FOCUS. on Corporate Social Responsibility at Société Générale

2007 FOCUS on Corporate Social Responsibility at Société Générale Retail Banking and Financial Services. Global Investment Management and Services. Corporate and Investment Banking

OUR VISION Consistent growth of our Group would not be possible without this trust - a value that forms the very basis of our activities and can only be achieved by taking into account the needs and concerns of all of the company's stakeholders. Société Générale is well aware of its responsibility to the environment and to society at large. As a major driver of wealth creation and development, the banking industry makes a significant contribution to economic and social progress.this places us under increased scrutiny, and means that our responsibility to society as a whole is perceived differently from that of other businesses. We know this because we listen to our stakeholders - civil society is becoming increasingly demanding over the extent of our responsibilities, meaning that we need to incorporate CSR considerations into all levels of our business, both upstream in our purchasing and sourcing procedures, and downstream in the environmental impact of our financing activities and in our relationships with customers. Société Générale s core strategy is to create lasting value for its shareholders, clients and staff. Yet this objective is only meaningful if it forms part of a broader policy of corporate social responsibility designed to promote social development and environmental protection. We choose our activities, suppliers and partners according to their ability to generate sustainable value, using a transparent selection process and at the same time encouraging increasingly open and constructive dialogue in order to create a climate of mutual trust. Our attitude of being constantly aware and our policy of ongoing reflection and improvement are deeply embedded in our corporate culture and form the basis for our corporate values - professionalism, team spirit, innovation - and ethics. It derives from our commitment to constant progress and is based on the 10 principles of the United Nations Global Compact to which we conform once again this year. Société Générale has made corporate social responsibility an integral part of its business, taking into account the specific geographical, cultural, social and economic characteristics of each country where it operates. Daniel BOUTON, Chairman 2

OUR COMMITMENTS Société Générale Group is committed to the protection of the environment and basic human and social rights in every aspect of its business and at each stage in its development. Signing in 2001 of the UN Environment Programme Statement by Financial Institutions on the Environment and Sustainable Development. Joining in 2003 the Global Compact, initiative of the Secretary General of the United Nations. Founding member of the Wolfsberg Group (prevention of money laundering). Signing in 2004 of the Diversity Charter in France. Signing in 2006 of the Principles for Responsible Investment. Support renewed in 2007 for the Carbon Disclosure Project. Adoption of Equator Principles in 2007. 3

Our responsible development derives from a culture of rigor and control that is constantly reinforced. CORPORATE GOVERNANCE 13 directors elected by the General Meeting, seven of which are independent and two of which are staff-elected. 9 Board of Directors meetings and 17 meetings of the three Specialized Committees in 2007. COMPLIANCE 570 (full-time equivalent) compliance officers. 257,000 hours of training in compliance and in anti-money laundering, corruption and the financing of terrorist activities in 2007. Consolidation of dedicated IT applications (transaction filter resources, insider list management, market abuse monitoring ). Group wide application of the Code of Conduct continued. Implementation of the obligations resulting from the transposition MiFID (European Markets in Financial Instruments Directive). Reinforcement of the organisation of compliance CORNERSTONES OF OUR BUSINESS RISK MANAGEMENT AND INTERNAL CONTROL 2,700 employees in the Group s risk function. A permanent supervision system to guarantee that transactions carried out at an operational level are correctly handled, secure and valid. An audit function employing 1,150 employees, coordinated by the General Inspection Department and organized according to Group division, to regularly assess the efficiency of internal controls. 4

The four strategic challenges for a CSR policy OUR CHALLENGES OUR POLICY TRUST The strict application of the principles of corporate governance, a risk management policy that is constantly reviewed and adapted, a sophisticated compliance policy, strict internal control procedures and a policy of heightened dialogue and exchange with each stakeholder. LEVERAGE EFFECT OF OUR BUSINESSES The inclusion of social and environmental concerns in financing and investment activities alongside the promotion of the protection of the environment and social development. RESPONSIBLE STAFF MANAGEMENT Diversity in recruitment, personal and professional development, skills management and forward careers management, non-discrimination, equal opportunities, professional integration of the disabled, social dialogue and a proactive policy of prevention and care. REDUCING OUR ENVIRONMENTAL IMPACTS Reduction in our CO 2 emissions, limited paper and energy consumption, optimization of our business travel, waste management and supplier relations and application of the highest environmental quality standards (HQE ) for building, etc. 5

