Societe Generale S.a. Class A · EURONEXT:GLE
Societe Generale S.a. Class A — ESG Presentation (December 2020)
61 slides from Societe Generale S.a. Class A's sustainability presentation, Dec 9, 2020
Slide 1: Sustainable and Responsible Banking ESG Roadshow
SUSTAINABLE AND RESPONSIBLE BANKING ESG ROADSHOW LORENZO BINI SMAGHI, CHAIRMAN SOCIETE GENERALE 8th-9th December 2020 DECEMBER 2020
Slide 2: Contents
CONTENTS 1 2 3 EXECUTIVE CORPORATE REMUNERATION SUMMARY GOVERNANCE POLICY › p3 › p13 › p21 APPENDICES p24: Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 CULTURE & SUSTAINABLE & E&S RISK CYBER SECURITY & REMUNERATION CAPITAL AND RESPONSIBLE MANAGEMENT ARTIFICIAL HUMAN CAPITAL FINANCE INTELLI
Slide 3: Executive Summary
1 EXECUTIVE SUMMARY DECEMBER 2020 │ 3
Slide 4: Selected 2020 Highlights: Preparing for the Future
SELECTED 2020 HIGHLIGHTS: PREPARING FOR THE FUTURE STRENGTHENING ORGANISATION INTEGRATING CSR IN BUSINESS ACTIVITY Renewed management team (p5) Leader in the energy transition (p9 and p36 - 41) _ Accelerated exit of coal (p38-40) Corporate purpose defined (p8) _ New target to align oil & gas activit
Slide 5: Renewed Management Team
RENEWED MANAGEMENT TEAM ACCELERATE THE TRANSFORMATION OF THE NEW ORGANISATION BUSINESSES AND PREPARE THE NEW STRATEGIC PLAN APPROVED BY BOARD Frédéric OUDÉA CEO 2 Deputy CEOs, instead of 4 Philippe Diony New roles of Deputy AYMERICH LEBOT DEPUTY CEO DEPUTY CEO General Manager to entrust a new Slawom
Slide 6: Management Competencies and Experience
MANAGEMENT COMPETENCIES AND EXPERIENCE Diony LEBOT Philippe AYMERICH • Deputy CEO in charge of control functions since May 2018, appointed additional • Deputy CEO in charge of French Retail Banking activities and Group Resources supervision in August 2020 to include: risk, compliance, internal contr
Slide 7: Governance and Accountability of Responsible Banking
GOVERNANCE AND ACCOUNTABILITY OF RESPONSIBLE BANKING THE BOARD GENERAL RESPONSIBLE COMMITMENTS CSR TEAM EXTENSIVE Approves CSR MANAGEMENT COMMITTEE defines, proposes, DEPLOYMENT strategy and risk Reviews CSR Validates new group CSR supports and OF TRAINING appetite; strategy and commitments and revi
Slide 8: A Corporate Purpose Approved by the Board That Guides Our Strategic Plan
A CORPORATE PURPOSE APPROVED BY THE BOARD THAT GUIDES OUR STRATEGIC PLAN OUR CORPORATE STAKEHOLDER STRATEGIC PLAN ROLL OUT CORPORATE PURPOSE DIALOGUE ACROSS GROUP PURPOSE _ Corporate Purpose 3 pillars for the next _ All Business and Clarification of the drew on 85,000 Strategic Plan: Service Units G
Slide 9: New Stage in Energy Transition
NEW STAGE IN ENERGY TRANSITION Please refer to appendices p36 -41 for more detail ACHIEVED THROUGH: SETTING SECTOR-BY-SECTOR TARGETS FOR _ The common open source methodology ALL FINANCING ACTIVITIES, STARTING WITH THE MOST defined with 4 other banks** for sector CARBON INTENSIVE SECTORS: alignment o
Slide 10: Continuing to Apply Responsible Compensation Practices
CONTINUING TO APPLY RESPONSIBLE COMPENSATION PRACTICES CSR performance condition 20% of the award, of which: _ ½ Energy transitionfinancing EXECUTIVE MANAGEMENT LONG-TERM INCENTIVES _ ½ Positioning within the extra-financial ratings (SAM, Sustainalytics & MSCI) For Executive Management: _ Achievemen
Slide 11: Active in Supporting Regulatory Developments
ACTIVE IN SUPPORTING REGULATORY DEVELOPMENTS SUSTAINABLE FINANCE IS A PRIORITY FOR THE EUROPEAN UNION European Commission: Action Plan on Financing Sustainable Growth European Banking Authority: 2025 roadmap on Sustainable Finance ACTIVE PARTICIPATION IN CONSULTATIONS VOLUNTARY PARTICIPATION IN _ SG
Slide 12: Selected Reports for Further Reading
