Danone // 2020 Universal Registration Document

Social, Societal and Environmental Responsibility 5.3 Preserve and renew the planet ’ s resources DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 160 Forest Footprint Policy In 2012, Danone launched its Forest Footprint Policy to eliminate deforestation from its supply chain by end of 2020, focusing on sixmain rawmaterials: palm oil, soy, paper and cardboard packaging, wood biomass, sugar cane, and bio-based raw materials for packaging. Palm Oil Policy Since 2015, Danone has pledged to ensure the traceability and pro- venance of the palmoil it uses. It must come fromplantations whose expansion does not threaten forests rated as High Conservation Value (HCV) and High Carbon Stock (HCS) or tropical peatland, and the plantations must respect the rights of indigenous populations and local communities as well as the rights of all workers. In 2020, Danone used approximately 65,600 metric tons of palm oil (compared with 68,000 metric tons in 2019). Since 2014, 100% of the palm oil purchased for its early life nutrition activities is certified RSPO (Roundtable on Sustainable Palm Oil)- Segregated, guaranteeing that it can be traced back to the plantations with the support of the Earthworm Foundation (a not-for-profit that supports the creation and development of solutions that address environmental and social issues). At the end of 2020, 95% of the palm oil purchased by Danone was certified RSPO Segregated, 3% was certified RSPO Mass Balance and the remaining 2% was “conventional” palm oil purchased in Africa. This is because in 2020, Danone worked with two of its US suppliers to build the first segregated palm oil supply chain. This major step forward was recognized by the CDP and enabled Danone to obtain the highest score possible in the CDP Forests–Palm Oil questionnaire for its transparency and its environmental perfor- mance in fighting deforestation. In addition, the Company publishes a list of its palm oil direct sup- pliers and mills on its website. Soy Policy Danone has pledged to contribute to the development of a res- ponsible supply chain for the soy used in its plant-based products and for use in animal feeds. Its Soy Policy consists of increasing transparency across its entire supply chain and notably promoting local protein-rich crops, alternatives to soy imports that help local farmers become more autonomous in animal feed production. Its goal is also to ensure the traceability of the soy used in animal feed for dairy cows from regions with a low deforestation risk. At the same time, Danone works with the Round Table on Responsible Soy (RTRS) association for the purchase of credits supporting the transition toward sustainable soy in Brazil. Danone’s soy consumption and its use in its plant-based products is described in section 5.5 Responsible sourcing–supplies other thanmilk . Packaging Policy and Paper and Cardboard Packaging Policy Through its Packaging Policy, Danone aims to guarantee the circu- larity of its packaging and accelerate the transition toward a global circular economy (see section Circular economy ). Danone has also developed a special Paper and Cardboard Packaging Policy with several leading NGOs (notably Rainforest Alliance), setting out three aims: • switch to lighter-weight packaging across its product range; • use recycled fiber whenever possible; • if not, use FSC certified virgin fibers or equivalent. In 2020, Danone used 98% of paper and board packaging made of recycled fibers or virgin certified (FSC, PEFC, SFI) fibers. Beyond its policies and action plans, Danone is committed to conti- nuing to work with its peers and suppliers to accelerate progress and foster systemic change on this issue. Danone will renew its commitment to the elimination of deforestation in 2021. Offsetting emissions Danone pledges to offset remaining greenhouse gas emissions while implementing solutions intended to improve the quality of life of the most vulnerable communities. Accordingly, Danone takes part in reforestation programs and schemes to restore natural ecosystems, notably through the Carbon Livelihoods Fund, of which Danone is a partner Company. The aim of compartments 1 and 2 of the Livelihoods Carbon Fund is to sequester or avoid 20 million metric tons of CO₂ emissions over 20 years through a dozen projects in Asia, Africa and Latin America. Carbon neutrality of its brands and production sites Danone also builds its commitment to carbon neutrality around its brands, whose climate action accelerated in 2020 when its evian and Volvic brands achieved carbon neutrality. More generally, the brands in the Waters Reporting Entity have pledged, via the WeActForWater collective, to achieve carbon neutrality in Europe by 2025. Furthermore, the Horizon Organic (EDP Reporting Entity) and Karicare (Specialized Nutrition Reporting Entity) brands have also committed to do so by 2025 and 2030, respectively. In addition, the baby milk production plant in Wexford, Ireland, has been certified carbon neutral by the Carbon Trust. The actions taken by the site have reduced its CO₂ emissions by 10,000 metric tons relative to 2010, reducing its direct carbon footprint by 70% whereas its production volumes have doubled. In 2019, the site offset its remaining emissions in agreement with the Gold Standards. Outcomes External recognition In 2020, CDP recognized Danone as the world’s leading company in terms of its environmental performance and its transparency in fighting climate change and protecting water resources, for the second consecutive year. As a result, Danone is one of only ten companies in the world to have been awarded the “triple A” rating for its 2019 performance in the CDP Climate Change, CDP Forests and CDP Water questionnaires. Since 2018, Danone has used an environmental performance criterion in its Group Performance Shares plans for approximately 1,600 of its senior executives, based on its CDP Climate Change score (see section 6.4 Details of long-term incentive plans ). CDPhas also recognized theCompany as aworld leader for its strategy and actions to fight climate change with the suppliers in its supply chain. As a result, it has joined the CDP Supplier Engagement Board. Greenhouse gas emissions Danone measures the greenhouse gas emissions of its entire value chain (scopes 1, 2 and 3) based on the international GHG Protocol developed by the World Resources Institute and the World Business Council For Sustainable Development (Greenhouse Gas Environment scope, see Methodology Note).