 from the application of IFRS 9 for insurance activities
In November 2017, Natixis presented its new 2018-2020 strategic plan, “New Dimension”. New Dimension sets out three strong initiatives aimed at developing solutions offering high added value to our clients: to deepen the transformation of our business model, which we achieved under the New Frontier plan, to allocate a significant portion of our investments to digital technologies, reflecting our clear resolve to differentiate ourselves to become a benchmark in the areas where Natixis’ teams boast strong and recognized skills.
Based on this new organizational structure, senior management monitors divisional performance, draws up business plans and manages the business from an operational perspective. In accordance with IFRS 8 “Operating Segments”, this is the segmentation used by Natixis to define its operating segments.
Wealth Management: this business line covers wealthV management activities in France and Luxembourg and Asset Management. Natixis Wealth Management holds a key place on the French market. The bank mainly develops its customer base from the clientele of the Caisses d’Epargne and Banques Populaires, and to a lesser extent from that of Natixis. Private Banking offers advisory services, financial planning and expertise, and fund management solutions.
Employee Savings Plans: this business line offers companies anV employee savings management solution (administration of employee accounts, fund administration and accounting).
In 2016, its organizational structure was adapted to better support its customers, by strengthening strategic dialog, and to accelerate the implementation of the “Originate to Distribute” model. This led to the creation of a new Investment Banking business line, whose mission is to develop strategic dialog with customers and incorporates the Acquisition & Strategic Finance, Capital & Rating Advisory, Equity Capital Markets and Strategic Equity Transactions business lines. It also includes Bond Origination.
This business line provides tools, infrastructures and services for payments: electronic payment, issuance and collection of mass electronic transfers, check processing, service vouchers, e-commerce,
In addition to these operational centers, there are Corporate Center activities, which primarily include central financial mechanisms and income related to management of Natixis’ assets and liabilities. To this end, it includes all Treasury activities, including the short-term Treasury business, which has been part of Natixis’ Finance Department since the start of 2017 (it was previously part of Corporate & Investment Banking).
Following the sale of 29.5% of the share capital of Coface (with Natixis retaining a 12.7% stake), Coface’s remaining contribution to Natixis’ consolidated financial statements is presented in the income statement on the line “Share in income of associates”. As a reminder, Coface’s main activities are credit insurance, factoring abroad, corporate information and rating, and accounts receivable.
In terms of costs, the Corporate Center recognizes the bank’s structural costs and the contribution to the Single resolution Fund.
Restated change between December 31, 2020 and December 31, 2019.(a) Of which for Asset Management:(b) - net banking income: €2,948 million; - expenses: -€2,157 million; - gross operating income: €792 million; - provision for credit losses: -€27 million; - pre-tax profit: €711 million.
Of which short-term cash:(c) - net banking income: €140 million; - expenses: -€62 million; - gross operating income: €78 million; - provision for credit losses: -€0 million; - pre-tax profit: €78 million.
Of which €1,069 million excluding the net revenues of the XVA desks, which can be broken down into €1,114 million in net revenues for FICT and -€45 million for Equities.(a)
This information is presented according to the new organization of the business lines adopted by Natixis at December 31, 2020.* Of which for Asset Management:(a) - net banking income: €3,511 million; - expenses: -€2,253 million; - gross operating income: €1,258 million; - provision for credit losses: -€6.5 million; - pre-tax profit: €1,257 million.
Corporate Center and Financial Investments (excluding Coface) (c) (d) Total 2018/2019 change (a) (87)%
Net revenues and operating expenses attributable to the Corporate Center include the residual impact of the activities sold to BPCE in the first quarter, subsequent to their deconsolidation at March 31, 2019. The impact (d) on net revenues came to €22.3 million and the impact on operating expenses amounted to -€22.5 million, both are primarily related to EuroTitres.
Financial assets at fair value through profit or loss 1,878 209,110 1 (610) 210,378
Loans and receivables due from banks and similar items at amortized cost 705 5,538 221 426 37,801 44,691
Loans and receivables due from customers at amortized cost 4,232 56,616 (286) 9 7,368 67,939
Financial liabilities designated at fair value through profit or loss 65 184,086 3,461 20,854 208,467
Deposits and loans due to banks and similar items 1,167 28,868 4,861 (176) 49,688 84,408
Deposits and loans due to customers 1,855 6,961 (39) 107 20,914 29,798
Financial assets at fair value through other comprehensive income 365 3,764 4 7,943 12,076
Loans and receivables due from customers at amortized cost 4,461 60,367 (336) 11 6,586 71,089
Financial liabilities at fair value through profit or loss* 121 214,322 3,601 235 218,279
Deposits and loans due to customers 2,597 12,781 (43) 103 15,047 30,485
Loans and receivables due from banks and similar items at amortized cost 935 26,004 265 440 604 19,867 48,115
Deposits and loans due to banks and similar items 986 42,594 2,114 (198) 518 25,913 71,927
Net income for the period – Group share (276) 106 269 110 (108) 101
Non-current assets held for sale 699 17 0 11 1 728
Financial assets at fair value through profit or loss* 170,943 10,746 36,934 9,906 272 228,802
The information on risk management required under IFRS 7, with the exception of the disclosures given below, is presented in Section 3.2.3 of Chapter [3] “Risk factors, risk management and Pillar III”.
Debt instruments at fair value through other comprehensive income 12,534 16 0 0 0 0 0 0 0 0 0 0 12,550
PD scale PD scale 0.00 to <0.15 0.15 to <0.25 0.25 to <0.50 0.50 to <0.75 0.75 to <2.50 2.50 to <10,0 10.00 to <100,0
Guarantees received for instruments impaired under IFRS 910.2.2 The following table presents the exposure of all of Natixis’s financial assets to credit and counterparty risk. This exposure to credit risk (determined without taking into account the effect of unrecognized netting and collateral) and counterparty risk is equal to the net carrying amount of the financial assets.
Debt securities at amortized cost 193 (142) 51 155 (147) 8
2015 plan 10/02/2016 6,084,435 Mar-2018 Mar-2019 2016 plan 10/04/2017 2,835,311 Mar-2019 Mar-2020 2018 plan 12/04/2019 3,260,945 Mar-2021 Mar-2022 2.68 2019 plan 10/04/2020 5,867,435 Mar-2022 Mar-2023 2.50 2020 plan 20/01/2021 1,353,434 Mar-2023 Mar-2024 2.73
Year of plan Grant date Initial number of shares granted Acquisition date
Fair value of the bonus share at the valuation date (in euros)
Plans settled in cash indexed to the share price of Natixis or its subsidiaries Total
2018 plan 26/02/2019 Mar-2020 Mar-2021 (5.0) 1.1 2019 plan 22/01/2020 Mar-2021 Mar-2022 (3.2) (12.1)
Post-employment defined-contribution plans Under post-employment defined-contribution plans, Natixis pays fixed contributions into a separate entity and has no obligation to pay further contributions.
Post-employment defined-benefit plans and other long-term employee benefits Post-employment defined-benefit plans include all post-employment benefits for which Natixis has committed to pay a specified level of benefits.
Fair value of plan assets (423) (105) 0 0 (528) (422) (104) 0 0 (526)
Effect of ceiling on assets 0 0 0 0 0 0 0 0 0 0
NET AMOUNT RECOGNIZED IN BALANCE SHEET 124 77 49 185 435 168 105 54 127 455
Separate asset components are for the most part segregated in the balance sheets of Natixis insurance subsidiaries (ABP Life Insurance), hedging the benefit liabilities of other entities within the Natixis group of consolidated (a) companies which were transferred to hedge the post-employment benefits of a few categories of employees.
Actuarial liabilities at end of period 579 212 49 185 1,025 622 238 54 127 1,042
Corresponds to Coface treated for accounting purposes under IFRS 5 and under EM since early 2020.(a) Including €86 million corresponding to the reclassification to the opening of the provision for time savings now considered as a long-term benefit.(b)
Consolidated financial statements and notes 375NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com c) Changes in recognized amounts on the balance sheet (Changes in hedging assets) Plan assets
Fair value of assets at start of period 422 104 526 255 102 357 o/w amounts paid out in respect of plan liquidation (12) (2) (14) (11) 0 (11)
Revaluation adjustments – Return on assets 1 1 2 2 1 3
Changes associated with non-current assets held for sale (a) (16) (19) (35) 0 0 0
TOTAL REVALUATION ADJUSTMENTS AT END OF PERIOD 330 13 343 328 30 358
TOTAL REVALUATION ADJUSTMENTS AT START OF PERIOD 129 3 132 45 2 47 o/w effect of ceiling on assets 1 0 1 (2) 0 (2)
Revaluation adjustments over the period 37 2 39 84 1 86 o/w effect of ceiling on plan assets 0 0 0 2 0 2
Revaluation adjustments over the period 1 1 2 (29) 1 (29)
Obligations in respect of other long-term employee benefits are accounted for using the same actuarial valuation method as that used for post-employment defined-benefit obligations, except for revaluation adjustments, which are immediately recognized in income.
Rate of increase in salaries 2.28% 2.44% - 2.27% 2.58% 3.99%
The two parameters of inflation rate and wage growth rate are no longer taken into account for the valuation of liabilities in the United States.(a)
For end-of-career awards and long-service awards, employee turnover is calculated by age bracket and grade based on a six-year average. A rate of 0% is used for employees aged 60 and over.
Consolidated financial statements and notes 379NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com i) Schedule of undiscounted payments
Other share-based plans11.2.4 Employee stock option plans under the Company employee savings plan
Plan maturity 5 years 5 years 5 years 5 years 5 years
Total subscribed amount (in millions of euros) €40.2M €2.1M €45M €26M €60M
For the record, there were no capital increases reserved for employees in 2019 or 2020.
At December 31, 2019, Natixis recorded an expense of €2.3 million for the discount granted on subscription to employee stock options under the Company employee savings plan, measured taking into account the five-year lock-up period applicable to the issued securities.
Since December 31, 2009, issues of perpetual deeply subordinated notes and preference shares have been recognized as equity instruments issued in accordance with a clause concerning dividend payments which has become discretionary and have been booked to “Consolidated reserves” in the consolidated balance sheet.
Deeply subordinated notes amounted to €1,978 million at December 31, 2020 (no change compared to December 31, 2019).
This authorization is based on the sixteenth-resolution of the General Shareholders’ Meeting of May 20, 2020. It authorizes Natixis to acquire, at a maximum price of €10 per share, a number of shares not exceeding 10% of the shares making up the capital of Natixis.
A financial guarantee is a contract that requires the issuer to compensate the holder of the contract for any loss that the holder incurs because a debtor fails to make payment when due. The exercise of these rights is subject to the occurrence of an uncertain future event.
The amounts shown represent the nominal value of the commitment undertaken: (in millions of euros) 31/12/2020 31/12/2019
Natixis guarantees the capital and/or returns on units in certain mutual funds. These guarantees are executed solely in the event that the net asset value of each of the units in the fund at maturity is lower than the guaranteed net asset value.
Unimpaired commitments for which expected credit losses are measured on a lifetime basis (S2 bucket)
New OBS commitments originated or purchased 9,153 (1) 203 (1) 9,356 (3)
Variations linked to changes in exchange rates 325 0 32 0 0 0 357 0
New OBS commitments originated or purchased 3,469 (1) 300 (2) 0 0 3,769 (3)
Variations linked to changes in credit risk parameters (excluding transfers) (1,113) (3) (748) (7) (3) 5 (1) 0 (1,864) (5)
Variations linked to changes in exchange rates (1,477) 0 (145) 0 (28) 2 0 0 (1,651) 2
The following financing commitments fall within the scope of IFRS 9: commitments qualified as financial liabilities at fair value throughV profit or loss if the entity that grants them has a practice of reselling or securitizing loans immediately after they are issued; commitments which are settled net (i.e. sold);V
Variations linked to changes in credit risk parameters (excluding transfers) (2,863) 4 (2,546) 3 (47) (4) (5) 2 (5,462) 5
New OBS commitments originated or purchased 10,595 (10) 1,258 (8) 0 0 3 0 11,855 (18)
Transfer to non-current assets held for sale 0 0 0 0 0 0 0 0 0 0
Fully sold, called or matured commitments (5,864) 1 (316) 2 (4) 0 (4) 0 (6,188) 3
Variable lease payments not included in the valuation of lease liabilities (9) (9)
Breakdown of lease liabilities and off-balance sheet commitments 14.1.3 by contractual maturity
The amounts presented in the table below comprise non-discounted contractual cash flows.
6 months to 1 year 1 to 2 years 2 to 5 years
Leases already signed but whose underlying assets have not yet been made available 0 0 0 0 0 104 257 361 1 2 2 61 312 378
< 2 years >= 2 years and <3 years >= 3 years and < 4 years >= 4 years and < 5 years > 5 years Total
Relations between the Group’s consolidated companies The main transactions between Natixis and related parties (BPCE and subsidiaries, Banque Populaire group including Banque Populaire banks and their subsidiaries, the Caisse d’Epargne network including the Caisses d’Epargne and their subsidiaries and all of the affiliates consolidated using the equity method) are described below: (in millions of euros)
Financial assets at fair value through profit or loss 19,641 258 3,155 4,517 14,376 224 3,196 5,408
Deposits and loans due to customers 163 72 36 1 346 51 41 14
Net fee and commission income (49) (46) (419) (313) (54) (46) (377) (245)
Income and expenses from other activities 51 50 6 15 69 70 3 16
Corresponds to the following entities: Factoring, Consumer Finance, Leasing and Sureties & Financial.(a)
Compensation of corporate officers The compensation of corporate officers is given in detail in the standardized tables in accordance with AMF recommendations in section 2.3 of the registration document.
Value of bonus shares granted during the fiscal year (b) €160,000 €160,000
AGIRC-ARRCO supplementary pension regime in tranche 2 cappedV at 4x the PASS (1) (3.86%),
AGIRC-ARRCO supplementary pension regime in tranche 2V capped at 4x the PASS (1) (3.86%),
Like the rest of the staff, the Chief Executive Officer is covered by the mandatory pension plan. He is not covered by the kind of supplementary pension plans described in Article 39 or Article 83 of the French General Tax Code.
Furthermore, Francois Riahi paid into an “Article 82” type life insurance policy (in reference to the French General Tax Code) put in place by BPCE. The premiums on this policy were paid by the Chief Executive Officer and not by Natixis. In 2020, François Riahi paid €69,391 into his policy. This system was not renewed for Nicolas Namias.
Indemnities for cessation of activity Severance payments The monthly reference compensation is equal to one-twelfth of the sum of the fixed compensation paid in respect of the last calendar year in activity and the average variable compensation paid over the last three calendar years of activity.
The annual social security contribution ceiling (PASS) is €40,524. Tranche 1 corresponds to the fraction of annual compensation between €0 and €40,524. (1) Tranche 2 corresponds to the fraction of annual compensation between €40,524 and €324,192. Tranche 2 capped at 4x the PASS corresponds to the fraction of annual compensation between €40,524 and €162,096.
At its meeting of February 11, 2021, the Board of Directors of Natixis defined new methods for determining the compensation for the termination of service of the Chief Executive Officer, under which the achievement of the objectives will be assessed on the basis of the fiscal years ended before said termination. These performance criteria are as follow: Average Natixis underlying net income over the two fiscal years1. preceding departure greater than or equal to 75% of the average budget forecast for the period; Average Natixis underlying ROE over the two fiscal years2. preceding departure greater than or equal to 75% of the average budget forecast for the period; Natixis cost/income ratio below 75% over the last half-year3. prior to departure.
Upon the departure of François Riahi, the Board of Directors of August 3, 2020 decided to make a non-compete indemnity of €400,000, corresponding to six months of fixed compensation, paid in installments over six months.
It should be noted that this decision does not call into question the role of François Riahi in the development of Natixis, particularly in the context of the COVID crisis.
PricewaterhouseCoopers Audit(2) was appointed by the shareholders at the General Shareholders’ Meeting of May 2016, for a term of six years ending as of the General Shareholders’ Meeting called to approve the 2022 financial statements.
The Statutory Auditors and their networks were paid the following amounts in return for their duties: (in millions of euros)
Amount % Amount % % Amount % Amount % % Amount % Amount % % Amount % Amount % %
Independent audit, certification and examination of the parent company and consolidated accounts 5,957 83% 7,863 83% (32)% 8,156 78% 7,728 72% 5% 2,438 77% 2,066 58% 15% 16,551 80% 17,657 73% (7)%
Services other than the certification of accounts 1,196 17% 2,591 17% (117)% 2,294 22% 2,681 25% (17)% 732 23% 1,312 37% (79)% 4,222 20% 6,585 27% (56)%
of which fees paid to the entity appointed as Statutory Auditor of the consolidating entities for the certification of the accounts 2,114 3,774 1,435 7,323 of which fees paid to the entity appointed as Statutory Auditor of the consolidating entities for services other than the certification of the accounts 218 192 2 412
Pursuant to the Article referred to above, the table below specifically provides information linked to net revenues, pre-tax profit, income tax and headcount as at December 31, 2020.