SELECTED REPORTS FOR FURTHER READING CLIMATE DISCLOSURE REPORT https://www.societegenerale.com/sites/default/files/documents/2020-10/climate-disclosure-report-20201027.pdf PACTA METHODOLOGY REPORT (aligning credit portfolios with Paris Agreement) https://2degrees-investing.org/wp-content/uploads/202
Slide 13: Corporate Governance
CORPORATE 2 GOVERNANCE DECEMBER 2020 │ 13
Slide 14: Snapshot of SG Board
SNAPSHOT OF SG BOARD Board Chairman Separation of Chairman and CEO roles since May 2015 Independence 14 Directors; 91.6% independent (excluding 2 staff-elected) Gender: 43% women; Diversity Nationality: 8 nationalities Key changes for 2021: Competence Broad range of skills: Risk, Control, Finance, I
Slide 15: Director Competencies and Experience (1/3)
DIRECTOR COMPETENCIES AND EXPERIENCE (1/3) Lorenzo Frédéric William Jerome BINI SMAGHI OUDEA CONNELLY CONTAMINE First appointment : 2014 First appointment : 2009 First appointment : 2017 First appointment : 2018 Term : 2022 Term : 2023 Term: 2021 Term : 2022 Italian French French French Tenure (yrs)
Slide 16: Director Competencies and Experience (2/3)
DIRECTOR COMPETENCIES AND EXPERIENCE (2/3) Gérard Juan Maria Annette Lubomira MESTRALLET NIN GENOVA MESSEMER ROCHET First appointment : 2015 First appointment : 2016 First appointment : 2020 First appointment 2017 Term : 2023 Term : 2024 Term 2024 Term : 2021 French Spanish German French Tenure (yrs
Slide 17: Director Competencies and Experience (3/3)
DIRECTOR COMPETENCIES AND EXPERIENCE (3/3) As at end-2019 DECEMBER 2020 │ 17
Slide 18: Board Committees
BOARD COMMITTEES 5 INDEPENDENT DIRECTORS 4 INDEPENDENT DIRECTORS Review of the risk panorama & mapping; Culture & Conduct; CSR; Review of Group accounts; Statutory Auditors; audit and HR risks; GDPR; cyber security; liquidity remediation; Brexit; NPLs; internal control; participation in US Risk Comm
Slide 19: Group Governance, Oversight and Management Structure
GROUP GOVERNANCE, OVERSIGHT AND MANAGEMENT STRUCTURE BOARD OF Audit & Internal Risk Compensation Nomination & Corporate DIRECTORS Control Committee Committee Committee Governance Committee General Management Committee GENERAL Group CEO, Deputy CEOs and Deputy General Managers MANAGEMENT Prepares and
Slide 20: Diversity at Societe Generale
DIVERSITY AT SOCIETE GENERALE… GENDER NATIONALITY Female Non-French 14 members 43% 43% BOARD Incl employee Male French representatives 57% 57% Non-French Female 17% GENERAL MANAGEMENT 6 members 17% 100% MALE Male French 83% 83% Non-French Gender Equality Female 25% Equileap 2019 MANAGEMENT 25% COMMI
Slide 21: Remuneration Policy
3 REMUNERATION POLICY DECEMBER 2020 │ 21
Slide 22: Group Remuneration – Key Policy and Principles
GROUP REMUNERATION – KEY POLICY AND PRINCIPLES . POLICY STRUCTURED CONTROL OF THE ROLE OF THE BOARD VARIABLE AND LONG- ON PRINCIPLES OF REMUNERATION POLICY COMPENSATION TERM REMUNERATION: LOYALTY AND VALUES: FOR REGULATED STAFF: COMMITTEE: To make recommendations to the General Management: varia
Slide 23: Remuneration Policy - Executive Management (1/3)
REMUNERATION POLICY - EXECUTIVE MANAGEMENT (1/3) SAY ON PAY EX ANTE 2020 Key changes introduced in 2020: Narrower set of circumstances in which CEOs are entitled to severance pay: no longer payable upon resignation whatever the reason; Introduction of a pro-rata calculation in certain cases for
Slide 24: Appendices
APPENDICES DECEMBER 2020 │ 24
Slide 25: Covid-19: Supporting Our People, Clients and All Partners
COVID-19: SUPPORTING OUR PEOPLE, CLIENTS AND ALL PARTNERS WITH A DEEP SENSE OF RESPONSIBILITY EMPLOYEES CLIENTS COMMUNITIES Priority given to the care CORPORATE INDIVIDUAL A global solidarity programme situation of our staff up to EUR 50m both at a French Accompanying corporate and institutional cli