OUR ORGANIZATION The Executive Committee defines the Group s CSR policy. The Sustainable Development Department implements and coordinates this policy. A network of around 60 contributors deploys the Group s policy and oversees all local initiatives. The Group s managers and staff contribute on a day-to-day basis. EMPLOYEE AWARENESS A sustainable development intranet Planethic which is accessible to all staff. A CSR brochure with 80,000 copies distributed internally. Conferences, seminars, exhibitions, etc. CSR REPORTING TOOL 76 business, social, environmental and sponsorship iresults indicators. 740 contributors. 61 countries covered by the reporting scope. INNOVATION A participative innovation strategy since 2003. A network of 511 innovactors throughout the Group. 1,600 innovative ideas submitted in 2007. 6

7 OUR ACTIONS

MICROFINANCE Société Générale remains committed to developing its microfinance activities in those countries in which it is present. 32 microfinance institutions (MFI) supported in 15 countries and 3 overseas departments and territories (DOM-TOM). EUR 120 million in refinancing. New stakes acquired in 2 MFIs (Cameroon and Madagascar) in 2007. 1,700,000 micro-businesses supported by the MFIs refinanced by Société Générale. In France, a partnership renewed signed with Adie (French Association for Economic Interest) in 2007; the 1 million EUR credit line had been used to grant 478 loans in 2007 to various micro-businesses. Société Générale Group also donated EUR 100,000 to ADIE New partnership with ADIE in West Indies (with Société Générale de Banques aux Antilles) in addition to the already existing agreements with Société Générale Calédonienne de Banque in New Caledonia and BFCOI in Mayotte. 8

SOCIALLY RESPONSIBLE INVESTMENT Reinforcement of the Group s SRI research and analysts teams (SG Securities, SGAM). Dedicated SRI funds: SGAM Invest Développement Durable (Société Générale EUR 144.8 million) and Etoile Développement Durable (Crédit du Nord EUR 45.6 million). A new fund was launched in november 2007: SGAM Invest Euro dd. Employee mutual funds integrating sustainable development criteria 40.3 M EUR of which 1.9 M EUR are invested in solidarity organisations 1. A total of almost EUR 13 billion in SRI AUMs. 1 Organismes solidaires in french. Innovation in Private Equity: - Foundation for therapeutic innovation - Investment in biotechnologies. ETFs (exchange trading funds) and 100% sustainable development certificates tied to specific sectors such as water (WOWAX, Lyxor ETF world water), solar energy (SOLEX), bioenergy (BIOX) and alternative energy (WAEX, Lyxor ETF New Energy), in the timber sector (TIMBEX) and in waste management sector (GLOBAL WASTE MANAGEMENT), etc. 467,034 EUR paid to charity associations in 2007 in the form of solidarity products and actions. Conciliance: a new service available in France enabling customers to make donations to associations when investing in mutual funds. CHARITY AND GREEN ISSUES 9

CARBON EMISSIONS MARKET In 2007, a portfolio of 100 M CERs (Certified Emission Reduction) representing 18% of the world market on the European market (ETS) in 2006, were traded by ORBEO, the first joint venture between a bank (Société Générale) and an industrial group (Rhodia) in 2006. Société Générale has been a member of the European Carbon Fund (ECF EUR 142 million) from day one. In France, ALD offers to offset carbon emissions (either partially or entirely) for its vehicle fleets via carbon credits. ALD partnering in France with ONF for financing replanting trees and continues in the United Kingdom the CARbon Offset initiative aimed at offsetting the CO 2 emissions of its vehicle fleets. RESPONSIBLE PRODUCTS AND FINANCING EUR 1.4 billion in new green financing - A major player in the financing of wind farms. - Recognized expertise in the financing of public transport. - Fair trade financing. Environmental assessment process and resources in project finance (consultant engineers from the Risk Division). Setting up in 2007 by a dedicated team of an E&S assessment procedure for project finance and in application of Equator Principles (adopted by the Group in September 2007). Financing policies that are carefully adapted to the risks of a given sector: arms, nuclear and merchant vessel industries. 1.32% of loans linked to sensitive sectors (gambling, tobacco, alcohol, arms). Real estate financing adapted to HQE certified buildings (partnership with Certivéa) to be launched in 2008 in favour of small and medium-sized companies. 10