MIROVA NATURAL CAPITAL LIMITED, FRENCH BRANCH (formerly MIROVA-ALTHELIA LIMITED, FRENCH BRANCH) Asset Management
Azure Capital Holdings Pty Ltd (u) M&A advisory services FC 53 53 52 52 Australia
Saudi Arabia Investment Company Fin. Institution FC 100 100 100 100 Saudi Arabia
EDF GROUP INVESTMENT (r) Investment company EM 8 8 6 6 Belgium
Vermilion (Beijing) Advisory Company Limited M&Al advisory services FC 51 51 51 51 China
Natixis Partners Iberia, S.A.* M&A advisory services FC 80 80 80 80 Spain
Peter J. Solomon Company LP M&Al advisory services FC 51 51 51 51 United States
NATIXIS REAL ESTATE HOLDINGS LLC Real-estate finance FC 100 100 100 100 United States
NATIXIS REAL ESTATE CAPITAL LLC Real-estate finance FC 100 100 100 100 United States
CM REO HOLDINGS TRUST Secondary markets finance FC 100 100 100 100 United States
CM REO TRUST Secondary markets finance FC 100 100 100 100 United States
MSR TRUST Real-estate finance FC 100 100 100 100 United States
Natixis Partners M&A advisory services FC 100 100 100 100 France
FCT Liquidité Short 1 Securitization vehicle FC 100 100 100 100 France
Natixis Alternative Holding Limited Holding company FC 100 100 100 100 United Kingdom
Fenchurch Partners LLP M&A advisory services FC 51 51 51 51 United Kingdom
NATIXIS STRUCTURED PRODUCTS LTD Issuing vehicle FC 100 100 100 100 Jersey
NATIXIS NEW YORK Fin. Institution FC 100 100 100 100 United States
NATIXIS HONG KONG Fin. Institution FC 100 100 100 100 Hong Kong
NATIXIS COFICINE** Finance company (audiovisual) FC 100 100 100 100 France
Natixis Investment Managers Korea Limited Distribution FC 100 100 100 100 South Korea
AEW VIA INVESTORS, LTD Asset Management FC 100 100 100 100 Cayman Islands
AEW Partners Real Estate Fund VIII LLC Asset Management FC 100 100 100 100 United States
AEW Senior Housing Investors IV LLC Asset Management FC 100 100 100 100 United States
AEW Partners Real Estate Fund IX, LLC Asset Management FC 100 100 100 100 United States
Seaport Strategic Property Program I Co-Investors, LLC (ee) Asset Management FC 100 100 United States
ALPHASIMPLEX GROUP LLC Asset Management FC 100 100 100 100 United States
ALTERNATIVE STRATEGIES GROUP LLC (g) Holding company 100 100 United States
CREA WESTERN INVESTORS I, INC. (x) Asset Management 100 100 United States
EPI SO SLP LLC Asset Management FC 60 60 60 60 United States
HARRIS ASSOCIATES LP Asset Management FC 100 100 100 100 United States
HARRIS ASSOCIATES SECURITIES, LP Distribution FC 100 100 100 100 United States
HARRIS ASSOCIATES, INC. Asset Management FC 100 100 100 100 United States
LOOMIS SAYLES ALPHA, LLC. Asset Management FC 100 100 100 100 United States
LOOMIS SAYLES DISTRIBUTORS, LP Distribution FC 100 100 100 100 United States
LOOMIS SAYLES SOLUTIONS, LLC (x) Asset Management 100 100 United States
Ostrum AM US LLC (formerly NAM US) Asset Management FC 100 100 100 100 United States
NATIXIS ASG HOLDINGS, INC. Distribution FC 100 100 100 100 United States
NATIXIS INVESTMENT MANAGERS, LLC (d) Holding company 100 100 United States
Natixis Investment Managers, LLC (formerly NATIXIS INVESTMENT MANAGERS, LP) (e)* Holding company FC 100 100 100 100 United States
NATIXIS INVESTMENT MANAGERS INTERNATIONAL, LLC Distribution FC 100 100 100 100 United States
NATIXIS IM INNOVATION (formerly AEW CO-INVEST) Asset Management FC 100 100 100 100 France
Dorval Asset Management* (j) Asset Management FC 89 89 55 55 France
Flexstone Partners SAS Asset Management FC 84 84 84 84 France
Ostrum AM (New) (t) Asset Management FC 55 55 100 100 France
AEW EUROPE HOLDING LTD Asset Management FC 60 60 60 60 United Kingdom
AEW EUROPE INVESTMENT LTD Asset Management FC 60 60 60 60 United Kingdom
AEW EUROPE PARTNERSHIP Asset Management FC 60 60 60 60 United Kingdom
AEW GLOBAL LTD Asset Management FC 60 60 60 60 United Kingdom
AEW GLOBAL UK LTD Asset Management FC 60 60 60 60 United Kingdom
NATIXIS INVESTMENT MANAGERS UK LTD Distribution FC 100 100 100 100 United Kingdom
MV Credit Limited Asset Management FC 100 100 100 100 United Kingdom
MV Credit LLP Asset Management FC 100 100 100 100 United Kingdom
NATIXIS INVESTMENT MANAGERS HONG KONG LIMITED Asset Management FC 100 100 100 100 Hong Kong
Poincaré Holdings Ltd Asset Management FC 50 25 50 25 Hong Kong
Poincaré Capital Management Ltd Asset Management FC 50 25 50 25 Hong Kong
Natixis Investment Managers International Hong Kong Limited (formerly Ostrum AM Hong Kong Ltd)* Asset Management FC 100 100 100 100 Hong Kong
PURPLE FINANCE CLO 1 Securitization vehicle FC 89 89 89 89 Ireland
Asahi Natixis Investment Managers Co. Ltd* Distribution EM 49 49 49 49 Japan
AEW Japan Corporation Asset Management FC 100 100 100 100 Japan
AEW Value Investors Asia III GP Limited Asset Management FC 100 100 100 100 Jersey
H2O Asset Management HOLDING Asset Management FC 50 50 50 50 Luxembourg
KENNEDY FINANCEMENT Luxembourg Investment company – Asset Management FC 100 100 100 100 Luxembourg
H2O AM Monaco SAM Asset Management FC 50 50 50 50 Monaco
Natixis Investment Managers Singapore Limited (formerly Ostrum AM Asia Ltd)* Asset Management FC 100 100 100 100 Singapore
AEW Asia Pte Ltd Asset Management FC 100 100 100 100 Singapore
H2O AM Asia Pte Ltd Asset Management FC 50 50 50 50 Singapore
Natixis Investment Managers Uruguay S.A. Distribution FC 100 100 100 100 Uruguay
Natixis Investment Managers S.A., Zweignierderlaasung Deutschland Distribution FC 100 100 100 100 Germany
AEW Asia Limited Australian Branch Asset Management FC 100 100 100 100 Australia
DNCA Finance Luxembourg branch (dd) Asset Management FC 100 85 Luxembourg
AEW Central Europe Czech Distribution FC 60 60 60 60 Czech Republic
Natixis Investment Managers US Holdings, LLC (formerly NATIXIS US HOLDINGS Inc) (c)* Holding company FC 100 100 100 100 United States
DAHLIA A SICAR SCA Private Equity FC 100 100 100 100 Luxembourg
Massena Partners – Branch Asset Management and investment advisory services FC 98 98 98 98 France
NATIXIS ASSURANCES Insurance company holding company FC 100 100 100 100 France
BPCE IARD (formerly ASSURANCES Banque Populaire IARD) Insurance for damage to property EM 50 50 50 50 France
BPCE Prévoyance (formerly ABP PRÉVOYANCE) Personal protection insurance FC 100 100 100 100 France
ADIR Insurance for damage to property EM 34 34 34 34 Lebanon
REAUMUR ACTIONS (formerly ABP DIVERSIFIE) Insurance investment mutual fund FC 100 100 100 100 France
NAMI INVESTMENT Insurance real estate investments FC 100 100 100 100 France
FONDS TULIP Insurance investments (Securitization funds) FC 100 100 100 100 France
FCT NA Financement de l'économie – compartiment Immocorp II Insurance investments (Securitization funds) FC 100 100 100 100 France
SCPI IMMOB ÉVOLUTIF (Formerly FRUCTIFONDS IMMOBILIER) Insurance real estate investments FC 50 50 51 51 France
SELECTIZ Insurance investment mutual fund FC 56 56 55 55 France
ALLOCATION PILOTÉE ÉQUILIBRE C Insurance investment mutual fund FC 43 43 40 40 France
ALTER CE (COMITÉO) Online service for Central works councils FC 70 70 70 70 France
DALENYS SERVICES (formerly RENTABILIWEB SERVICES)* Internal services provider FC 100 100 100 100 France
DALENYS MARKETING (formerly RENTABILIWEB MARKETING)* Online service FC 100 100 100 100 France
Coface S.A. (a) Holding company EM 42 42 42 42 France
Coface EUROPE (a) Credit insurance and related services EM 42 42 42 42 France
BUSINESS DATA INFORMATION (a) Marketing and other services EM 42 42 42 42 Israel
COFACE BELGIUM SERVICES (a) Business and solvency data EM 42 42 42 42 Belgium
COFACE DEBITOREN (a) Receivables management and data EM 42 42 42 42 Germany
COFACE HOLDING ISRAEL (a) Holding company EM 42 42 42 42 Israel
COFACE NEDERLAND SERVICES (a) Receivables management and data EM 42 42 42 42 Netherlands
COFACE NORTH AMERICA (a) Credit insurance and related services EM 42 42 42 42 United States
COFACE POLAND CMS (a) Financial data EM 42 42 42 42 Poland
COFACE SERVICES NORTH AMERICA GROUP (a) Holding company EM 42 42 42 42 United States
COFACE SERVICIOS ESPANA SL (a) Receivables management and data EM 42 42 42 42 Spain
COFACE ROMANIA CMS (a) Insurance EM 42 42 42 42 Romania
COFACE RUS INSURANCE COMPANY (a) Credit insurance EM 42 42 42 42 Russia
COFACE SEGURO DE CREDITO MEXICO (a) Insurance EM 42 42 42 42 Mexico
COFACE SIGORTA TURKEY (a) Insurance EM 42 42 42 42 Turkey
COFACE SOUTH AFRICA (a) Insurance EM 42 42 42 42 South Africa
COFACE SOUTH AFRICA SERVICES (a) Insurance EM 42 42 42 42 South Africa
COFACE CENTRAL EUROPE HOLDING (a) Holding company EM 42 42 42 42 Austria
Colombes Fund (a) Mutual funds EM 42 42 42 42 France
Lausanne Fund (a) Mutual funds EM 42 42 42 42 Switzerland
COFACE SVERIGE – SUCC (COFACE KREDIT) (a) Insurance EM 42 42 42 42 Sweden
COFACE UK – SUCC (COFACE EUROPE) (a) Credit insurance and related services EM 42 42 42 42 United Kingdom
COFACE IBERICA – SUCC (COFACE EUROPE) (a) Credit insurance and related services EM 42 42 42 42 Spain
COFACE NEDERLAND – SUCC (COFACE KREDIT) (a) Insurance EM 42 42 42 42 Netherlands
LEID – SUCC (Coface AUSTRIA) (a) Insurance EM 42 42 42 42 Lithuania
COFACE SINGAPOR – BRANCH (COFACE EUROPE) (a) Credit insurance and related services EM 42 42 42 42 Singapore
COFACE TAIWAN – BRANCH (COFACE EUROPE) (a) Credit insurance and related services EM 42 42 42 42 Taiwan
COFACE ASSICURAZIONI SPA (a) Credit insurance and related services EM 42 42 42 42 Italy
FONCIERE KUPKA Real estate operations FC 100 100 100 100 France
Entity treated as an associate following the announcement on February 25, 2020 of the signing of a memorandum of understanding for the sale of the 29.5% stake in Coface(a) Entity deconsolidated in the first quarter of 2020 after the percentage interest fell below eligible levels.(b) In the first quarter of 2020, NIM simplified the organizational structure of the AM holding companies in the United States. As part of this transaction, Natixis US Holdings, Inc. was transformed into a limited liability company (c) (LLC), then renamed Natixis Investment Managers US Holdings, LLC.
During the first half of 2020, some of the seed money invested in the Thematics AI and Robotics fund was redeemed. As a result, Natixis IM's share of that fund became 31% as of 30/06/2020.(k) Deconsolidated entity as of the first quarter of 2020 after the fund matured.(l) Entity recently created and consolidated in the second quarter of 2020, for operational support of Asset Management activities (services, IT infrastructure).(m) Acquisition of the entity in third quarter of 2020.(n) Entity absorbed by Coface Do Brasil Seguros De Credito in the third quarter of 2020.(o) In order to develop its distribution activity in Europe, the Luxembourg entity Natixis Investment Managers S.A. created a branch in Belgium which was consolidated in the third quarter of 2020.(p) During the third quarter of 2020, the managers of Thematics AM exercised the put options on a portion of their shares, representing 10% of the share capital of Thematics AM, within the planned buyback window.(q) The shareholding rate in EDF Investissement Groupe has risen from 6.1% to 7.5% following two capital reductions in the second half of 2020.(r) Consolidation in the fourth quarter of 2020: Natixis Wealth Management will transfer its life insurance brokerage business to this subsidiary.(s) In the fourth quarter of 2020, Ostrum AM’s shareholding rate decreased from 100% to 55% following the absorption of the activities of La Banque Postale Asset Management (LBPAM).(t) The shareholding rate in Azure entities rose from 52.2% to 53.1% following the departure of two minority shareholders in the first and fourth quarter of 2020.(u) The branch closed in the third quarter of 2020.(v) Entity closed in the fourth quarter of 2020.(w) Deconsolidation of the entity in the fourth quarter of 2020 following its liquidation.(x) Deconsolidation in the fourth quarter of 2020 following absorption by DNCA Finance.(y) Deconsolidation in the fourth quarter of 2020 following absorption by NIM P3 Finance.(z) Deconsolidation of the entity in the fourth quarter of 2020 after the percentage interest fell below eligible levels.(aa) Consolidation in the fourth quarter of 2020 after thresholds were exceeded.(bb) Consolidation of the entity in the fourth quarter of 2020 as part of the development of Loomis activities in Europe.(cc) Entity consolidated in the fourth quarter of 2020, to accommodate the former activities of its subsidiary DNCA Luxembourg.(dd) Entity created and consolidated in the fourth quarter of 2020 as part of the management of a new real estate fund in the United States.(ee)
Non-consolidated equity investments at December 31, 2020 representing a fraction of the share capital greater than or equal to 10% and whose net book value is greater than or equal to €5 million are as follows: Entities Country Share of capital held (a)
In compliance with the engagement entrusted to us by your General Shareholders’ Meeting, we have audited the accompanying consolidated financial statements of the Natixis Group for the year ended December 31, 2020.
Without calling into question the opinion expressed above, we draw your attention to the point set out in Note 5.4 to the consolidated financial statements concerning the change in the presentation of option premiums.
It is in this complex and evolving context that, in accordance with the provisions of Articles L.823-9 and R.823-7 of the French Commercial Code relating to the justification of our assessments, we bring to your attention the key audit matters relating to the risks of material misstatement that, in our professional judgment, were the most important for the audit of the consolidated financial statements for the fiscal year, as well as the responses we have provided to you to address these risks.
Statutory Auditors’ report on the consolidated financial statements 405NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
The estimated gains and losses on other assets have been recorded.
Given the importance of these disposals for the Natixis Group, we considered that their accounting treatment, as well as the information provided in this respect in the notes to the consolidated financial statements, was a key audit matter for fiscal year 2020.
In the case of Coface, the amount of non-current assets held for sale amounted to €446.3 million and the loss on disposal recognized was -€145.6 million, presented in gains and losses on other assets.
With regard to H2O, the amount of non-current assets and liabilities held for sale amounted to €281.5 million and €54.7 million respectively, and the estimated loss on disposal was -€47.6 million euros, presented in gains and losses on other assets.
We have reviewed the documentation relating to these transactions made available by Natixis and assessed their accounting treatment as of December 31, 2020.
In accordance with the “impairment” component of IFRS 9, Natixis recognizes impairment and provisions to cover expected credit losses on outstandings that reflect their classification in stage 1, 2 or 3. The stage that outstandings are assigned to depends on the increase in credit risk observed since their initial recognition. The deterioration of the credit risk during fiscal year 2020 was assessed on the basis of the quantitative criteria and qualitative criteria as indicated in Notes 1.4.2 and 5.3 to the consolidated financial statements.
We considered these impairments to be a key audit matter as it is an area where judgment plays a significant role in the preparation of the financial statements, particularly in the context of a pandemic, whether in terms of classifying outstanding loans in stage 1, 2 or 3, determining the inputs and procedures for impairment calculations in respect of outstandings in stages 1 and 2, and assessing the individual provisioning level of outstanding loans in stage 3.
Net exposures in respect of customer loans and receivables totaled €67,939 million at December 31, 2020. Provision for credit loss totaled €851 million at
Please refer to Notes 1.4, 5.1, 5.3, 5.22, 6.8, 7.6.2 and 10.2 to the consolidated financial statements for more details.
the determination of individual impairment losses and theV associated governance and validation system.
As part of this work, we verified that the measures granted to customers in the context of the crisis (moratoriums, loans guaranteed by the State, etc.) had indeed been included in the risk assessment.
We also verified the information detailed in the notes on the impairment of customer loans and receivables, including those relating to credit risk.
Statutory Auditors’ report on the consolidated financial statements 407NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
The recognition of a provision and determination of its amount as well as the information disclosed in the notes to the consolidated financial statements require, by their very nature, the exercise of judgment, not least because of the difficulty of estimating the outcome and financial consequences of ongoing proceedings.
Please refer to Notes 5.22, 6.8 and 7.16 to the consolidated financial statements for more details.
We took note of the status of ongoing proceedings and the main risks identified by the Natixis Group, mainly through regular discussions with management (and more specifically Natixis Legal, Compliance and Tax Departments) and by reviewing the documentation made available to us.
As part of its capital markets activities within the Corporate & Investment Banking division, the Natixis Group holds on its balance sheet a significant portion of financial instruments recognized at fair value.
Different approaches are used to determine market value depending on the nature and complexity of the instruments: use of directly observable quoted prices (instruments classified in Level 1 of the fair value hierarchy), valuation models with inputs that are mostly observable (instruments classified in Level 2) and valuation models with inputs that are mostly non-observable (instruments classified in Level 3).
In the context of the health crisis and its effects on the financial markets, certain market parameters were adjusted with significant effects, notably on the valuations of equity products, in particular during the first half of 2020, as described in Note 1.4.3.
We considered the assessment of complex financial instruments to be a key audit matter due to the material nature of the exposures and the use of judgment in determining fair value and the effects of the health crisis.
At December 31, 2020, Level 2 financial instruments represented assets of €155,944 million and liabilities of €173,857 million.
At December 31, 2020, Level 3 financial instruments represented assets of €5,534 million and liabilities of €10,809 million.
For more details, please refer to Notes 1.4.3, 5.6, 5.22 and 7.5 to the consolidated financial statements.