Slide 26: Appendix 1: Culture & Conduct and Human Capital
APPENDIX 1 CULTURE & CONDUCT AND HUMAN CAPITAL DECEMBER 2020 │ 26
Slide 27: Anchoring a Culture of Responsibility
ANCHORING A CULTURE OF RESPONSIBILITY . A COMMON A GROUP CODE OF CULTURAL FOUR GROUP VALUES: LEADERSHIP MODEL: CONDUCT: TRANSFORMATION: Reinforcing a speak-up culture: Team Spirit Describing required A Group Code of Conduct that new whistleblowing system Responsibility management and sets out th
Slide 28: Three-Year Culture and Conduct Programme
THREE-YEAR CULTURE AND CONDUCT PROGRAMMME ACCELERATING CULTURAL TRANSFORMATION A CLEAR ROADMAP WITH 3 MAIN OBJECTIVES... 1 Accelerate SG’s cultural transformation 2 Achieve the highest standards of quality of service, integrity and behaviour 3 Make SG’s culture a differentiating factor: quality of s
Slide 29: Relying on a Multi-Pronged Approach
RELYING ON A MULTI-PRONGED APPROACH… GOVERNANCE Culture & Conduct programme launched January 2017: regular follow up by the Board Overall responsibility for the programme is with General Management : the Group Head of Culture & Conduct reports directly to the CEO and delivers an annual dashboard
Slide 30: … and with Clear Deliverables
… AND WITH CLEAR DELIVERABLES PROGRAMME KEY ACHIEVEMENTS 96% of active employees, worldwide, completed A new quarterly committee, chaired by the CEO, was created in 2020 to allow General Management to continue to follow the Group’s training on the appropriation of the Group Code of progress on Cultu
Slide 31: Policies to Shape and Grow Our Staff
POLICIES TO SHAPE AND GROW OUR STAFF STAFF SUCCESSION PLANNING TARGETED DEVELOPMENT Redefined talent detection, 89% employees completed at least one training programme Focusing on a diversity of critical skills 26.6 hours in average of training hours per employee WORKFORCE 57% women 44% women manage
Slide 32: Focus on Gender Diversity in the Group
FOCUS ON GENDER DIVERSITY IN THE GROUP Gender diversity embedded in all HR processes French Gender Equality Index Score 86/100 in 2019 Charters: UN Women Empowerment Principles in Collective agreements with unions on equal opportunities 2016; UK Women in Finance Charter 2018; renewal Unconsc
Slide 33: Appendix 2: Sustainable & Responsible Finance
APPENDIX 2 SUSTAINABLE & RESPONSIBLE FINANCE DECEMBER 2020 │ 33
Slide 34: Six Strategic CSR Priorities: Transform to Grow
SIX STRATEGIC CSR PRIORITIES: "TRANSFORM TO GROW" CSR PRIORITIES APPROVED CLIMATE BY BOARD RESPONSIBLE CHANGE EMPLOYER Committed to align Developing lending portfolio employee skills, with Paris Agreement SUSTAINABLE adapting to changing Integration of E&S DEVELOPMENT ETHICS & environments risk mana
Slide 35: Comprehensive and Integrated Value Creation
COMPREHENSIVE AND INTEGRATED VALUE CREATION TO DELIVER STRONG PERFORMANCE AND CREATE A POSITIVE IMPACT CLIMATE LEADERSHIP SOCIAL CHANGE SUSTAINABLE DEFINING THE AND INNOVATION DEVELOPMENT IN AFRICA WAY WE DO BUSINESS Selected Examples: Selected Examples: Selected Examples: SATISFY AND PROTECT Be a l
Slide 36: Leading the Industry with Collective Action
LEADING THE INDUSTRY WITH COLLECTIVE ACTION FOUNDING SIGNATORY OF THE PRINCIPLES FOR RESPONSIBLE BANKING AND COLLECTIVE COMMITMENT ON CLIMATE ACTION SOCIETE GENERALE A REGULAR Committing to strategically align our business with the UN Sustainable FOUNDING SIGNATORY TO Development Goals and the Paris
Slide 37: PACTA: Pioneering Alignment of Credit Portfolios
PACTA: PIONEERING ALIGNMENT OF CREDIT PORTFOLIOS Implementing a standard, called PACTA for Banks, which is open source and available for all to use: joint publication of a methodology with the Katowice Banks and 2DII in September 2020 OBJECTIVE: _ Select indicators that are enablers of the transitio
