SCI ALTAIR 1 (a) Real estate operations FC 100 100 100 100 France
SCI ALTAIR 2 (b) Real estate operations FC 100 100 100 100 France
FONCIERE KUPKA (a) Real estate operations FC 100 100 100 100 France
Non-consolidated investments at December 31, 2019 representing 10% or more of the capital with a net carrying amount of €5 million or more: Entities Country
Furthermore, the non-audit services that we provided to your Company and its controlled undertakings during the fiscal year that are not disclosed in the management report or the notes to the consolidated financial statements are as follows: PricewaterhouseCoopers Audit: the main engagements conductedV in fiscal year 2019 concerned certification, comfort letters issued in connection with issuance programs, reviews of compliance procedures and services provided as part of restructuring measures.
Without prejudice to the opinion expressed above, we draw your attention to the changes to the accounting methods relative to the first-time application of IFRS 16 “Leases” and IFRIC 23 “Uncertainty over Income Tax Treatments”, as described in Note 1 “Basis of presentation” and in Note 2 “Impact of the first-time application of IFRS 16 at January 1, 2019” to the consolidated financial statements.
Pursuant to the provisions of Articles L. 823-9 and R. 823-7 of the French Commercial Code (Code de commerce) relating to the justification of our assessments, we draw to your attention the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period, as well as how we addressed those risks.
Outstanding loans bearing a known counterparty risk (stage 3) are subject to impairments determined essentially on an individual basis. These impairments are measured based on the recoverable value of the receivable, i.e. the present value of the estimated recoverable future cash flows after taking the impact of any collateral into account.
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 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.
We evaluated the design and tested the effectiveness of the key controls put in place by the Natixis Group in particular those related to: the identification of indicators of impairment (such as past-dueV payments) and the counterparty rating process; the classification of exposures in stage 3;V
We also assessed the information presented in detail in the notes to the consolidated financial statements and required by IFRS 7 concerning the impairment of financial assets at December 31, 2019.
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.
Additional valuation adjustments made, to reflect certain market,V counterparty or liquidity risks.
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.
At December 31, 2019, Level 3 financial instruments represented assets of €7,060 million and liabilities of €12,075 million.
the documentation and periodic review of the observability criteriaV used to classify complex financial instruments in the fair value hierarchy.
We carried out these checks with the assistance of our valuation experts, 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, 2019.
We also assessed the information presented in detail in the notes to the consolidated financial statements and required by IFRS 7 concerning financial instruments at December 31, 2019.
As part of its insurance business, the Natixis Group recognizes technical reserves that represent its commitments towards policyholders.
Depending on the type of risks covered by the reserves, the main audit procedures applied included: obtaining an understanding of the general conditions relatingV to insurance contracts marketed by the Group; appraising the methods and assumptions used to calculate thoseV reserves, including their consistency with applicable regulations, market practices and the economic and financial context; 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.
At December 31, 2019, €1,388 million was recorded on Natixis’ consolidated balance sheet under deferred tax assets, including €789 million in tax loss carryforwards
Statutory Auditors’ report on the consolidated financial statements 389NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
In accordance with applicable professional standards in France, we have also performed the specific verifications required by law and regulations of information about the Group disclosed in your Board of Directors’ management report.
As at December 31, 2019, PricewaterhouseCoopers Audit was in its fourth year of appointment without interruption. As of that date, the length of Deloitte & Associés’ uninterrupted appointment was over 20 years, including 14 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.
Statutory Auditors’ responsibilities for the audit of the consolidated financial statements
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment throughout the audit and furthermore: 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; obtains an understanding of internal control relevant to the auditV in 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 consolidated financial statements;
See Note No. Off-balance sheet items – Commitments received 2019 2018
Commitments received from banks 9,402 8,743 35 Commitments on securities 8,480 8,212 35 Other commitments received 13,950 10,987
Parent company financial statements and notes 393NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
See Note No. Year ended December 31 2019 2018 12 Due to central banks 12 Due to banks 99,615 96,850 16 Provisions for risks and other expenses 2,264 2,192
Equity excluding fund for general banking risks 17,463 17,672 19 Regulated provisions and investment subsidies 2 2
See Note No. Off-balance sheet items – Commitments given 2019 2018
Commitments given to customers 25,675 32,387 35 Commitments on securities 9,321 8,758 35 Other commitments given 23,862 18,480
See Note No. Year ended December 31 2019 2018 23 Interest and similar income 7,683 7,198 23 Interest and similar expenses (6,866) (6,444)
Write-down, amortization and impairment of property, plant and equipment and intangible assets (79) (77)
Parent company financial statements and notes 395NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Statement of assets, liabilities and Note 23 commitments related to management of public procedures
Establishments and operations in Note 39 non-cooperative States or territories within the meaning of Article 238-0A
Natixis’ separate financial statements have been prepared and are presented in accordance with regulation No. 2014-07 of the Autorité des Normes Comptables (ANC — French accounting standards authority) dated November 26, 2014 relating to the financial statements of companies in the banking sector and Regulation No. 2014-03 (modified) relating to the French General Accounting Plan (PCG — Plan comptable général).
Financial statements for foreign subsidiaries, prepared in accordance with local rules, are restated in accordance with generally accepted accounting principles in France for the preparation of individual financial statements.
Loans for which there is an identified credit risk, regardless of any guarantees, that makes it probable that Natixis will be unable to recover all or part of the amount owed by the counterparty under the terms and conditions of the loan agreement, are considered to be non-performing. This corresponds to loans for which an event of default as defined in Article 178 of the European regulation dated June 26, 2013 relating to prudential requirements applicable to credit institutions has been identified. In particular, loans that include payments over three months overdue are classified as non-performing loans.
Financial difficulties are determined by observing a number of criteria such as amounts past due for more than 30 days or an at-risk rating. The restructuring of a loan does not necessarily result in the counterparty being classified in the Basel default category, as the financial difficulty is addressed before the counterparty is downgraded into the Basel default category.
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.
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.
The DCF method for measuring future cash flows is based on the establishment of business plans prepared by the management of the subsidiaries in question and approved by Natixis’ senior management. The discount rate on future cash flows is the result of: an average rate of return on an investment deemed to be risk-free;V
Treasury shares held for distribution to employees are classified as held for sale and follow the corresponding rules.
Income, value adjustments and proceeds on disposal of securities portfolios are recognized as follows: income from variable-income securities is recognized as andV when received or when the payment has been subject to a resolution at a Shareholders’ Meeting; income from fixed-income securities is recognized based on theV accrual method; value adjustments and proceeds from the disposal of securitiesV are recognized under different headings depending on which portfolio they belong to: under “Net revenues” for securities held for trading andV securities held for sale, as a provision for credit losses on fixed-rate securities in theV portfolio of securities held for sale or for investment when adjustments in value relate to counterparty risk exposure, under net gains/(losses) on fixed assets:V
for adjustments in the value of securities held for investmentV (excluding impairment for risk exposure to a counterparty) when there is a high probability of disposal of such securities held for investment due to unforeseen circumstances and for all proceeds from the disposal of securities held for investment, for investments in associates, subsidiaries and affiliates andV other long-term securities.
Reclassifications from the “held for trading” to the “held for sale” and “held for investment” categories and from “held for sale” to “held for investment” are permitted in exceptional market circumstances requiring a change in strategy or when the securities in question have ceased to be tradable on an active market since their acquisition.
In line with applicable accounting principles, a specific amortization 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-depreciableV
non-destructible buildings (of historical importance):V non-depreciable walls, roofs and waterproofing: 20 to 40 yearsV
These transactions are carried out for four purposes: micro-hedging (hedging of specific transactions or positions);V
Gains or losses on specific hedges are recognized in income on a symmetrical basis with the income and expenses of the position or transaction being hedged.
In accordance with Article 41 of the Amended Finance Act for 1997 (No. 97-1239 of December 29, 2007), amended by Article 121 of the Amended Finance Act for 2008 (No. 2008-1443 of December 30, 2008), Article 5 of the Amended Finance Act for 2014 (No. 2014-1655 of December 29, 2014) and the agreement signed with the French State on May 10, 2017, Natixis manages certain public procedures on behalf of the French State, mainly consisting of loans and gifts to foreign States conferred within the framework of Public Development Aid, non-concessional loans to foreign States, gifts to the “Fund for Private Sector Aid and Studies” and the stabilization of interest rates for export credit guaranteed by the State.
“Post-employment benefits” such as pensions, other supplementary retirement benefits applicable to the banking industry, end-of-career awards and other contractual benefits payable to retirees. Natixis distinguishes between two types of post-employment benefits: defined-contribution plans, which mainly consist of the socialV security basic pension scheme and the supplementary schemes Agirc and Arrco, under which an entity has no obligation to pay a specified benefit amount. Contributions paid under defined contribution plans are expensed in the corresponding period; defined-benefit plans under which Natixis has a legal orV constructive obligation to pay a specified benefit amount are valued and funded.
In accordance with recommendation No. 2013-02 of the Autorité des Normes Comptables (ANC — French accounting standards authority) on rules for measuring and recognizing retirement and similar commitments, dated November 7, 2013 (which allowed the partial adoption of revised IAS 19 as adopted by the European Union in June 2012), Natixis chose to maintain the corridor method approach in the individual financial statements.
plus or minus any unrecognized actuarial gains or losses inV accordance with the corridor principle arising from: experience adjustments linked to demographic variables,V
Parent company financial statements and notes 401NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
The corresponding expense recognized in the 2019 income statement was €18.0 million versus €14.9 million at
Changes to the terms and conditions of a cash-settled employee retention and performance plan indexed to the value of the Natixis share which would lead to the latter being reclassified as an employee retention and performance plan settled in shares would trigger, when the plan stipulates the allocation of existing shares, the derecognition of the debt recorded for the initial plan indexed to the value of the Natixis share and the recognition of a liability as a provision for the new employee retention and performance plan settled in shares. The difference between the recognition of the new plan and the derecognition of the preexisting debt is taken directly to profit and loss. When the plan provides for the allocation of new shares, only the derecognition of the debt recorded for the initial plan indexed to the value of the Natixis share is taken to profit and loss.
Plans settled in shares are recognized in accordance with French Accounting Committee (CRC) Regulation No. 2008-15, which provides for the recognition of a liability where there is the likelihood or the certainty that the obligation to grant shares generates an outflow in settlement without an offsetting provision: if the granting involves the issue of new shares, Natixis incurs noV outflow and, as a result, no expense is recognized; if the granting involves the repurchase of shares or the granting ofV existing shares, an outflow will be recognized when the shares are issued to employees, without an offsetting provision. A provision is then set aside taking account of the entry cost of the shares or the share price on the balance sheet date if the shares have not yet been purchased and the probable number of shares granted to employees. The expense is recognized in stages over the vesting period.
In accordance with delegated regulation 2015/63 and implementing regulation 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. Contributions paid to the fund may be made in cash security deposits recognized as assets on the balance sheet (15% in cash security deposits) and in contributions recorded in income as “Taxes and regulatory contributions”.
Instead, the premium is initially recognized on the accruals line and taken to income over the same period, in the same amount and on the same line as: reversals of provisions for impairment (under “Provision forV credit losses”), the deferred recognition of the discount (under net revenues)V arising on October 1, 2008 on assets reclassified within “Loans and receivables” at that date pursuant to the amendment to IAS 39 and IFRS 7 published on October 13, 2008.
Transfer of certain Specialized Financial Services (SFS) business lines to BPCE
On February 6, 2020, the Board of Directors approved the 2019 financial statements. On February 25, 2020, Natixis announced the signing of a preliminary agreement for the sale of 29.5% of its stake in Coface for a unit price of €10.70 per share.
This announcement has no impact on Natixis' separate financial statements. After the sale which, given the regulatory authorizations required, may not be completed until several months after the announcement, Natixis will no longer sit on the Board of Directors of Coface.
Provisions for non-performing loans amounted to -€48 million at December 31, 2019, compared with -€48 million at
Restructured loans as defined in Note 1 recorded as non-performing or irrecoverable loans amounted to €1,093 million before impairment at December 31, 2019 versus €1,014 million at December 31, 2018. The amount after impairment amounted to €744 million at December 31, 2019 versus €721 million at December 31, 2018.
For these categories of securities, the gross values shown in the “Securities held for sale” and “Securities held for investment” columns are redemption value.(a) Of which securities loaned for €33,653 million at December 31, 2019 versus €25,669 million at December 31, 2018.(b) Of which "Bonds and other listed fixed-income securities" for €14,588 million at December 31, 2019 versus €15,404 million at December 31, 2018.(c) Of which "Shares and other listed variable-income securities" for €70,213 million at December 31, 2019 versus €47,097 million at December 31, 2018.(d)
The main changes during 2019 related to:(a) - the exclusion of the Fideppp Private Equity investment fund for -€8 million; - the exclusion of Cofimage 23 for -€3 million; - the exclusion of Cofimage 25 for -€2 million; - the exclusion of Dollfus Mieg & Compagnie for -€2 million. The main changes during 2019 related to:(b) - the reversal of provisions on Banco Finantia S.A. for -€2 million; - the reversal of provisions on Dollfus Mieg & Compagnie for -€2 million. The main changes during 2019 related to:(c) - Oddo BHF for +€17 million; - Komgo S.A. for +€2 million The main changes during 2019 related to:(d) - the exclusion of Natixis Lease for -€400 million; - the exclusion of Natixis Financement for -€354 million; - the exclusion of Natixis Factor for -€248 million; - the exclusion of CEGC for -€495 million; - the Natixis Foncière capital reduction for -€35 million; - the exclusion of Natixis Brasil for -€27 million; - the Natixis Trust capital increase for +€50 million; - the Natixis Algérie capital increase for +€72 million; - the Natixis Payment Holding capital increase for +€155 million. The main changes during 2019 related to:(e) - Natixis Brasil for -€18 million; - Natixis Bank for -€2 million. The main changes during 2019 related to:(f) - a reversal of provisions on Coface S.A. for -€89 million; - an addition to the existing provision on Natixis Wealth Management for +€31 million; - a reversal of provisions on Natixis Factor for -€70 million; - an addition to the existing provision on Contango Trading S.A. for +€12 million.
Information on shareholdings exceeding the disclosure Note 8 threshold following investments in French companies during 2019
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 % at 31/12/2019 Number of shares at 31/12/2019
DF EFG3 LIMITED MAPLES CORPORATE SERVICES LIMITED OF PO BOX 309, UGLAND HOUSE, Grand Cayman, KY1-1104 U 85,000 USD (5,165) USD 100.00%
Parent company financial statements and notes 409NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Customer transactions 119,320 113,291 * o/w repurchase agreements 86,803 72,466 * o/w accrued interest 97 78
Investments in subsidiaries and affiliates (393) (50) 171 8 3 (261)
Future salary increases are estimated by grade based on a constant population and a three-year average. At December 31, 2019, this average (including inflation) was 2.28%, the same as at
Unrecognized actuarial gains and losses 0 (22) (2) 1 (23) 1 (7) 5 (1)
Total net obligation at January 1 39 29 32 89 189 39 44 34 84 201
Benefits paid over the period (3) (6) (2) (41) (52) (1) (6) (2) (43) (52)
Benefits vested over the period 1 6 3 19 29 1 8 3 50 62
Payments to the fund during the period (2) (2) (3) (3)
Plan amendments recognized over the period 3 3 3 (2) 1
Change in obligation taken to income (3) (16) 0 (25) (44) 1 3 (2) 9 11
Actuarial gains and losses on benefit obligations 41 9 2 2 54 (11) (10) (2) (3) (26)
TOTAL NET OBLIGATION AT DECEMBER 31 65 21 32 66 184 39 29 32 89 189
The contractual conditions of deeply subordinated notes state that the issuer may suspend (in whole or in part) the payment of interest, as non-paid coupons are not deferred.
In the event of the liquidation of Natixis and regardless of any reduction to the securities’ original nominal value, unit-holders will bear their securities at their original nominal value.
Parent company financial statements and notes 415NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
scope of Retention and performance plans, and the creation of 11,982,805 shares under the “MAUVE 2018” transaction.