SOCIAL RESPONSIBILITY Staff development and diversity 135,000 employees 119 nationalities 57.1% of which are women 55.7% of which are based outside France 18,886 new hires on permanent contracts (55,6% of which are women). Creation of the Diversity Council, whose aim is to promote best practices within the Group. 3.5 million hours of training given to more than 100,000 employees (58% of which are women). More than 87,000 employees and former employees are Société Générale shareholders. Social dialogue: 259 agreements signed Group wide in 2007. Fighting aids: a plan of action in each African entity concerned. Creation of a task force for actions in favour of the disabled (recruitment, training and integration of at least 160 persons in the coming 4 years) in 2007. 11

DIRECT ENVIRONMENTAL IMPACT Environmental reporting including more than 118,000 people (about 88% of Group headcount) on items such as energy, water, waste, business travel... Group CO 2 emissions : 265,700 tons of CO 2 (i.e 2.3 tons/occupant covering a scope of 114,500 occupants). 55,000 MWh green electricity bought via green certificates as from 2005 i.e covering 22% of Group's electricity consumption in France. High environmental standards (French HQE certification) applied into the construction of the Granite tower. Recycled paper represents about 20% of paper for office use in France and about 15 % within the Group. Société Générale is founding shareholder of Ecofolio, a French environmental body whose main aim is to enable companies to respect new legislations on printing for business purposes. more than 418,000 individual customers in France chose electronic bank statements. SUPPLIER RELATIONS 1,819 referenced suppliers. 128 purchasers trained in CSR issues in 2006. Pursuing implementation of the Ethical Sourcing Programme 2006 2008, a socially responsible purchasing policy: - mapping of CSR risks for purchase, - CSR assessment of suppliers and setting up a dedicated tool e-sourcing Tool@achats, - all contracts to systematically include sustainable development clauses. 12

GROUP SPONSORING Corporate Foundation in support of the Group s charity work with funds of EUR 1 million per year. The foundation helps young people join the working population and to support literacy campaigns throughout France: about 50 projects were approved in 2007. EUR 32.7 million in Group sponsoring, including EUR 6.1 million in charity. Worldwide citizenship program set up at Group level in partnership with CARE (launching beginning 2008). Reinforcement of the Group s partnership with Habitat et Humanisme, following its acquisition of a stake in the association s real-estate company: Foncière Habitat et Humanisme. 2006-2008 partnership with the Nicolas Hulot Foundation for Nature and Humanity (Living Sea program). Talents et Partage, an independent charitable organization set up by Société Générale staff (retired and present), supported over 90 projects in 2007 for a budget of around EUR 500,000. KB volunteers help to clean land and replant Sumava forest after the tempest. 13

OUR RESULTS 2007 financial results Net Banking Income..... 21 923 M EUR Group Net Income......... 947 M EUR (including 4.9 bn EUR net loss on unauthorized and concealed trading activities) Breakdown of Net Banking Income per business line (in billions of euros) 1999: french standards 2007: IFRS (including IAS 32 & 39 and IFRS 4) 14

REWARDING OUR PERFORMANCE The Group is listed on the main SRI indexes, DJSI (World and Stoxx), FTSE4 Good, ASPI and Ethibel in 2006. The Group is one of the 17 Eurostoxx50 companies present on all of these 5 sustainable development indexes*. Société Générale is the only stock in the DJ EUROSTOXX 50 to be included in both the Climate Leadership Index and the Merrill Lynch Carbon Leaders Europe Index. Société Générale is one of the eight CAC 40 companies to be listed on the world s four leading SRI indexes (June 2007). Climate Disclosure Leadership Index (CLI) 2007 * A sustainable development index is made up of the top stocks selected according to environmental, social and corporate governance criteria by specialist agencies. 15

This information is extracted from the http://csr.socgen.com website contact.devptdurable@socgen.com Design: Group Sustainable Development Department Creation: Harrison & Wolf - April 2008 Printed on 100% recycled paper using vegetable based inks.