Climate Change Data

Environmental Metrics

ESG Focus Areas

• Cooperative Development
• Community Investment
• Employee Satisfaction

Social Achievements

• Supported approximately 300 social, cultural, scientific, or educational organizations through donations, sponsorships, and employee volunteerism.
• Supported youth programs through internships and temporary employment.

Governance Achievements

• Adoption of a Code of Ethics and Professional Conduct.
• Creation of a Risk Management Commission.
• Implementation of projects for compliance with Bill 198 and its regulations.
• Adoption of the Charter for the Audit Commission.
• Adoption of the Compliance Policy for Caisse centrale.
• Adoption of the Policy on the Appointment of Officers and Employees to External Positions.

Climate Goals & Targets

Environmental Challenges

• Fierce competition from major Canadian and foreign banks.
• Slower economic growth due to the strong Canadian dollar and its impact on exports.
• Low interest rates impacting net interest income from capital market segment activities.

Mitigation Strategies

• Geographic diversification of the loan portfolio.
• Establishment of a new commercial loans subsidiary in the United States.
• Business agreements signed with almost all Corporate Financial Centres (CFCs).
• Use of derivatives and disposal of certain investments to modify asset terms and benefit from market opportunities.
• Rigorous liquidity management and broader access to funding on the Canadian market.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Cooperative Development
• Community Investment
• Environmental Sustainability
• Employee Wellbeing
• Risk Management

Environmental Achievements

• Reduced paper consumption through double-sided photocopying and other initiatives.
• Distributed coffee mugs and glasses to replace styrofoam cups.
• Implemented bins for collecting recyclable waste.

Social Achievements

• Remitted $112.3 million to its members (17% increase from 2006).
• Donated over $150,000 to organizations promoting youth development.
• Donated nearly $620,000 to various charitable organizations.
• Raised $85,000 through annual golf tournament for children's charities.
• Participative management initiatives, including employee satisfaction surveys and meetings with the President.

Governance Achievements

• Implemented various initiatives to maintain corporate governance in line with its cooperative nature.
• Developed internal risk assessment tools and models for Basel II compliance.
• Reviewed responsibilities between the Fédération and Caisse centrale boards.
• Reviewed remuneration policy for officers.
• Integrated cooperative difference indicators into profit-sharing plan.
• Adopted a regulatory compliance policy.

Climate Goals & Targets

Environmental Challenges

• Liquidity crunch and ABCP crisis in global financial markets.
• Increased borrowing costs.
• Reduced accessibility of global financial markets.
• Rising Canadian dollar negatively impacting manufacturing exporters.

Mitigation Strategies

• Strategies to lengthen borrowing maturities and diversify funding sources.
• Participation in CMHC mortgage bond issues.
• Active management of Canadian, U.S., and European borrowing programs.
• Securitization program as an alternate source of funding.
• Creation of a single hub for the Desjardins network to better promote products and services.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Governance
• Ethics and Integrity
• Economic Performance
• Indirect Economic Impacts
• Product Responsibility
• Shareholder Engagement
• Procurement Practices
• Member and Client Experience
• Financial and Cooperative Education
• Local Communities
• Labour/Management Relations
• Training and Education
• Diversity and Equal Opportunity
• Anti-corruption
• Member and Client Privacy and Data Protection
• Management of Greenhouse Gas Emissions
• Residual Waste

Environmental Achievements

• Desjardins Group was ranked second in Canada by the CDP (Carbon Disclosure Project) in 2016, along with two other financial institutions.

Social Achievements

• Implemented initiatives to improve access to financial services for disadvantaged people.
• Initiatives to enhance financial and cooperative literacy.
• Implemented local community engagement, impact assessments and development programs (percentage unavailable due to lack of survey).

Governance Achievements

• Implemented a reputational risk assessment process.
• Training on social acceptability is available to caisse officers upon request.
• Federation and CCD merged effective January 1, 2017, to optimize and streamline Desjardins Group’s structure.

Climate Goals & Targets

Environmental Challenges

• Environmental risk (financial, operational, or reputational loss due to environmental issues).
• Data limitations for certain indicators due to system incompatibility or unavailable data from subsidiaries (e.g., Western Financial Group).