The capital increase in fiscal year 2018 corresponds to the allocation of 945,549 bonus shares to certain Natixis employees, within the
Parent company financial statements and notes 417NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Parent company financial statements and notes 419NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Depreciation, amortization and impairment of property, plant and equipment and intangible assets (79) (77)
Natixis SA was subject to an audit covering the 2008 to 2013 fiscal years. Final notice was received by Natixis during the 2018 fiscal year and the accounting impacts were factored into the accounts at
Fee and commission income and expenses 32 55 242 56 2 387 (6) 69 240 56 359
Parent company financial statements and notes 423NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
(in millions of euros) <= 3 months 3 months to 1 year 1 to 5 years > 5 years Undated Total
Bonds and other fixed-income securities 3,729 1,888 3,131 6,903 0 15,651
Article L.511-45 of the French Monetary and Financial Code and the Ministerial Order of October 6, 2009, require banks to disclose in a note to their financial statements their establishments and operations in States and territories that do not have an administrative assistance agreement with France aimed at countering fraud and tax evasion, which provides access to banking information.
Monitoring of Natixis’ subsidiaries and branches in non-cooperative countries forms an integral part of Natixis’ risk monitoring process overseen by the Risk function. This process involves: local Risk Officers/functions that have a functional link to theV central Risk Control Department; specific reporting procedures that respect local constraints butV also comply with overall risk requirements.
Company financial performance over the last five years (Art. 133, 135 and 148 of the French Decree on Commercial Companies)
Income after tax, depreciation, amortization and provisions 1,134,225,514.40 1,621,448,753.36 1,678,182,285.17 1,834,308,793.77 2,242,111,898.15
Income after tax, but before depreciation, amortization and provisions 0.32 0.45 0.42 0.60 0.74
Income after tax, depreciation, amortization and provisions 0.36 0.52 0.53 0.58 0.71
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 as at December 31, 2019 and of the results of its operations for the year then ended in accordance with French accounting principles.
Statutory Auditors’ report on the parent company financial statements 427NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Please refer to paragraph 1 of Note 1 and to Notes 5, 14 and 31 to the parent company financial statements for more details.
In addition, we carried out a credit review, based on a sample of files selected on the basis of materiality and risk criteria, in which we: took note of the latest available information on the situation ofV sensitive and non-performing counterparties; performed independent analyses of the assumptions used and theV estimates of provisions drawn up by management based on information provided by the institution and external data; verified that estimated impairment allowances were correctlyV recognized.
Natixis is involved in litigation before the courts and is the subject of investigations and requests for information from regulatory and tax authorities in different jurisdictions.
Provisions for litigation and other risks amounted to €1,005 million at December 31, 2019 (see Note 17 to the parent company financial statements).
For more details, please refer to paragraph 10 of Note 1 and to Note 17 to the parent company financial statements.
We took note of the status of ongoing proceedings and the main risks identified by Natixis, including through regular discussions with management (and more specifically Natixis’ legal, compliance and tax departments) and by reviewing the documentation made available to us.
We also carried out confirmation procedures with Natixis’ legal advisors regarding ongoing proceedings.
We considered financial instruments not quoted on an active market to be a key audit matter due to the material nature of the exposures and the use of judgment in determining fair value.
Please refer to paragraph 2 of Note 1, and to Notes 6, 27 and 28 to the parent company financial statements for more details.
the determination of the main valuation adjustments, as well as theV value adjustments made.
We carried out these checks with the assistance of our valuation experts, with whom we also carried out independent valuations by examining, on a sample basis, the assumptions, methodologies and models used to estimate the main valuation adjustments at
Statutory Auditors’ report on the parent company financial statements 429NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
As regards the information provided in accordance with the requirements of Article L. 225-37-3 of the French Commercial Code relating to the compensation and benefits paid or allocated to the directors 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 controlling your Company or controlled by it. Based on this work, we certify the accuracy and fair presentation of this information.
Responsibilities of management and those charged with governance for the financial statements
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment throughout the audit and furthermore: 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; are not provided or are inadequate, to issue a qualified opinion or a disclaimer of opinion; 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 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.
Internal control procedures relating to accounting and financial information 431NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
support and appropriate training for the accounting and regulatoryV reporting teams of those consolidated entities that use the consolidation and data collection tools so that best practices are shared across the Company.
The preparation of the consolidated financial statements also relies on: the use of a direct consolidation method, rolled out throughout theV Group, allowing for the analysis and control of the consolidation packages of each consolidated company via a formal review process; preparation of consolidated financial statements on a quarterlyV basis. This allows for greater control over financial reporting within tight time frames; reporting and reconciliation of intra-group transactions at M-1V and then at M, where M is the reporting month, thus increasing the number of reconciliations and contributing to the preparation of quarterly statements; use of an automated control process for individual informationV provided by the consolidated entities through the use of consolidation packages that incorporate accuracy and consistency checks, which must be complied with before the data can be transmitted; individual analysis of all entries impacting consolidatedV shareholders’ equity and the preparation of supporting documents for taxes, including proof of deferred taxes, for each consolidated entity, thus contributing to the substantiation of consolidated shareholders’ equity.
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,V for 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 intoV the various reports; offer BPCE access to Natixis’ data through dedicated interfaces,V in 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 as of June 2020), thus facilitating the compilation and preparation of certain regulatory reports (COREP capital reporting and FINREP), in addition to financial statements for publication.
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 (outstandings and income statement), reconciliation of cash accounts and checking and clearing of suspense items; consistency checks through analytical reviews;V
For regulatory reporting, permanent and periodic controls apply to the completion and monitoring of: accuracy and veracity checks, such as the management/financialV account base reconciliation processes, as the management data used for preparing reports can come from various sources; controls of the traceability and completeness of data, throughoutV the various reporting preparation processes; compliance and presentation controls in respect of the regulatoryV requirements specific to each reporting process; quality controls of the data (in accordance with the BCBS 239V program) needed to produce the reports and the quality of the attributes entered into the databases used, allowing the proper breakdown of accounting or management data; consistency checks between published reports, where possibleV and relevant.
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 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 that make these reports more reliable;
Internal control procedures relating to accounting and financial information 433NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com independent second-level controls under the hierarchical authorityV of the Accounting and Ratios Department and the functional authority of the Compliance Department. The Regulatory and Accounting Review team, aside from 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.
In addition to the operational control tasks delegated to it, the Regulatory and Accounting Review team also fulfills the following duties as part of overseeing and monitoring the control function within the Group: 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 Review officers appointed by each of the local financial, compliance or risk departments. This takes place through quarterly Review 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.
implementing the production process and the associated controlV environment relative to IFRS 16, particularly through the introduction, as of January 1, 2019, of a shared tool for calculating the impact of the standards on IFRS accounts, and for preparing associated accounting records; the strengthening of accounting and financial information controls,V particularly regarding manual inputs, new accounting standards (IFRS 9 and IFRS 16), anti-corruption and tax avoidance regulations; the reinforcement of local control system monitoring processesV and support for the Review officers, particularly internationally, for all the European, US and Asian platforms,
Work in 2020 will be focused on the following actions: the continuation of projects arising from new regulations andV standards, such as SURFI 2020 (RUBA — “unified reporting for banks and similar credit institutions”), Basel 3 revised, IFRS 17 (for insurance entities), COREP, the new definition of “default”, as well as plans for a daily LCR; the ongoing progress of the project to streamline the informationV systems used for market and financing transactions in France and abroad; continuing the implementation of the project to streamline andV pool data used by the various overview systems. New functions are anticipated for the Accounting & Ratios division and in the Risk division in 2020; a large-scale inventory project to streamline our architecture byV 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; the roll-out of the digitalization initiatives launched in 2019: a newV expense management tool; a centralized system for overseeing and monitoring closing periods, and for monitoring and reporting on first- and second-level controls in all areas within management’s purview. This tool will gradually be rolled out to the subsidiaries and branches; continuing with initiatives aimed at strengthening second-levelV controls in accounting and regulatory matters.
Strategic outlines and organization of the ESR policy 437NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
NA – Green assets % of green assets invested in 2019 14%
CIB – Renewable energy financing Installed capacity of projects financed in 2019 7.8 GW
AWM – Renewable energy investments Installed capacity of projects in portfolio 5.3 GW
AWM – Natural capital investments AuM invested in natural capital strategies €432m
ESR is one of the main cross-business drivers used to achieve the goals of the New Dimension 2018-2020 strategic plan, which is aimed at creating long term value. It is backed by enhanced governance, with the establishment of a dedicated department reporting directly to a member of the Senior Management Committee.
It involves an assessment of the social and environmental risks run by Natixis’ business lines, while driving performance and development: ESR will fuel the Company’s strategic dialog with clients and support their own transition to a more sustainable model, with the development of innovative offers.
In accordance with the new requirements of the non-financial performance report, Natixis has described its business model (see Introduction to this universal registration document) 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.
Natixis has applied Groupe BPCE’s risk rating policy, based on the risk analysis methodology established by the Group Risk, Compliance and Permanent Control division, which established: a universe of ESR risks broken down into three types: governance,V products and services, and internal operations. These risks were identified in terms of regulations, industry practice, ESG rating agencies’ assessment criteria and requests from clients and investors; a methodology for ranking the risks by their frequency and severity;V
The list of risks and their materiality was reviewed together with the Natixis Risk Department in 2019 to take into account upgrades in the tools used to measure risks that are specific to Natixis, in particular the Risk Appetite Framework.
In 2019, the social and environmental risks related to financing activities were included in the review of the Risk Appetite Framework. Environmental risks cover both physical and transition climate risks, which are considered material, and other environmental risks (impact on biodiversity, pollution, natural resources).
O th er n on -p rio rit y ris ks
Strategic outlines and organization of the ESR policy 439NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Nature of ESR issue Risks identified Risk management system Key performance indicators See Chapter
employees’ commitment, manage our direct impacts on the environment, responsible purchasing policy, solidarity initiatives
This department is also responsible for all regulatory and strategic ESR reports: universal registration document, carbon assessment, mobility plan, etc. In addition, it is in charge of relations with international and external stakeholders (clients, employees, ESG rating agencies, NGOs, etc.) with questions on Natixis’ ESR policy.
To further its analysis and oversee the implementation of its ESR strategy, the ESR team regularly holds a ESR Steering Committee, attended by around twenty senior managers from the main business lines and corporate functions. This Committee discusses ESR best practice for the development of products and services and for internal operations.
In this context, the Corporate & Investment Banking business line has established a Green & Sustainable Hub. This operational hub comprises experts who help issuers and investors all around the world by offering them solutions and expertise in green and sustainable financing. Its expertise extends to all asset classes: the structuring and origination of loans, and investment solutions, in partnership with the business lines, which have appointed Green Captains, and in coordination with the ESR Department.
Strategic outlines and organization of the ESR policy 441NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
The PRB were drafted by 30 founding banks — including Natixis — under the United Nations Environment Program Finance Initiative (UNEP-FI) and were officially launched at the United Nations Climate Action Summit in New York on September 22, 2019. At the launch, the unprecedented global coalition brought together 130 signatory banks collectively holding over $47 trillion in assets, representing one third of the global banking sector.
The PRB set out what it means to be a responsible bank and provide the first global framework for incorporating sustainability in all banking activities, be it in terms of strategy, financing, market and advisory activities or their direct impact.
They are the benchmark for measuring progress achieved by governments and private sector companies, including financial institutions.
The SDGs are universal, inclusive, interconnected, ambitious targets that provide all of Natixis’ business lines with a framework for measuring the impact of their activities, a means of raising employee awareness, a way of encouraging cooperation between business lines, and a source of business opportunities.
In the course of its business, Natixis has dealings with various stakeholders, including but not limited to: EmployeesClients Shareholders
Employees of Natixis S.A. and its subsidiaries Staff representatives and unions
Completion of questionnaires Invitations to tender Product development and management Contracts
Supporting Chairs Relations with Grandes Ecoles and universities Campus Awards Receiving interns, including co-op students
The following table shows the most recent assessments by the top ESR rating agencies and their previous ratings.
The Code of Conduct has two main sections. First, it sets out Natixis’ commitments (client interests take precedence, ethics, responsibility towards society, protecting the reputation of Natixis and Groupe BPCE). The second section describes the rules of conduct that must guide each member of staff in their actions and decisions.
The Code of Conduct is available on the Natixis website at: Bespoke governance
The Global Culture and Conduct Committee meets every quarter or on an ad hoc basis to discuss individual cases, approve ESR procedures and supervise their roll-out.
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; andV
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.
All staff are required to complete mandatory training on the Code of Conduct.
To tackle cyber risk and ensure personal data protection, Natixis has a specific department that reports to the Compliance Department — the IT Systems Security and Business Continuity Department.
For more information on these matters, see Chapter 3.2.8 “Compliance risk”.
dialog and respectful discussion of diverging interests are necessary to ensure the correct functioning of the democratic process. To this end, it engages in dialogue with public and government officials on proposed legislative and regulatory requirements that impact Natixis’ business as well as its ability to serve its clients.
With this charter, Natixis ensures the integrity and probity of its lobbying activities in compliance with its Code of Conduct and applicable laws, rules and regulations. It applies to all entities controlled by Natixis and to their employees. It covers lobbying and advocacy activities, which are coordinated by Natixis’ Public Affairs Department and its parent company, BPCE. Natixis believes that
Reporting Standard (CRS) for the Automatic Exchange Of Information (AEOI) on income received by participating countries’ tax residents abroad, as well as US FATCA regulations to prevent tax avoidance involving foreign accounts or entities owned by US Persons. (See Chapter 3.2.8.3 Client protection — Know Your Client.)
Natixis observes transparency rules intended to combat tax avoidance in France and around the world. It applies the Common
notification within 15 business days of the date ofV acknowledgement of whether the information reported is eligible for further investigation; notification within three months of the date of acknowledgementV of the steps taken to process the information reported or, if this process has been completed, the action taken (or not taken) based on the information.
The procedure provides protection to the whistleblower (who may in no circumstances be subject to disciplinary action or legal proceedings in respect of the report, provided they have acted impartially and in good faith) and ensures the information is treated appropriately and in full confidence, in accordance with the applicable regulations.
In line with the sustainable development objectives of its New Dimension strategic plan, all of Natixis’ business lines develop innovative financial products and services designed to service its clients’ environmental and social ambitions. Several key initiatives were launched over the past two years to drive the transition of each business line towards sustainable finance: the signing of the Principles for Responsible Banking, the introduction of the Green Weighting Factor, the internal working group on natural capital and biodiversity, the integration of environmental, social and governance (ESG) criteria throughout Asset Management strategies, Natixis Assurances’ strategy of aligning its investments with the goals of the Paris Agreement.
private company, and the first fund to invest in sustainable ocean management. This pioneering strategy was once again rewarded by industry recognition in 2019. For example, Natixis was named Most Innovative Investment Bank of the year by The Banker.
In the past two years, Natixis has contributed to many innovations in sustainable finance including the first certified green real estate loan and the first green syndicated loan, the first social bond issue by a
Natixis examines ESG criteria closely when preparing its investment strategies, as sustainable development issues allow it to provide investors with value-creating solutions over the long term.
In 2019, Natixis Investment Managers, which groups the expertise of 25 affiliate Asset Management companies around the world and ranks among the world’s biggest asset managers (€934 billion in assets under management at December 31, 2019), pursued its pledge to take Environmental, Social and Governance (ESG) issues into consideration in the investment models each of its affiliates develops. Recognition of ESG criteria, which have been an integral part of the investment strategies of Ostrum AM and Mirova since their creation, is gaining ground among all of Natixis Investment Managers’ affiliates.
The Principles for Responsible Investment (PRI) were published by the United Nations in 2006 as a voluntary commitment encouraging institutional investors and asset managers to incorporate ESG in the management of their portfolios. In 2019, 2,372 signatories with $86.3 trillion in assets under management had adopted the PRI(1).
Nineteen Natixis Investment Managers affiliates, which together hold 90.1% of total assets managed by Natixis Investment Managers affiliates, had signed the PRI as of December 31, 2019, namely: AEW CILOGER, AEW Capital Management, Alliance Entreprendre, Dorval Asset Management, DNCA, Flexstone Partner, Harris Associates LP, Investors Mutual Limited, Loomis Sayles, Mirova, MV Credit, Naxicap Partners, Ossiam, Ostrum AM, Seeyond, Seventure Partners, Thematics Asset Management, WCM Investment Managers, and Vega Investment Managers. In 2019, Natixis Investment Manager also signed the PRI on behalf of the federation of investment firms it represents.
