TCFD REPORT 2021 TACKLING CLIMATE CHANGE 34 CLIMATE-RELATED RISK MANAGEMENT As a financial institution operating across four business lines, Natixis is exposed in many ways to climate change related risks. Due to their distinctive characteristics, physical and transition risks are particularly complex to understand. They imply forecasting over much longer time horizons than those we are used to consider, and collection of new datasets on our counterparties and financed assets. For the Risk division, improving understanding and oversight over our exposure to climate risks is one of the key stakes in our 2024 strategic plan. As a result, we have planned to expand our existing set-up over the coming years by investing in the development of methodologies and climate risk scenario simulation tools, and by strengthening our transaction analysis and portfolio monitoring processes. A dedicated center of expertise will coordinate this effort which will involve all Risk teams, in close cooperation with Business Lines and ESR department. Olivier Vigneron Chief Risk Officer and Senior Management Committee member, Natixis Mapping the impact of climate risks Climate risk is increasingly considered one of the main risks to the current financial system. In 2020, the European banking supervision authorities have again identified climate risks as one of the main risk factors for banks in the Eurozone 6 . Natixis recognizes the challenges posed by climate change on the planet and society as well as its customers and business model. As such, Natixis decided to strengthen its climate risk identification framework. This review relies on quantitative and qualitative data andissupportedbyalong-termoutlook.ItaimstoinfluenceNatixis’operationalstrategy. CLIMATE RISKS TERMINOLOGY Natixis is directly or indirectly exposed to several climate risk factors. To define these risks, Natixis has adopted the risk terminology suggested by the Task Force on Climate- Related Financial Disclosures (TCFD). • Acute physical risks refer to direct losses that are driven by extreme weather events,  including the damage they may cause in the destruction of physical assets (real estate and/or production), the decline in local economic activity and, potentially, disruption of value chains. A strengthened climate risk identification process 1 6. https://www.bankingsupervision.europa.eu/banking/priorities/risk_assessment/html/index.fr.html