Mitigation Strategies

• Environmental risk is an integral part of the Integrated Risk Management Framework.
• Line of responsible investment products that factor in environmental, social, and governance aspects.
• Nine action plans for implementing sustainable development policy, including involvement in the CDP.
• Internal data validation by senior management.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Standardized organization-wide procurement policy.
• Supplier Centre section on Desjardins.com with information on supply and payment services, values, supplier selection process, code of conduct, and procurement process.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Core option

Certifications: Null

Third-party Assurance: Internal validation by senior management

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• Earned a B grade from the CDP, beating the industry average of C

Social Achievements

• Initiatives to improve access to financial services for disadvantaged people
• Initiatives to enhance financial and cooperative literacy

Governance Achievements

• Federation and Caisse centrale Desjardins merged to optimize structure
• 98.1% attendance rate for meetings of the Federation’s Board of Directors

Climate Goals & Targets

Environmental Challenges

• Environmental risk of financial, operational or reputational loss from environmental issues
• Increased credit risk through impairment of assets pledged as collateral
• Greater natural disaster and climate change risks for property and casualty insurance subsidiaries

Mitigation Strategies

• Instituted a sustainable development policy applying to all operations
• Updated strategic plan and performance management practices to include priorities supporting sustainable and responsible economy
• Setting carbon footprint reduction targets and gradually including these targets in performance objectives
• Developing innovative, sustainable products and services

Supply Chain Management

Responsible Procurement

• Standardized procurement policy organization-wide
• Code of conduct for suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 Guidelines

Third-party Assurance: PricewaterhouseCoopers LLP (limited assurance on Scope 1, 2, and 3 greenhouse gas emissions)

Environmental Metrics

ESG Focus Areas

• Cooperation
• Environment
• Social
• Governance

Environmental Achievements

• Reduced GHG emissions from operations to 17,547 metric tons of CO2 equivalent in 2021, down 30% from 2020 and 57% from 2019.
• Achieved carbon neutrality in operations since 2017.
• Set a goal to reduce GHG emissions from operations by 41% below 2019 levels by December 31, 2025.
• Issued $500 million in sustainable bonds to fund projects with environmental or social benefits.
• Invested $1.48 billion in renewable energy infrastructure (as of September 30, 2021).

Social Achievements

• Invested $9 million in financial and cooperative education programs.
• Supported 17,342 people through the Desjardins Mutual Assistance Fund.
• Increased total budget to support youth to nearly $80 million.
• Awarded 3,377 scholarships totaling $4.1 million.
• Recognized as one of Canada’s Best Diversity Employers by Mediacorp.
• Launched Empowering Women, a Canada-wide network for women in leadership.

Governance Achievements

• Achieved the highest ESG Assessment score among diversified banks in North America (Moody’s ESG Solutions).
• Developed a science-based climate strategy with a net-zero emissions target by 2040.
• Integrated an ESG indicator into employee incentive plans starting in 2022.
• Adopted a target for reducing operational emissions by 41% compared to 2019 levels by 2025.
• Introduced 10 ESG performance indicators in management committee performance reviews starting in 2022.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the pandemic.
• Climate change impacts.
• Maintaining a high employee retention rate during a period of economic uncertainty.

Mitigation Strategies

• Developed alternative sourcing strategies.
• Implemented an ambitious climate action plan with a net-zero emissions target by 2040.
• Offered competitive total compensation packages and flexible work arrangements to employees.

Supply Chain Management

Supplier Audits: 247 out of 1,991 suppliers (12.4%) assessed based on sustainable development criteria

Responsible Procurement

• ESG criteria incorporated into procurement decisions.
• Priority given to local suppliers.
• Supplier diversity program valuing women, LGBTQ+, Indigenous, visible minority, disabled, veteran, social economy, and under-35 owned businesses.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: GRI Standards (Core option), TCFD, Principles for Responsible Banking (PRB), Principles for Sustainable Insurance (PSI)

Third-party Assurance: PricewaterhouseCoopers LLP (limited assurance for Scope 1, 2, and 3 emissions)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 13 (Climate Action)

Desjardins's initiatives contribute to these goals through investments in renewable energy, support for entrepreneurship and community development, promotion of financial inclusion, and climate action initiatives.

Sustainable Products & Innovation

• Responsible investment products
• Green home program
• Green auto loan program

Awards & Recognition

• Canada’s Greenest Employers
• Best 50 Corporate Citizens in Canada
• Canada’s Best Diversity Employers
• Top Employers for Young People
• Forbes World’s Top Female-Friendly Companies

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental, Social, and Governance (ESG)

Environmental Achievements

• Reduced carbon footprint of investments in publicly traded securities by 40% below the benchmark indexes (target: 25% reduction)
• Achieved 40% share of renewables in lending to energy corporations (target: 35% by 2025)
• Reached $1.7 billion investment portfolio in renewable energy infrastructure (target: $2 billion by 2025)
• Financed 2 biomethanization projects (target: 6 by 2025)
• Reduced GHG emissions from operations by 49% from 2019 levels in 2022 (target: 41% reduction by 2025)

Social Achievements

• 93% of 58,000+ employees completed mandatory sustainable development training (target: 85% by 2023)
• Launched alternative transportation program for employees

Governance Achievements

• Board-level oversight of climate-related issues
• Executive compensation linked to ESG performance
• Implemented group-wide sustainability policy

