Natixis pledged to align its business strategy with the United Nations sustainable development goals and the Paris Agreement on the climate in September 2019, when it signed the UNEP FI Principles for Responsible Banking. Thirty other banks were involved in this milestone initiative, which now boasts 185 signatories.
Throughout the past year, Natixis has pursued its commitment to environmental and social responsibility (ESR) with a focus on two main areas i.e. biodiversity and climate change.
Natixis realizes that the deterioration of natural capital is a crucial challenge and has decided to mobilize all its business lines across financing, asset management and insurance to support biodiversity, on a par with its climate efforts. This move is a further aspect of our overall strategy to support clients in all dimensions of their own environmental transition. Work kicked off two years ago and culminated in a series of specific, measurable and time-bound commitments in June 2020 to safeguard biodiversity and natural capital via the company's various business lines and direct impacts.
A year ago, Natixis became the first bank to actively manage its balance sheet's climate impact, as it applied a capital allocation mechanism to each financing deal based on its effects on the climate – the Green Weighting Factor (GWF). This innovative system applies to all Natixis' financing deals worldwide and across all business sectors, apart from the financial sector.
The GWF is now fully embedded in our credit process and has become a way for Natixis to effectively manage its climate strategy. The GWF has been applied in an increasing number of ways throughout the past year:
- decisions for granting loans;
- assessment of climate transition risks and climate stress tests;
- strategic dialogue with clients and business strategy;
- structuring sustainable finance products;
- active portfolio management, including distribution and securitization;
- dynamic balance sheet projections.
The last key stage in this project to align our balance sheet with the Paris Agreement goals will involve transforming GWF scores into a temperature trajectory and setting clear targets for each business line: these objectives should be set next year as part of the forthcoming strategic plan.
Principles for Responsible Banking:
- Align with the Paris Climate Agreement and Sustainable Development Goals (SDG),
- Increase positive impacts and reduce negative impacts,
- Work responsibly with clients,
- Consult and engage with stakeholders,
- Take targeted and public commitments, and ensure transparency and accountability on progress.
Find out more on the UNEP FI website and discover two videos featuring Karen Degouve, Head of Sustainable Business Development within the ESR Department at Natixis (Driving the green transition & Becoming a signatory).