Danone // 2020 Universal Registration Document

5 Social, Societal and Environmental Responsibility 5.5 Promoting sustainable, inclusive growth with suppliers 187 DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 • a vanilla plantation project in Madagascar supported by the Livelihoods Fund for Family Farming. The aim of this project, which involves 3,000 family farms, is to develop solutions that improve the quality and traceability of vanilla production, boost food security for farmers and preserve biodiversity; • participation in a multi-stakeholder holistic project in the Siak and Pelalawan districts in Indonesia to support deforestation-free palm oil and improve the livelihoods of small farmers. The aim of this initiative is to develop sustainable and inclusive production models in these regions. Collaborative initiatives Danone participates in several dedicated palm oil platforms such as POIG, SASPO and RSPO, as well as more generic platforms such as the Sustainable Agriculture Initiative (SAI). The Company also contributes to collaborative food and beverage sector initiatives such as AIM-Progress and the CGF. Whistleblowing system Since 2017, the Danone Ethics Line has also enabled whistleblowers to report suspected environmental and human rights violations (see section 5.1 Responsible practices: ethics and integrity ). The reporting process was developed in consultationwith employee representatives and ensures that whistleblowers are protected. In 2020, 31 reports were made in the “human rights” category. This category selected by whistleblowers includes violations in the areas of child labor, forced labor, right to collective bargaining, working time and wages. The reports received in 2020 came from 14 coun- tries and covered routine human resources matters, including in particular working time (nearly 50%) and wages and, in some cases, trade unions and unfair dismissal. None of them qualified as human rights violations, but all have been or are being pursued in thorough internally investigations. Thus, 24 cases have been closed and 7 are still under investigation. All reports received in the “human rights” category are initially reviewed by the Human Resources function. If serious violations are identified based on a report, the Sustainability, Human Resources and General Secretary departments come together to review them and determine appropriate action plans. In 2020, eight reports were made in the “environmental violations” category, all of which were investigated and plans for mitigation measures were developed as necessary. All cases have been closed. All reports received in the “environmental violations” category are initially reviewed by Danone’s Compliance Department and, when necessary, sent to the relevant function or department in order to investigate and, where applicable, mitigate the potential problem. In addition, in 2019 Danone published on its website the grievance mechanism it developed, with Earthworm Foundation’s support, to handle allegations of non-compliance with the palm oil policy. In 2020, the Company strengthened its process to address human rights violation allegations coming fromchannels other than Danone Ethics Line by formalizing a human rights grievance reporting tem- plate and following up on them through weekly grievance meetings. Tracking and assessing the effectiveness of supplier programs Danone tracks its RESPECT program using three indicators that measure (i) suppliers’ registration on the Sedex platform (KPI 1), (ii) the audit plan completion rate (KPI 2), and (iii) on-time closure by auditors of audits that identified critical non-conformities (KPI 3). Due to the pandemic, in 2020 the latter two indicators were converted to resources indicators, which helped strengthen the involvement of the purchasing teams. Instead of plan completion, the KPI 2 indicators measured the pur- chasing teams’ efforts to work together to develop the 2021 audit plan combining risk and commercial significance. This indicator was 89% for the regions in 2020. Instead of audit closure, the KPI 3 indicator measured the purchasers’ involvement with their suppliers in the closure of critical non-conformities, with the help of expert resources. This indicator was 74% in 2020. These RESPECT indicators are included in the calculation of the variable compensation of the regional purchasing teams and the RESPECT team, including for their managers.