Business line contributions to green and sustainable growth 449NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
The implementation of the Green Weighting Factor will enable Natixis to meet these objectives. The Green Weighting Factor is a solution that can be replicated by all banks committed to aligning their portfolios with the transition. Natixis will gradually share it with its peers in 2020, in particular with banks committed to climate action in the United Nations Environment Program Finance Initiative (UNEP-FI), including signatories of the Principles for Responsible Banking (PRB) (see Chapter 6.3.2.1 GWF: an innovative solution for a greener loan book).
Ostrum AM systematically incorporates material ESG aspects in its analysis for both its equity and credit funds. The companies it invests in are always asked about ESG issues and how they include them in their business model. This process applies to €255.4 billion in assets under management, representing 93% of its total assets under management. Ostrum AM’s responsible investment approach applies to all its investments in sovereign assets from emerging and developed countries and over 90% of its debt investments. Since 2019, all its equity investments incorporate ESG dimensions throughout the investment process.
In October 2019, Citywire(1) ranked Ostrum AM fifth out of 220 European investment management firms that are truly committed to ESG.
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 pre-investment ESG analysis which takes a detailed look at the main ESG issues in order to establish an action plan for the years to come. Each issue is analyzed in detail, including a review of its materiality for the Company, its strategic importance in the sector, a summary of the Company’s ESG performance and appropriate indicators. Naxicap Partners won Private Equity magazine’s ESG – sustainable development award in 2019.
Natixis Assurances extended its ESG analysis to its real estate portfolio in 2019: certified assets are given priority for new acquisitions. AV certification process is included in the business plan for non-certified assets. Acquisitions incorporate objectives set out in an energy convergence plan (to reduce energy use in line with regulations); for the existing portfolio, business plans must include an energyV convergence plan with short, medium and long-term goals (to reduce energy use in line with regulations). A certification plan is prepared in the same way as for new acquisitions.
Natixis Assurances ultimately aims to fully incorporate ESG criteria, with certification for all its real estate assets (compared with 40% of its portfolio by market value as of the end of 2019).
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).
Natixis Assurances has gradually incorporated ESG criteria at the start of its investment process to exclude from its discretionary portfolio management mandates and dedicated funds all issuers deemed to be disregarding the Sustainable Development Goals. As well as excluding the sectors and companies listed above, it removes issuers assigned a negative rating by Mirova’s ESG research team from its investment universe. Natixis Assurances’ life insurance investments have had no exposure to these issuers since the end of 2017.
Ostrum AM offers its customers socially responsible products on all its asset classes with a range of investment strategies, representing a total of €66.6 billion, or 24.3% of its total assets under management: Best in class & Positive screening: selection of the best ratedV issuers from an investment universe that excludes issuers with a high ESG risk profile; Best in universe: selection of issuers from all sectors with the bestV ESG performance in the investment universe; Bespoke strategies: strategies co-built with clients for theirV dedicated funds or discretionary mandates to match their ESG philosophy as closely as possible.
Mirova, the Group’s sustainable investment affiliate and a pioneer in impact investing, includes ESG criteria in all its investment filters applied to all asset classes, representing €12.5 billion in assets under management. In 2019, Mirova was awarded the 2019 gold prize for management companies (3), which singles out companies whose funds obtain the best financial performance over time.
Except at Seeyond, and only for certified funds at DNCA.(1) Except at Seeyond, and only for index funds at Seeyond(2) Warded by the monthly business magazine Mieux Vivre Votre Argent.(3)
Seeyond, a specialist in active quantitative management, is drawing on Mirova’s ESG research expertise to upgrade its business model to take ESG criteria into account. One of its equity funds, which applies a minimum volatility strategy (1), already incorporates ESG criteria by allocating investments based on issuers’ ESG risks and excluding the riskiest issuers. This fund totals €940 million, or 9.7% of Seeyond’s total assets under management.
Thematics, an investment management firm specialized in innovative equity themes, incorporates ESG criteria in all its investment processes, covering 100% of assets under management (€600 million): definition of investment universe: specific exclusions are applied toV each thematic fund in addition to exclusions relating to sector policies. For example, companies producing plastic water bottles are excluded from the water investment strategy and companies with military contracts are excluded from security and artificial intelligence & robotics funds; selection: ESG criteria are one of the four risk categories analyzedV to select the best risk/reward opportunities; investment: thresholds that take ESG scores into account are usedV to fine tune positions.
ESG criteria are incorporated into investment strategies through a combination of approaches: exclusions (controversial activities, tobacco, coal, etc.);V
a best-in-class approach that exclude 30% of securities with theV worst ESG scores in a given business sector; an approach aimed at reducing the carbon footprint.V
A pure equity management strategy that selects stocks based on their volatility and correlation profiles to reduce the overall volatility of the equity portfolio.(1)
renewable energy on site or renewable energy certificatesV purchased; risks relating to the water supply and water quality.V
This approach seeks to generate a significant, measurable environmental and social impact while maximizing the financial return. 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).
equity). These six funds are part of the Beyond range, and they apply the following ESG criteria: DNCA has been awarded SRI certification for six of its funds that incorporate ESG criteria, representing €774 million in assets (European equity, international equity, European infrastructure exclusion of issuers with ESR risks from the portfolio. This filterV meets the requirements set out in the government-recognized SRI certification; selection of issuers having a positive impact on the sustainableV economic transition.
Ostrum AM, Mirova, Seeyond, DNCA, Thematics AM and Ossiam place shareholder engagement at the center of their responsible investor approach.
After performing pre-investment ESG audits, Naxicap Partners systematically includes an ESG clause in its shareholders’ agreements. This clause includes a commitment to implement a detailed action plan and provide regular information and responses to ESG questionnaires (120 indicators). In addition, Naxicap Partners works with the management of the companies in its portfolio to establish a plan to reduce greenhouse gas emissions and adapt to climate change. In 2020 it began looking at how to factor ESG criteria into the variable compensation of its investment teams and the executive officers of the companies in its portfolio.
In terms of voting policy, the Asset Manager regularly participates in general meetings of companies in which the investment vehicles under management have holdings. Failing this, Naxicap Partners grants powers to other shareholders of the company for the purpose of representing it.
Investment Managers) alone account for nearly 21.2% of this market in France, which is estimated to be worth €139 billion by the French Asset Management Association (AFG).
Natixis Interépargne (NIE) is committed to sustainability as a pioneer in employee and retirement savings in France with over €33.5 billion in assets under custody. Amounts managed by Natixis (via Natixis
Natixis is also a confirmed leader in responsible company savings plans in France with SRI-certified assets under custody with Natixis Interépargne amounting to €5.8 billion. Solidarity-certified funds amount to more than €1.7 billion. With total assets of over €7.65 billion, Natixis’ market share exceeds 25% in SRI and 29.5% in solidarity investments in France.
SRI assets under management Solidarity assets under management Total (SRI + Solidarity assets under management)
In 2019, the Mirova Solidaire fund surpassed the symbolic €200 million mark in terms of assets under management, with inflows of nearly €20 million over the year. These inflows allowed the fund to invest €10 million in the lodging house scheme run by Habitats & Humanisme. Under this scheme, 20 new lodging houses (low cost individual residences with shared living spaces) will be provided in line with the government’s policy of creating 10,000 additional rooms in such houses. The Mirova Solidaire fund was certified a French Impact fund in 2019, which will increase its visibility.
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 maintaining or developing employment. Since the ICMA launched the Social Bonds Principles in 2017, the volume of social bonds has increased by 41%, rising from $7.9 billion in 2017 to $11.1 billion at year-end 2018.(1) The market is growing fast but it remains small in relation to the green bonds market. Natixis arranged the issuance of nine sustainable and social bonds in 2019.
Natixis co-arranged a sustainable term loan for the Ghana Cocoa Board. This new $300 million loan over three years includes a margin adjustment mechanism based on environmental and social goals. Greater awareness of child labor and empowerment for women through education programs and community support are part of the goals. This deal is one of the first in this sector to encourage environmentally friendly production techniques and improve farmers’ livelihoods.
Natixis was lead manager for the first sustainable bond issue by Action Logement, an organization run jointly by the government, employers and unions which finances low cost housing in France. The bond raised €1 billion over 15 years. It will finance the commitments made by employers and union bodies under the €9 billion voluntary investment plan signed with the government in April 2019. The funds raised will finance and refinance social and green projects, for example, the construction and renovation of social housing. The net proceeds will fund contributions to public policy, assistance and services for individuals, and social and capped-rent housing schemes in France.
Natixis finalized its GWF methodology in 2019, drawing on its own sector expertise and on external consultants specialized in
By adjusting the expected return on each loan depending on its impact on the environment and the climate, Natixis encourages its teams to favor green financing solutions (for an equivalent level of credit risk). This is a concrete way of contributing to the United Nations Sustainable Development Goals regarding climate change and the environment.
The GWF has been in use since September 2019 and is fully incorporated in the bank’s processes and loan approval systems. It will be independently audited by KPMG in 2020.
These indicators will be monitored quarterly as of the end of 2019, and nearly all the loan portfolio will be assigned a rating in 2020.
The GWF methodology is open and scalable and it will be able to incorporate the criteria included in the EU classification system on what can be considered an environmentally sustainable economic activity — the so-called taxonomy — as progress is made by the European Commission Technical Expert Group (TEG).
Corporate & Investment Banking’s Green and Sustainable Hub published several reports (1) in 2019 to raise awareness and understanding of the implications of the TEG’s work. These reports include in-depth analysis on the three topics addressed by the TEG in 2019 on the European Commission’s request, namely the taxonomy, the new European Green Bond Standard and climate and ESG benchmarks.
Renewable energy is constantly setting new records in terms of installed capacity: 175 GW (2) was rolled out in 2018, up from 157 GW in 2017, with a total of 2,356 GW around the world. New solar energy capacity installed in 2018 (98 GW) outstripped new fossil fuel electricity production capacity. The proportion of electricity production from renewable sources has reached 26.1% in 2018 in the world.
3 offshore wind farms with a total capacity of 1,498 MW;V
15 PV and concentrated solar power projects with a capacity ofV 3,712 MW.
Renewable energy accounted for more than 90% of total financing granted by CIB in the electricity production sector in 2019.
Natixis funded the first offshore wind farm in France off the coast at Saint-Nazaire. This 480 MW wind farm has 80 turbines covering a surface area of 78 km located between 12 km and 20 km offshore and at depths ranging from 12 m to 25 m. It will be operational in 2022 and it is expected to produce the equivalent of 20% of the electricity consumption of the Loire-Atlantique department.
Portfolio exposure to renewable and non-renewable energies per year €2.52 bn €89m €1.88 bn €89m €1.68 bn €77m
Financing for the world’s biggest concentrated solar power (CSP) project in the United Arab Emirates
The first two phases of the power plant (13 MW and 200 MW) are already in service and the third is under construction and due to be launched before the end of 2020. This new phase will bring an additional 700 MW in installed capacity using two different CSP systems: a 600 MW parabolic trough and a 100 MW central tower (which will be 260 m tall, the biggest in the world) covering a total surface area of 43 km2 according to the Dubai Electricity and Water Authority (DEWA).
Business line contributions to green and sustainable growth 459NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Financing and investment in mobility and sustainable cities6.3.2.3 2019 KEY EVENT
Natixis and EDHECinfra join forces in an ESG research project for infrastructure
In 2019, Natixis continued to expand its financing and arrangement business in the sustainable real estate sector, with various solutions including mortgage loans, green bonds, securitization vehicles, and green loans. 12 deals for sustainable real estate were closed in 2019.
Natixis and ICAMAP closed the first green equity bridge loan for €100 million. This deal, which observes the Loan Market Association’s Green Loan Principles, will finance the development of real estate projects using low carbon construction techniques in the Greater Paris area.
Ivanhoé Cambridge: the first green margin loan for the real estate sector
AEW CILOGER continued its efforts to obtain certification for its portfolio assets throughout 2019. 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. Certified assets amount to €6 billion, or 19% of AEW CILOGER’s portfolio. In 2019, seven funds, including two new funds, took part in the Global Real Estate Sustainability Benchmark (GRESB) assessment, which covers topics relating to the environment (measures to reduce the environmental footprint), social aspects (relationships with stakeholders and the social impact of activities) and governance (policies and procedures). Six of these funds achieved a Green Star rating, including one pan-European fund, which obtained a Green Star 4* rating.
Natixis Assurances monitors and reports annually on the portion of its real estate investments that have environmental certification. At year-end 2019, 52.4% of real estate assets under investment mandates were certified (HQE, BREEAM). Natixis Assurances extended the incorporation of ESG criteria in its real estate portfolio in 2019. 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 regulatory requirements and contribute in full to ESG issues in order to build sustainable cities.
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. In the event of a claim, policyholders can repair damaged paintwork themselves using eco-friendly paint available at a preferential price. Policyholders also receive assistance and advice on how to save energy.
As the transition to electric vehicles gathers pace, in 2019 Mirova published a report (1) providing insight into the challenges facing the electric vehicle sector and the solutions available and identifying high added value segments in this sector to channel savings towards these companies, which are crucial to the energy transition. Electric vehicles represent a revolution for the automotive industry and for the transport sector as a whole. The technology driving this transformation is constantly changing, leading all stakeholders to review how they perceive mobility.
Natixis Assurances offers preferential rates to individuals who travel less than 8,000 km per year in their car: this option applies to 25.5% of contracts (194,297 policies), or €67.8 million in annual premiums in 2019. Savings of up to 30% are offered to electric vehicle owners. In the interest of supporting its customers, Natixis Assurances also offers eco-driving courses.
Business line contributions to green and sustainable growth 461NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Société du Grand Paris: the first entirely green Euro Medium Term Note
In September 2018, Société du Grand Paris launched Europe’s biggest sustainable infrastructure project totaling €35 billion. Natixis was joint bookrunner for two green bond issuances, in October 2018 (€1.7 billion over 10 years) and March 2019 (€2 billion over 15 years). This vast project is the biggest transportation project in Europe and it brings many benefits, for example reducing greenhouse gas emissions, improving air quality and reducing travel times. Natixis received a green bond award for this green bond issue at the IFR awards 2019 (2).
Natixis is also active in green bond investments through its Asset Management affiliates. At year-end 2019, Ostrum AM managed green bond investments totaling €4.362 billion in 131 funds and investment mandates. Of the €2.4 billion in fixed income assets under management by Mirova, €1.6 billion is invested in green bonds. One of its flagship strategies, applied by the Mirova Global Green Bond Fund, invests solely in green bonds (€228 million in the Luxembourg registered fund and €33 million in the US fund).
Natixis was CSR agent for a €900 million syndicated loan facility for Agrial, an agricultural cooperative based in Normandy. The credit agreement indexes the loan interest rate to CSR indicators aligned with Agrial’s own targets for 2025. These indicators include reducing energy consumption, increasing the sale of pesticides not made using chemical synthesis, and developing organic production.
Development of low carbon structured products6.3.2.5 2019 saw strong activity on the core range of climate indices developed since 2015, in particular on the Euronext ECO5E index launched in 2018 and the Climate Orientation, Solactive Climate and Energy Transitions indices.
Natixis and Groupama launch a climate index-linked green bond fully committed to the energy transition
In 2015, Mirova developed a method for measuring the carbon footprint of issuers in different business sectors. The methodology (3) has been enhanced since 2018 to assess portfolio alignment with the climate scenarios set in the Paris Agreement, using: carbon footprint data from an external provider (scope 1, 2 andV 3 emissions); climate scenarios from the Intergovernmental Panel on ClimateV Change (IPCC); investment projections from the International Energy Agency (IEA).V
Using this method, Mirova estimates that the climate scenario for all its equity, bond and infrastructure portfolios stands at 1.5°C, compared with 4.5°C for the MSCI Europe index and 3.8°C for the MSCI World index (4).