We tested the effectiveness of the key controls that we deemed relevant to our audit, including those relating to: the validation and periodic review, by the Risk division, of valuationV models and related adjustments; the independent verification of valuation inputs;V
We carried out these checks with the assistance of our valuation specialists, with whom we also carried out independent valuations by examining, on a sample basis, the assumptions, methodologies and market inputs of the valuation models used to estimate the main valuation adjustments at December 31, 2020.
We also examined, on a sample basis, any variances in margin calls with Natixis’ market counterparties, which helped us assess the appropriateness of the valuations.
Lastly, we verified the information presented in the notes on financial instruments at December 31, 2020, including that relating to the impacts of the health crisis on the fair value of financial instruments.
Statutory Auditors’ report on the consolidated financial statements 409NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
We considered the valuation of these provisions to be a key audit matter insofar as they represent a significant amount in the Group’s financial statements and since some of these reserves require the exercise of judgment in determining the assumptions (e.g. experience tables and behavioral statistics) or calculation models used, particularly in the context of the Covid-19 pandemic.
Liabilities related to insurance policies amounted to €104,182 million at December 31, 2020.
We used the actuarial specialists to assist us in auditing these items.
Depending on the type of risks covered by the reserves, the main audit procedures applied included: obtaining an understanding of the general conditions relating toV insurance contracts marketed by the Group; assessing the methods and assumptions used to calculate theseV provisions, in particular their compliance with applicable regulations, market practices and the economic and financial context made more uncertain by the health crisis; testing, on the basis of accounting reconciliation, recurrence tests,V or surveys, the reliability of information relating to insurance contracts recorded in the management systems and used for the valuation of technical reserves; carrying out, based on a sample of policies, an independentV recalculation of certain reserves; assessing calculation methods and the result of the liabilityV adequacy test, as required under IFRS 4.
With the help of our specialists, we verified the appropriateness of the model adopted by management to identify existing tax loss carryforwards to be used, whether through deferred tax liabilities or future taxable profits.
This goodwill is specifically monitored by allocating it to dedicated cash-generating units (CGUs). Each CGU is subject to an impairment test, at least annually, or more frequently when there are indications of impairment, by comparison between its net carrying amount and recoverable amount (determined by discounting future cash flows).
We considered that the valuation of goodwill was a key point of our audit because of the judgment by management involved in the determination of the recoverable amount, in particular with regard to the choice of valuation methods used and the main assumptions taken into account in the calculations (in particular the assumptions regarding the growth rate of the projected cash flows from the medium-term plans of the business lines and the discount rates), but also given the current context of the health crisis.
For more details, please refer to Notes 2.5, 5.22 and 7.12 to the consolidated financial statements.
We reviewed the processes and controls implemented by Natixis to identify any objective indications of impairment and assess the need for goodwill impairment.
We then carried out, with the help of our business valuation experts, a critical review of the methods used to implement the methodology and we assessed the calculation of the recoverable amount of the various CGUs.
We thus verified: the relevance of the valuation methods selected by Natixis withV regard to market practices; the consistency of cash flow projections with management’s latestV estimates as validated by the Board of Directors, and their reasonableness in the context of the economic and financial health crisis; the consistency of the main assumptions (growth rate, discountV rate, etc.) by comparison with market data; the validity of the calculations made by the Natixis Group byV carrying out independent counter-calculations.
We also carried out analyses of the sensitivity of the valuations to a change in the main assumptions.
We attest that the consolidated Non-Financial Performance Report required by Article L.225-102-1 of the French Commercial Code is included in the Group's management report, it being specified that, in accordance with the provisions of Article L.823-10 of the Code, we have not verified the information contained in this report with respect to its fair presentation or the consistency with the consolidated financial statements of the information contained and should be reported by an independent third party.
We were appointed Statutory Auditors of Natixis S.A. by the General Shareholders’ Meetings held on May 24, 2016 in the case of PricewaterhouseCoopers Audit, and on June 16, 1998 in the case of Deloitte & Associés (taking into account the mergers of firms that have occurred since that date). The appointment was previously held by other entities of the Deloitte network for which the full history of appointments cannot be established.
As at December 31, 2020, PricewaterhouseCoopers Audit was in its fifth year of appointment without interruption. As of that date, the length of Deloitte & Associés’ uninterrupted appointment was over 20 years, including 15 years since the combination of the IXIS business of the Caisse Nationale des Caisses d’Epargne (CNCE) and the Natexis Banques Populaires business of Banque Fédérale des Banques Populaires (BFBP), which on November 17, 2006 resulted in the incorporation of Natixis through the transfer of CNCE’s subsidiary shares and equity investments to the Natexis Banques Populaires entity, which was renamed Natixis.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risk management systems and, where applicable, the internal audit of procedures for preparing and processing accounting and financial information.
The consolidated financial statements have been approved by the Board of Directors.
Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company financial statements.
In addition: identifies and assesses the risks of material misstatement of theV consolidated financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
See Note No. Year ended December 31 2020 2019 4 Cash and balances with central banks, postal cheque accounts 24,526 15,858 6 Government securities and equivalent 18,113 44,221 4 Advances to banks 81,014 87,300 6 Bonds and other fixed-income securities 10,175 15,643 6 Shares and other variable-income securities 38,910 70,504 7 Investments in associates and other long-term investments 154 192 7 Investments in subsidiaries and affiliates 13,510 13,979 11 Property, plant and equipment 118 137
Commitments given to customers 21,341 25,675 36 Commitments on securities 9,117 9,321 36 Other commitments given 20,008 23,862
See Note No. Year ended December 31 2020 2019 24 Interest and similar income 5,596 7,683 24 Interest and similar expenses (4,554) (6,866)
Information on shareholdings exceeding Note 8 the disclosure threshold following investments in French companies during 2020
Statement of assets, liabilities and Note 23 commitments related to the management of public procedures
Establishments and operations in Note 39 non-cooperative States or territories within the meaning of Article 238-0A of the French General Tax Code
At December 31, 2020, no gains or losses on disposals or impairment losses were recognized in the parent company financial statements of Natixis.
The residual share of 12.7%, which is not affected by the sale agreement, was however valued on the basis of Coface’s closing stock market price (€8.21 per share) for €158.5 million, after the recognition of a provision of -€41.4 million (including an addition of -€37.7 million in the 2020 fiscal year - see note 7 Shares in related companies, investments, other securities held.
In this environment, many companies are experiencing cash problems, and Natixis is helping its customers get through this crisis, particularly by participating in the implementation of certain government-directed economic support measures (see Note 2.1 below).
The provision for credit losses thus increased during the fiscal year 2020. It amounted to €694 million at December 31, 2020 compared to €429 million at December 31, 2019.
The SGL is a one-year cash loan with repayment deferred over that period. Recipient companies will be able to decide at the end of the first year to pay off the SGL over a period of one to five additional years. At the end of the first year, the beneficiary companies may extend the amortization period for an additional year. During this period, only interest and the cost of the State guarantee will be paid.
For eligible companies, the amount of the SGL is generally capped at 25% of the Company’s revenue. The SGL is 70% to 90% guaranteed by the government, depending on the size of the Company, with the banks assuming the rest of the risk. The government guarantee
Interest on the SGLs is in return for the time value and credit risk associated with the principal. The early repayment penalty is zero or set in a contractually reasonable manner, and the extension conditions are not set in advance but rather are reviewed at the time of the extension based on market conditions.
SGLs are recognized in the “Transactions with customers” category (see Note 2.1).
In the context of the Covid-19 crisis, Natixis granted various forms of concessions (temporary suspensions of due dates, rescheduling payments, etc.) to some of its clients, in order to help them overcome temporary cash flow difficulties caused by the crisis. A case-by-case analysis was carried out in order to determine whether the financial difficulties encountered by the client were purely fleeting and of the moment, and whether the resulting restructuring would enable the counterparty to get through the crisis without jeopardizing its ability to honor its contractual agreements at maturity.
Given the effects of the Covid-19 health crisis on financial markets, the valuation of some products was affected by market illiquidity during the fiscal year 2020.
Against this backdrop, Natixis' activities were exposed to significant remarking of certain value factors, such as the “dividend” component: - the announcement by some companies that they would suspend their dividends led to a near-elimination of most short-term dividends and was also reflected in the consensus values used for the remarking of this factor;
This situation affected Natixis’ revenues in fiscal year 2020, with a decrease in the level of remarks in the second half of the year.
However, Natixis applied for the first time on December 31, 2020 ANC regulation No. 2020-10 of December 22, 2020 which amends ANC regulation No. 2014-07 on the presentation of securities loans on the balance sheet. This change consists in presenting under “Other liabilities” the debt representing the securities borrowed, less the value of the securities borrowed (classified as trading securities on the balance sheet), and the value of the securities borrowed that have been loaned out (also classified as trading securities on the balance sheet). Details of these changes are presented in notes 6 and 16.
In addition, at December 31, 2020, Natixis modified: the presentation in the income statement of negative interest,V which is now included: in the “Interest and similar expenses” item when it relates to aV financial asset, in the “Interest and similar income” item when it relates to aV financial liability.
Before this change was applied, the amounts of premiums accrued and premiums outstanding were respectively presented in the balance sheet under “Miscellaneous debtors” and “Miscellaneous creditors”, separately from the sections on options purchased or sold to which they relate.
As these premiums are inseparable from derivatives, their presentation on the balance sheet has been modified: the amount of premiums remaining to be paid and the amount of premiums remaining to be received are now included in the value of the conditional derivatives purchased or sold to which they relate (see Note 2.16).
The reversal of the effect of discounting on impairments of non-performing loans associated with the passage of time is recognized under “Interest and similar income” on the income statement.
The Covid-19 health crisis is a global crisis affecting all the geographical areas in which Natixis operates, while its impact is much more differentiated according to the economic sectors. In this context, and taking into account a methodology based solely on country risk on the one hand and sector risk on the other, it appeared that the sector criterion represented the most relevant approach to collective risk. Accordingly, a change in the methods used to calculate collective provisions was made in 2020 to retain the sector-based criterion as the first objective indicator of risk deterioration.
Maintaining the previous methods for estimating collective risk would have led to an increase of €68.0 million on all collective provisions. However, including the change described above, collective provisions increased by €16.5 million over the year, with sectoral provisions showing a marked increase of €76.3 million in 2020. These include the provisioning of new sectors most affected by the consequences of the Covid-19 crisis (aviation, press, automotive construction, hotel and catering, communication/media and transport).
In the event of a securities lending transaction, the securities loaned cease to appear on the balance sheet and a receivable representing the carrying amount of the securities loaned is recognized as an asset.
The applicable classification and measurement rules are as follows: securities held for trading: securities that are originally bought orV sold with the intention of reselling or repurchasing them in the short term, and securities held as part of a market-making operation. Securities bought or sold for the purposes of the specialized management of a trading portfolio are also classed as securities held for trading. In order to be eligible for this category, the securities must be tradable on an active market as of the date of their initial recognition and their market prices must be accessible, representing actual transactions regularly occurring in the market under normal trading conditions.
At each balance sheet date, they are measured at market value and the grand total of any valuation difference is recognized on the income statement under the heading “Balance of transactions on securities held for trading”; securities held for sale: securities which are not classified in anyV other category are considered as securities held for sale.
They are valued at year-end at their lowest carrying amount or market value. Unrealized losses give rise to the recognition of an impairment loss, whose calculation factors in gains from any hedging transactions conducted. Unrealized gains are not recognized; securities held for investment: securities held for investment areV dated fixed-income securities acquired with the stated intention of holding them to maturity and for which Natixis has the ability to hold them through to maturity.
In line with regulatory requirements, unrealized losses are not subject to impairment, unless there is a strong likelihood that the instruments will be sold before maturity due to unforeseen circumstances or if there is a risk of default by the issuer of these instruments. Unrealized gains are not recognized; investments in associates, subsidiaries and affiliates and otherV long-term investments other long-term securities: investments made by Natixis in theV form of securities, with the intention of forging lasting professional relationships and creating a special relationship with the issuing company, but without any influence over the management of the corporate entities in which investments were made due to the low percentage of voting rights held.
They are included in the balance sheet at their lowest historical cost or value in use. Unrealized losses are subject to a provision for impairment; investments in associates: investments in the form of securitiesV that are deemed useful to Natixis’ business if held for the long term.
These securities are valued individually at their lowest value in use at the reporting date and their acquisition cost. Unrealized losses are subject to a provision for impairment; investments in subsidiaries and affiliates: shares and otherV variable-income securities in related corporate entities over which Natixis exercises exclusive control, i.e. corporate entities likely to be fully consolidated in Natixis’ consolidation scope.
Treasury shares: Natixis may hold treasury shares to regulate itsV share price under a liquidity agreement. These shares are recognized as securities held for trading and follow the same rules as other securities in this category. Moreover, treasury shares acquired through arbitraging on stock market indexes are recognized as securities held for trading.
In line with applicable accounting principles, a specific depreciation schedule is defined for each significant component of an item of property, plant and equipment which has a different useful life or is expected to consume future economic benefits differently from the item as a whole. For buildings comprising business and investment property, the following components and depreciation periods are applied: land: non-depreciable;V
Purchased software is amortized on a straight-line basis over its estimated useful life, which in most cases is less than five years. Internally-generated software is amortized over its estimated useful life, which cannot exceed 15 years.
When the fixed assets relate to a leased building, their depreciation period is made consistent with that of the leases. In particular, when Natixis decides not to renew a lease (for example under a so-called 3-6-9 lease), the period of depreciation of the fixed assets relating to the lease (e.g.: fixed fixtures and fittings) is capped at the residual term of the lease.
Issue or redemption premiums on bond issues are amortized over the life of the issues in question and the related expense is recognized under the heading “interest and similar expenses” on the income statement.
This item covers perpetual and dated subordinated notes, which in the event of liquidation can only be redeemed after all other creditors’ claims have been met. Accrued interest is credited to the corresponding receivables item on the income statement.
The accounting treatment of speculative positions is identical for interest flows. Contracts are marked to market value at each reporting date and any unrealized losses are recognized in income as provisions.
In accordance with Article 41 of the Amending Finance Law for 1997 (No. 97-1239 of December 29, 1997), amended by Article 121 of the Amending Finance Law for 2008 (No. 2008-1443 of December 30, 2008), Article 5 of the Amended Finance Law for 2014 (No. 2014-1655 of December 29, 2014) and the agreement signed with the French State on December 24, 2019, Natixis manages certain public procedures on behalf of the French State, mainly consisting of loans and grants to foreign States conferred within the framework of Public Development Aid, non-concessional loans to foreign States, grants to the “Fund for Private Sector Aid and Studies” and the stabilization of interest rates for export credit guaranteed by the State. The related transactions, some of which may be guaranteed by the State, are recognized separately in the financial statements. The State and other related creditors have a specific right over the Natixis’ assets and liabilities allocated to these institutional operations. The bank’s assets and liabilities relative to these operations are identified on the balance sheet under each of the headings concerned with these operations.
A provision is set aside for defined-benefit plans based on an actuarial assessment of the benefit obligation using the projected unit credit method. This method draws on demographic and financial assumptions. The value of plan assets is deducted from the actuarial debt. This valuation is carried out on a regular basis by independent actuaries.
differences between expected returns on plan assets andV reimbursement rights and their actual returns; minus the market value of plan assets at the closing date.V
Since 2010, Natixis allocates plans, the payment of which is based on shares, to certain categories of its personnel. These plans are settled in two forms : in Natixis shares for some and cash indexed to the price of the Natixis share of others. Each plan is a three-year plan, with one-third of the plan settled after two years and two-thirds at the end of the vesting period, with the exception of “short-term” plans settled in cash indexed to the Natixis share price, which are settled in the year they are granted.
All of these plans are contingent on satisfying service and/or performance requirements.
The corresponding expense recognized in the 2020 income statement was €9.3 million versus €18.0 million at December 31, 2019.
In accordance with Delegated Regulation No. 2015/63 and Implementing Regulation No. 2015/81 supplementing the BRRD Directive on ex-ante contributions to financing mechanisms for the resolution, the Single Resolution Board set the level of contributions to the Single Resolution Fund for 2019. The contributions paid to the fund may be made in the form of cash guarantee deposits which are recorded as assets on the balance sheet (up to a maximum of 15% of the contributions called up) and contributions recognized in the income statement under the item “Taxes and regulatory contributions”.
In order to improve the clarity of its financial statements, Natixis has modified the presentation of premiums on options settled on a maturity or final basis (see Note 2).
The impact of these changes on the balance sheet is presented below: (in millions of euros)
Impact of change in how option premiums are recognized 2019 pro forma before modification
Bonds and other fixed-income securities 15,643 (5,484) 10,159 14,645 (4,470) 10,175
Shares and other variable-income securities 70,504 (29,403) 41,101 68,346 (29,436) 38,910
Natixis announced on November 5, 2020, at the time of the presentation of its quarterly results, the launch of a program of transformation and operational efficiency that will generate approximately €350 million in sustainable cost savings at the end of 2024 (circa €270 million in exceptional costs over the period), including in particular the transformation of the Corporate and Investment Banking activity.
This approach of anticipation, adaptation and development has led Natixis, since 2016, to organize its support functions around two areas of activity in Europe: Paris and Porto. In line with this organizational plan, a development project for the Porto center was presented to the social partners at the end of January 2021.
This would consist of: continue the development in Porto of the support functions alreadyV established there, in particular Technology & Transformation – with Data & Technology, COO-CIB and Global Business Management & Transformation, Human Resources and Risks; locating other support functions in Porto: Finance, Workplace andV Communication, as well as certain Corporate and Investment Banking activities within Coverage and Distribution Portfolio Management.
This proposed takeover bid, at a price of €4.00 per share (dividend attached), will be submitted to the AMF for review and will, if applicable, be followed by a squeeze-out if the conditions of implementation work are satisfied.
This proposed offer would be part of an ambitious industrial project for the development of Natixis’ business lines and the simplification of its functional channels, which Groupe BPCE intends to study as part of the preparation of its strategic plan.