Slide 38: Accelerated Transition Timelines
ACCELERATED TRANSITION TIMELINES NO IMMEDIATE FROM END-2021: REDUCE REDUCE CONDITIONS: DEDICATED EXPOSURE EXPOSURE ceasing to offer products COAL FINANCING and services (unless all clients with mining and power assets to to thermal to thermal of coal mines dedicated to energy coal to coal have defin
Slide 39: Credit Portfolio Alignment (Pre-2020 Targets)
CREDIT PORTFOLIO ALIGNMENT (PRE-2020 TARGETS) IN 2016 SOCIETE GENERALE DEVELOPED A METHODOLOGY AIMED AT MONITORING AND REDUCING ITS COAL POWER AND COAL MINING FINANCING WITH THE IEA 2DS Coal power financing target achieved : Coal mining financing target achieved : limiting to 19% the proportion of c
Slide 40: Credit Portfolio Alignment (Post-2020 Targets)
CREDIT PORTFOLIO ALIGNMENT (POST-2020 TARGETS) IN 2020 SOCIETE GENERALE, APPLYING THE PACTA METHODOLOGY, SETS A NEW COAL COMMITMENT SIGNIFICANTLY MORE AMBITIOUS THAN THE IEA PRODUCTION TREND Thermal coal power and mining financing To exit thermal coal in 2030 for OECD and EU and 2040 for the rest of
Slide 41: Steering the Portfolio Away from High Carbon
STEERING THE PORTFOLIO AWAY FROM HIGH CARBON ELECTRICITY MIX FINANCED BY SOCIETE GENERALE: Renewables Coal Coal 35% Renewables +16pts -9pts 20% 11% 51% 2019 Mid-2020 2017 Gas Oil 28% 2% Gas Hydro Nuclear 32% Oil 4% 5% Hydro 2% Nuclear 6% 4% SOCIETE GENERALE A REFERENCE BANK IN RENEWABLE ENERGY #1 wo
Slide 42: Grow with Africa Initiative Launched 2018
GROW WITH AFRICA INITIATIVE LAUNCHED 2018 LEVERAGING OPERATIONS IN 19 COUNTRIES AND HISTORICAL PRESENCE OVER A CENTURY INFRASTRUCTURE FINANCING SUPPORT FOR AFRICAN SMEs Four areas of focus: energy, transport, water Creation of local “SME Centres” bringing together and waste management and sustainabl
Slide 43: Appendix 3: E&S Risk Management
APPENDIX 3 E&S RISK MANAGEMENT DECEMBER 2020 │ 43
Slide 44: Identifying and Managing E&S Risks
IDENTIFYING AND MANAGING E&S RISKS REGULAR AND OPEN DIALOGUE _ Regular dialogue between Group top management, risk and sector experts: _ Leverages existing risk governance, in particular the Group Risk Committee chaired by the Group CEO E&S RISKS DO NOT _ Allows the identification of new E&S factors
Slide 45: E&S Risk Management Framework
E&S RISK MANAGEMENT FRAMEWORK E&S RISK IDENTIFICATION E&S ASSESSMENT E&S ACTIONS E&S RISK MANAGEMENT PRINCIPLES _Identifies whether the _The E&S assessment can result in a INTEGRATED customer’s activities or the _Assesses counterparties or transactions positive, conditional INTO THE transaction pres
Slide 46: Focus: Managing Climate Risk
FOCUS : MANAGING CLIMATE RISK GOVERNANCE: MEASURING SENSITIVITY TO CLIMATE RISK: _ Implementation of a Climate Vulnerability Indicator (CVI), to reinforce the credit analysis on the most _ Since 2017, Group Risk Committee exposed counterparties. The CVI : reviews climate risks at least once a year _
Slide 47: Disciplined Approach Through Duty of Care Plan
DISCIPLINED APPROACH THROUGH DUTY OF CARE PLAN IDENTIFIES ENVIRONMENTAL & SOCIAL RISKS RESULTING FROM GROUP ACTIVITIES WORLDWIDE PREVENTS SERIOUS BREACHES SOCIETE GENERALE DUTY OF CARE PLAN SCOPE GOVERNANCE MONITORING Covers human rights, fundamental Roll-out is coordinated by the CSR, HR and Implem
Slide 48: Appendix 4: Cyber Security and Artificial Intelligence
APPENDIX 4 CYBER SECURITY AND ARTIFICIAL INTELLIGENCE DECEMBER 2020 │ 48
Slide 49: Governance of Cyber Security
GOVERNANCE OF CYBER SECURITY TONE FROM THE TOP CONTEXT and COLLABORATION Cyber security is monitored by the Board of Directors’ Risk Committee and receives a The EU regulatory framework for cyber and data security is evolving: quarterly IT and cyber dashboard the Network and Information Security