Aware of the importance and urgency of the climate challenge, DNCA has factored climate issues into its investment approach with the conviction that the ecological transition is both a risk factor and a source of investment opportunities. Its climate approach is based on the work and recommendations of the Taskforce on Climate-related Financial Disclosure (TCFD). The analysis, which uses a proprietary model, assesses the risks facing the issuer and any opportunities associated with its positioning on the ecological transition. The model draws on qualitative evidence and quantitative data: the issuer’s exposure to climate risk depending on its businessV sector and geographical footprint.
For the SRI fund range (Beyond range), specific indicators have been developed in addition to traditional carbon measures to assess each fund’s position regarding the financing of fossil fuels and green activities.
Ossiam has established a framework for measuring its portfolios’ transition risk and comparing it with their benchmark. The framework can be applied to several indicators such as: greenhouse gas emissions;V
risks associated with the energy transition (measurement of coal,V oil or gas reserves); impact measurement (measurement of green energy production orV impact investments).
3 funds and 1 mandate benefit from this measurement framework (which represent €518 million, or 12.3% of assets under management) have a goal of achieving a 40% 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.
At the end of 2019 it was on track to achieve its target, with over €980 million invested in green assets over the year. With this policy, Natixis Assurances intends to encourage and give priority to
Integrate biodiversity in its dialog with the public authorities in7. all countries in which it operates; Raise awareness and train employees in biodiversity; promote8. and encourage their initiatives to protect nature; Assign resources and establish appropriate partnerships to9. support concrete actions and monitor their progress; Publicly report on the implementation of its commitments.10.
Natixis will decide and announce individual commitments for its financing and investment activities by April 2020, using SMART goals (Specific, Measurable, Agreed upon, Realistic, Time-based).
The Green Weighting Factor 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.
For agricultural commodities, Natixis helps its clients with natural capital protection. Natixis was Senior MLA for an innovative sustainability loan (revolving credit facility) for COFCO International for which it received the "Best Sustainability-Linked Loan" from The Asset (3). This $2.1 billion syndicated loan included ESR objectives, in particular an improvement in agricultural product traceability, primarily soybeans sourced from Brazil. An independent third party will assess the achievement of the objectives each year. If the Company meets the objectives, the interest savings will be invested in sustainable supply chains and health and safety for local communities.
IFC Performance Standard 6: biodiversity conservation and sustainable management of living natural resources.(1) As defined in the Equator Principles.(2)
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Since 2017, Mirova has used an investment platform specialized in preserving biodiversity and natural capital developed both in-house and via the acquisition of Althelia Ecosphère, which was finalized in 2019. Mirova develops innovative investment solutions to mitigate and adapt to climate change, and to protect local regions, biodiversity, soil and marine resources, with €300 million invested in natural capital.
The LDN Fund continued to raise funds throughout 2019, with commitments totaling $150 million and a target of $300 million. The LDN strategy was selected in the Real World Impact Initiative of the Year category at the UNPRI 2019 awards alongside four other finalists, reflecting international acknowledgement of the innovative and relevant nature of this strategy.
Mirova plans to allocate $100 million in sustainable financing to protect, restore or improve living conditions for indigenous populations and to preserve biodiversity in the Amazon. The strategy is managed by Mirova Natural Capital in partnership with the US Agency for International Development (USAID).
It was launched in 2018 and has raised nearly all of its target of $100 million, with more than $92 million raised as of the end of 2019. It will invest in around twenty sustainable projects such as sustainable offshore aquaculture and technology to reduce bycatch
SOF’s investments are having substantial positive impacts in terms of socio-economic 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 ha of marine protected areas in ecosystems with high environmental value.
Natixis worked with Euronext to create the Euronext® Water & Ocean Europe 40 EW index. This index, which is based on a holistic methodology, has a balanced sector allocation in order to better meet the challenges related to water. An impact report comparing performance with the benchmark will be produced each year.
AEW chairs the Circolab non-profit created in February 2018 to promote the circular economy in the construction and real estate sector and in particular to encourage the reuse of materials via various initiatives: publication of reuse guidelines, promotion of best practices, development of shared tools, creation of an ecosystem of real estate sector players. Circolab currently has around sixty members (public and private sector contracting authorities, construction firms, building materials manufacturers, project managers, and associations).
Managing environmental, social and governance risks 467NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Environmental, Social and Governance (ESG) risks are factored into financing and investment activities as part of a global approach involving the business lines, the ESR Department and the control functions. The approach includes drafting and applying ESR policies in the most exposed sectors, determining excluded sectors, and assessing and monitoring ESG risks on transactions and counterparties using various tools and processes.
Lowering of the limit from 50% to 25% in the coal sector
Defense sector policy published in June 2018. 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.
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 to include a Defense
In light of this commitment, Natixis published a detailed account of its tobacco sector policy in May 2018. This policy applies to Natixis, Ostrum and Natixis Assurances’ financing, investment and services activities.
In November 2018, Natixis published an oil and gas sector policy setting out the terms of its commitment, namely to: discontinue the financing of projects involving the exploration,V 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 (1), 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 evaluation methods, and analyzing controversial issues that its business lines involves analyzing clients and transactions to ensure clients may run into. they comply with its ESR policies and exclusion commitments, analyzing transactions according to the Equator Principles or other
Breakdown of the number of transactions reviewed by geographic area (2017-2019)
As a signatory of the Equator Principles since December 2010, Natixis applies an industry-wide methodology recognized by 101 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.
In the interest of establishing lasting relations with its clients, the objective is to raise awareness among the business lines — before a credit decision is made — of all the situations that can give rise to reputational risk, and where necessary to consider appropriate measures. This analysis will be systematically applied when the screening solution described below is rolled out.
The system will be integrated with client onboarding and loan approval processes to allow the systematic analysis of ESG risks. It will involve the business lines, Compliance, and the Risk and ESR Departments. A far-reaching training and acculturation program will accompany the system’s launch throughout the year. The assessment process will gradually be applied to the portfolio of existing clients, taking into account the schedule for periodic renewals of financing authorizations.
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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 6.2.5).
A first set of suppliers in high risk purchasing categories (servers, ATMs, payment cards, furniture) has been assessed under the process applied since 2018 and other categories of suppliers are under assessment.
This system can be used outside the consultation process for suppliers already approved or those that invoice large amounts to Groupe BPCE.
Managing environmental, social and governance risks 471NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Indicators are used to monitor the roll-out of the duty of vigilance process for high and very high risk procurement categories: 31% of relevant procurement categories have been assessed;V
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 US, and has launched several initiatives to limit its impact on the environment (e.g. certified buildings, use of resources, waste management, eco-friendly business travel, etc.).
Regarding the risks incurred by Natixis employees and service providers in terms of human rights, the decision was made to extend efforts in areas deemed most important in view of Natixis’ businesses: working conditions, prevention of discrimination, and personal safety.
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.
early warning systems are essential to be able to anticipate andV respond quickly to risks and dangerous situations. To allow this, security managers can now access an early warning system on the internet that analyzes safety and security risks arising from geopolitical events; the self-assessment and compliance system used for the pastV three years has been reviewed and rationalized. Its use was extended from France to all offices at the end of 2019.
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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.
Pursuant to Article 173 of the French Energy Transition Act, Natixis is required to report on the climate risk management tools it has put in place and on its low carbon strategy.
Since 2016, Natixis has been part of a working group to improve recognition of these risks: specifically, and in line with the Autorité de Contrôle Prudentiel et de Résolution (ACPR — French Prudential Supervisory Authority for the Banking and Insurance Sector), BPCE and Natixis participated in a working group addressing Article 173, Provision V of the Energy Transition for Green Growth Act of August 17, 2015, with a view to drawing up stress test scenarios. The working group reviewed the sectors most exposed to physical risk and to transition risk.
In 2019, Natixis took part in banking sector discussions with the ACPR on two major topics: climate strategy and governance, and climate risk metrics. These meetings allowed banks to present and compare their systems and will allow the ACPR to publish a guide to best practice in taking climate risk into account in the first quarter of 2020.
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 and transition risk will be systematically incorporated into the assessment of financing opportunities (see Chapter 6.3.2.1 Green Weighting Factor: an innovative solution for a greener loan book).
Over and above the GWF methodology described above, this initiative has raised awareness of the risks and opportunities associated with climate change among business line and risk management teams. Insofar as since September 2019 each loan file reviewed by the Credit Committee and covered by the initiative must be rated for its climate impact, in-depth discussions are held during the loan approval process on the consequences of climate change on the borrower’s activity.
This innovative approach covers generated emissions, prevented emissions and each company’s overall contribution to the fight against climate change. It assesses investments made relative to a benchmark scenario and compared to the principal market indices.
Applied to the strategies managed by Mirova, the methodology shows that the investments made by the Natixis subsidiary are below the 2°C scenario and are much better than the main benchmark indices.
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). DNCA aims to extend its climate impact analysis to all its equity and corporate bond investments by the end of 2020; Ossiam has established a framework for measuring its portfolios’V transition risk and comparing it with their benchmarks. Funds that benefit from this measure have a goal of achieving a 40% reduction in their absolute greenhouse gas emissions, carbon intensity and potential emissions arising from fossil fuel reserves (in relation to their benchmark); 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.
The economy stands to suffer from these physical risks, and some sectors and geographic regions are already proving vulnerable to such events, which can result in major financial losses (interruptions in the supply chain, loss of operations), alter the value of assets and affect borrower solvency. This could have a knock-on effect on credit and investment portfolios.
Direct impact: Each year, Natixis measures its carbon emissions (see Chapter 6.5.3) and takes a number of measures to limit its own impact on the climate, namely: carbon neutrality of power consumption via renewable energyV supply contracts; energy-efficient buildings;V
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 applies a low carbon strategy across all of its business lines: Asset & Wealth Management, Corporate & Investment Banking, Insurance, and Payments (see Chapter 6.3.2).
Managing climate risk in projects financed by Natixis (see chapter 6.4.1): 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. This framework was strengthened by the EP IV amendment which take account physical and transition risks as set out in the TCFD ans the Paris Agreement.
Exclusion of carbon-intensive issuers: Since 2015, Natixis has ceased all financing and investments in the coal sector and has also undertaken to stop financing oil sands and oil exploration in the Arctic.
In line with its policy of recognizing ESR in its activities, for over ten themes: sustainable real estate, management of resources and years, Natixis has actively reduced its direct impact on the carbon emissions, digital sustainability, mobility, waste management, environment, which is significant given the number of its employees and the protection of biodiversity. and offices. This impact reduction policy is broken down into six
The Real Estate and Logistics Department has introduced a total cost of ownership approach to its projects and investments that allows it to factor in the environmental impact of its activities. It is especially involved in setting up and monitoring environmental certifications, optimizing energy consumption and ensuring building accessibility.
Natixis and its subsidiaries in France (with the exception of Financial investments and affiliates — see scopes in Chapter 6.8) account for 239,228 m2 in office space and 15,917 workstations, as well as two data centers operated for Groupe BPCE.
After receiving ISO 14001 certification for the management of its buildings over several years, the Real Estate and Logistics Department (DIL) launched its DIL Progress label in 2017. This specifically covers the department’s commitments in terms of building works, operations and data center management, and security, across all its business lines. The ESR aspect includes the key environment-related actions stipulated under the ISO 14001 standard: identifying the main sources of environmental impact;V
For the past two years, DIL Progress certification has been performed by Bureau Veritas Certification.
In Madrid, Natixis occupies a BREEAM (4) certified building. In Hong Kong, its teams work in the ICC building, which has received several certifications for its environmental performance (platinum-level BEAM (6) certification, bronze-level LEED (7) certification for interior design).
The Real Estate and Logistics Department ensures optimum resource management by closely managing the various resources used: energy (electricity, heating and cooling utilities), water and paper. Each building it manages has a budget for energy consumption, which is monitored on a monthly basis.
Combining these measures with efforts to raise employee awareness of “eco-gestures” has steadily reduced energy consumption in Natixis buildings since 2010, per workstation and per m² of rented surface.
contribute to the Sustainable Development Goals (SDGs) that are compatible with the city’s Climate Plan. In addition, the bank has set a target to reduce the energy consumption of its buildings in the Paris region by 30% between 2010 and 2020. This target has already been met, with a 40% reduction in consumption per m2 since 2010. Following on from the commitment made in 2015, Natixis signed a new Paris Climate Action agreement in October 2018 and intends to 2019 KEY EVENT
Natixis took part in the CUBE 2020 challenge organized by the IFPEB (French Institute for Building Efficiency), for the first time in 2018.
Since 2019, Natixis’ offices in Germany have been supplied with 100% renewable energy. All its international offices are working towards the same goal.
Some offices produce power, for example the Liberté 2 site in Charenton has a solar ‘carpet’ that powers the building’s water heating system. The heat produced by Natixis’ data centers is used to heat a neighboring aquatics center.
more widespread use of shared multifunction printers, and the company-wide roll-out of laptop computers, notably as part of the bank’s Easy program.Internal consumption (reams of paper, letterhead) has been falling steadily for several years, thanks to awareness-raising initiatives, the
A campaign to stop the use of disposable plastic cups was organized in all Natixis’ offices in France and around the world during European Week for Waste Reduction. Employees were asked to use their own mug or to order one from Natixis’ office supplies catalog.
The volume of paper waste decreased substantially in 2019, in step with the decline in paper consumption.
Natixis also sells its IT equipment to companies specialized in reusing and recycling Waste Electrical and Electronic Equipment (WEEE). It represented 10 metrics tons in 2019.
Since 2018, a new waste sorting and collection circuit for used aluminum coffee capsules has been introduced in the main buildings that use such capsules, in conjunction with the bank’s coffee supplier and the companies collecting the capsules.
Since 2018, Natixis has stepped up its efforts to promote clean mobility, in accordance with the French Energy Transition for Green Growth Act of 2015, with the publication of an inter-company mobility plan for the Greater Paris region. Five other plans were also drawn up for the main French regions in which Natixis has offices.
The inter-company mobility plan for the Greater Paris region involves more than 20 Group companies and 26 different office buildings, or some 18,000 employees. It enabled Natixis to take fresh steps to reduce the need for employees to travel and to support more environmentally-friendly forms of transport.
Expanding bicycle infrastructure: Natixis has 650 indoor and outdoor bike parking spaces at its offices in Greater Paris. In addition, 15 of its 26 sites in Greater Paris have changing rooms with showers and lockers.
Facilitating the use of electric vehicles: Parking spaces fitted with charging sockets have been installed, with 117 spaces available at the end of 2019 (an increase of 40 spaces since 2018).
Encouraging the use of public transport and green modes of transport: Natixis encourages its employees to use public transport systems, which are widely available close to its offices. It reimburses 60% of employee travel costs. Since 2018, Natixis has also been reimbursing employee subscriptions to public bike-sharing services in full.
To mark European Mobility Week, Natixis hosted a conference on “The future of green mobility in the Deux Rives neighborhood”. The conference brought together stakeholders from the public and private sectors and addressed cycling, non-polluting means of transport and solutions planned in the 12th and 13th districts of Paris.
Natixis is therefore selecting more eco-friendly vehicles — in terms of both CO2 and particulate emissions — under its car policy. The share of electric and hybrid engine vehicles in the bank’s car fleet increased substantially in 2019, to 96 vehicles, or 14% of the total fleet, compared to 9% in 2017. Under its car policy, Natixis only provides Senior Management Committee members with rechargeable hybrid vehicles respecting average CO2 emission rates of 41.5 g/km.
The fleet only has one diesel car, which will be returned in 2020.
In 2019, business travel has decreased significantly, particularly given the change in scope (SFS subsidiaries which are no longer taken into account)
distances of less than 3 km. In 2019, 49% of courier services were provided by bicycle couriers, representing a total distance of over 11,418 km traveled (compared to 4,000 km in 2017). Abroad, Natixis in Milan has also implemented a bicycle courier service.For urgent courier services in the Paris region, the Real Estate and
Given the high level of digitization throughout Natixis’ business lines, digital sustainability is a key challenge for Natixis. The information system has a very high environmental and social impact throughout the life cycle of its IT hardware: consumption of energy and natural resources, greenhouse gas emissions, waste management, and service accessibility.