Natixis and Arch Capital 3.3 Group Ltd. announce the completion of the contract to sell 29.5% of the share capital of Coface
Following the approval of the relevant competition and regulatory authorities, Natixis and Arch Capital Group Ltd. announced on February 10, 2021 the sale by Natixis of a 29.5% stake in the share capital of Coface to Arch Financial Holdings Europe IV Limited, an affiliate of Arch Capital Group Ltd., at a price of €9.95 per share (dividend attached).
Interbank and similar transactions 105,540 103,158 * o/w subordinated loans 0 0 o/w reverse repurchase agreements 34,692 36,220 o/w accrued interest 56 86
Non-performing loans amounted to €30 million at December 31, 2020, compared with €48 million at December 31, 2019. At December 31, 2020, as at December 31, 2019, Natixis had no irrecoverable loans due from credit institutions.
Provisions for non-performing loans amounted to -€30 million at December 31, 2020, compared with -€48 million at December 31, 2019.
The amount of perpetual subordinated loans totaled €808 million at December 31, 2020 versus €808 million at December 31, 2019.
Restructured loans as defined in Note 1 amounted to €263 million in performing loans, before impairment, at December 31, 2020 versus €183 million at December 31, 2019. The amount after impairment amounted to €259 million at December 31, 2020 versus €182 million at December 31, 2019.
Non-performing loans amounted to €3,764 million at December 31, 2020 versus €2,856 million at December 31, 2019 (of which €179 million at December 31, 2020 relating to irrecoverable loans versus €195 million at December 31, 2019).
Bonds, shares and other fixed Note 6 and variable income securities
Parent company financial statements and notes 429NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
The main changes during 2020 related to:(b) - the Natixis Marco capital reduction for -€300 million; - the Natixis Trust capital reduction for -€50 million; - the disposal of Récomex for -€10 million; - the counter-valuation of Natixis North America for -€14 million; - the Natixis Payment Holding capital increase for +€21 million. The main changes during 2020 related to:(c) - Coface S.A. additional provisions of +€38 million.- - Natixis Paiement Holding additional provisions of +€68 million.
Information on shareholdings exceeding the disclosure Note 8 threshold following investments in French companies during 2020
The table below was drawn up in accordance with the provisions of Article L.247-1 of the French Commercial Code : Breach of threshold of 5% of share capital %
A – BREAKDOWN OF INVESTMENTS WITH A GROSS VALUE OF OVER 1% OF THE REPORTING COMPANY’S CAPITAL
NATIXIS ASSURANCES 30 AV PIERRE-MENDÈS-FRANCE 75013 Paris NC 148,014 EUR 1,138,721 EUR 100.00%
NATIXIS TRUST 51 AVENUE JOHN F. KENNEDY L-1855 Luxembourg NC 609,865 EUR 134,015 EUR 100.00%
NATIXIS ALGÉRIE IMMEUBLE EL KSAR – ZONE D’AFFAIRES MERCURE – LOT 34/35 BAB EZZOUAR 16311 Alger NC 20,000,000 DZD 1,619,177 DZD 100.00%
CONTANGO TRADING S.A. 30 AV PIERRE-MENDÈS-FRANCE 75013 Paris NC 90,100 EUR (82,931) EUR 100.00%
DF EFG3 LIMITED Maples Corporate Services Limited of PO Box 309, Ugland House, Grand Cayman, KY1-1104 NC 85,000 USD (1,674) USD 100.00%
Of which subsidiaries and investments not covered under paragraph A.* Excluding income of the year.(A) FY 2020.(a) Coface S.A. – FY 2019.(b)
Parent company financial statements and notes 431NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Parent company financial statements and notes 433NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
At December 31, 2020, Natixis changed the way options purchased or sold are presented, backed by a premium paid in installments or in fine.
Securities transactions 20,606 85,143 o/w trading securities, liabilities on borrowed securities 0 66,577 o/w trading securities, other liabilities on securities 20,592 18,552 o/w accrued interest 14 14
As these premiums are inseparable from the derivative instruments, their presentation in the balance sheet has changed: the amount of premiums accrued and premiums outstanding is now included in the value of options purchased or sold to which they relate (see Note 2.16).
Provisions for impairment deducted from assets (1,420) (578) 567 1 3 (1,427)
NIT dispute As a reminder, on December 18, 2019, the French antitrust body (Autorité de la Concurrence) announced that France's four historical meal voucher companies were to be fined a total of nearly €415 million for price fixing. On a financial level, the fine incurred by Natixis came to €83.3 million (of which €4.4 million for Natixis Intertitres alone, with Natixis being severally liable for the balance). Natixis has appealed this decision and believes it has numerous arguments in its defense with which to challenge it. Under these conditions, no provisions were booked in the financial statements at December 31, 2019 or December 31, 2020.
The remaining average working lives of employees, for all benefits, is 12.0 years versus 12.2 years at December 31, 2019.
Benefits paid over the period (3) (3) (1) (35) (42) (3) (6) (2) (41) (52)
Benefits vested over the period 1 7 3 17 28 1 6 3 19 29
Payments to the fund during the period (1) (1) (2) (2)
Actuarial gains and losses on benefit obligations (13) 2 (11) 41 9 2 2 54
At December 31, 2020, amounts due under the Time Savings Account are included in “other long-term benefits” in the amount of €69 million, whereas they were (a) recorded as of December 31, 2019 under “short-term benefits” in the amount of €64 million.
Of which -€176 million in interest expense on subordinated debt at December 31, 2020 versus -€197 million at December 31, 2019.
At December 31, 2020, Natixis modified the presentation of negative interest in the income statement, which is presented: in the “Interest and similar expenses” item when it relates to aV financial asset; in the “Interest and similar income” item when it relates to aV financial liability.
Of which, at December 31, 2019, €1,100 million in net gains and losses in connection with the sale of the Specialized Financial Services division to BPCE.(a)
The tax consolidation agreement at Natixis Group is based on the principle of neutrality, whereby each subsidiary determines its tax and contributes to the Group tax as if it were not consolidated.
Parent company financial statements and notes 445NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Fee and commission income and expenses 138 62 202 31 1 434 32 55 242 56 2 387
Other banking income and expenses 212 3 (9) (7) 0 200 213 9 (1) (3) 0 218
OTHER INSTRUMENTS 299,474 369,861 o/w hedges - of interest rate instruments 35,418 26,265 - of exchange rate instruments 23 3 - of other instruments 2,386 2,721 o/w macro-hedges 122,221 171,974 o/w isolated open positions 351 309
Information on risk management is presented in Section 3.2.3 of Chapter [3] “Credit and counterparty risks”.
Parent company financial statements and notes 447NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Foreign exchange transactions and foreign currency Note 37 loans and borrowings
Bonds and other fixed-income securities 1,904 1,215 4,448 2,608 0 10,175
Parent company financial statements and notes 449NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
At December 31, 2020, in accordance with the above-mentioned Article, Natixis hereby reports that it has: in Panama, €66 million in outstanding financing (net of provisions)V and €78 million in loan commitments given; in the Bahamas, financing outstandings (net of provisions) ofV €264 million; in Oman, €426 million in outstanding financing (net of provisions),V €2 million in financial guarantees given and €157 million in loan commitments given.
Company financial results over the last five fiscal years (Articles 133, 135 and 148 of the French companies decree)
Income after tax, depreciation, amortization and provisions 0.52 0.53 0.58 0.71 0.05
Social security and other employee benefits 388,380,689.14 503,004,737.45 421,145,026.49 523,163,629.26 317,843,440.76
Of which in 2018:(a) - an ordinary dividend of €945,086,577.60; - a special dividend of €1,512,138,524.16.
In compliance with the assignment entrusted to us the General Shareholders’ Meeting, we carried out the audit of the parent company financial statements of Natixis for the year ended December 31, 2020, as appended to this report.
In our opinion, the parent company financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company for the past fiscal year and of the results of its operations for the year then ended in accordance with French accounting principles.
The global crisis related to the Covid-19 pandemic has created particular conditions for preparing and auditing the financial statements for this fiscal year. The crisis and the exceptional emergency health measures taken have had multiple consequences for companies, particularly in respect of their activity and financing and have caused increased uncertainties for their future outlook. Some of these measures, such as travel restrictions and remote working, have also had an effect on the internal organization of companies and on the arrangements for conducting audits.
It is in this complex and evolving context that, in application of the provisions of Articles L.823-9 and R.823-7 of the French Commercial Code pertaining to justification of our assessment, we bring to your attention key points of the audit as they pertain to the risk of material misstatement which, in our professional judgment, were the most important for the audit of the annual financial statements for the year, as well as the responses we have provided to these risks.
The assessments thus made are part of the audit of the annual financial statements taken as a whole, as approved above, and the formation of our opinion expressed above. We do not provide a separate opinion on specific items of the annual financial statements.
As part of its financing activities within the Corporate & Investment Banking division, Natixis recognizes provisions on an individual basis to cover incurred credit losses on loans and receivables granted to customers.
The Covid-19 pandemic has led to a health and economic crisis that is affecting borrowers’ ability to repay their debts, with mixed situations depending on geographic regions and business sectors. In response to this crisis, each country deployed specific governmental measures (partial unemployment schemes, state-guaranteed loans, moratoriums, etc.).
For more details, please refer to paragraph 10 of Note 2 and to Note 17 to the parent company financial statements.
The determination of the market value of these financial instruments is based on valuation techniques that include a significant amount of judgment in the choice of methodologies and data used, given: the use of internal valuation models;V
We tested the effectiveness of the controls that we deemed relevant to our audit, including those relating to: the validation and periodic review, by the Risk division, of valuationV models and related adjustments; the independent verification of valuation inputs;V
The valuation impacts related to the health crisis, particularly on Equity products, were taken into account in our work with particular attention to the estimates used by Natixis.
Statutory Auditors’ report on the parent company financial statements 453NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Information given in the management report and in the other documents on the financial position and the financial statements provided to shareholders
We certify the existence, in the section of the management report of the Board of Directors devoted to corporate governance, of the information required under Articles L.225-37-4, L.22-10-10 and L.22-10-9 of the French Commercial Code.
As regards the information provided in accordance with the requirements of Article L.22-10-9 of the French Commercial Code relating to the remuneration and benefits paid or allocated to corporate officers and any other commitments made in their favor, we have verified the consistency of that information with the financial statements or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from companies included in the scope of consolidation. Based on this work, we certify the accuracy and fair presentation of this information.
As regards the information relating to elements that your company considered likely to have an impact in the event of a public exchange offer or takeover bid, provided in accordance with the provisions of Article L.22-10-11 of the French Commercial Code, we verified their compliance with the documents from which they were taken and which were provided to us. On the basis of this work, we have no matters to report on this information.
In accordance with part III of Article 222-3 of the AMF General Regulation, the management of your Company informed us of its decision to postpone the application of the single electronic reporting format as defined by Commission Delegated Regulation No. 2019/815 of December 17, 2018 for fiscal years beginning on or after January 1, 2021. As a result, this report does not contain any conclusions on compliance with this format in the presentation of the annual financial statements intended to be included in the annual financial report mentioned in I of Article L.451-1-2 of the French Monetary and Financial Code.
Management is responsible for the preparation and fair presentation of the parent company financial statements in accordance with French accounting principles and for such internal control as management determines is necessary to enable the preparation of parent company financial statements that are free from material misstatement, whether due to fraud or error.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment throughout the audit. In addition: identifies and assesses the risks of material misstatement of theV financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; obtains an understanding of internal control relevant to the audit inV order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control; evaluates the appropriateness of accounting policies used and theV reasonableness of accounting estimates and related disclosures made by management in the parent company financial statements; assesses the appropriateness of management’s use of the goingV concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the Statutory Auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the parent company financial statements or, if such disclosures are not provided or are inadequate, to issue a qualified opinion or a disclaimer of opinion; evaluates the overall presentation of the financial statements andV assesses whether these statements represent the underlying transactions and events in a manner that achieves fair presentation.
The Finance Department prepares Natixis’ consolidated financial statements and all consolidated regulatory reports (including solvency, liquidity and resolution-related ratios) using the tools and databases developed and administered by Natixis S.A.
For the preparation of the consolidated financial statements and part of its regulatory reporting, Natixis has software that enables it to: produce a local IFRS-compliant reporting package, including, forV foreign entities, a reporting period foreign currency conversion feature; extend its data collection and consolidation processes toV regulatory reporting; guarantee the consistency of data relating to the banking andV insurance consolidation scopes; offer retrieval features that can be used to input data into theV various reports; offer BPCE access to Natixis’ data through dedicated interfaces, inV keeping with confidentiality rules given that Natixis is listed; secure the integration process for consolidation packages receivedV from international entities through the implementation of local first-level controls followed by centralized second-level controls.
To perfect its overall data collection system, Natixis is continuing to develop its consolidation tool by adding new modules or adapting existing modules to new standards (including the update of IFRS 9 as of January 1, 2018 and IFRS 16 as of January 1, 2019 and changes to FINREP reporting in 2020 and 2021), thus facilitating the compilation and preparation of certain regulatory reports (COREP capital reporting and FINREP), in addition to financial statements for publication.
Natixis is also continuing its project to provide streamlined and pooled data, which is gradually being implemented through the introduction of a summary of all functions (accounting, regulatory, financial management and risk management), through quality accounting data and enabling the production of the new regulatory reports required by the regulator (MREL, Anatitres, Anacrédit) and allowing analyses at a granular level.
The fact that most subsidiaries have their own management and control functions means that internal control procedures are decentralized and are tailored to the organization of each of the consolidated entities, relying on a multi-tier accounting control process: a first line of defense, where first-level permanent and localV controls in operational business lines are integrated into the processing process and formalized in detailed work programs; a second line of defense overseen by each entity’s Financial orV Compliance or Risk Departments where permanent second-level controls, independent of operating processes, are performed to ensure the reliability of accounting and regulatory reporting processes and verify the existence and quality of the first-level controls; finally, a third line of defense, the last level of this system, devolvedV to the General Inspection (Natixis or BPCE) in its role of periodic control.
For accounting, permanent and periodic controls apply to the completion and/or monitoring of: for justifying accounts, accuracy and veracity checks, such as theV procedures for management/financial account reconciliation (on-balance-sheet outstandings and off-balance sheet commitments), reconciliation of cash accounts and checking and clearing of suspense items; consistency checks through analytical reviews;V
These controls are conducted using several accounting systems, whose number is being reduced, however, due to the integration of a significant part of Natixis’ consolidated scope into the target financial information ecosystem.
For all these scopes, Natixis and its subsidiaries continue to develop their accounting and financial control procedures and to equip themselves with reconciliation and control tools that contribute to the auditability of the processes, with the Finance Department supervising, supporting and monitoring the controls carried out within the subsidiaries.
homogenization of control procedures and programs within theV various business lines and entities of the Group: method, tool, feedback and timing of processes.
For Natixis, the system is organized based on: accounting or regulatory production teams, within the businessV lines or centralized within the Accounting and Ratios Department, that handle all work related to the correct entry of transactions and the collection of data required for regulatory and prudential reporting and the implementation of day-to-day controls; first-level controls under the hierarchical and/or functionalV authority of the Accounting and Ratios Department including all monthly and quarterly controls; independent second-level controls under the hierarchical authority ofV the Accounting and Ratios Department and the functional authority of the Compliance Department. The Permanent Financial Control-LOD2 Department, in addition to managing the system, also performs its own controls, including the review of first-level controls; dedicated tools that allow for the automated reconciliation ofV account entries and centralization of control results using an internal application.
This entire system contributes to the security and reliability of published financial information.
As part of the coordination of the financial control function within Natixis, the Permanent Financial Control-LOD2 Department carries out the following tasks: definition of the control policy applicable to Natixis and itsV subsidiaries: organizational and operational principles of permanent internal control for accounting, fiscal and regulatory matters, in accordance with the policy established by Groupe BPCE; management of the control system within the subsidiaries,V working with the Permanent Financial Control officers appointed by each of the local Financial, Compliance or Risk Departments. This takes place through quarterly Financial Control Committee Meetings, themed workshops, and bilateral cooperation with international entities and platforms; monitoring and implementing an accounting and regulatory controlV environment within each entity by collecting and operating a set of periodic reporting dashboards. The results of these dashboards are then sent to each entity, including a process for alerting the finance, compliance or risk officers and, if necessary, the central or local Control Functions Coordination Committees.
Work in 2021 will be focused on the following actions: continuation of projects resulting from regulatory and normativeV changes, such as SURFI 2020 (RUBA reporting) whose implementation has been postponed by the regulator, FINREP 2021, Basel 3 revised – CRR2, IFRS 17 (for insurance entities), etc; the ongoing progress of the project to streamline the informationV systems used for market and financing transactions in France and abroad; the continued implementation of the project to streamline and poolV data used by the various synthesis systems, with the launch of a large-scale contract data project to streamline our architecture by integrating one central process for accounting and management data, as well as a single adjustment process at the service of all downstream consumers; strengthening finance/risk governance and controls for valuation,V observability and fair value hierarchy for financial products; continued deployment of the tool for reporting the results of firstV and second level controls in Natixis subsidiaries and branches; the continuation of the actions undertaken to strengthen first andV second-level controls, particularly in the area of accounting to combat corruption in order to comply with the directives of the French Anti-Corruption Agency, on the prudential and regulatory areas for adapting systems to changes in 2021, and more generally in the field of “Data”, to meet BCBS 239 requirements.
audits conducted by Statutory Auditors. This work is carried out byV a group of firms working in a uniform manner each quarter on most of the entities falling within Natixis’ scope of consolidation and whose opinions rely on, in particular, compliance with policies determined and validated beforehand by Natixis and the effectiveness of local internal control procedures.
Strategic outlines and 6.1 organization of the ESR policy 460 Strategic pillars of ESR6.1.1 460
Business line contributions 6.4 to green and sustainable growth 473 Sustainable growth: financing 6.4.1 the transformation in society 474
Green growth: financing the energy 6.4.2 transition and combating climate change 488
Report by one of the Statutory 6.10 Auditors, appointed independent third party, on the consolidated non-financial performance report 538
Banking, Asset & Wealth Management, Insurance, Payments) and its functional channels, and covers environmental, social/societal and economic dimensions.
