TCFD REPORT 2021 TACKLING CLIMATE CHANGE 37 CLIMATE-RELATED RISK MANAGEMENT Changes to the regulatory and legal framework Regulatory and tax risks caused by the energy transition could lead to additional costs or Natixis, or an inability to continue certain activities, or even sanctions in the event of non-compliance with its obligations. Faced with increased involvement from legislators and supervisory authorities in the financial system globally with respect to climate change, Natixis is exposed to significant risk over the timeframe of its next strategic plan. This could increase further in a scenario of longer-term accelerated transition. Operational risk The increased  frequency and intensity of extreme weather events is reflected in increased risk of damages caused to property assets and infrastructure (e.g., data centers). As its overall real estate footprint is limited and concentrated in zones with relatively limited exposure to physical risk, Natixis is exposed to limited short-term risk which could nevertheless increase longer-term in the event of a considerably deteriorated climate scenario. Reputational risk Civil society and external stakeholders place increasing importance on the environmental impact of players in the financial system. This can spark controversy and even action  that can negatively impact the reputations of the targeted institutions. As a leading player in the financial sector, Natixis already has significant exposure to  this risk, particularly if its energy transition commitments turn out to be inappropriate  orinsufficientorifthereisaperceivedinconsistencybetweenitscommitmentsandits  activities.