In 2019, the IT Department focused its digital sustainability policy on reducing its direct impacts, ensuring responsible design for its digital services, and promoting new, clear, innovative solutions to address Natixis’ social and environmental challenges.
In 2019, the IT Department extended the length of use of employees’ business smartphones by at least one year, which will generate savings of 58 tons of CO2 equivalent in 2020.
As part of the optimization of its IT equipment, Natixis enabled the re-use of nearly 7,000 office devices with organizations specialized in the re-use of IT equipment and donated over 1,500 mobile phones, tables and laptops to charities and hospitals.
Natixis has been taking steps to keep its IT-related power consumption in check and thanks to more responsible purchasing, its new equipment uses less energy. The implementation of extended workstation standby settings, which began in 2019 with the aim of reducing user electricity consumption by 40%, is continuing in all buildings in France and around the world.
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 responsibly without compromising security, or ensuring we retain only the required data, without losing sight of our regulatory obligations. To find the right balance combining efficiency and simplicity, Natixis’ IT teams will have to be innovative, unassuming and agile.
This last component of Natixis’ digital sustainability policy seeks to provide solutions for measuring the digital impact of Natixis’ business lines and its employees’ environmental footprint.
Consistent with the "Objectif 100 hectares" charter signed in 2017, Natixis committed to: developing urban farming and landscaping projects for bothV existing and future Natixis buildings in Paris; 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.
In response to a request by employees, two new shared kitchen gardens were created in Natixis’ buildings in 2019 — one in Porto and one at the Liberté 2 building in Charenton. Employees were involved in designing the garden in partnership with a specialized firm, and were taught the basics of gardening and informed about the impact it would have on biodiversity.
Lastly, several conferences around biodiversity were organized to raise employee awareness.
The HR strategy has three objectives: to support the transformation of the business lines, promote a positive employee experience, and actively develop talent.
The managed scope covers all of Natixis and its subsidiaries(1) around the world that apply its HR Policies. The indicators provided in Chapter 6.4.3 refer to this scope.
Average: (new hire rate + departure rate)/ 2.(a) Number of new hires during the year/average annual headcount.(b) Number of departures during the year/average annual headcount.(c)
Over 85% of employees in the Natixis France managed scope, working at 26 different companies, are covered by the collective bargaining agreements of the banking and insurance industries. There are, however, five separate agreements across the whole scope.
At Natixis S.A., the collective work week is 38 hours and employees also enjoy compensatory time off in lieu of overtime. The current set of agreements on the management of working hours includes several types of contracts (part-time, short-time, special working conditions for employees with disabilities, etc.) and provides for the associated terms and conditions of compensation and social security contributions.
actions to promote the hiring of young people while retaining olderV employees;
484 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019 the same complementary healthcare insurance for all NatixisV France employees; measures to address employees with disabilities, including aV Group-wide policy covering the professional integration and retention of employees with disabilities, and an allocation for children with disabilities.
Employer-employee communications employer-employee communications and the career path of employee representatives.
A BPCE Agreement, applicable to Natixis, covering the careers of employee representatives, reflects the importance placed on
In addition to these overall agreements, several agreements were signed by Natixis’ French entities in 2019, including nine by Natixis S.A.
The “Change@Natixis” method in place since 2018 helps to address the human aspects of change management by serving as a frame of reference for any major transformation. The method was established in-house out of a need to better pre-empt the impact of transformation projects on working conditions, and to improve how the human aspects of change management are taken into consideration.
In 2018, Natixis launched its program to simplify the organization by: reducing the number of managerial levels and making teamsV larger; recognizing talented employees by creating three leadership roles:V manager-leaders, who focus on team development and activity oversight; project leaders, who manage strategic and cross-business projects; and expert leaders, who focus on the development and dissemination of specific expertise; applying a new leadership model to guide the actions of all leadersV and help them drive the Company’s transformation.
A compensation logbook gives Natixis employees in France an individualized view of their salary, additional forms of compensation, social security coverage, and employee savings plan for the previous year.
The compensation policy is centered on three components and reflects both individual and collective performance: fixed compensation reflects, at the individual level, the skills,V responsibilities and expertise expected for a position, as well as the ole and importance of duties in the organization; variable compensation is granted where applicable, based on theV achievement of individual and collective targets. Pursuant to the various regulations in force, and to encourage performance over the long term, a significant portion of variable compensation granted to employees identified as risk-takers may be deferred (from 40% to 70% for the highest amounts).
Natixis also encourages its employees in France to contribute to collective performance via incentives, profit-sharing and employee savings mechanisms (employee savings plan and collective pension plan).
In 2019, eight of Natixis’ companies in France took part in a wage equality index (see paragraph on “Gender Equality”). And as required by UK law, in 2019 Natixis London published its annual report on the wage gap between men and women.
ESR criteria are factored into Natixis' compensation policy through: the inclusion of Natixis' ESR strategy when determining the ChiefV Executive Officer's variable annual compensation; ESR assessment goals set by non-financial agencies for theV long-term incentive plan for members of the Senior Management Committee, the inclusion of ESR criteria (paper and energy consumption)V in Natixis' profit-sharing agreement; the inclusion of additional specific ESR goals in certain NatixisV subsidiary incentive schemes.
SRI certification of half of employee savings schemes (PES andV PERCO).
Average gross annual compensation of staff under permanent contracts (a) (excl. profit-sharing, incentives and employer contributions to the Company savings plan) (in thousands of euros) 89.7(b) 83.1 80.8
Average gross annual compensation is calculated based on full-time permanent employees(a) Excluding Specialized Financial Services (SFS), disposed on 01/04/2019. It should be noted that the average gross annual compensation of staff under (b) permanent contract in 2018, restated for the exclusion of the SFS division, would be 90.0). Including the Specialized Financial Services (SFS) division.(c)
Note: The overall contribution amount paid in 2019 totaled €38.67 million (€43.76 in 2018 and €40.55 in 2017)
Through its Work & Life program, Natixis is committed to pursue its efforts undertaken in 2019 to improve quality of life in the workplace via four objectives: ensuring conditions that enable employees to deliver high-quality work are met, improving the quality of relations and cooperation, improving well-being in the workplace, and better addressing the human aspects of transformation projects. According to the Employee Opinion survey, employees’ perception of quality of life in the workplace improved in 2018, with an average score of 6.7/10.
The international offices also organized several initiatives. For example, wellness/health days or wellness weeks were organized throughout the EMEA region during the year.
With the Stress Observatory, employees can complete a stress questionnaire during their periodic medical exam. From a company-wide standpoint, the observatory maintains a statistical database used to measure the global stress level of staff and how it changes over time, based on organizational and geographic criteria. The results are presented each year to the CHSCT (the Health, Safety and Working Conditions Committee).
Frequency of workplace accidents (a) (number per million hours worked) 6.11 6.61 7.17
In 2019, Natixis focused on continuing its initiatives to promote diversity in four key areas: gender equality in the workplace, cooperation between older and young employees, and the integration and retention of employees with disabilities.
In terms of training, Natixis has set up a talent development program for its female employees: “Réussir sa carrière au féminin” (achieving success in your career as a woman) for managers and experienced executives. 392 female employees of Natixis in France have participated in the program since its launch, including 32 in 2019.
To promote the attractiveness of Natixis, a “Women in Finance” Shadowing Day was held for female students from business and engineering schools to experience what it’s like to be a woman working at Natixis. The objective was twofold: to show these young women jobs in finance among; and to draw them to jobs that are currently predominantly occupied by men. In 2019, some 50 young women took part in the initiative.
In May 2019, Natixis was a partner at the Women in Sciences event in Paris, which was attended by 130 young women who had come to participate in practical applications of scientific modeling.
International Women’s Day provides Natixis the opportunity every year to raise awareness by organizing conferences and testimonials in the different countries in which it operates on gender equality in the workplace.
In 2019, Natixis designed and ran a mentoring program dedicated to the talents of the women from the Purple Leaders community (extended leadership circle). Through the program, 15 women can benefit from the support from a member of the Senior Management Committee or the Comex for a period of one year. The goal is to promote talented women in the company, make them more visible, and encourage them to take on bigger responsibilities at Natixis.
March 8, 20 presented Natixis with the opportunity to formalize its commitment to UN Women by agreeing to the Women Empowerment Principles (WEP), signed by Natixis Chief Executive Officer François Riahi, thus officially launching the creation of a dedicated fund. On a broader note, for Natixis this commitment is a way of emphasizing the connection between gender equality and economic performance.
Gatherings such as conferences, workshops and networking events focused on equality and diversity took place throughout the year both in and outside France. They key themes included "Taking action for a more equal society", together with representatives from associations dedicated to addressing inequalities throughout the working lives of girls and women; and a General Shareholders' Meeting on themed "Equality in the banking sector", which took the form of a round-table discussion involving both men and women.
Further afield, other initiatives in favor of equality between women and men took place in 2019: A signatory of the Women in Finance Charter, Natixis London committed to a target of 30% of women in senior management roles within five years. Natixis London also launched its first "Natixis Pride" LGBT network.
In Asia, the DANA (Diversity At Natixis APAC) initiative launched in 2018 continued to engage all employees in combatting stereotypes by signing an internal charter.
In 2019, Natixis Algérie rolled out its Shadowing Day to give young women insights into finance careers.
With respect to governance, Natixis has seven women on its Board of Directors, out of a total of 15 members, and two of the Special Committees (Audit Committee and Strategic Committee) are chaired by women.
Under the Agreement on Employment and SWP, Natixis has set quantified targets and taken steps to encourage the retention of older staff members and end-of-career adjustments.
Natixis has committed to maintaining the percentage of employees aged 55 or older at more than 12% of the workforce (the figure was over 16% at year-end 2019), and to ensuring that persons aged 45 and older account for at least 5% of total annual hires.
A part-time employment program for older staff, with support measures, and skills sponsorship initiatives with associations are available to employees over 58. Since its inception in 2015, the skills sponsorship program for older employees provides staff in France with opportunities to volunteer their time over a period of at least one year (one day or two half-days per week) at one of 9 different associations. These associations support different causes, including disabilities, the environment, children’s aid and pre-professional integration.
In France, Natixis aims for 47% of new hires to be young people under 30 (41% in 2019), to offer permanent contracts to 15% of work-study participants (13.8% in 2019), and to hire the equivalent of 6% of its workforce under work-study contracts.
Since 2018 Natixis, in collaboration with Ecole Polytechnique and HEC Paris, have run Chaire X-HEC — an international chair for teaching and research aimed at developing a data usage culture. Of note, Natixis organized a Data Challenge in May 2019 for students, and in November took part in a data seminar.
In 2019, Natixis became the partner of the Bachelor Tech & Code Factory of the Web School Factory. It is a free three-year training program, including two years of apprenticeship to prepare for a career in coding and digital.
Natixis is committed to a policy to promote the hiring, professional integration and retention of employees with disabilities. Championed by the Mission Handicap team and its network of experts in the business lines, the policy has led to two company agreements while strengthening cooperation with management and delivering tangible results.
Natixis’ commitments are as follows: to professional training. New measures are regularly taken when a person with a disability joins the Company and for managers responsible for employees with disabilities; promoting the retention of employees with disabilities byV adapting positions and working conditions, and providing access developing a hiring plan by participating in specialized hiringV forums, establishing partnerships with schools and universities, and developing application pools. In 2019, Natixis hired 30 employees with disabilities; promoting the use of disability-friendly companies by diversifyingV the list of approved services and partners. Natixis works with disability-friendly companies via co-contracting agreements, and for the provision of services and personnel; conducting communication and awareness-raising campaignsV for all Natixis employees.
As part of the European Disability Employment Week (EASPD), Natixis' teams across 27 locations in France took part in events about invisible disabilities, which represent 80% of disabilities in the workplace. The week included a conference on diabetes, events about cancer, language and learning difficulties, such as dyslexia and dysphasia, and allowed by discussions between staff and occupational doctors, as well as an online game, to round out the awareness campaign.
All of Natixis' skills development tools are available on the Learning Hub, which works as a single, profile-based point of entry that is connected to the new talent management platform, HR One. The platform centralizes all free-acess resources, and offers a vast range of format and scenarios for learning. It meets everybody's needs through: Access to the entire training offering, with the option of makingV requests online, train online, and choose the dates of the desired training; Access to mandatory training and follow-up;V
Since 2019, any staff involved in driving or contributing to a project can benefit from a new development program called
Natixis also organizes and coordinates in-house trainer communities comprising subject-matter experts, to help share specific skills.
In 2019, Natixis received two major learning awards. The first was first prize on the "Learning Companies Barometer", awarded at Learn Assembly's French Touch Education event, in recognition of the rapid transformation of Natixis' Learning teams. The second was the "U-Spring" silver trophy in the "Strategic Transformation" category in recognition of Natixis' ability to innovate, as well as the impact of its training policy on the group's overall strategy and organization.
In 2019, Natixis employees in France received over 219,000 hours of training. 91.6% of employees took one or more training courses.
Office and IT 9.2 8.2 10.5 o/w Personal and professional efficiency, Human Resources 14.4 17.8 16.8
Number of employees trained/(headcount at December 31 + number of employees out of the scope during the year)(a)
The individual development interview is an opportunity for in-depth discussion between all employees and their manager, focused on their professional and career development. An individual career development plan is drawn up following this meeting.
As an example, every year since 2013, the Natixis Leadership Program (NLP) has enabled a gender-balanced group of 20 young talents to do a course dedicated to corporate strategy, consisting of training, coaching and seminars.
The Internal Transfer and Hiring Team was further developed in 2019, and was entrusted with filling over 94% of job openings in 2019, for a total of 1,371 hires.
Two months after the scheme’s launch, the results for December are promising, with more than 424 donors and more than €5,000 raised. In 2020, the MicroDon platform will be rolled out to encourage time giving and offer employees different ways of supporting charity.
Each year, Natixis organizes a request for student solidarity projects, the CAMPUS Awards to encourage student socio-cultural, socio-athletic and sustainable development initiatives. For the seventh edition of the CAMPUS Awards in 2019, 10 projects presented by teams from universities, engineering and business schools were awarded financial support from Natixis (prize money of
In all its international offices, Natixis establishes partnerships with general-interest associations and mobilizes employee support for solidarity-based projects, beginning in the EMEA region: The Milan branch took part in a local marathon in support of theV Italian cancer research charity, AIRC. It is also a partner of a food bank and of Dynamo Camp (a charity that helps disabled children), which members of staff can volunteer to support.
The partnerships with associations in the Americas set up severalV years ago continued: the Central Park Conservancy, Sunrise, Make-a-Wish, the RonaldV McDonald Foundation and the Children’s Tumor Foundation in support of sick children;
In the US, through the Natixis Community Giving Initiative, NatixisV also supports its employees’ initiatives by publishing information and organizing collections for various associations.
Lastly, Natixis is continuing to expand its contributions toV charitable causes in the Asia-Pacific region, with an increase in staff volunteering activities, including: a new edition of Hong Kong Volunteering Month: preparation andV distribution of meals for elderly persons, rooftop gardening sessions with disabled students, a coastal cleanup operation and a collection of Christmas gifts for disadvantaged children; support for the charity Pour un Sourire d’Enfant (PSE) continuedV with the launch of a program of four-week internships for four students.
6.3.1.2 Natixis commits to the new Principles for Responsible Banking (PRB) 1-10 5 1-6 1-10 1-17
The information in this document covers the 2019 fiscal year. The reporting period considered is one full calendar year, running from January 1 to December 31.
Environmental information relating to the direct impact of Natixis relates to the scope of Natixis France, with the exception of certain qualitative information collected from international locations.
internationally, the Wealth Management business acquiredV Massena Partners (Luxembourg) — 29 employees.
Report by one of the Statutory 6.9 Auditors on the Consolidated Non-Financial Performance Report contained in the management report
We performed our work in accordance with Articles A. 225-1 et seq. of the French Commercial Code setting out how the independent third party should perform its review and in accordance with the professional code of the Compagnie Nationale des Commissaires aux Comptes (France’s National Association of Statutory Auditors) relating to this assignment (and pursuant to the international standard ISAE 3000 "Assurance engagements other than audits or reviews of historical financial information").