With its strong and recognized expertise, Natixis' ambition in terms of ESR involves all of its business lines (Corporate and Investment
Strategic outlines and organization of the ESR policy 461NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
(1) Percentage of assets managed on behalf of third parties by affiliates of Natixis Investment Managers (NIM) that systematically include ESG criteria in their investment decisions.
monitoring the inclusion of extra-financial criteria in executiveV compensation; examining ESR risks in terms of investment, economic performanceV and reputation; monitoring reporting, particularly the Statement of Non-FinancialV Performance; reviewing the Company’s extra-financial ratings.V
At the executive level, an ESR Sponsors Committee bringing together executives from all Natixis business lines and functions, around the Executive Management Committee, ensures the validation and monitoring of the ESR strategy.
To feed its thinking and steer the implementation of its strategy, ESR now relies on two steering Committees: one dedicated to internal ESR impacts and employee engagement, the other to sustainable business development and the management of ESR risks in our business lines.
Lastly, the ESR team works in close coordination with the BPCE sustainable development Department, both in defining and monitoring strategic guidelines and in reporting consolidated ESR data at Group level.
the United Nations Principles for Responsible Investment (UN-PRI)V since 2008; the Equator Principles since 2010;V
Adopted in 2015 by the UN’s 193 Member States at the sustainable development Summit in New York, the SDGs have become the benchmark for measuring progress by governments and private companies, including banks.
Mindful of its role in achieving these goals, Natixis has identified 13 SDGs to which it already makes a material contribution that is set to expand in the years to come, through financing and investments or in its own daily operations.
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Partner of the EDHECinfra Research Chair on ESG risk analysis of infrastructure investments
Transfer of skills as part of the Solidarity Leave with the Planète Urgence association
Major player in financing renewable energies in France and worldwide 100% green electricity supply contract for buildings in France
Partnership with the NGO Electriciens Sans Frontières, for the installation of solar panels in health centers
Commitment to reduce the energy consumption of buildings in the Île-de-
Natixis is a partner of Paris Action Climat, a signatory of the city of Paris “100 hectares” charter and a member of the Les Deux Rives circular district
Alignment of the investment strategy with the Paris Agreement (affiliates of
IN OUR BUSINESS LINES IN OUR OPERATIONS AND OUR SOLIDARITY PROGRAMS
Strategic outlines and organization of the ESR policy 465NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
General Shareholders’ Meetings Meetings and newsletters (specific mechanism for individual shareholders)
In-house information – ESR training Specific Committees (e.g. Committee for Hygiene, Safety and working conditions) Employee Opinion survey
Since 2020, Natixis has responded to the CDP questionnaire with BPCE.*
In accordance with the new requirements of the non-financial performance report, Natixis has described its business model (see p. 8-9) and identified the main risks and opportunities arising from the social and environmental impact of its activities, the respect for human rights, and the fight against corruption and tax avoidance.
increased transition risk for the energy and natural resourcesV financing business lines.
Protection of customers and investors Risks of money laundering and terrorist financing Risks of corruption Cyber risks
Number of ESG risk reviews 6.5.1 AUM in solidarity investments 6.4.1.4
Percentage of financing with the greatest impact on the climate (rated brown)
 Handle clients’ after-sales requests in a fair and timely manner
 Behave in accordance with Natixis commitments with regard to Environmental and Social Responsibility
These guidelines are illustrated using examples that are representative of the activities and duties performed at Natixis.
The Code of Conduct is available on the Natixis website at: Bespoke conduct governance
All the Natixis business lines and support functions are in charge of adapting the principles of the Code of Conduct to their activities. Accordingly, conduct matters have been included in the governance of different Group entities via existing or newly created Conduct Committees.
Local adaptations are covered by rules set out in the Global Conduct Policy, which outline: the responsibilities imposed by the Code of Conduct and,V specifically, how conduct must have a bearing on both strategic and operational decisions and on individual behavior; the terms of governance and reporting;V
The Committees all met at least once in 2020 and reviewed any shortfalls with respect to the Code – in terms of Human Resources, risk, compliance or other matters – ensuring that these shortfalls were addressed in the annual appraisals of the employees concerned.
The process put in place allows for timely monitoring of the alert, with in particular, depending on the applicable regulations: immediate acknowledgement of the report;V
Natixis places great importance on protecting customer’ interests and it regularly enhances its customer information, KYC and complaint handling process.
With regard to corruption, Natixis has a corruption prevention program whose main rules and procedures are set out in the Anti-corruption policy, applicable to all its entities and employees and available on the website ( docs/application/pdf/ 2020-08/politique_anti-corruption_natixis.pdf/).
For more information on these various topics, please refer to Chapter [3.2.8.4] “Non-compliance risks - Financial security”.
The coordination of interest representation issues is monitored by a dedicated team within the Corporate Secretary’s Office, Public Affairs.
All new products and new activities must be approved with regard to these laws and regulations. In addition, Natixis reports transparently on its organizational structure and operations, and discloses its revenues and the corresponding taxes on a country-by-country basis for greater clarity on the determining factors of its tax expense. It has also adopted the UK HM Revenue & Customs Code of Practice on Taxation for Banks.
Natixis observes transparency rules intended to combat tax avoidance in France and around the world. As such, it applies the Common reporting Standard (CRS) on the Automatic Exchange of Information (EAI), which systematically provides tax authorities with information on revenue of tax residents received abroad, the US FATCA standard that aims to combat tax evasion involving foreign accounts or entities held by US taxpayers (refer to Chapter [3.2.8.3] Protection of clients and investors – Know Your Customer (KYC)) as well as the European standard DAC6 on the declaration of transactions with a potentially tax-aggressive nature. More generally, Natixis complies with the international tax standards published by the OECD (BEPS actions).
Green Weighting Factor (portfolio environmental impact) 23% green 26% neutral 51% brown 21.6% green 32.6% neutral
% of green assets in portfolios (commitment of 10% by 2030) 3.2% 4.5%
% of total assets under management (2019: €934bn/ 2020: €1,135bn). The scope of reporting on indicators was extended (nine affiliates in 2019/24 affiliates + (a) four distribution platforms (NIM Solutions, Managed Portfolio Advisors, NIM Solutions US, Active Index Advisor) in 2020). Including the sustainable bonds of Ostrum, Mirova and DNCA. The increase is mainly due to the merger of Ostrum with LBPAM.(b) Including the Natural Capital strategies of Mirova, the Water strategy of Thematics and the Ossiam Food for Biodiversity strategy.(c)
Taking into account the SDGs by Natixis’ different business lines In Asset Management
Thanks to the partnership established at the end of 2019 with the independent impact rating agency Impak Finance, Vega IM integrates impact analysis into the management of a fund in order to meet the challenges related to the SDGs. This innovative approach, which takes into account both the generation of positive impacts and the mitigation of negative impacts, led to the creation in 2020 of the VEGA Responsible Transformation Fund.
Thematics developed, during fiscal year 2020, an impact measurement approach built on data provided by ISS ESG to assess the positive or negative influence of the funds on the 17 SDGs. The contribution of these funds can range from -10 to +10 for each SDG, ultimately making it possible to assign a score on environmental and social issues. All the funds subject to the analysis obtained a positive rating at the end of the evaluation cycle, and above their benchmark. In parallel, the controversies of the companies that make up the fund are studied. The objective for Thematics is to be able to compare its ratings in opportunities (SDG) and in risks (controversies) with the benchmarks of the strategies, and possibly with the funds of other managers to measure its impact against its peers.
Flexstone worked in 2020 on the evolution of its ESG analysis grid with the inclusion of priority SDGs in the evaluation of each investment. In particular, four priority SDGs were selected: climate, education, gender equality, decent work and economic growth. This new approach will be effective from 2021.
Government of Mexico: first sovereign bond linked to the sustainable development Goals
Natixis acted as Sole Sustainability Structurer and Joint Bookrunner to assist the Mexican Ministry of Finance in the design of the sustainable emission benchmark linked to the SDGs. This framework combines an eligibility program with green and social projects. The eligibility of social projects will be determined using geolocation, with priority given to vulnerable populations living in remote and disadvantaged areas (illiteracy, low attendance at school, lack of health services, lack of access, electricity, etc.).
This is the first time that the SDGs have been used as an entry point for a framework and that an opinion on SDG alignment has been given by the United Nations Development Program (UNDP).
into consideration in the investment models each of its affiliates develops. The integration of ESG criteria is thus progressing throughout the management of NIM’s affiliates.
Business line contributions to green and sustainable growth 475NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com 21 Natixis Investment Managers affiliates, which together hold 93% Partners, Ossiam, Ostrum AM, Seeyond, Seventure Partners, of total assets managed by Natixis Investment Managers affiliates, Thematics Asset Management, Vega Investment Managers, Vauban had signed the PRI as of 31/12/2020, namely: AEW CILOGER, AEW Infrastructure Partners, Vaughan Nelson IM, WCM Investment Capital Management, Alliance Entreprendre, Dorval Asset Managers. NIM Solutions, a services and fund distribution platform, Management, DNCA, Flexstone Partner, Harris Associates LP, is also a signatory. In 2019, Natixis Investment Manager also signed Investors Mutual Limited, Loomis Sayles, Mirova, MV Credit, Naxicap the PRI on behalf of the federation of investment firms it represents.
These were developed by a group of 30 founding banks, including Natixis, brought together by the Finance Initiative of the United Nations Environment Program (UNEP FI), and now include 214 banks.
Stakeholders4. 6.1.5 Dialog with stakeholders 6.3 Business ethics and security – Representation of interests 6.4.3.1 Natixis’ biodiversity commitments
The affiliates of Natixis Investment Managers offer a range of solutions built on the conviction that ESG criteria can play an important role in identifying potential risks, seizing opportunities and generating returns for investors.
Found under the name “ESG analysis” in the 2019 Non-Financial Performance Statement.(1) Found under the name “ESG integration” in the 2019 Non-Financial Performance Statement.(2)
% in total assets under management of NIM 93% 83% 12% 2% 8% 1% 31%
Only certain funds include the notion of impact. It is therefore not applied to all assets under management.* For Real Estate and Infrastructure affiliates, there are no labeled funds, so this category includes assets (buildings or infrastructure) that have received a GRESB ** assessment and/or have obtained an environmental certification such as BREEAM In- Use, HQE, etc.
DNCA, a leading European equity manager, developed its own ESG rating model in 2018, called Above & Beyond Analysis (ABA). This model analyzes its portfolios by rating issuers according to ESG criteria focused on two complementary concepts: Corporate social responsibility and the sustainable transition. This approach has been complemented by a proprietary impact analysis model that seeks to generate significant and measurable positive environmental and social impacts in addition to maximizing financial returns. The model assesses a Company’s ability to meet three requirements: additionality (adding value to the market or regulation), intentionality (integration of the Company’s strategy) and measurability (using relevant comparable data). For the time being, this analysis only applies for the management of the DNCA Invest Beyond Semperosa fund. Dedicated impact reporting(1) is published each year.
DNCA manages €26 billion, of which €7.5 billion are certified (i.e. 29% of assets under management). In 2020, DNCA obtained SRI certification for five new funds and aims to have its entire offering (equities, bonds) certified by the end of 2021. DNCA won three awards at the “Responsible Finance Awards”, rewarding the performance of its SRI approach.
Mirova, an affiliate dedicated to sustainable investment, this year took another step forward in its specific positioning, focused on impact. Indeed, in 2020 Mirova received the B-Corp label and changed its bylaws to become a company with a mission, thus confirming the importance for the Company of putting its societal utility at the heart of its operations. Mirova systematically takes into account in its investment filters the ESG criteria for all asset classes, i.e. €19.5 billion of assets under management, of which 15 billion are labeled. The Company is 100% SRI and all of its portfolios are aligned with a 2°C warming trajectory, in line with the ambitions of the Paris Climate Agreement. During the year 2020, Mirova was also at the origin of the reCOVery initiative created in partnership with Fabernovel, a collaborative thinking process for companies and financial players to encourage the debate on a fair and sustainable restart of the economy following the COVID-19 crisis.
Vega Investment Managers, a specialist in tailor-made management solutions for private investors, has since 2018 developed expertise in fund selection taking into account ESG criteria. The ESG Club manages this selection based on an in-depth analysis of the responses to a questionnaire sent to Asset Management companies that declare that they have integrated an ESG process. This SRI/ESG universe of open architecture fund selection feeds VEGA Durable, launched in October 2018 (wealth management funds of funds) and the SRI guidance mandates in personalized GSM.
Seeyond, a specialist in active quantitative management, focused in 2020 on the accessibility of non-financial raw data in order to integrate them optimally into its investment approaches: three ESG data providers were selected for this purpose. Seeyond has also strengthened the governance of ESG issues with the creation of a Socially Responsible Investment Committee (composed of the Deputy CEO, the Head of Development, members of management, quantitative research and development). Since 2020, Seeyond has managed a second fund according to a euro zone equity strategy incorporating ESG (sustainable investment management) criteria: allocation of investments according to the ESG risks of issuers and exclusion of the most risky. The addition of this new fund brings assets under sustainable management to €920 million, i.e. 10.4% of total assets and 17.6% of equity assets.
In order to improve the transparency of information, in 2020 Ossiam increased the number of ESG indicators monitored in the portfolios and consolidated in ESG information sheets that will be shared with clients from 2021. These sheets cover ESG issues, but also from 2021 the alignment with a 1.5°C scenario, the portfolio’s contribution to the SDGs and the results of the votes and commitments by portfolio.
Following the merger of Ostrum with LBPAM, Thematics manages two formerly Ostrum new strategies, explaining an increase in AuM managed by Thematics to €2.98 billion at the end of 2020. An ESG specialist joined Thematics at the beginning of 2021 to strengthen the ESG approach on these strategies and the positioning on climate and collaborative engagement.
Thematics AM obtains the SRI label for all its thematic strategies Thematics AM takes a new step forward in its (representing €1.9 billion in assets under management). commitment as a responsible company. In 2020 the The SRI label, awarded following a strict certification portfolio management company was awarded the SRI process conducted by independent bodies, is a unique label for all of its existing range of global thematic benchmark for savers wishing to participate in a more strategies, namely the five funds Thematics AI & sustainable economy and give meaning to their Robotics, Thematics Safety, Thematics Subscription investments.
Responsible management is applied to 100% of their assets under management.
Harris Associates uses a fundamental bottom-up research process to identify companies that are trading at a significant discount to their estimated intrinsic value. As part of this process, all material risks and opportunities are taken into account, including ESG issues. These are factored into the estimation of intrinsic value and, where relevant, are brought up during the engagement with the portfolio companies’management teams. Taking all the material ESG criteria into account provides a clearer picture of a firm’s intrinsic worth and its potential to generate shareholder value over the long term.
Naxicap Partners, a French Private Equity specialist, is involved in LBO and Private Equity financing in all sectors of activity. It applies ESG analysis to all companies in its portfolio in which the total amount invested exceeds €5 million, which account for 98% of assets under management. External auditors perform mandatory preinvestment ESG analysis which takes a detailed look at the main ESG issues in order to establish an action plan for the years to come.
Before making any investment decisions, the investment team looks at: ESG strategy;V
AEW CILOGER proposes a systematic integration of ESG criteria on 17% of its assets (€5.9 billion in sustainable investment), and in 2020 created an SRI module on the energy performance monitoring portal to monitor action plans to improve the ESG performance of all assets.
AEW CILOGER set up a working group within the French association of investment property companies (Association française des sociétés de placement immobilier – ASPIM) to create a real estate SRI label in France incorporating criteria covering all environmental, social and governance issues. After local work carried out in 2019, the label resulted in a ministerial decree and was published in July 2020. In this vein, the SRI certification of two consumer funds is in the process of obtaining. It should take place at the beginning of the 2021 fiscal year.
AEW Capital Management is expected to acquire over $1 billion in gross real estate value in 2020, all of which will include an ESG (responsible investment) analysis.
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AEW Capital Management is committed to integrating the 17 SDGs into the activities of the entire portfolio to ensure that its ESG program contributes to a more sustainable world. This integration is monitored and measured by the ESG Committee and a third-party ESG consultant. The results are published each year in the sustainable development report.
For the management activity, NIM Solutions has developed a quantitative and qualitative internal ESG analysis methodology: definition of the investment universe by applying a quantitativeV filter; proprietary scoring to identify the best ESG funds;V
Natixis Assurances systematically includes an ESG-certified unit-linked product (SRI or Greenfin certification) in all new life insurance policies. These certified unit-linked products represented €1.75 billion at the end of 2020.
Launch of a responsible individual retirement savings plan In 2020, Natixis Assurances launched a new individual retirement savings plan (PERI) which offers an ESG approach incorporating SRI-certified funds. This plan is composed of three positive impact assets: a Euro fund that undertakes to invest at least 10% ofV new payments in assets with a positive impact for the climate; two unit-linked vehicles that incorporate ESG criteria:V
Societal exclusion policies: Natixis has adopted exclusion policies for sectors and issuers that do not respect certain human rights and fundamental principles of corporate responsibility. DNCA, Ostrum AM, Mirova, Seeyond, Thematics AM, Ossiam and Natixis Assurances apply these commitments to their investments, in full compliance with their fiduciary duties towards their customers. The following sectors and issuers are excluded: controversial weapons;V
companies deemed the worst offenders (which do not observe theV principles of the United Nations Global Compact or the OECD Guidelines for Multinational Enterprises)(2); blacklisted countries (those on the FATF list or under US orV European embargo).
Ostrum AM, Mirova, Seeyond, DNCA, Thematics AM, Dorval and Ossiam place shareholder engagement at the center of their responsible investor approach.
The voting and engagement policies are based on two complementary principles: individual ongoing engagement by using voting rights andV maintaining dialog with issuers; collaborative engagement alongside other investors aimed atV raising awareness of the importance of ESG among issuers, government authorities and regulators. In 2020, DNCA supported two new commitments related to climate change (CA100+ and the CDP SBTi campaign), while Ostrum supported several new commitments on the traceability of livestock supply chains(3).