Climate Goals & Targets

Environmental Challenges

• Supply chain emissions
• Data limitations for comprehensive ESG and climate risk assessments
• Integrating climate change into the strategy of a diversified financial institution
• Limited internal resources for certain ESG initiatives

Mitigation Strategies

• Developing methodologies for measuring and reducing supply chain emissions
• Improving data collection and analysis for ESG and climate risk assessments
• Implementing initiatives to raise awareness and understanding of climate change risks and opportunities
• Hiring and training professionals in climate change and sustainable development

Supply Chain Management

Supplier Audits: 329 suppliers (13.9%) representing 55% of procurement spend

Responsible Procurement

• Supplier Code of Conduct
• ESG scoring of suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Extreme weather events

Transition Risks

• Carbon pricing mechanisms
• Emerging regulations
• Market shifts

Opportunities

• Development of green products and services
• Growth in renewable energy sector
• Increased demand for responsible investment products

Reporting Standards

Frameworks Used: TCFD, GRI, SASB, UN PRI, UN PSI, UN PRB, PCAF, SBTi

Third-party Assurance: PwC Canada (limited assurance)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)

Desjardins's initiatives contribute to these goals through investments in renewable energy, emissions reduction efforts, and support for sustainable development.

Sustainable Products & Innovation

• Desjardins Green Program
• SocieTerra Funds and Portfolios
• Low-carbon ETFs
• Priority Terra Market-Linked Guaranteed Investments
• Sustainable bonds

Awards & Recognition

• One of Canada’s Greenest Employers (since 2015)
• One of the Best 50 Corporate Citizens in Canada (since 2015)
• Highest ESG Assessment score among diversified banks in North America (Moody's ESG Solutions)

Environmental Metrics

ESG Focus Areas

• Financial inclusion and accessibility
• Financial empowerment
• Member/client experience
• Responsible products and services
• Environment and climate
• Social
• Governance

Environmental Achievements

• Reduced emissions by 49% by the end of 2023 compared to 2019 levels.
• Increased support for the renewable energy sector; share allocated to renewables in our energy sector lending reached 59% at the end of 2023 (vs. 40% in 2022).
• Invested nearly $1.89 billion as at September 30, 2023 in renewable energy infrastructure.
• GHG emissions from paper consumption decreased by more than 15% compared to 2022.

Social Achievements

• Launched an immersive learning path on equity, diversity and inclusion.
• Received Platinum Parity Certification from Women in Governance.
• Invested $12.2 million in programs to foster healthy financial habits, financial wellness and financial empowerment.
• Distributed almost $2.5 million in youth dividends to 163,901 young members.
• Proactively contacted over 65,000 members with variable rate mortgages to offer solutions for interest rate hikes.

Governance Achievements

• Separation of the duties of the chair of the board and the role of president and CEO, adopted at the 2023 annual general meeting.
• Updated Desjardins Group's mission statement.
• Achieved top scores from Moody's ESG Solutions and Sustainalytics in the diversified banks in North America category for ESG performance and risk management.
• Added an ESG performance indicator to the general incentive plan of all Desjardins employees.

Climate Goals & Targets

Environmental Challenges

• High personal debt rate in society.
• Supply delays for low-emission vehicles due to worldwide shortages.
• Increasing vehicle thefts in Canada.

Mitigation Strategies

• Launched financial education initiatives to promote financial empowerment.
• Offered a higher per-kilometre rate for employees using hybrid/electric vehicles or carpooling for business travel.
• Offered a free Tag tracking system to insureds in high-risk areas for vehicle theft prevention.

Supply Chain Management

Supplier Audits: 400 suppliers assessed during the year (through calls for tenders); 62% of products and services purchased from assessed suppliers.

Responsible Procurement

• Supplier Code of Conduct
• ESG assessment of suppliers
• Sustainable procurement guide
• Supplier diversity program

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, TCFD, IFRS S2, CDP

Certifications: LEED, BOMA BEST, BOMA 360, Platinum Parity Certification (Women in Governance)

Third-party Assurance: PricewaterhouseCoopers LLP (limited assurance for Scope 1, 2, and 3 emissions)

UN Sustainable Development Goals

• 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13, 16, 17

Initiatives contribute to various SDGs as detailed in Appendix 1.

Sustainable Products & Innovation

• Green Homes Program
• Responsible investment solutions
• Green Option for Desjardins auto loans
• ESG swap financial product

Awards & Recognition

• FundGrade A+ Awards
• SRP Americas Awards
• SPi Awards for Excellence
• LSEG Lipper Fund Awards Canada
• J.D. Power ranking for investor satisfaction
• Insurance Business Canada Awards
• Canada's Greenest Employers
• Best 50 Corporate Citizens in Canada
• BOMA Quebec awards