We completed the work needed to assess the Report’s compliance with regulatory requirements and the sincerity of the Information reported: We familiarized ourselves with the activity of all the companiesV included in the scope of consolidation and the description of the main risks.
assess the process for selecting and approving the main risks asV well as the consistency of the results, including the key performance indicators presented, in terms of the main risks and policies described; corroborate the qualitative information (action and results) weV deemed the most important (1) — for qualitative information related to certain risks (corruption and taxation), our review was performed at the level of the consolidating level, and for others at the level of the consolidating entity and on a selection of entities.
For the key performance indicators and the other quantitative results (1) we considered to be the most important, we applied: analytical procedures to verify the correct consolidation ofV collected data as well as the consistency of changes thereto; substantive tests, on a sampling basis, to verify the properV application of definitions and procedures, and to reconcile data with supporting documents. This review was performed on a selection of contributing entities (2) and covered between 63% and 100% of consolidated data in the key performance indicators and outcomes selected for these tests.
Based on our work, we did not observe any significant misstatement likely to call into question the compliance of the non-financial performance report with regulatory requirements, and the fair presentation of the Information, taken as a whole, in accordance with the Standard.
Without prejudice to the conclusion expressed above, and in accordance with the provisions of Article A. 225-3 of the French Commercial Code, we issue the following comments: Only a portion of the group’s asset management activities areV concerned by the information relative to the integration of ESG criteria in investment activities as well as the methods for measuring portfolios’ climate impact; The portfolio carbon- and temperature-intensity indicatorsV presented in the Declaration are a voluntary measurement of the impact of the group’s investment activities and were excluded from the scope of our work.
�Selected quantitative information: French and international employees for the managed scope; percentage of permanent contracts in France; total new hires in France, total (1) departures in France; percentage of women on the Executive Committee (COMEX); percentage of women on the Senior Management Committee; number of employees who receive training; average number of training hours, energy consumption (electricity, hot and cold fluid used in office buildings); total paper consumption, greenhouse gas emissions; amount of SRI assets for Ostrum, Mirova, DNCA, Ossiam, Naxicap, Seeyond and Thematics; amount of renewable energy financing arranged during the year; amount of sustainable real estate financing arranged during the year; amount of green bonds arranged during the year. �Natixis France: Natixis S.A. Paris and its French subsidiaries (Ostrum, Mirova, DNCA, Ossiam, Naxicap, Seeyond and Thematics)(2)
Changes in Natixis’ capital over 7.1.2 the last five fiscal years 502
Summary table of current 7.3.1 authorizations granted to the Board of Directors by the General Shareholders’ Meeting and their use by the Board of Directors 506
Report of the Board of Directors 7.3.2 on the use of capital increase authorizations 507
The share capital amounted to €5,049,354,392 on March 1, 2020, divided into 3,155,846,495 fully paid-up shares of €1.60 each.
No stock options were granted in fiscal years 2009 to 2019.
Summary of stock option plans granted to Natixis executive corporate officers at December 31, 2019
Options held in respect of the issuer and of the companies referred to above, that were exercised during the period, by the 10 salaried employees of the issuer and of these companies who hold the most options thereby awarded 0 N/A N/A
Following the merger of Banque Fédérale des Banques Populaires (BFBP) and Caisse Nationale des Caisses d’Epargne (CNCE) that resulted in the creation of BPCE, Natixis has been majority-owned by BPCE since August 1, 2009.
As far as Natixis is aware, at this date no shareholders, other than those listed in the above table, owned more than 5% of the capital or voting rights.
Board members, including natural and legal persons, owned 70,64% of Natixis’ capital at December 31, 2019 (of which almost all is owned by BPCE).
Under the share buyback program authorized by the General Shareholders’ Meeting of May 28, 2019, Natixis owned 2,083,199 treasury shares at December 31, 2019.
At December 31, 2019, the percentage of share capital owned by Natixis employees was 2.79%, of which: 1.10% was held through capital increases reserved for employees;V
Distribution of share capital and voting rights 505NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
1.08% held through capital increases reserved for employees.* 0.73% held outside of employee savings plans by employees and former employees. 0.90% held under the BPCE Actions Natixis employee share ownership plan, including holders of Groupe BPCE shares.
Of which 1.10% held through capital increases reserved for employees, 0.74% of which held outside of employee savings plans by employees and former (a) employees and 0.95% of which held under the BPCE Actions Natixis employee share ownership plan, including holders of Groupe BPCE shares.
Natural or legal persons exercising or potentially exercising 7.2.4 control over Natixis
Summary table of current authorizations granted 7.3.1 to the Board of Directors by the General Shareholders’ Meeting and their use by the Board of Directors
Report of the Board of Directors on the use 7.3.2 of capital increase authorizations
By virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution nineteen, the Board of Directors of Natixis decided at its May 23, 2017 meeting to award 79,369 bonus shares to the members of the Natixis Senior Management Committee, including 29,911 shares awarded to the Chief Executive Officer of Natixis. These shares will vest at the end of a vesting period that runs until May 22, 2021, inclusive, provided that a continued service requirement and performance conditions are met.
By virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution nineteen, the Board of Directors of Natixis decided at its May 23, 2018 meeting to award 11,661 bonus shares, prorated to reflect the length of time served in office in 2018, to Laurent Mignon, the Chief Executive Officer of Natixis, and 58,024 bonus shares to the members of the Natixis Senior Management Committee. These shares will vest at the end of a vesting period that runs until May 22, 2022, inclusive, provided that a continued service requirement and performance conditions are met.
By virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution nineteen, the Board of Directors of Natixis decided at its August 2, 2018 meeting to award 13,605 bonus shares to François Riahi, the Chief Executive Officer of Natixis since June 1, 2018. These shares will vest at the end of a vesting period that runs until May 22, 2022, inclusive, provided that a continued service requirement and performance conditions are met.
By virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution twenty, the Board of Directors of Natixis decided at its April 12, 2019 meeting to award
By virtue of the authorization granted by the Combined General Shareholders' Meeting of May 21, 2013, resolution seventeen, the Board of Directors decided at its February 18, 2015 meeting to award a total of 95,144 bonus shares to the members of the Natixis Senior Management Committee, including 27,321 shares awarded to the Chief Executive Officer, in respect of the 2015 Plan. The vesting period for these shares expired on February 18, 2019.
Consequently, in a decision made on February 18, 2019, by virtue of the authority granted to him by the Board of Directors, the Chief Executive Officer of Natixis acknowledged that the number of shares to be delivered came to 48,894 shares, which were existing shares previously acquired by the Company under its share buyback program.
Consequently, in a decision made on March 1, 2019, by virtue of the authority granted to him by the Board of Directors, the Chief Executive Officer of Natixis acknowledged that the number of shares to be issued to the beneficiaries of the 2016 Plan came to 1,842,126 new shares and that the number of shares to be issued to the beneficiaries of the 2017 Plan came to 947,764 new shares.
The Chief Executive Officer thus acknowledged capital increases by capitalization of reserves in the amount of €2,947,401.60 via the issue of 1,842,126 new shares with a par value of €1.60 in respect of the 2016 Plan and in the amount of €1,516,422.40 via the issue of 947,764 new shares with a par value of €1.60 in respect of the 2017 Plan, thereby increasing the Company’s share capital from
7 CAPITAL AND SHARE OWNERSHIPInformation from Article L.225-37-5 of the French Commercial Code 508 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019
Under the Mauve plan, beneficiaries are able to subscribe for Natixis shares (or for a similar alternative if they are international beneficiaries) on advantageous terms and with the benefit of employer-paid contributions in compliance with the provisions of existing plans within Natixis.
Natixis’ main shareholder BPCE held 70.64% of the share capital and 70.68% of the voting rights at December 31, 2019. Given its capital structure, Natixis believes that a hostile takeover bid would have very little chance of succeeding.
Stock market indexes CAC Next 20, SBF Top 80 EW (SBF80), SBF 120, CAC All-Tradable and Euronext 100
In 2019, Natixis’ share price decreased by 4% (from €4.12 at December 31, 2018 to €3.96 at December 31, 2019), delivering a return on investment of +14% including dividends paid. Over the same period, the euro zone banking stocks index (DJ Euro Stoxx Bank) rose by 11% (+17% including dividends paid).
The average daily volume of Natixis shares traded on the market amounted to around 5.87 million shares in 2019 versus an average of around 4.77 million shares in 2018.
Calculated using the average number of shares (excluding treasury shares) during the period and after accounting for net interest payments on deeply (a) subordinated notes after tax. Calculated using the number of shares at December 31 of the year in question and after paying out the proposed dividend for 2013, 2014, 2015, 2016, 2017, (b)
The following two bodies also coordinate relations with individual investors: Shareholder Club
Club members receive the newsletter, the shareholder newsletter and the shareholder guide.
The Shareholder Club website (clubdesactionnaires.natixis.com) contains comprehensive information about the Club and its services and allows online registration.
Online video chat sessions have been held to discuss Natixis’ earnings and strategy or other economic or stock-market related topics, and recordings of these chats were posted on our website (www.natixis.com) and sent to members of the Shareholder Club via our newsletters.
In partnership with École de la Bourse, training on taxation was also made available to members of the Shareholder Club.
At the General Shareholders’ Meeting, there is a dedicated Shareholder Club stand for members of the Shareholders’ Club.
Under the bank’s Sponsorship and Patronage Program, members of the Shareholder Club were invited to attend various sporting and cultural events throughout the year (rugby matches in several French cities, backstage visit to the Bastille Opera House, entry to the “Degas à l’Opéra” exhibition at the Orsay museum, and two concerts performed by the Paris Orchestra at the Paris Philharmonic Hall).
The CCAN is an advisory body and sounding Board composed ofV 12 members who represent Natixis’ individual shareholders. These members are themselves individual shareholders chosen through an application process that includes interviews. The Committee is in charge of all aspects of financial communication with individual investors, and in particular the communication tools at their disposal.
At the Committee’s request, Natixis Head of Press Relations andV Social Media Daniel Wilson gave a presentation on the Group’s press relations and social media. He reiterated that the New Dimension strategic plan treats the brand as a strategic lever in raising the profile of Natixis both in France and abroad.
In addition, on two separate occasions the Committee worked onV the project to redesign the Natixis website, particularly the “Investors and Shareholders” section. Some members also took part in user tests. This work was carried out jointly with Natixis’ Communications department.
Finally, following on from the 2018 workshop on the glossary ofV financial terms, in 2019 the CCAN finalized the document, which aims to answer shareholder questions about financial terminology and now features more than 400 definitions.
All information concerning the General Shareholders’ Meeting is available from the Natixis website via the following link: Investors & Shareholders >> Shareholder Corner >> Shareholders’ Meetings (www.natixis.com)
The Gold Trophy award recognizes all the Company's efforts to serve individual shareholders and foster an ongoing relationship across all channels of communication.
It unites all assessment criteria used by Le Revenu’s editorial team, namely the development of digital communications and the regularity of more traditional forms of communication.
This award also honours Natixis' day-to-day commitment to nurturing dynamic, close relationships with individual shareholders.
Finally, it highlights the efforts made by Natixis’ Shareholder Relations team to serve its individual shareholders.
The core responsibility of the Investor Relations Department is to maintain clear and transparent dialog with the financial community on Natixis’ financial standing, strategy, economic environment and any other information that would assist in accurately assessing Natixis’ situation.
Draft resolution of the Combined 8.2.3 General Shareholders’ Meeting of May 20, 2020 523
Agreements submitted for the approval of the General Shareholders’ Meeting 528
Terms and conditions of attendance 8.1 by shareholders at Shareholders’ Meetings
The OGM is held annually and its purpose is to inform shareholders about the running of the Company. Their principal objective is to give an opinion on the financial statements of the previous fiscal year, to determine the appropriation of income, and to set the dividend and the conditions for its payment.
The EGM is convened each time there are decisions concerning a change in the bylaws, notably in the event of a financial transaction affecting the share capital.
With respect to holders of bearer shares, proof of their status as a shareholder must be provided directly to the centralizing body of the meeting by the authorized intermediaries holding their bearer share accounts. The intermediaries do so by producing a certificate that must be attached to the voting form or admission card request in the name of the shareholder or the name of the registered intermediary acting on behalf of the shareholder. A certificate is also delivered to shareholders who wish to attend the meeting in person and who have not received an admission card by D-2, midnight Paris time.
Any shareholders that hold more than 1% of the voting rights and have already declared that they have crossed the statutory threshold, may obtain or consult the list of shareholders that have crossed the statutory threshold at Natixis’ registered office or by contacting Natixis’ Investor Relations (30 avenue Pierre Mendès-France 75013 Paris).
Delegation of authority to the Board of Directors concerning theV trading by the Company in its own shares; Extraordinary business
Amendment of Article 12 of the bylaws relating to the powersV of the Board of Directors; Harmonization of Articles 13 and 29 of the bylaws with the newV legislative provisions and updating of Articles 14 and 22 of the bylaws; Powers to complete formalities.V
Report of the Board 8.2.2 of Directors on the resolutions submitted to the Combined General Shareholders’ Meeting of May 20, 2020
Nineteen resolutions will be submitted to the shareholders at the Combined General Shareholders’ Meeting to be held at 3 p.m. on May 20, 2020 at Palais Brongniart, 25 place de la Bourse — 75002 Paris.
Approval of the financial statements for fiscal year 2019 (resolutions one and two)
In resolutions one and two, the General Shareholders’ Meeting is asked to approve the 2019 Natixis parent company and consolidated financial statements, respectively.
Resolution three covers the appropriation of the corporate earnings of Natixis: payment of a dividend, paid in cash at €0.31 per share. Natixis’ financial statements at December 31, 2019 showed positive net income of €2,242,111,898.15. After taking into account retained earnings of €1,008,081,398.50, and as the legal reserve exceeded 10% of the share capital, distributable earnings amounted to €3,250,193,296.65.
In accordance with legal provisions, the following dividends were distributed for the three fiscal years prior to fiscal year 2019: Fiscal year
Resolution four concerns the approval of related-party agreements, pursuant to Articles L.225-38 et seq. of the French Commercial Code, authorized by the Board of Directors during fiscal year 2019 and until the Board of Directors’ Meeting of February 6, 2020. These agreements are presented in the Statutory Auditors’ special report along with those entered into prior to fiscal year 2019 and still effective, which do not need to be re-approved by shareholders (see Chapter 8, Section 8.2.4 of the 2019 Natixis universal registration document).
Since February 12, 2019, your Board has authorized the following agreement: On December 19, 2019, the Board of Directors authorized newV partnership agreements between CNP Assurances, BPCE, Natixis S.A. and BPCE Vie (the main terms of which are set out in Chapter 8, Section 8.2.4 of the 2019 Natixis universal registration document).
8 GENERAL SHAREHOLDERS’ MEETINGSCombined General Shareholders’ Meeting of May 20, 2020 518 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019
Approval of the disclosures referred to in Article L.225-37-3 of the French Commercial Code (resolution five)
Opinion on the components of compensation paid during or granted in respect of the fiscal year ended December 31, 2019 to each executive corporate officer (resolutions six and seven)
Resolutions six and seven relate to components of compensation paid during fiscal year 2019 or granted in respect of the same fiscal year to Laurent Mignon, Chairman of the Board of Directors, and François Riahi, Chief Executive Officer.
Compensation and benefits of any kind for the Chief Executive Officer of Natixis in 2019
Individual strategic targets (30%), including 15% related to theV implementation of the 2018-2020 strategic plan; the three other strategic targets, each weighted at 5%, in relation to oversight in terms of supervision and control as provided for by regulations (including the implementation of the Risk Appetite Framework and the activation of the threshold breach remediation process); the implementation of Natixis’ transformation and managerial performance assessed with
In respect of strategic criteria: €307,200, or 106.67% of theV target
The variable compensation amount for fiscal year 2019, which will be submitted to a vote of the shareholders in May 2020, was determined by the Natixis Board of Directors based on the Compensation Committee’s recommendation of 102.94% of the target variable compensation, i.e. €988,262: one portion will be paid in 2020, 50% of which will beV indexed to the Natixis share price, i.e. €348,212; the other portion will be deferred over three years, 50% ofV which will be indexed to the Natixis share price, i.e. €640,050. These deferred amounts will be paid in thirds in 2021 (100% in cash), 2022 (50% in cash and 50% indexed to the Natixis share price or in securities) and 2023 (100% indexed to the Natixis share price or in securities), provided that the continued service requirement and performance conditions are met.