Mirova and Ostrum call for a gender equality action plan Mirova, Ostrum AM, Amundi, AXA IM, La Banque Postale Club does not aim to impose mandatory quotas, but AM and Sycomore AM, representing nearly €3,000 billion supports a voluntary approach aimed at achieving of assets under management, created in significant and lasting change within companies (dialog November 2020 the “30% Club France Investor Group” with the management bodies of companies, analysis of in order to promote greater gender diversity within the recruitment processes, use of voting rights to governing bodies of SBF 120 companies. The objective is encourage companies to act when the measures taken to increase the representation of women on the SBF 120 are deemed insufficient). governing bodies to reach at least 30% by 2025. The
Natixis Interépargne (NIE) is committed to sustainability as a pioneer in employee and retirement savings in France with over €35 billion in assets under custody. Amounts managed by Natixis (via Natixis Investment Managers) alone account for nearly 25% of this market in France, which is estimated to be worth €136.6 billion at June 30, 2020 by the French Asset Management Association (AFG).
The increase in outstandings is due to an acceleration in the distribution of these funds (by BPCE and partner distributors) in response to regulatory incentives (PACTE law), a greater appetite of clients for SRI funds and better performance of SRI funds.
This fund was awarded the “Relance” label launched in October 2020 by the French Treasury: this label aims to direct French savings towards investment vehicles that support the economic recovery plan unveiled by the French Government following the COVID-19 crisis. With €820 million under management at the end of September 2020, it is the largest fund to have received this label, without having to change its portfolio, which was already aligned with the requirements of the label.
Any fund that mentions a management policy under the label in question in its legal documentation is considered to be “labeled”.(1) Solidarity Funds (Mirova solidaire) and solidarity-based 90/10 funds.(2)
Sustainable bonds raise funds that may only be used to finance or refinance a series of green or social projects (only social projects for social bonds). The projects financed by social bonds and sustainable bonds include vital infrastructure such as access to clean water, access to basic services like education and healthcare and maintaining or developing employment.
The market is growing strongly but remains modest in size compared to the environmental bond market ($180 and $963 billion respectively for social and green bonds)(1).
Supporting our customers with innovative products to deal with the COVID-19 crisis The COVID-19 crisis has brought social considerations back to the forefront of the thematic or impact financing market: while containment measures worsen poverty, exacerbate social inequalities and put a strain on the resilience of companies, Social bonds emissions were very well received by the market, as evidenced by the over-subscription of order books (three to seven times).
Inaugural social issues in the context of COVID-19 Natixis, sole structurer of Unédic’s social issue
Carried out as part of the Social Bond Principles of ICMA(2), this issue represented to date (May 2020) the largest social bond ever issued in the world, all issuers combined. Worth €4 billion and maturing in 2026, the transaction was a great success with investors: at its close, the order book stood at €7.75 billion.
employees. Unprecedented in terms of their scale, these schemes help to preserve the employment and income of more than one in two private employees in France, and to protect people affected by the particularly difficult economic context.
This inaugural issue, which took place in the context of an unprecedented health and economic crisis, will mainly be dedicated to financing the crisis response measures deployed by Unédic: reinforcement of the traditional unemployment insurance schemes and the introduction of an exceptional activity mechanism partial covering more than 12 million private sector
In September 2020, as a structurer and order-maker, Natixis supported the Caisse d’amortissement de la dette sociale (CADES) in its first issue since the start of the health crisis, inaugurating its social bond program drafted in accordance with the Social Bonds Principles. This issue received a second opinion from VigeoEiris, which awarded it its highest rating (“advanced”), in line with best market practices.
The funds raised through the issuance of social bonds by CADES will be allocated to the financing and/or refinancing of social security deficits, deficits caused by decreases in revenue (economic conditions, deferral or exemption of charges), and/or increases in expenses (materialization of social risks, greater use of benefits).
How to respond to the coronavirus epidemic? Survey of responsible investors international asset managers from ten countries with a total of more than €13 trillion in assets under management responded to the survey: Natixis’ Green & Sustainable Hub conducted a survey in April 2020 of global investors to understand their expectations regarding the response to the coronavirus epidemic, particularly in terms of financing. Twenty-four for 96% of investors, the Social Bond framework isV appropriate for financing requests related to the COVID-19 crisis; transparency is required: 88% of investors require aV precise allocation of funds as a prerequisite for investment; 52% and 44% of them consider, respectively, medicalV and epidemiological studies, and the costs of transformation of production lines (for the supply of prevention and care equipment) as the most relevant allocations of funds for a bond issued by a company or financial institution.
Green growth: financing the energy transition 6.4.2 and combating climate change
Climate change is one of the most critical challenges facing our global society. Through its various assessment reports, the IPCC(1) provides scientific evidence that urgent action is needed to limit greenhouse gas emissions and address climate-related risks. In 2015, governments agreed in Paris to limit global warming to well below 2°C above pre-industrial levels while pursuing efforts to hold it to 1.5°C. The financial sector has an important role to play in addressing the climate crisis by supporting the transition to a low-carbon climate-resilient economy that balances the environmental, social and economic needs of society. Recognizing its responsibility as a financial actor, Natixis has committed to align its balance sheet with the objective of the Paris Agreement. By joining the Collective Commitment to Climate Action (CCCA) under the Principles for Responsible Banking in 2019, Natixis committed to mobilize its products, services and relationships to help facilitate the economic transition necessary to achieve climate neutrality.
This internal tool will enable Natixis to set climate impact targets for each of its business activities in 2021, and ultimately deliver on its commitment to align its balance sheet with the objective of the Paris Agreement. The tool includes both (i) a comprehensive methodology to assess the climate impact and climate transition risk of each financing (rated on a 7-level color scale from brown to green), and (ii) an internal capital allocation mechanism that links the amount of internal capital being allocated of each transaction to its level of positive or negative impact on climate change (and other environmental impacts when material). By using a favourable or adverse adjustment to risk weighted assets (credit RWA), the GWF adapts the expected return of each transaction depending on the environmental impact of the object being financed (project, asset, general corporate purpose). This is an internal mechanism that has no impact on the regulatory RWAs.
The GWF rating methodology was finalized in 2019 for all sectors financed by the bank, with the exception of the financial sector. After the methodological development and a proof of concept phase, the GWF was implemented in the bank’s IT systems and incorporated in the bank’s processes along the lending value chain. The GWF is being gradually deployed globally to all business lines. At December 31, 2020, the GWF tool is applied to the entire bank balance sheet with the exception of the financial sector, representing €154 billion in outstandings, of which 70% has been rated.
Because the GWF is fully imbedded in the bank’s credit process, it has proved to be much more than a mere assessment and reporting tool. Since it was rolled-out a year ago, it has become a true decision making, strategic dialogue and operation incitation tool. The GWF has indeed been used for several purposes in 2020, including the following use cases: credit process and lending decision making;V
This resulted in a differentiated client tiering and adapted commercial activity in order to accelerate the development of sustainable finance. It was also decided to exit some client relationships with no transition potential.
The Intergovernmental Panel on Climate Change (IPCC) was created in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment (1) Programme (UNEP) to assess the science related to climate change and provide governments with scientific information to develop climate policies. The IPCC provides regular assessments of the scientific basis of climate change, its impacts and future risks, and options for adaptation and mitigation. Its latest special report « Global Warming of 1.5°C » demonstrates climate change is already affecting many industries and regions globally, and that related impacts are only expected to increase. IPCC’s Sixth Assessment Report is expected to be released in 2021.
Additional work is currently ongoing to translate the balance sheet’s rating mix resulting from the GWF methodology into a temperature trajectory. Natixis is committed to use the GWF initiative to set climate impact targets for all its banking activities. The climate impact targets will be defined with different time horizons (short, medium and long term) at the bank level, and for each business line in 2021.
In 2019 worldwide, the installed capacity of the renewable energy sector was up by 176 GW(1), stable compared to the 179 GW of 2018. However, new renewables accounted for 72% of total capacity additions, with 90% of total renewable capacity coming from solar and wind. These additions brought the share of renewable energies in total global energy capacity to 34.7%, compared to 33.3% at the end of 2018.
In 2020, Natixis once again positioned itself as a leading player in renewable energy financing, particularly in Europe and Latin America.
Renewable energy accounted for more than 87% of total financing granted by CIB in the electricity production sector in 2020.
Total installed capacity of renewable energy projects financed by Natixis per year
Business line contributions to green and sustainable growth 491NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
A social bond, the first in its sector, was also issued in 2020.
regulatory requirements and contribute in full to ESG issues in order to build sustainable cities.
Natixis Assurances monitors and reports annually on the portion of its real estate investments that have environmental certification. At year-end 2020, 49% of real estate assets under investment mandates were certified (HQE, BREEAM). In 2019, Natixis Assurances extended ESG integration to its real estate portfolio and ultimately aims to fully integrate ESG criteria. In 2020, it will implement an energy convergence plan and continue to obtain certification for the assets in its portfolio. The asset acquisition policy includes identifying, monitoring and managing sustainable development indicators. Natixis Assurances intends to go beyond
Natixis Assurances also encourages individual policyholders to save energy via its range of home insurance products. The range includes coverage of equipment such as domestic windmills, solar panels or solar-powered water heaters, energy control cabinets, storage batteries and rainwater collection tanks. The launch of a new insurance offer in 2020 has made it possible to extend coverage to wood-frame houses and thatched roofs, which represent carbon sinks and thus contribute to the mitigation of climate change. In the event of a claim, policyholders can repair damaged paintwork themselves using eco-friendly paint available at a preferential price. As for guaranteed household appliances, new equipment is provided with environmentally friendly A+ equipment that is more energy efficient.
In addition, policyholders benefit from support services to achieve energy savings, in particular by having access to a network of RGE certified craftsmen (Recognized Guarantor of the Environment: qualified professionals for energy renovation work).
AEW CILOGER continued its efforts to obtain certification for its portfolio assets throughout 2020. Its buildings received BREEAM on construction, LEED existing building, HQE in use, BREEAM in use, BBCA (low-carbon building) or BEPOS (positive energy building) certification. The amount of certified assets amounted to €7.6 billion, representing 23% of AEW CILOGER’s portfolio. In 2020, six funds
stations, biodiversity, the circular economy, and the fight against, food waste, waste management, resilience to climate change. Some projects have already been completed and have been extended to other buildings, in particular on biodiversity and the circular economy.
The Innov 2019 project, launched in 2019 and rolled out until 2021, aims to test innovative solutions at around forty pilot sites, based on seven themes: photovoltaic electricity, electric vehicle charging
Natixis Assurances offers preferential rates to individuals who travel less than 8,000 km per year in their car: this option applies to 26,4% of contracts (211,977 policies), or €74.8 million in annual premiums in 2020. Savings of up to 30% are offered to electric vehicle owners. The new means of soft urban transport (electric bicycle, electric scooter, gyropod, etc.) can be provided as an option via the residential offer. In the interest of supporting its customers, Natixis Assurances also offers eco-driving courses.
Natixis arranged 34 green bond issues in 2020, for a total arranged amount of €15.9 billion, confirming its solid positioning on this market, especially in Europe.
Natixis is also active in green bond investments through its Asset Management affiliates.
“Développement des Territoires”: First structured product combining social obligation and climate index As environmental and social issues are increasingly closely linked, financial products must take into account this growing holistic vision. This structured product thus combines a social bond dedicated to local economic development in France and an underlying climate-themed index. All funds collected by the social obligation will finance VSEs and SMEs in economically and socially disadvantaged areas in mainland France, in particular those hard hit by COVID-19; this product thus contributes to the reduction of regional inequalities and to the resilience of the economy.
The climate-themed index, Euronext Climate Objective Euro Decrement 5%, focuses on companies seeking to improve their carbon performance, their environmental commitments and their ability to offer products and services that are compatible with an economy reducing their carbon footprint.
In 2015, Mirova developed a method for measuring the carbon footprint of issuers in different business sectors. The methodology has been enhanced since 2018 to assess portfolio alignment with the climate scenarios set in the(2) Paris Agreement, using: carbon footprint data from an external provider (scope 1, 2 and 3V emissions); climate scenarios from the Intergovernmental Panel on ClimateV Change (IPCC); investment projections from the International Energy Agency (IEA).V
In 2020, climate change was identified as a key area by Loomis Sayles, and a priority for the Company. In collaboration with the ESG sub-Committee on climate change created in 2019, a set of guiding principles on climate change was created: material considerations on climate change are an integral part ofV Loomis Sayles ‘investment decisions; direct engagement is inherent in Loomis Sayles ‘fundamentalV analysis for all asset classes.
Its climate approach is based on the work and recommendations of the Taskforce on Climate-related Financial Disclosure (TCFD). This analysis, based on a proprietary model, assesses the risks facing the Company, as well as any opportunities related to its positioning on the ecological transition: the issuer’s exposure to climate risk depending on its businessV sector and geographical footprint; an assessment of the issuer’s climate strategy.V
Business line contributions to green and sustainable growth 495NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com 2020 KEY EVENT
DNCA is committed to publishing each year, from June 2021, the climate trajectory of all its investments managed under the Paris Agreement and the objective of carbon neutrality in Europe by 2050. To steer the climate trajectory of its investments, DNCA will use the CDP temperature assessments available for nearly 2,850 international companies. The temperature assessment methodology converts companies’ emission reduction targets into temperature trajectories.
12 funds benefit from this measurement framework (which represent €2.9 billion, or 74% of assets under management) have a goal of achieving a reduction (in relation to their benchmark) in their greenhouse gas emissions (scopes 1, 2, 3 upstream emissions), carbon intensity and potential emissions arising from fossil fuel reserves. The 12 funds have a footprint of 528 t of CO2 per million euros of revenue versus 532 t of CO2 for the benchmark.
perform a progressive measurement of the carbon footprint of itsV investment portfolio covering companies for which this indicator is material; work with the management of these companies to draft a plan toV reduce emissions and adapt to climate change.
In order to be able to monitor and manage the trajectory for all the GHG emissions of the portfolio companies year after year, Naxicap has mandated Sirsa in the course of 2020 to identify the indicators needed to calculate the significant items in scope 3 and the relevant factors associated issues of portfolio companies. As a result, from 2021 Naxicap will be able to estimate the entire carbon footprint by emission category of the portfolio companies subject to its ESG policy, enabling it to build an action plan and a climate trajectory.
AEW CILOGER in 2017 calculated the carbon footprint of its portfolio of institutional assets in France, which represents 824 buildings. The GHG Protocol international method was used, the results obtained in terms of carbon intensity were 10.4 t of CO2/million euros and 28.3 kg eCO2/m2. Since 2018 this calculation has been carried out for two investors.
Since 2018, reporting on climate risk and alignment with the 2°C objective has been carried out for several investors, using the Science Based Target (SBT) method. These portfolios are aligned with the objectives of the Paris Agreement.
Meeting the growing need for decarbonization and adaptation to climate change is essential to develop resilient infrastructure. Vauban IP thus excludes investments in the exploration and production of fossil fuels (coal, oil, shale gas and gas), and annually assesses the carbon footprint of the assets in the portfolio (on scopes 1, 2 and 3). This assessment makes it possible to identify the levers for action to reduce and avoid GHG emissions, to engage in dialog with joint ventures on these actions, and to discuss compensation solutions when emissions cannot be avoided. Vauban IP is also part of the TCFD approach and is committed to offsetting its own carbon emissions.
Natixis is involved in several initiatives with other financial institutions seeking to establish industry-wide methodological principles for calculating the carbon footprint of the portfolios managed by banks, insurers and asset managers (including working groups under the UNEP FI). Given the wide variety of its business lines, Natixis is particularly keen to find common principles that will ensure consistency in how it quantifies the carbon footprint of its different activities. These principles will provide a framework in which to establish detailed targets for reducing this carbon footprint.
All Natixis financing, Asset Management and insurance business lines have been involved in a cross-functional discussion of biodiversity issues since 2018, resulting in eight commitments(3) projects targeted at 100% on its direct and indirect biodiversity impacts. These commitments are part of Natixis’ participation in the act4nature international initiative(4), and their SMART nature (specific, measurable, additional, relevant, time-bound) was validated by a multi-stakeholder Committee made up of 16 partners including several environmental NGOs. Natixis was the first bank involved in the act4nature international initiative to communicate individual SMART commitments in June 2020: include biodiversity in Natixis’ next strategic plan to be1. announced in 2021; support the environmental transition of its customers by2. systematically integrating biodiversity issues into its sustainable finance offering by 2021. Natixis is committed to structuring at least five new operations incorporating specific biodiversity targets per year over the next two years; measure the impact on the biodiversity of its customers, its3. financing, some of the assets managed for third parties and real estate investments; integrate biodiversity criteria into the ESG (environmental,4. social and governance) analysis, shareholder dialog for the sectors for which biodiversity is the most important and in real estate investment decisions; avoid, reduce and offset its impact on biodiversity, whether5. direct or derived from its financing activities; increase the outstandings of its Asset Management dedicated6. to natural capital and the protection of water resources to €2 billion by 2023 through investment funds managed by its affiliates Mirova and Thematics; train and raise awareness of Natixis employees on biodiversity7. issues; actively contribute to the emergence of market standards by8. 2022 to measure and report on the impact of companies in terms of biodiversity. This commitment incorporates the initiative launched by Mirova on May 28, 2020 alongside three other asset managers – AXA Investment Managers, BNP Paribas Asset Management, Sycomore Asset Management – which currently involves 30 investors representing more than €6 trillion of assets under management for biodiversity issues(5).
CIB The ESR Screening tool aims to systematically integrate the analysis of ESG risks into the systems for entering into relationships and granting credit through a two-level mechanism: identify the customers most at risk.1.
Structuring financing solutions incorporating specific biodiversity objectives 5+ transactions/year in 2020V
Avoiding, reducing and offsetting the impact of our financing through: Equator Principles: number of projects V subject to a specific biodiversity analysis
Exclusion of project financing on sites V classified IUCN I and II, RAMSAR wetland, UNESCO World Heritage.
The work will be shared with all banks and will reduce financial flows with a negative impact on nature, while promoting those with a positive impact.
