TCFD REPORT 2021 TACKLING CLIMATE CHANGE 25 PUTTING CLIMATE AT THE HEART OF OUR BUSINESS STRATEGY Affiliates' investment activities can be classified into different categories. The following internal classification applies: • Responsible investment: ESG integration (inclusion of material ESG issues in research and decision-making) and implementation of an active shareholding policy (engagement and voting policy); • Sustainable investment: investment strategy structured into ESG issues, which aims to alignvalues,financialoutperformance,andsocietalimpactthroughinvestment; • Impact investment: strategy to address societal challenges, such as those defined by the United Nations Sustainable Development Goals (SDGs). In a period of climate-driven economic and social transition, the TCFD is designed to increase transparency and resilience across the financial markets. Its recommendations provide a common international framework for investors to mainstream information regarding exposure to climate risks and opportunities. This allows investors to make informed decisions on transactions and capital allocation. With this analysis, NIM’s listed and unlisted asset managers gain better insight into their portfolios’ climate change impact. TCFD is also a support tool, aligning their clients’ asset allocation with a 1.5°C scenario. Nathalie Wallace Global Head Sustainable Investment, Natixis Investment Managers Sector policies Affiliates may decide to exclude specific investments. Exclusion may apply to entire sectors, companies or individual issuers. In line with Natixis’ sector policies, funds may exclude the followingindustries:thermalcoal,tobaccoandcontroversialweapons. Affiliates adopt these policies as a risk management approach. Such sectors are regarded as more vulnerable to regulatory restrictions, fines and changes in client behavior, which can reduce long-term investment returns. The decision to apply exclusions is made at the affiliatelevel,consistentwithNIM’smulti-affiliatemodel. Engagement and voting policy Within the framework of its ESG policy, Natixis Investment Managers expects its affiliates to actively make investments. This involves: • engaging with the companies in which they invest, identifying risks and opportunities, and contributing to improving performance (through direct, third-party or collaborative engagement); • voting at Shareholders’ Meetings and supporting their investment strategies. In recent years, the number of resolutions addressing environmental and social issues has increased. In particular, this applies to the mining and energy sectors which are the most impacted by climate change. Active engagement and voting policy on ESG topics