In keeping with the principle of the Chief Executive Officer’sc) eligibility to receive bonus shares as part of Long-Term Incentive Plans for members of the Senior Management Committee of Natixis (“LTIP CDG”), at its May 28, 2019 meeting, the Board of Directors of Natixis awarded 31,708 bonus shares to François Riahi. Depending on whether performance conditions are met, this could result in the acquisition of a maximum of 38,049 shares, i.e. up to 0.00101% of share capital at the allocation date.
The performance of Natixis shares versus the Euro Stoxx Banks index will be compared every year during the four-year period covered by the plan, i.e. fiscal years 2019, 2020, 2021 and 2022, for each of the annual tranches, each representing 25% of the shares allocated. Based on the relative performance of Natixis’ TSR compared with the average TSR of the Euro Stoxx Banks index, a ratio will be applied for each annual tranche, as follows: performance below 90%: no vesting of shares allocated outV of the annual tranche; performance equal to 90%: 80% of the shares of the annualV tranche shall vest; performance equal to 100%: 100% of the shares of the annualV tranche shall vest; performance greater than or equal to 120%: 110% of theV shares of the annual tranche shall vest.
On May 2, 2018, the Board of Directors decided that François Riahi would, effective from his appointment as Chief Executive Officer, be entitled to the same severance payments and consideration for non-compete agreement as his predecessor. These commitments and agreements were approved by the General Shareholders’ Meeting on May 23, 2018.
Approval of the compensation policy for the Chairman of the Board of Directors, the Chief Executive Officer and the members of the Board of Directors (resolutions eight to ten)
components of Natixis’ executive corporate officers based on the principles of competitiveness in comparison with market practices for similar positions, and the way said components relate to performance.
After consulting with the Compensation Committee and before pay packages are approved by the General Shareholders’ Meeting, the Board of Directors determines the various compensation
Please refer to the information contained in the corporate governance report in Section 2.4 of the 2019 Natixis universal registration document.
Overall budget for compensation paid to the employees referred to in Article L.511-71 of the French Monetary and Financial Code during the fiscal year ended December 31, 2019 (resolution eleven)
The definition of regulated categories of staff at Natixis is primarily based on the principles set out in Directive 2013/36/EU, known as CRD IV, and the French Ministerial Order of November 3, 2014, and is determined according to criteria set by the European Banking Authority (EBA) in its regulatory technical standard published on December 16, 2013, and approved by the European Commission in Commission Delegated Regulation (EU) No. 604/2014 of
Resolutions twelve proposes that the shareholders ratify the co-opting as a director of the Company of: Dominique Duband, which took place during the meeting of the Board on February 6, 2020, to replace Françoise Lemalle, who resigned, to serve out the remainder of his predecessor’s term of office, i.e. until the 2022 General Shareholders’ Meeting held to approve the financial statements for the year ending
Dominique Duband is 61 years old and serves as the Chairman of the Steering and Supervisory Board of Caisse d’Epargne Grand Est Europe (see Dominique Duband’s résumé in Chapter 2 “Corporate Governance,” Section 2.2 of the 2019 Natixis universal registration document).
In resolutions thirteen to fifteen, shareholders are asked to reappoint the following three directors, whose terms of office expire at the end of this General Shareholders’ Meeting: Alain Condaminas, Chief Executive Officer of Banque PopulaireV Occitane (see Alain Condaminas’ résumé in Chapter 2 “Corporate Governance” — Section 2.2 of the 2019 Natixis universal registration document);
Nicole Etchegoïnberry, Chairwoman of the Caisse d’EpargneV Loire-Centre Management Board (see Nicole Etchegoïnberry’s résumé in Chapter 2 “Corporate Governance” — Section 2.2 of the 2019 Natixis universal registration document); Sylvie Garcelon, Chief Executive Officer of CASDEN BanqueV Populaire (see Sylvie Garcelon’s résumé in Chapter 2 “Corporate Governance” — Section 2.2 of the 2019 Natixis universal registration document).
The directors will be reappointed for a term of four (4) years, i.e. until the end of the Ordinary General Shareholders’ Meeting convened in 2024 to approve the financial statements for the fiscal year ending
Thus, the Board of Directors would be authorized to set up a treasury share buyback program up to a limit of 10% of the total number of shares comprising the Company’s share capital, or 5% of the total number of shares comprising the Company’s share capital acquired with a view to being held and subsequently tendered in connection with a merger, spin-off or asset transfer. The Company cannot under any circumstance own at any given time more than 10% of the shares comprising its share capital. These share purchases would be for the purposes of: managing the liquidity contract;V
allocating or transferring shares to employees in respect of theirV share of the Company profits, Employee Savings plans or share buyback programs and to allocate bonus shares or any other form of share allocation to members of staff; canceling shares;V
tendering shares (for exchange, payment or another reason)V in connection with acquisitions, mergers, spin-offs or asset transfers; tendering shares upon exercising rights attached to securitiesV granting rights to capital.
Finally, resolution nineteen concerns the granting of the powers required to complete the legal formalities and disclosures relating to this Combined General Shareholders’ Meeting.
Summary table on the financial resolutions submitted to the General Shareholders’ Meeting by your Board of Directors
Your Company may at no V time hold a number of shares representing more than 10% of its share capital adjusted by transactions affecting it subsequent to this General Shareholders’ Meeting The number of shares V acquired with a view to holding them or subsequently tendering them in connection with a merger, spin-off or asset transfer may not exceed 5% of the share capital For liquidity contracts, V the 10% ceiling is calculated net of the number of shares resold during the authorization period Overall amount allocated V to the buyback program: approximately €3.1 billion
Maximum purchase price of €10 per share (adjustable particularly in the case of a reverse share split)
Unusable V authorization during public share offers The Board of V Directors ensures that buybacks are executed in accordance with prudential requirements, such as those established by regulation
Independent director In accordance with the Afep-Medef code and the internal regulations of the Board of Directors (available online on Natixis’ website: www.natixis.com), an independent director is a person who has no ties with the management, Company or Group of a nature liable to compromise their freedom of judgment or create a conflict of interest with the management, Company or Group. Accordingly, an independent member of the Board of Directors cannot: in the last five years, be or have been:V an employee or executive corporate officer of the Company,V an employee, executive corporate officer or director of a company consolidated under Natixis,V an employee, executive corporate officer or director of BPCE or of a company consolidated by BPCE;V be an executive corporate officer of a company in which the Company directly or indirectly holds a directorship, or in V which a designated employee of the Company or an executive corporate officer of the Company (currently or within the last five years) holds a directorship; be a customer, supplier, investment or corporate banker:V that is material for the Company or its Group,V or for which the Company or its Group represents a significant portion of such person’s business;V have close family ties with a corporate officer;V have been a Statutory Auditor of the Company within the last five years;V have been a member of the Company’s Board of Directors for more than 12 years. Independent director status is lost V once a Board member has served for 12 years; receive variable compensation in cash or in shares, or any performance-linked compensation from the Company.V
Agreements in which any of the above-mentioned persons is indirectly involved are also subject to the Related Party Agreements Procedure. Finally, agreements between companies with common officers are also subject to the Related Party Agreements Procedure. The prior approval of the Board of Directors is justified by an explanation of the agreement's value for the Company, in particular by specifying the financial conditions attached.
Conditions for the issuing of shares to which the securities giving access to share capital issued entitle the holder and dates on which these rights may be exercised: Securities giving access to share capital in the form of debt securities (for example, bonds convertible into or redeemable for shares, or bonds with share warrants attached) may entitle holders to shares at any time, during set periods, or at established dates. The shares may be provided by way of conversion (for example, of convertible bonds into shares), redemption (for example, bonds redeemable in shares), exchange (for example, bonds exchangeable for shares), or the presentation of a warrant (for example, bonds with share warrants attached) or by any other way, during the issue period, regardless of whether the holders of securities issued in this way have waived their preferential subscription rights. In accordance with the law, when your General Shareholders' Meeting delegates the authority to issue securities giving access to shares to be issued, the preferential subscription rights to the shares to which the securities issued entitle them are waived.
Combined General Shareholders’ Meeting of May 20, 2020 523NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, having reviewed the management report and the report of the Statutory Auditors on the consolidated financial statements for the fiscal year ended on December 31, 2019, hereby approves said consolidated financial statements as presented, including the balance sheet, income statement and notes to the financial statements, as well as the transactions reflected in these financial statements or summarized in these reports.
For individual beneficiaries who are tax residents of France and hold shares outside of an equity savings plan, these dividends are subject to income tax: at a single flat-rate withholding tax (PFU tax) of 12.8%, the tax baseV of which is the gross amount of dividends (Article 200 A of the French General Tax Code); or at the express and irrevocable option of the beneficiary whenV declaring their income, at the progressive income tax scale following the application of an allowance of 40% of the gross amount of dividends (Article 158-3-2° of the French General Tax Code).
Regardless of the tax treatment of dividends for income tax purposes (flat tax on capital income [PFU] or progressive income tax scale), the paying establishment located in France must collect: a mandatory non-definitive flat-rate withholding tax (PFO) at a rateV of 12.8% (Article 117 [iv] of the French General Tax Code) as an initial income tax payment, unless individual beneficiaries who are tax residents of France have applied for an exemption under the conditions set out in Article 242 (iv) of the French General Tax Code; social security charges of 17.2%.V
In accordance with legal provisions, the shareholders hereby note that for the three fiscal years prior to fiscal year 2019, the following dividends were distributed: Fiscal year
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby approves, pursuant to Article L.225-100(II) of the French Commercial Code, the disclosures referred to in Article L.225-37-3(I) of the French Commercial Code, as set out in the corporate governance report presented in Chapter 2, Section 2.4 and Chapter 8, Section 8.2.2 of the 2019 Natixis universal registration document.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, pursuant to Article L.225-37-2 of the French Commercial Code, hereby approves the compensation policy for the Chairman of the Board of Directors, as set out in the corporate governance report presented in Chapter 2, Section 2.4 and Chapter 8, Section 8.2.2 of the 2019 Natixis universal registration document.
Resolution nine: Approval of the compensation policy for the Chief Executive Officer, pursuant to Article L.225-37-2 of the French Commercial Code
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, pursuant to Article L.225-37-2 of the French Commercial Code, hereby approves the compensation policy for the Chief Executive Officer, as set out in the corporate governance report presented in Chapter 2, Section 2.4 and Chapter 8, Section 8.2.2 of the 2019 Natixis universal registration document.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, pursuant to Article L.225-37-2 of the French Commercial Code, hereby approves the compensation policy for the members of the Board of Directors, as set out in the corporate governance report presented in Chapter 2, Section 2.4 and Chapter 8, Section 8.2.2 of the 2019 Natixis universal registration document.
Resolution eleven: Overall budget for compensation paid to the employees referred to in Article L.511-71 of the French Monetary and Financial Code during the fiscal year ended December 31, 2019
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby resolves to reappoint Nicole Etchegoïnberry as a director, for a period of four (4) years ending with the adjournment of the 2024 General Shareholders’ Meeting held to approve the financial statements for the fiscal year ending December 31, 2023.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby resolves to reappoint Sylvie Garcelon as a director, for a period of four (4) years ending with the adjournment of the 2024 General Shareholders’ Meeting held to approve the financial statements for the fiscal year ending December 31, 2023.
Resolution sixteen: Delegation of authority to the Board of Directors concerning the trading by the Company in its own shares
The maximum purchase price under this resolution will be ten (10) euros per share (or the equivalent value of this amount on the same date in any other currency). This maximum price applies only to purchases decided from the date of this meeting and not to forward transactions entered into by virtue of an authorization given at a previous General Shareholders’ Meeting and providing for purchases of shares subsequent to the date of this meeting. The shareholders delegate to the Board of Directors, in the event of a change in the par value of the share, capital increases by capitalization of reserves, bonus share awards, stock splits or reverse stock splits, distribution of reserves or of any other assets, redemption of capital, or any other transaction affecting the share capital, the power to adjust the maximum purchase price indicated above to take into account the impact of these transactions on the share value;
Combined General Shareholders’ Meeting of May 20, 2020 527NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com to amend as follows Article 14 “Senior Management procedures” of the Company’s bylaws to update the wording thereof:V
The shareholders and third parties are informed of this choice under the conditions set forth in the legal and regulatory provision in force.
8 GENERAL SHAREHOLDERS’ MEETINGSCombined General Shareholders’ Meeting of May 20, 2020 528 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019
In accordance with Article L. 225-40 of the French Commercial Code, we were informed of the following agreements entered into during the past fiscal year that were approved by the Board of Directors.
New partnership agreements entered into 1. by CNP Assurances, BPCE, Natixis S.A. and BPCE Vie
Combined General Shareholders’ Meeting of May 20, 2020 529NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
In accordance with Article R. 225-30 of the French Commercial Code, we were notified that the following agreements, already approved by the General Shareholders’ Meeting in previous years, were still being executed in the past fiscal year.
Corporate officers concerned on the applicable date: Alain Denizot, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; Philippe Sueur, a member of the Steering and Supervisory Board of Caisse d’Epargne Ile-de-France and a member of the Board of Directors of Natixis; and Sylvie Garcelon, Chief Executive Officer of Casden Banque Populaire and a member of the Board of Directors of Natixis.
The signing of the Disposal Agreement and the EuroTitres Agreement, which indicates a sale price of €2.7 billion, is in the interests of the Company, given Project Smith’s strategic benefit to Natixis and the fair price. Project Smith has enabled Natixis to improve its strategic growth capacity and achieve, ahead of schedule, its 2020 target CET1 ratio of 11%. It also provides the Company with more strategic flexibility so it can accelerate the implementation of its asset-light model while consolidating its distinctive, high added-value expertise, which is light on capital and low on cost of risk.
8 GENERAL SHAREHOLDERS’ MEETINGSCombined General Shareholders’ Meeting of May 20, 2020 530 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019
Capital gains recognized by Natixis in the parent company financial statements from the disposal of these activities totaled €1,100,187,495.00 in fiscal year 2019.
Corporate officers concerned on the applicable date: François Pérol, Chairman of the Management Board of BPCE and Chairman of the Board of Directors of Natixis; Laurent Mignon, Chief Executive Officer of Natixis and a member of the Management Board of BPCE; Catherine Halberstadt, a member of the Management Board of BPCE and permanent representative of BPCE at Natixis; Alain Condaminas, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; Thierry Cahn, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; Françoise Lemalle, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; and Stéphanie Paix, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis.
Enrollment of Natixis in the insurance 4. policy taken out by BPCE with Arial CNP Assurances
Corporate officers concerned on the applicable date: François Pérol, Chairman of the Management Board of BPCE and Chairman of the Board of Directors of Natixis; Laurent Mignon, Chief Executive Officer of Natixis and a member of the Management Board of BPCE; Marguerite Bérard-Andrieu, a member of the Management Board of BPCE and permanent representative of BPCE at Natixis; Alain Condaminas, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; Thierry Cahn, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; Françoise Lemalle, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis; and Stéphanie Paix, a member of the Supervisory Board of BPCE and a member of the Board of Directors of Natixis.
Compensation agreement between 5. Natixis and Banque Palatine and amendment to the agreement
Corporate officers concerned on the day the compensation agreement was signed: BPCE, a Banque Palatine and Natixis director, as represented byV Daniel Karyotis on the Natixis Board of Directors.
On February 9, 2017, the Board of Directors authorized the signing of an amendment to the compensation agreement between Natixis and Banque Palatine originally signed on February 10, 2016, designed to offset particular additional costs sustained by Banque Palatine in connection with the transfer of the investment services provided to its clients to Natixis EuroTitres and Caceis, and previously provided by a service provider outside Groupe BPCE.