The Green Weighting The Green Weighting Factor Initiative introduced in September 2019 now systematically evaluates the impact of financing solutions on biodiversity in relevant sectors as well as the impact of dedicated financing solutions (project or asset financing) on Key Biodiversity Areas.
Natixis already incorporates an in-depth analysis of the impact on biodiversity in its project financing activities and in 2021 it will continue to step up its recognition of natural capital preservation in all its activities: In accordance with the Equator Principles, Natixis requires its clients to examine all the risks and potential impacts of their projects from an environmental, social, health and safety perspective and to take all the necessary steps to minimize and correct the potential impacts. Protecting biodiversity is an integral part of these requirements. The quality of the client’s impact studies and management systems is also taken into account when assessing the project. The assessment is generally performed by an independent consultant and it pays particular attention to the preservation of natural and critical habitats, in compliance with the regulations applicable to the project. For projects located in non-designated countries(1), additional action is required to meet the conditions set by the International Finance Corporation(2).
Mining activities to extract, recycle and transform commodities have a significant impact on natural capital and biodiversity. For this
For agricultural commodities, Natixis helps its clients with natural capital protection. Natixis acted, alongside ING, as Joint Bookrunners, Mandated Lead Arrangers and CSR coordinators, to finalize a Sustainability-linked loan for Tereos, one of the leading sugar and ethanol producers in Brazil. This $105 million long-term facility is the first Sustainability-linked loan in the sugar and ethanol sectors in Brazil.
promote the flow of cocoa beans from Ghana certified by a trusted third party, such as the Rainforest Alliance,V Fairtrade and UTZ.
understand the role of institutions, policies and the private sector inV transforming these challenges into opportunities; understand the role of sustainable finance in ensuring thatV economic activities capable of providing solutions to water problems have access to capital commensurate with the scale of these challenges.
In May 2020, an Investors Statement on the need to measure the impact on biodiversity collected more than thirty signatures from major institutional investors around the world, representing more than €6 trillion in assets under management. This statement showed that there is an unmet demand for quality research to help investors respond to the biodiversity crisis.
The LDN Fund aims to generate positive environmental and socioeconomic impacts alongside financial returns. By addressing land degradation, the LDN Fund aims to deliver the following benefits: land degradation neutrality;V
The LDN Fund continued to raise funds throughout 2020 totaling $140 million.
The Althelia Sustainable Ocean Fund (SOF) managed by Mirova, invests in companies that harness the ocean’s natural capital sustainably, build resilience in coastal ecosystems and create sustainable economic growth. SOF holds a mixed portfolio of assets in the sustainable marine products sector, the circular economy and conservation. The fund focuses on emerging markets and small island nations.
Launched in 2018, Mirova finalized in 2020 the fundraising of $132 million.
Recent partnerships were established with Eunomia and KFW to promote a study on the circular economy in the Caribbean, where the recycling rate of plastics is currently among the lowest in the world. This collaboration will also enable the launch of a “blue carbon” project to support the development of mangroves, a strategic natural solution to mitigate climate change.
Business line contributions to green and sustainable growth 501NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
SOF’s investments are having substantial positive impacts in terms of socioeconomic development and the preservation of natural resources. The fund has set the following goals for its ESG impact: climate: protection of over 17,500 hectares of mangrove forestV from deforestation and degradation (over 9 million tons of CO2e captured), production of 177,000 tons of fish protein (which has a smaller carbon footprint than beef); livelihoods: creation or continuation of over 5,500 jobs inV vulnerable coastal communities and indirect support for over 14,000 additional jobs in related value chains and businesses; ecosystems: direct protection and sustainable management ofV over 175,000 hectares of marine protected areas in ecosystems with high environmental value.
This impact investment strategy dedicated to the regeneration of nature will be managed by Mirova.
“Ossiam Food for Biodiversity”: launch of the first Biodiversity ETF fund In 2020, Ossiam launched this strategy, which applies to the entire food sector including the entire supply chain, from agricultural products to restaurants. It focuses on the impact on biodiversity, by optimizing the Mean Species Abundance (MSA), under minimum constraints of liquidity, diversification and reduction of the carbon impact. The fund has a higher non-financial performance compared to the benchmark, with a lower biodiversity impact and lower GHG emissions.
The fund’s assets amounted to $24.4 million at the end of 2020.
Managing environmental, social and governance risks 503NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
The sectoral policy also applies to investments made by Ostrum, for all directly managed portfolios, and to Natixis Assurances, for all general-purpose funds. Both Ostrum and Natixis Assurances have stopped investing in industrial companies deriving 25% or more of their business from coal-fired power plants and/or thermal coal mining. Mirova prohibits all investments in the fossil fuel sector.
Natixis accelerates its complete exit from the coal sector On May 18, 2020, Natixis made a commitment to no longer support companies developing new coal-fired power plants or thermal coal mines, and will completely withdraw from thermal coal in 2030 for EU countries and other countries in the OECD and 2040 in the rest of the world. A new detailed policy was published on October 27, 2020.
For its investment activities, Ostrum is strengthening its coal exit strategy.
Since March 2009, Natixis has prohibited financing, investment and offers of services to companies involved in manufacturing, storing or trading anti-personnel mines and cluster bombs. The commitment made by Natixis in March 2009 was extended in June 2018 to include a Defense sector policy amended in September 2020. This policy, which is available for consultation on the Natixis website, extends the scope of arms excluded by the Group and sets specific criteria for conducting transactions, notably with respect to arms exporting and importing countries.
In November 2018, Natixis published an oil and gas sector policy setting out the terms of its commitment, namely to: discontinue the financing of worldwide projects involving theV exploration, production, transportation and storage of extra-heavy oil and oil derived from oil sands, and related export terminals; no longer provide general purpose corporate financing for, and noV longer invest in(2), any company of which the aforementioned activities (see above) account for 30% or more of total operations; discontinue financing for onshore or offshore oil exploration andV production projects in the Arctic.
Managing environmental and social risks across Natixis’ financing business lines involves analyzing clients and transactions to ensure they comply with its ESR policies and exclusion commitments, analyzing transactions according to the Equator Principles or other evaluation methods, and analyzing controversial issues that its clients may run into.
Over the last three years, 563 (including 224 in 2020) such transactions have been managed in this way, with the following sector breakdown: Breakdown of the number of transactions reviewed by sector (2018-2020)
As a signatory of the Equator Principles since December 2010, Natixis applies an industry-wide methodology recognized by 114 member banks and financial institutions aimed at evaluating the E&S risks of the projects it finances and assessing the quality of the management systems used by its clients to manage, minimize, and remedy the impacts they cause as best they can.
This methodology applies to the financing of investments in new projects or the extension of existing projects. For Natixis it mainly concerns infrastructure, energy (oil, gas), electricity and renewable energy, and the mining and metals sectors around the world.
An organizational structure has been set up to involve both the business lines and the ESR Department in assessing and managing transactions. The process includes an assessment of the quality of existing E&S documentation prepared by the client (or client advisory services, if such documentation has not yet been drafted), the measurement and classification of the potential E&S impacts and risks, and, where necessary, the consultation of external specialists. It also provides for the drafting of an action plan for impact mitigation and correction measures, which is included in the financial documentation. Compliance with the action plan is monitored over the life of the financing facility.
Natixis’ credit approval process includes a summary of key issues used to assess a project.
The banks and institutions that are members of the Equator Principles association approved an amended version of the Principles (Amendment EP IV) on November 18, 2019, which became effective on October 1, 2020. The new version extends the scope of application of the Principles and strengthens the conditions applied when assessing transactions, in particular in terms of human rights (especially the rights of indigenous communities) and physical and transition risks arising from climate risk. Initiatives have been launched to raise team awareness and organize training.
For all the financing transactions referred to above, and also when deemed necessary for any other transaction, an analysis is performed to determine whether the borrowing company, its operator or main shareholder has a history of poor management of its operations, from an environmental, social or health and safety standpoint.
To identify, assess and monitor the environmental, social and governance (ESG) risks of its corporate clients, Natixis has set up a complementary tool, ESR Screening.
Implementation of an environmental, social and governance (ESG) risk screening tool for corporate clients This new system in place in all regions includes two levels of assessment integrated with existing risk management systems.
The first level ranks clients in a risk category based on the context in which they do business, the maturity of their ESR risk management system, any controversies to which they may be exposed and the type of business relationship they maintain with Natixis.
The second level performs an in-depth analysis of the most material ESG risks. The analysis focus on counterparties identified as being the most at risk and most often involves direct discussions with the client.
The system is integrated throughout client onboarding and loan approval processes to allow the systematic analysis of ESG risks. It involves the business lines, Compliance, and the Risk and ESR divisions.
The assessment process will gradually be applied to the portfolio of existing clients, taking into account the schedule for periodic renewals of financing authorizations.
Lastly, Natixis’ Compliance Department has adapted the bank’s whistleblowing system to take new regulations into account (including, in particular, the duty of vigilance, but also the Sapin II law) (see Chapter [6.2.]).
Regarding the enforcement of the duty of vigilance law, Natixis and BPCE Procurement took part in a concerted effort in the banking and insurance sector to map out ESR risks in purchasing activities, involving three other banking groups. The map, which was delivered in June 2018, enables the following risks to be measured by country and by category of purchase: Fair practices and ethics
The mapping system identified 13 types of high ESR risk-type purchases from among more than 100 purchasing categories in the banking sector. These high risk purchases are to be the subject of targeted duty of vigilance measures: Under the new consultation procedures conducted by BPCE Procurement in sensitive categories, suppliers are assessed on the basis of their ESR performance: the ESR questionnaire based on the risk map is sent to theV supplier; the supplier must detail their action plan to deal with the identifiedV ESR risks; BPCE Procurement/Natixis ESR together assess this response;V
The process applied since 2018 has made it possible to assess a first series of suppliers in sensitive categories. At the end of 2020, 62% of the purchasing categories concerned by the system had been assessed (servers, ATMs, bank cards, relationship marketing, furniture, vehicles, etc.) and other categories are being assessed.
For purchases made directly by Natixis, an equivalent process was implemented in 2020 as part of the new Know Your Supplier procedure (KYS). For all purchases of more than €50 thousand in one of the thirteen sensitive categories, this process is now followed for purchases made in France and will be gradually rolled out to international platforms.
The environmental risks associated with Natixis’ operations are discounted as its business is not liable to generate serious adverse impacts on the environment. Furthermore, the bank already applies strict environmental regulations in Europe and the United States, and has launched several initiatives to limit its impact on the environment (e.g. certified buildings, reduced use of resources, waste management, eco-friendly business travel, etc.).
With regard to salaries, beyond compliance with regulatory minima, each entity participates each year in a targeted salary survey on Financial Services in order to allow the various trades to adapt their remuneration policy and verify their competitiveness. In terms of social protection, the entities rely either on surveys conducted on a multi-year basis, or on the expertise of the brokers who intervene in the management of these programs to ensure that they are in line with standards of the Financial Services industry. Overall, maternity leave is more favorable than local regulations.
On the basis of this initial assessment, the Human Resources Department is considering a group-wide employment framework for all Natixis employees regardless of the country, covering, for example, minimum paternity/maternity leave, the implementation of minimums or standards in social protection or access to an employee savings scheme.
The self-assessment and compliance system used for the past three years has been reviewed and rationalized. Its use was extended from France to all offices at the end of 2019.
Travel safety around the world is enhanced through an application that brings together all travel agencies and offers training adapted to each trip. A global security unit is being developed to better coordinate actions and costs.
In addition, the ESR Department has implemented with the business lines, the Compliance and Risk Departments a solution to identify, assess, and monitor corporate clients’ environmental, social and governance (ESG) risks. The assessment process will gradually be applied to the portfolio of existing clients, taking into account the review schedule (see Chapter [6.4.1]).
Whistleblowing system whistleblowing system is available to any person holding an employment contract with Natixis, as well as to employees of external service providers or subcontractors (see Chapter [6.2.5]).
The whistleblowing system forms an integral part of Natixis’ Code of Conduct and is based on a company-wide policy which sets the minimum standard to be applied throughout Natixis group. In July 2018, Natixis S.A. published an updated version of its existing whistleblowing system to reflect the latest regulatory changes. The
As a financial institution and major economic player, Natixis is exposed to climate risk in the running of its operations and business activities. Taking this climate risk into consideration is crucial for the bank in all its areas of business: Asset Management, Financing and investments, insurance and Payments.
Natixis has taken a series of measures to adapt to the effects of climate change: the consequences of extreme climate events (e.g. storms,V heatwaves, flooding of the Seine, etc.) that can directly impact Natixis in France and internationally are addressed in the Business Continuity Plan (BCP). The impact of the different scenarios is assessed in the operational risk map, resulting in the calculation of a VaR (value at risk) that takes into account external data, the quality of the BCP and insurance coverage; the climate risks linked to our business operations are taken intoV account insofar as Natixis’ clients may themselves 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 transition to a low-carbon economy). Since 2019, these risks have been incorporated into Natixis’ risk monitoring system, the Risk Appetite Framework.
In 2018, Natixis took the innovative step of introducing a Green Weighting Factor to support its clients in the shift towards lower carbon activities and gradually decarbonize its balance sheet. Climate transition risk will be systematically included in the assessment of financing opportunities.
In accordance with Article 173, Provision VI of the Energy Transition for Green Growth Act establishing new ESG reporting obligations, certain Natixis subsidiaries have made extensive efforts to measure the carbon footprint of their portfolios: Mirova and Natixis Assurances use the Carbon Impact AnalyticsV method co-developed by Mirova and Carbone 4 to calculate the carbon footprint of their portfolios.
Natixis Assurances has pledged to align its investment policy with the 2°C climate scenario and each year it will devote nearly 10% of new investments to green assets, with a target of 10% of its total investments being in green assets by 2030; in 2020, Ostrum AM initiated a reflection on a new methodology ofV alignment with the IPCC temperature scenarios in order to be able to report to its clients on the impact of their portfolios. A TCFD report will also be published in 2021; DNCA factors climate issues into its investment policy by drawingV on the work and recommendations of the Taskforce on Climate-related Financial Disclosure (calculation of each company’s climate risk exposure and assessment of its climate strategy). Since the end of 2020, DNCA assesses the temperature of all of its investments in partnership with the CDP. The objective is to take stock of the on-Board climate risks and to steer a gradual alignment of all investments in accordance with the Paris Agreement; Ossiam has established a framework for measuring its portfolios’V transition risk and comparing it with their benchmark. This framework can be applied to several indicators such as GHG emissions, risks associated with the energy transition (coal reserves, etc.) or impact (production of green energy, etc.). Work on the temperature trajectory of the portfolios was initiated in 2020 and will be completed in 2021; in 2019, Loomis Sayles set up a new sub-Committee dedicated toV climate change in order to integrate climate issues into its activities. Substantial work has been undertaken on climate change, including the use of tools such as analysis of climate-related scenarios as recommended by the TCFD; Harris Associates takes into account climate risk on aV case-by-case basis, depending on the exposure of individual companies to material risks related to climate change; Naxicap Partners has signed up to the International ClimateV Initiative to help achieve the objectives of the Paris Agreement. An initial estimate of its carbon intensity (scope 1 and 2 emissions) was completed in 2019. In 2020, in respect of the 2019 fiscal year, Naxicap published all the GHG emissions of its portfolio companies, including scope 3 which accounts for the majority of companies’ impact on the climate; since 2018, AEW Ciloger reports on climate risk and alignmentV with the 2°C objective for several investors using the Science Based Target (SBT) method. These portfolios are aligned with the objectives of the Paris Agreement; AEW Capital Management calculates the carbon footprint of 44%V of its portfolio: GHG emissions decreased by 2.1% in 2019 compared to 2018. In 2021, AEW Capital Management will develop and implement a resilience program that will align with the recommendations of the TCFD, including the determination of a target that aligns with the SBTI (Science Based Target Initiative) with an annual reduction of at least 2.5% of GHG emissions; Vauban IP excludes investments in the exploration and productionV of fossil fuels and annually assesses the carbon footprint of the assets in the portfolio (scopes 1, 2 and 3). This assessment makes it possible to identify the levers of action to avoid and reduce GHG emissions and to engage in dialogue with joint ventures on these actions; since December 2020, NIM Solutions has access to Trucost’sV climate data to holistically support its clients in measuring and integrating climate criteria into their investments. This will be done through various services: portfolio analyses, integration of climate criteria, investment solutions integrating climate considerations, reporting, as well as a strong presence in methodological research and development.
6 2020 NON-FINANCIAL PERFORMANCE REPORTManaging environmental, social and governance risks 510 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020
Indirect impact generated by its business lines: Natixis draws on its investment and financing operations as its key means of action the fight against climate change, both in terms of risk management and business opportunities. Natixis is implementing a low-carbon strategy, fully integrated into its ESR policy, in all its business lines.
Financing green growth: Natixis is a significant player in the financing of renewable energies, particularly in Europe and Latin America: 21 new projects were financed in 2020 representing an installed capacity of 6,510 MW for an agreed amount of €1.5 billion. Natixis is also a leading bank in the financing of sustainable infrastructures (sustainable real estate, sustainable mobility, environmental services), as well as in the green bond market.
Managing climate risk in projects financed by Natixis: As a signatory of the Equator Principles, Natixis incorporates climate change into the environmental impact assessments conducted on its major projects. Borrowers are required to present an analysis of the possible alternatives to their projects, and to report annually on the project’s CO2 emissions once it is in operation.
In line with its policy of recognizing ESR in its activities, for over ten years, Natixis has actively reduced its direct impact on the environment related to its internal operations. These impacts are very significant given its 16,000 employees and its numerous sites in France and abroad.
This policy is broken down into seven themes: sustainable real estate, responsible digital technology, the promotion of sustainable mobility, resource management (energy and paper), responsible purchasing, waste management and revegetation. These themes serve the key areas of biodiversity protection and the fight against climate change, the latter being managed each year as part of the carbon footprint.
