TCFD REPORT 2021 TACKLING CLIMATE CHANGE 42 CLIMATE-RELATED RISK MANAGEMENT The ESR Screening tool In 2020/2021 Natixis introduced its complementary ESR Screening tool to identify, assess and monitor environmental, social and governance (ESG) risks of its corporate clients. This tool allows to identify the clients most at risk and to perform an in-depth analysis of those. Climate transition and physical risks are fully integrated in this tool. The Energy Transition & Natural Resources industrial group supports the bank’s clients in their own energy transition. To achieve this, we systematically integrate climate risk in our due diligences and assess our financing operations in the natural resources sector in the light of industry best practices and standards. Furthermore, in our global portfolio, we promote financing for corporates who integrate these issues by reducing the carbon footprint of their activities or by focusing growth on more virtuous activities from a climate perspective. Frank Pluta Global Head of Energy Transition & Natural Resources Industry Group, Natixis Tools and methodologies are regularly reviewed and updated to ensure they remain fit for purpose to take into account the changes in climate risks related scientific knowledge as well as internal and external data availability. Tools such as the Green Weighting Factor (GWF)andtheESRScreeningareincorporatedintheNatixisriskgovernancemodel. To strengthen its climate, physical and transition risk assessment approach, in 2020, Natixis kick-started work on quantitative methodologies to measure its exposure to climate, physical and transition risks. Such efforts are expected to continue over the next few years. Tools integration in decision making processes The “Know Your Customer” (KYC) process As part of its ESR Screening tool, a specific questionnaire was integrated in KYC processes  worldwide. The questionnaire is answered by front officers for corporate clients. It allows  to rank client according to the level of vigilance required based on the context in which they do business, the maturity of their ESR risk management system, any controversies  to which they may be exposed and the type of business relationship they maintain with Natixis. Credit decision-making process During the credit approval and annual review process, all files are subject to a specific assessment,whichincludesthefollowing: • Systematic application of the Green Weighting Factor 7 (assessment of transactions’ climate impact). A continuous improvement approach 7. À l’exception du secteur financier pour lequel la méthodologie n’a pas été développée