Memorandum of Understanding 6. and agreements relating to the new partnership agreements between the CNP and BPCE groups
The discussions with CNP continued, and initially resulted in a master memorandum of agreement between CNP Assurances, BPCE, and Natixis, which was authorized by the Board of Directors on November 4, 2014, and then in a Memorandum of Understanding, as well as in various specific agreements referred to in that protocol (“the New Partnership Agreements”), which were authorized by the Board of Directors on February 18, 2015, and where the main provisions are as follows: Memorandum of Understanding between CNP Assurances, BPCE and Natixis
determine, organize, and manage the contractual package formedV by the New Partnership Agreements, for which the Memorandum of Understanding is the umbrella agreement; determine the term of the New Partnership Agreements, namelyV seven years as from January 1, 2016. At the end of this seven-year period, BPCE will be able to either extend the new partnership agreements for a period of three years as from January 1, 2023, or to purchase CNP’s insurance deposit inventory. BPCE will have the option of acquiring the existing portfolio at December 31, 2020 and CNP the option, in 2020 and 2022, of notifying BPCE of its desire to initiate discussions with a view to such sale; determine and organize the operation of the PartnershipV Monitoring Committee (and of any potential sub-committees set up by the latter); and more broadly, organize and manage the relations between theV Parties under the Renewed Partnership.
Agreements entered into by CNP Assurances, BPCE, Natixis, and ABP Vie (a subsidiary of Natixis Assurances): life insurance and accumulation product inventory, distributed by the Caisses d’Epargne network until December 31, 2015, and during the interim period determined in the Protocol.
Quota share reinsurance treaty entered into by CNP AssurancesV and ABP Vie in the presence of Natixis, with a view to ABP Vie, a Natixis Assurances subsidiary, reinsuring 10% of CNP Assurances’
New business (tranche 1) reinsurance treaty entered into by ABPV Vie and CNP Assurances in the presence of Natixis: quota share reinsurance by CNP Assurances of 40% of all ABP Vie’s life insurance and accumulation products distributed by the Caisses d’Epargne network as from January 1, 2016.
New business (tranche 2) reinsurance treaty entered into by ABPV Vie and CNP Assurances in the presence of BPCE and Natixis: quota share reinsurance by CNP Assurances of 90% of new business involving ex-CNP customers.
Laurent Mignon, Chief Executive Officer of Natixis and Chairman ofV the Board of Directors of Coface
BPCE, a Natixis and Coface director, as represented by DanielV Karyotis, Chief Financial Officer and a member of the Management Board of BPCE, BPCE’s Permanent Representative on the Board of Directors of Natixis.
The “3a2” debt issuance program in the 8. United States implemented by BPCE and the amendment to the agreement relating to the guarantee granted to BPCE bondholders by the Natixis New York Branch Office on April 9, 2013
Alain Condaminas, a member of the BPCE Supervisory Board andV Natixis director
Catherine Halberstadt, a member of the BPCE Supervisory BoardV and Natixis director
Stéphanie Paix, Chairwoman of the Management Board ofV Caisse d’Epargne Rhône-Alpes and Natixis director
BPCE, as represented by Daniel Karyotis, Chief Financial Officer andV a member of the Management Board of BPCE and BPCE’s Permanent Representative on the Board of Directors of Natixis.
On February 22, 2012, the Board of Directors authorized a new invoicing agreement pertaining to Natixis’ affiliation to BPCE, in replacement of the existing affiliation agreement.
Term of the agreement: the agreement will enter into effect for the parties as long as Natixis is affiliated with BPCE, as defined by the provisions of Article L. 511-31 of the French Monetary and Financial Code.
Didier Patault, a member of the BPCE Supervisory Board and NatixisV director
The expenses recognized by Natixis in respect of this agreement amounted to €30,823,986.00 for the fiscal year ended December 31, 2019.
Combined General Shareholders’ Meeting of May 20, 2020 533NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019www.natixis.com
Likewise, IXIS CIB entered into letters of joint and several commitment and guarantee with its US subsidiaries, namely Natixis Municipal Products Inc. (formerly CDC Municipal Products Inc.), Natixis Derivatives Inc. (formerly CDC Derivatives Inc.), Natixis Financial Products Inc. (formerly CDC Financial Products Inc.), Natixis Funding Corp. (formerly CDC IXIS Funding Corp.) and Natixis Commercial Paper Corp. (formerly CDC IXIS Commercial Paper Corp.).
The expenses recognized by Natixis in respect of these agreements came to €427,968.00 for the fiscal year ended December 31, 2019.
“Miroir NFP” Reciprocal Total Return Swap Agreement betweenV Natixis and Natixis Financial Products Inc.; “Miroir NREC” Reciprocal Total Return Swap Agreement betweenV Natixis and Natixis Real Estate Capital Inc.
These agreements have lapsed following the exercise of the Termination Option on these contracts.
Cross reference table 9.6 for the annual financial report and the management report 547
Registration No. (1st page of the bylaws): 542 044 524 RCS PARIS
the performance of the specific assignments entrusted by the French State in the economic and financial area,V in the framework of special agreements; the performance of all brokerage business;V
Registered office: 30 avenue Pierre Mendès-France — 75013 Paris, Paris Trade and Companies Register No. 542 044 524.
Natixis is a joint stock company (société anonyme) with a Board of Directors. It is governed by the regulations pertaining to commercial companies, by the provisions of the French Monetary and Financial Code (Code monétaire et financier) and by these bylaws.
the acquisition of interests in companies, groups or associationsV with a direct or indirect connection with the activities referred to above; as well as the execution of all private and commercial transactions.V
Article 5 — Identification of the shareholders authorized intermediary to communicate all information regarding the holders of securities conferring immediately or in the future voting rights in its Shareholders’ Meetings, namely their identity, nationality, address, how many securities they own and the restrictions to which these securities may be subject.
The Company may, under the conditions stipulated by the legislative and regulatory provisions in force, request any organization or
Shareholders shall be liable for losses only to the extent of their contributions to the Company’s share capital.
The Company is managed by a Board of Directors, consisting of at least three (3) directors and no more than eighteen (18) directors, subject to the departures stipulated by law in the event of a merger.
The directors are appointed by the Ordinary General Shareholders’ Meeting; however, the Board has the right, in the event of the vacancy of one or more seats, due to death or resignation, to appoint replacements temporarily, each for the period remaining in his predecessor’s term, subject to ratification by the next General Shareholders’ Meeting.
The Board of Directors convenes as often as the Company’s11.1 interests and legal and regulatory provisions so require, upon notice from its Chairman either at the registered office or at any other location indicated in the notice, which may be sent by email.
Subject to an Emergency such as defined below, and the case referred to in Article 14 below, the Board of Directors must be convened with reasonable notice prior to the scheduled date of the meeting. Notices of meetings shall include the detailed agenda for the meeting.
Prior to the meeting, and with sufficient notice, the directors must be given the information enabling them to make an enlightened decision.
Minutes of meetings of the Board of Directors shall be prepared, and copies or extracts thereof shall be issued and certified in accordance with the law.
In the event of an Emergency, the notice and convening periods of the Board of Directors are not subject to Article 11.1 above, provided that the Chairman of the Company’s Board of Directors has: given prior notice to the directors providing the reason for theV Emergency as per the foregoing definition; and provided all directors, along with the notice of said BoardV Meeting, with all the necessary information for their analysis.
Article 13 — Compensation of the members of the Board of Directors
The Board may also allocate special compensation to the directors in the cases and conditions provided by law.
The Board of Directors may appoint a Chief Executive Officer from among the directors or outside their ranks.
Non-voting members are appointed for a term of four (4) years. A non-voting member’s duties end at the end of the Ordinary General Shareholders’ Meeting convened to approve the financial statements of the past fiscal year, held in the year during which his term expires. Non-voting members may be re-elected and may be dismissed by the General Shareholders’ Meeting.
The proxy or vote cast before the meeting by this electronic method, as well as the receipt that is issued for it, will be considered irrevocable written documents that are enforceable in all cases, with the stipulation that in the event of the disposal of shares before the second business day preceding the meeting at zero hour, Paris time,
All these documents are placed at the disposal of the Statutory Auditors according to legal and regulatory provisions.
Article 34 — Equity capital below one-half of the share capital
Documents concerning Natixis (Articles of Association, bylaws, reports, Code of Conduct, mail and other documents, historical parent company and consolidated financial information, for each of the two fiscal years prior to the publication of this document) are partly included in this document and may be consulted at the Company’s head office, preferably on appointment.
This universal registration document is available in the “Investor Relations” section of the Company’s institutional website, www.natixis.com.
SECTION 1 PERSONS RESPONSIBLE, THIRD PARTY INFORMATION, EXPERT REPORTS AND COMPETENT AUTHORITY APPROVAL 542
Item 1.3 Statement or report attributed to a person as an expert N/A N/A N/A
Item 1.4 Information sourced from a third party N/A N/A N/A
Item 5.3 Important events in the development of the issuer’s business 212 to 216
Item 6.2 A list of the issuer’s significant subsidiaries, including name, country of incorporation or residence, the percentage of share capital owned and, if different, the percentage of voting rights held.
Item 8.2 Explanation of sources and amounts of the issuer’s cash flows and narrative description of the issuer’s cash flows
Item 8.3 Information on the issuer’s borrowing conditions and funding structure
SECTION 9 REGULATORY ENVIRONMENT 157; 162 to 165; 169 to 171; 203 to 205 166; 171 to 176; 180 to 182; 211 to 118; 121 to 126; SECTION 10 TREND INFORMATION 228 237
Item 14.3 Information about the issuer’s Audit Committee and Compensation Committee 68 to 70; 72-73 54 77 to 78; 81 to 82 73 to 74; 77 to 78
Item 16.1 Shareholders owning more than 5% of the share capital or voting rights
SECTION 17 RELATED PARTY TRANSACTIONS 367; 546 212 to 213 377 316
Item 18.1 Historical financial information 233 to 383; 392 to 194 to 337; Item 18.2 Interim financial and other information N/A
Item 18.3 Auditing of historical annual financial information 384 to 391; 426 to 338 to 343; Item 18.4 Pro forma financial information N/A N/A N/A N/A
Item 18.6 Legal and arbitration proceedings 151 to 153 68 to 70 158 to 160 167 to 169
Item 19.1 Share capital 415; 502 to 505; 546 211; 217 431; 523 to 524 371; 450
Information provided in respect of Article L.451-1-2 of the French Monetary and Financial Code
Statutory Auditors’ report on the consolidated financial statements 384 to 391
Statutory Auditors’ report on the parent company’s financial statements 426 to 430
Table summarizing the authorizations granted in respect of capital increases, in application of Articles L.225-129-1 and L.225-129-2 of the French Commercial Code and the use made of said powers in FY 2019. 506
ADAM Association for the Defence of Minority Shareholders (Association de Défense des Actionnaires Minoritaires).
Backtesting A method of comparing observed actual losses with expected losses of a model.
Bail-in A mechanism designed to limit the use of public funds by a failing institution still in operation or in the process of liquidation. The bail-in mechanism grants power to the supervisory authorities to require certain creditors of a credit institution on the brink of failure to convert their debt into shares in the institution and/or to take a loss on their holdings. Under the European accord of June 26, 2015, in the event of capital inadequacy (due to losses), creditors holding subordinated debt, then senior creditors, then unsecured deposits by large corporates, then those of SMEs and finally those of individuals exceeding €100,000 will be bailed-in. However, secured deposits, covered bonds, employee compensation, liabilities related to the institution’s vital activities and interbank liabilities with a maturity of less than 7 days should not be affected.
CAGR Compound annual growth rate. Mean annual growth rate over a specified period
CCAN Natixis Shareholders’ Consultative Committee (Comité Consultatif des Actionnaires de Natixis).
CFCC Comité de coordination des fonctions de contrôles (Control Functions Coordination Committee)
The risk of loss from the inability of clients, issuers or other counterparties to honor their financial commitments. Credit risk includes counterparty risk related to market transactions and securitization.
District Court The lower tier of the US federal judicial system.
EL Expected loss, i.e. the value of the loss likely to be incurred given the quality of the structure of the transaction and any measures taken to mitigate risk, such as collateral. It is calculated by multiplying exposure at risk (EAD) by Probability of Default (PD) and by Loss Given Default (LGD).
Exposure at default (EAD) A financial institution’s exposure in the event of a counterparty’s default. EAD covers on- and off-balance sheet exposures. Off-balance sheet exposures are converted into balance sheet equivalents with the help of internal or regulatory conversion factors (drawdown assumption).
GRI Global Reporting Initiative — An organization consisting of stakeholders and partners (businesses, audit firms, human rights, environmental protection, labor organizations, and government representatives) which has created a joint framework for the development of sustainability reporting.
IRRBB Interest Rate Risk in the Banking Book. IRRBB designates the current or future risk to which the bank’s capital and profits are exposed due to adverse interest rate fluctuations influencing positions in the banking book.
Market risk The risk of a loss in value on financial instruments resulting from changes in market parameters, from the volatility of these parameters or from the correlations between these parameters. These parameters are exchange rates, interest rates and the prices of securities (equities, bonds), commodities, derivatives or any other assets, such as real estate assets.
Monoline An insurance company that takes part in a credit enhancement operation, backing a debt security issue (e.g. in securitization transactions) with the aim of improving the issue’s rating.
MREL Minimum requirement for own funds and eligible liabilities — Ratio defined in the European Bank Recovery and Resolution Directive indicating the minimum requirement for own funds and eligible liabilities that have to be available to absorb losses in the event of resolution
Natixis leverage ratio This ratio is calculated based on the rules set forth in the Delegated Act, without phase-in except for DTAs on tax-loss carryforwards and with the hypothesis of a roll-out for non-eligible subordinated notes under Basel 3 by eligible notes. Repo transactions with central counterparties are offset in accordance with IAS 32 rules without maturity or currency criteria. The ratio is presented after canceling transactions with affiliates, pending ECB authorization.
NRE French law on New Economic regulations (Loi sur les nouvelles Réglementations Économiques)
Rating An appraisal by a financing rating agency (Moody’s, Fitch Ratings, Standard & Poor’s) of the creditworthiness of an issuer (company, government or other public entity) or a transaction (bond issue, securitization, covered bond). The rating has a direct impact on the cost of raising capital.
Resecuritization The securitization of an exposure that is already securitized where the risk associated with an underlying pool of exposures is tranched and at least one of the underlying exposures is a securitization position.
Solvency Measures the ability of a business or an individual to repay its debt over the medium to long term. For a bank, solvency reflects its ability to cope with the losses that its risk profile is likely to trigger. Solvency analysis is not the same as liquidity analysis. The liquidity of a business is its ability to honor its payments in the normal course of its business, to find new funding sources and to achieve a balance at all times between its incomings and outgoings. For an insurance company, solvency is covered by the Solvency II Directive, see Solvency II.
Spread The difference between the actuarial rate of return on a bond and the actuarial rate of return on a risk-free loan with the same duration.
SRM Single Resolution Mechanism: An EU-level system to ensure an orderly resolution of non-viable banks with a minimal impact on taxpayers and the real economy. The SRM is one of the pillars of the European Banking Union and consists of an EU-level resolution authority (Single Resolution Board — SRB) and a common resolution fund financed by the banking sector (Single Resolution Fund — SRF).
Stress test A bank stress test simulates the behavior of a bank (or Group of banks) under extreme but realistic economic scenarios (i.e. worsened prospects for growth, unemployment and inflation) to assess whether the bank’s (or banks’) capital reserves are sufficient to absorb such a shock.
A financial instrument combining a bond product and an instrument, such as an option, providing exposure to any asset type (equities, forex, fixed-income, commodities). Such instruments may be backed by a (total or partial) guarantee on the investment. In a different context, the term “structured product” or “structured issue” can also refer to securities resulting from securitization transactions, for which a ranking of bearers is established.
Tier 1 Tier 1 (T1) refers to the portion of a financial institution’s prudential capital that is considered to be the most solid. It includes its capital stock and retained earnings allocated to reserves. The ratio of Tier 1 capital to risk-weighted assets is a solvency indicator used in the Basel 1, Basel 2 and Basel 3 prudential accords.
TUP Total transfer of assets and liabilities (Transmission Universelle de Patrimoine)
co m 30, avenue Pierre Mendès France 75013 Paris www.natixis.com A joint company with a board of directors with share capital of €5,049,354,392