16,162 workstations (compared to 15,917 in 2019), as well as two data centers operated for Groupe BPCE. Natixis is currently working to rationalize its real estate portfolio to reduce its environmental impact. This rationalization made possible by the introduction of the Flex Office and by the generalization of two days of remote workingNatixis and its subsidiaries in France (with the exception of Financial for the majority of its employees.investments and affiliates – see scopes in Chapter [6.8]) account for 242,494 m2 in office space (compared to 239,228 m2 in 2019) and
Abroad, Natixis also occupies environmentally-certified offices. The Natixis head office building in New York benefits from the LEED gold environmental label for its design and construction. It has also improved its Energy Star score from 69 to 76. In Madrid, Natixis occupies a BREEAM certified building. In Hong Kong, the occupied building has been recognized for its environmental performance with numerous certifications (BEAM (5) platinum level, LEED (6) bronze level for interior fittings).
HQE : High Environmental Quality(1) BBC : Low Consumption Building(2) HPE: High Energy Performance(3) BREEAM : Building Research Establishment Environmental Assessment Method.(4) BEAM: Building Environmental Assessment Method.(5) LEED: Leader in Energy and Environmental Design.(6)
Promoting the reuse of Natixis equipment at the end of the cycle
Natixis encourages the reuse of its equipment at the end of the cycle, either by selling it to reuse channels or by making occasional donations to associations. Thus, in 2020, thanks to donations from Natixis, Les Ateliers du Bocage were able to reuse 88% of the 1,418 smartphones donated, the others being upgraded. In addition, laptops and tablets were donated to the Necker Hospital as well as to associations for integration and assistance to families located in Seine et Marne and Val de Marne.
The IT Department aims to be able to offer digital services that fulfil Natixis’ social and environmental commitments while meeting its business lines’ requirements. For example, this involves designing infrastructure eco-responsibly or ensuring we retain only the required data, without compromising security or losing sight of our regulatory obligations.
The second example is the Internet network infrastructure overhaul. This new infrastructure, offering a significantly higher capacity, has reduced the number of equipment and associated energy reductions: it will be more virtuous over its entire seven-year life cycle, allowing a reduction of nearly 23% of greenhouse gas emissions.
At the end of 2019, a tool for measuring the carbon footprint of paper prints was developed for employees. This tool measures the number of individual prints made on an annual basis and makes employees aware of their daily impact (on the principle of life cycle analysis including the impact of printers, ink, paper).
To support the increase in bicycle use, Natixis has created an additional 200 secure parking spaces for bicycles in the Paris region, with more than 850 indoor and outdoor spaces. In addition, Natixis has pooled all the bicycle parking spaces in its buildings, which are now open to all employees. Lastly, Natixis provides changing rooms with showers and lockers at 15 of the 26 sites in the Paris region.
In addition, in the event of a pollution peak with restrictions on car traffic, additional remote working days may be granted, as well as authorizations to work at home for employees with remote connection facilities.
Natixis continues to increase the number of car parking spaces with recharging points. There were 151 places in 2020, compared with
Employee survey on mobility and transport In 2020, Natixis launched a survey of all its employees in France. The survey recorded a high participation rate (45%) with more than 5,500 respondents. This survey aimed to better understand employees’ habits and expectations in terms of home-work and inter-site travel. The results will be used to prepare Natixis’ future mobility plan as well as for discussions on the development of its buildings while meeting the new Mobility Guidance Act.
Natixis’ business travel policy has set out rules ensuring the safety and comfort of employees during business trips, while contributing to the policy of optimizing costs and managing the environmental impact of these trips. This policy applies to Natixis and its subsidiaries, excluding Financial investments in France. The subsidiaries and branches abroad establish travel rules that are consistent with the Group’s Worldwide Travel policy.
This notably includes rules on business travel that has an environmental impact: when a destination can be reached by both rail and air, trains areV now compulsory for a number of destinations in France and Europe (depending on journey time); economy class is compulsory for domestic flights, flights betweenV European countries and intercontinental flights of less than four hours; the use of taxis and the reimbursement of mileage expenses areV governed by rules on specific use (approval by manager, exceptional circumstances). Natixis also prefers that its employees use green taxis (hybrid vehicles) for business travel.
optimization of heating and cooling systems that give greaterV consideration to temperatures outside the building.
Energy consumption: electricity, heating and cooling of office buildings (in mwh) 34,556 39,345 56,022
In 2015 Natixis signed a Paris Climate Action partnership with the City of Paris and participates in achieving the sustainable development objectives of the Paris Climate Plan. This commitment was renewed in 2018 with a target of a 30% reduction in the energy consumption of its buildings in the Paris region between 2010 and 2020. Between 2010 and 2019, Natixis had already exceeded this target with a 40% reduction in energy consumption per m2. If we include 2020, where the drop in consumption was accentuated by the specific context of the COVID-19 health crisis, this decrease reaches 47% between 2010 and 2020.
Natixis renews its participation in the CUBE 2020 challenge Following its 1st participation crowned with two medals in 2018-2019 in the CUBE 2020 energy saving competition, organized by the Institut Français de Performance Énergétique du Bâtiment, Natixis renewed its participation with two new buildings, one in France and one in Portugal.
Several actions make it possible to produce energy or recover heat in Natixis buildings: in one of the data centers operated by Natixis, the heat producedV by IT equipment is used to heat the water in the neighboring aquatic center in Marne-la-Vallée; in Paris, the heat from the IT equipment in the trading room isV recovered to heat the 47 quai building. This provides heating autonomy of eight months out of twelve, with the additional heat coming from the district heating network; in Charenton, the Liberté 2 building heats its domestic water byV installing solar carpets; in Kazakhstan, Natixis is participating in an on-site renewableV energy production project with the installation of solar panels on the roof of the building’s car park.
Since November 2015, Natixis’ buildings have run entirely on green electricity, i.e. from fully renewable sources of energy, pursuant to the terms of its energy supply contract with Engie. The supplier guarantees this origin via approved certificates (ENGIE Green Electricity certificate, “electricity from renewable sources”).
In France, paper consumption was halved between 2019 and 2020. This decrease is largely due to increased remote working by employees in 2020. The paper consumption here is exhaustive given that no printing can be done from the employees’ homes, for security reasons.
Managing our direct environmental impact 517NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com 2020 KEY EVENTS
The responsible purchasing policy is a strategic and operational lever for the implementation of the BPCE and Natixis ESR policy. The main objective of the policy is to promote more eco-friendly products and services that provide guarantees and added value at the social and societal levels.
This policy is based on a number of tools, including a responsible purchasing framework, specifying the criteria applicable by category of products and services.
In 2020, the Communications Department also reviewed its catalog of goodies to have a smaller and more responsible offering, based on the criteria of usefulness, origin, composition and product certification.
Consistent with the Objective 100 hectares Charter signed with the City of Paris in 2017 Natixis is committed to: developing urban farming and landscaping projects as part of theV operation of its buildings; promoting eco-friendly green spaces in built-up areas, contributingV to biodiversity and water management in Paris by banning the use of pesticides and saving water; sharing its knowledge of the subject with other partner companies,V employees and project stakeholders.
Three shared kitchen gardens in Natixis buildings in Paris, Porto and Charenton-le-Pont now allow its employees to get together to garden and to learn about urban agriculture and biodiversity. These
Open houses and the distribution of harvests made it possible to raise the awareness of employees working at the buildings in question.
Lastly, in 2020, ESR correspondents were made aware of biodiversity issues through La Fresque de Biodiversité participatory workshops, following conferences organized in 2019 on this theme.
Natixis is taking action to reduce the waste it generates. The Company is committed to a responsible approach called “Let’s go from disposable to sustainable” with the aim of eliminating all single-use items.
The volume of sorted waste decreased drastically in 2020 compared to 2019, given the limited presence of employees on site in the context of the COVID-19 health crisis.
In addition, Natixis sells its electrical and electronic equipment (including IT) to specialized reuse and recycling channels. The weight of waste electrical and electronic equipment (WEEE) was 6.26 tons in 2020 for France. Natixis Frankfurt transfers the profits from the resale of WEEE to environmental projects around the world.
In addition, a collection circuit for aluminum coffee capsules has been set up in collaboration with the supplier and the companies in charge of collecting them in order to recycle them. Abroad, Natixis’ offices in New York have aligned themselves with the French approach by installing collection systems for this type of capsule.
Natixis Investment Manager France renewed its contract with the company Cy-clope to collect cigarette butts from the Éléments building in order to recover them in specialized channels.
Every November, during European Waste Reduction Week, Natixis organizes a series of events to raise employee awareness of waste management and its impact on the environment. In 2020, several remote conferences were held, including a conference on planned obsolescence with the non-profit organization “Halte à l’Obsolescence programmée” and workshops on zero waste led by an employee involved in this field (France) and by the Sistema Terrestre Sustentável association (Portugal).
Carbon footprint (in metric tons of co2 equivalent) 2020 2019 2018
The trends observed in 2020 are as follows: lower energy consumption (see section 6.6.2);V
It should be noted that Natixis does not assess the carbon impact of its business lines in the carbon footprint. However, an assessment of the climate impact of the investment vehicles offered by Natixis was carried out in certain business lines (see section [6.3.2.6])
The 17,678 contracts in the Natixis Worldwide scope correspond to 16,943 FTE* (Management data). The breakdown by division of these 16,943 FTEs is as follows: Corporate & Investment Banking: 3,572, Asset & Wealth Management: 5,020, Insurance: 1,898, Payments: 1,088, Support Departments and others: 4,615, Financial Investments (Natixis Algérie): 750. Using Management data, the global breakdown of the 16,943 FTE employees by business line is as follows: Corporate & Investment Banking: 2,597, Asset & Wealth Management: 5,020, Insurance: 1,898, Payments: 1,088, Support Departments and others: 5,590, Financial Investments: 750 (Natixis Algérie).
Data not restated for transfers and restructuring between business lines between 2018 and 2019.(a) Including French overseas departments and territories.(b) Natixis Algérie.(c) Natixis Worldwide means the entire accounting scope of consolidation of Natixis and its subsidiaries ** around the world, including financial investments (1) (Coface, Fimipar, Natixis Algérie).
The managed scope covers all of Natixis and its subsidiaries(2) around the world that apply its HR Policies. The indicators provided in Chapter [6.4.3] refer to this scope.
Including transfers of the activities outside the managed scope. The conversion of fixed-term employment contracts to permanent employment contract are included under both new hires (permanent employment contracts) and departures (fixed-term employment contracts).
Collaborative work carried out in 2020, with the broad participation of employees representing all business lines, resulted in the emergence of the Purple Way, which defines Natixis’ culture and is based on three pillars: lasting impact by ethically and responsibly bringing our expertiseV to our clients and stakeholders; entrepreneurial spirit by being agile, involved and resilient in allV circumstances; collective intelligence by actively working to succeed together, asV a team, with openness and trust.
In 2020, this system made it possible to define or update all succession plans for Executive Committee members and the majority of Natixis Global Leaders (first leadership circle) in all Natixis entities.
Natixis also offers a Women Sponsorship Program, allowing the sponsorship, for one year, of 15 female talents from the Purple Leaders community (extended leadership circle) by a member of the Executive Management Committee or Executive Committee. The aim is to promote these employees in the Company and encourage them to take on greater responsibilities.
Internal transfers between divisions (in %) 2.7 7.3 nc 48.5 69 nc 100 60 nc 35.3 40 nc 5.5 13.8 nc
In a constantly changing world, the ability to adapt makes all the difference. This is why, in 2020, Natixis set up Jobs in Motion, a strategic program to meet the challenges of business transformation by promoting a stronger culture of internal mobility.
offer promising positions to employees who do not have theV required skills, by making them accessible via appropriate training courses.
In 2020, Natixis embarked on an SWP approach – a responsible anticipation approach, over a period of three to four years which aims to identify the resources and skills that the Company will need in order to achieve its development objectives. The methodology has been formalized and experiments have been carried out to clarify the “jobs and skills of the future” and to develop an action plan to align skills with the needs of the business lines and guide training, retraining, mobility, etc.
Creation of the Step up Academy The Step up programs offer positions of the future accessible through enhanced training courses to employees whose jobs are undergoing transformation. They aim to reconcile the evolution of employees with the skills needs of the business lines. As soon as they take up their new position, employees start a training course of three to nine months, adapted to their profile. They are supported during their training by their tutor, manager and HR manager. The employee shares best practices and feedback with other employees of the promotion throughout the program.
It has five major priorities: developing the skills needed to accompany the business lines’V transformation and maintain the employability of staff in positions undergoing transformations; meeting the challenges of the digital transformation and newV ways of working; developing leadership and supporting changes in management toV boost employee engagement; enhancing English language skills to further the Company’sV international growth; facilitating employee mobility.V
All of Natixis’ skills development tools are available on the Learning Hub, a single entry point, which gives access to the entire training offer, with online request management, tracking and selection of desired training dates, including mandatory training and follow-up.
In addition, Natixis organizes and leads internal trainer communities, made up of specialists within the business lines. A brand new MOOC was designed for them in 2020 to help them understand the essential stages of digitization (face-to-face, distance learning, mixed-learning) and better understand the Natixis learning ecosystem. It is supplemented by the organization of virtual classes to discuss practical cases.
Throughout the year, Natixis worked on the digital transformation of its training offer to continue to support the upskilling of its employees in the specific context of 2020. Thus, 33 new distance learning courses are now offered to as many people as possible.
Office and IT 11.4 9.2 8.2 o/w Personal and professional efficiency, Human Resources 13.5 14.4 17.8
Consolidated figures at 26/01/2021, representing at least 90% of hours of training received during the year.
In accordance with the Agreement on Employment and SWP, Natixis has also made commitments in favor of employees under 30, including hiring them under permanent contracts, developing work-study programs and providing induction schemes for new hires.
Natixis aims to recruit at least 47% of young people under the age of 30 in France (37.9% of new hires in 2020), and to offer a permanent employment contract to 15% of work-study students (7.8% in 2020).
In 2020, around 450 work-study students and 670 interns were recruited in France. In addition, there were 50 VIEs operating internationally.
Natixis’ policy on gender equality in the workplace is upheld in the framework agreement for companies in the France scope, and internationally through voluntary actions.
equal pay, career development and promotions, professional training, work-life balance and parenting, and communication and raising awareness. Further collective agreements and action plans on this topic are in force in other companies within the scope of NatixisWithin the scope of Natixis S.A., a gender equality agreement, France. The commitments made under these agreements arerenewed in 2020, calls for the implementation of concrete initiatives reviewed every year by dedicated Equity Committees.centered on six priorities: hiring and employment, compensation and 2020 KEY EVENT
In 2020, Natixis was included for the first time in the Bloomberg Gender Equality Index. The 350 companies included in this index stand out for their actions and results in favor of gender equality and also for their transparency, since each of them undertakes to publish data relating to professional equality within its company.
Natixis management supports the Winn network (Women in Natixis Network) which aims to promote gender diversity in Natixis management in France and internationally. This association is sponsored by Nicolas Namias, Natixis Chief Executive Officer. In 2020, there were 1,017 participants globally, including 192 men.
Natixis also supported the creation of the All Equals network launched at the initiative of a group of employees. It aims to prevent discrimination based on sexual orientation and promote equality and inclusion of LGBT+ people.
% of women in the extended leadership circle (Purple Leaders) (a) 33.7 32.2 30.9 22.2 16.3 16.1 24.5 20.4 26.5 28.1 19.4 14.3 31.8 29.6 29.4
% of women in the leadership circle (Global Leaders) (a) 29.4 27.8 25.0 16.7 0.0 0.0 66.7 60.0 60.0 20.0 0.0 0.0 30.3 26.9 26.3
% of women on the Executive Committee (a) 26.3 25.6 20.5 0.0 0.0 nc 100.0 100.0 100.0 nc nc nc 27.5 26.7 22.2
Managerial circles are inclusive, as decided in 2019 by the HR Codir. Pro forma were carried out on these circles for 2018 and 2017, but not on the scope (a) (SMITH).
Percentage of women among employees granted individual pay increases 59.2 57.5 58.9
Disability awareness through Role Reversal – Handi’days 2020 Every year, on the occasion of the European Week for the Employment of People with Disabilities (SEEPH), Natixis educates its employees about disability. In 2020, for five weeks, employees were able to follow a web-series of three episodes, based on the concept of reversal, that is to say by putting themselves in the situation of a company where disability is the standard. This web-series was supplemented by quizzes and a final meet-up bringing together the actors of the series and the employees of the Company.
Targeted and regular communications were sent to all employees to provide them with the best possible support and information in a difficult context. The psychological counseling unit was mobilized.
At the same time, occupational physicians were regularly involved in discussions with the internal teams in charge of adapting the system for managing the health crisis in line with government recommendations. Lastly, via the complementary health insurance, the HR Department set up free medical consultations (remote medical consultations accessible 24 hours a day, seven days a week, via access to a remote consultation platform).
Part-time workers as a % of headcount (a) 9.2 10.1 10.6 3.9 3.8 5.3 0.4 0.1 0.5 0.1 0.1 0.1 7.5 8.3 9.2
Workplace accident frequency rate (a) (in number per million hours worked) 2.85 6.11 6.61
In 2020, an employee listening system was deployed on a massive or thematic questions. The tool was made available to 19 entities so scale within Natixis. This system, entitled “YourPulse” based on that each business line could construct its questionnaires in a format short, rapid and anonymous surveys makes it possible to quickly and and frequency appropriate to its context and as close as possible to regularly take the pulse of employees on the basis of a few recurring specific needs.
An enhanced employee listening system during the health crisis Since March 2020, more than a hundred surveys have been launched by the various entities. The system made it possible to carry out social monitoring and to support employees throughout the health crisis by collecting their specific questions and needs during this period. In addition to this “quantitative” system, a methodology for facilitating “discussion spaces” was also deployed: managers were supported by guides and webinars to facilitate discussions within their teams on topics related to the health crisis or changes in work organization/remote working.
In 2015, the Senior Management Committee signed the 15 Work/Life Balance Commitments Charter. The charter was an initiative of the French Ministry of Social Affairs, Health and Women’s Rights, and the OPE (French observatory aimed at improving the balance between work and home life), and it encourages signatory companies to take action in favor of a better life-work balance.
In terms of well-being in the workplace, to make everyday life easier staff now benefit from a concierge service at the Austerlitz and Charenton offices.