Slide 50: Protection of Assets and Digital Trust Is a Strategic Issue
PROTECTION OF ASSETS AND DIGITAL TRUST IS A STRATEGIC ISSUE Security of key assets Protect data and prevent leakage Identify and enhance protection of sensitive assets Reinforce security of data and applications Customers Trust and Agility Build leading digital solutions for Extend our sec
Slide 51: Governance of Artificial Intelligence
GOVERNANCE OF ARTIFICIAL INTELLIGENCE STRONG GROWTH IN THE ADOPTION OF DATA AND AI IN THE TRANSFORMATION OF SOCIETE GENERALE OVER THE LAST TWO YEARS: WE NOW COUNT MORE THAN 500 DATA USE CASES IN OUR PIPELINE, OF WHICH 200 ARE LIVE DATA SCIENCE TEAMS NOW TOTAL MORE THAN 150 FULL TIME EMPLOYEES BOARD
Slide 52: Appendix 5: Remuneration
APPENDIX 5 REMUNERATION DECEMBER 2020 │ 52
Slide 53: Say on Pay Ex Ante 2020 Remuneration Policy for Board
SAY ON PAY EX ANTE 2020 REMUNERATION POLICY FOR BOARD BOARD OF DIRECTORS Total compensation amounts to EUR 1.7 million and was adopted by the General Meeting on 23 May 2018. This remains unchanged. As regards the allocation, it shall take into account the responsibilities of each Director, parti
Slide 54: Say on Pay Ex Ante 2020 Remuneration Policy for CEOs
SAY ON PAY EX ANTE 2020 REMUNERATION POLICY FOR CEOS CHIEF EXECUTIVE OFFICER & DEPUTY CHIEF EXECUTIVE OFFICERS Reflects experience and responsibilities and is in line with practices in similar companies FIXED COMPENSATION Fixed compensation maintained at 1 300 000 € for the CEO and 800 000 € for the
Slide 55: Say on Pay Ex Ante 2020 Remuneration Policy for CEOs
SAY ON PAY EX ANTE 2020 REMUNERATION POLICY FOR CEOS CHIEF EXECUTIVE OFFICER & DEPUTY CHIEF EXECUTIVE OFFICERS For a period of 6 months, compensated as per fixed remuneration NON-COMPETE CLAUSE Non-payment of the clause in case of departure within six months before claiming pension or Universal Regi
Slide 56: Say on Pay Ex Post 2019 Compensation Chief Executive Officer
SAY ON PAY EX POST 2019 COMPENSATION CHIEF EXECUTIVE OFFICER LTI Fixed 24% 37% Variable 39% 2019 FIXED €1,300,000 COMPENSATION €1,387,152 Targets achieved result in eligibility for 79.0 % of ANNUAL VARIABLE the variable compensation REMUNERATION (including 277,430 € payable in 70.6 % of quantitati
Slide 57: Chief Executive Officer Remuneration: Comparison with CAC 40
CHIEF EXECUTIVE OFFICER REMUNERATION Comparison with CAC 40 Companies and Financial Institutions in Europe Global compensations 2019 25,000,000 25 000 000 € € 20,000,000 20 000 000 € € 15,000,000 15 000 000 € € CAC 40 EUROPEAN FINANCIAL INSTITUTIONS 10,000,000 10 000 000 € € 10,000,000 10 000 000€€
Slide 58: Say on Pay Ex Post 2019 Compensation Deputy Chief Executive Officers
SAY ON PAY EX POST 2019 COMPENSATION DEPUTY CHIEF EXECUTIVE OFFICERS PHILIPPE SÉVERIN PHILIPPE DIONY AYMERICH CABANNES HEIM LEBOT 2019 FIXED COMPENSATION €800,000 €800,000 €800,000 €800,000 ANNUAL €755,136 €580,520 €762,680 €727,904 Targets reached giving right to variable remuneration: (incl. 151,0
Slide 59: Chief Executive Officers Pay Ratios 2015 - 2019
SAY ON PAY EX POST CHIEF EXECUTIVE OFFICERS PAY RATIOS 2015 - 2019 CHIEF EXECUTIVE OFFICER PAY RATIOS Ratio to employee median 74 71 66 65 remuneration 59 50 49 47 47 42 Ratio to employee average remuneration 2015 2016 2017 2018 2019 DECEMBER 2020 │ 59
Slide 60: Disclaimer
DISCLAIMER This presentation contains forward-looking statements relating to the targets and strategies of the Societe Generale Group. These forward-looking statements are based on a series of assumptions, both general and specific, in particular the application of accounting principles and methods
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