Danone // 2020 Universal Registration Document

5 Social, Societal and Environmental Responsibility 5.6 Danone’ s social innovation funds 189 DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 5.6 DANONE’S SOCIAL INNOVATION FUNDS DANONE COMMUNITIES In 2007, Danone created the Danone Communities SICAV (Société d’Investissement à Capital Variable) and the Danone Communities FPS (Fonds Professionnel Spécialisé, or specialized professional investment fund). The SICAV invests (i) at least 90% of its assets in moneymarket instruments, bonds and other vehicles that emphasize socially responsible investment, and (ii) nomore than 10% in the FPS. As of December 31, 2020, the Danone Communities SICAV fund had a total of €92 million in assets under management. Of that total, 16.3% was held by Danone and 41.85% was held by its employees through Danone Communities Solidaire, an employee investment fund (fonds commun de placement d’entreprise, or FCPE). As of December 31, 2020, Danone also held 71.73% of the FPS. Danone Communities and its partners invest in businesses that have a significant social impact in line with Danone’s purpose, primarily in emerging countries, of “bringing health through food to as many people as possible”. In particular, Danone Communities backs social entrepreneurs who are working to reduce malnutrition and improve access to safe drinking water, two levers to reduce poverty. FPS Danone Communities backs 12 social companies in 17 different countries. To date, Danone is also a shareholder in three of these social businesses: Grameen Danone Foods Limited in Bangladesh; La Laiterie du Berger in Senegal; and Nutrigo in China. As of December 31, 2020, total investments in these businesses came to €14 million for the Danone Communities FPS fund (€12.8 million as of December 31, 2019). DANONE ECOSYSTEM FUND (FONDS DANONE POUR L’ÉCOSYSTÈME) The Company created the Danone Ecosystem Fund in 2009, with initial funding of €100 million. An endowment fund headed by a board of directors, it is tasked with strengthening and expanding community service activities within the Danone ecosystem. A guidance committee, composed of representatives of Danone and non-Company members, establishes the fund’s major strategic gui- delines, especially with regard to priorities and resource allocation principles. An investment committee is responsible for proposing investment projects for the endowment to the board of directors and overseeing their deployment. Once projects are selected, they are deployed by non-profits and/ or by the fund directly. Since its creation, the fund has supported projects in five key areas: sustainable sourcing, micro-distribution, recycling, personal care, and sustainable management of land and catchment areas. The fund has no employees: Danone staff members are assigned to manage its day-to-day operations and administrative activities. Their salaries and travel expenses, which totaled €1.4 million in 2020 (€1.4 million in 2019), are charged to the fund in full by Danone. As of December 31, 2020, the Danone Ecosystem Fund had 34 ac- tive projects worldwide, representing a total commitment of €78.6 million (€77 million as of December 31,2019). LIVELIHOODS CARBON FUND The Livelihoods Carbon fund (LCF) is an investment fund, SICAV-SIF (Société d’Investissement à Capital Variable-Fonds d’Investissement Spécialisé), dedicated to restoring ecosystems and carbon assets. It seeks to invest in three types of projects in Africa, Asia and Latin America: (i) restoration and preservation of natural ecosystems; (ii) agroforestry and soil restoration through sustainable agricultural practices; and (iii) access to rural energy to reduce deforestation. The carbon credits generated by the fund are certified, then allo- cated to its investors in proportion to their investments. As such, the Livelihoods Carbon Fund fights climate change while improving living conditions for local communities. Building on the results achieved by the Livelihoods Carbon Fund, which was created in 2011 by ten private investors, in 2017 eight of these investors created a second compartment to step up their efforts to fight climate change and protect vulnerable people. As of December 31, 2020, investors have pledged to invest: • a total of €45.9 million in LCF compartment 1 (with Danone accounting for €13.8 million of that amount). This compartment 1 currently supports nine projects; • a total of €65 million in LCF compartment 2 (with Danone ac- counting for €25 million of that amount). This compartment 2 had approved six projects as of December 31, 2020. LIVELIHOODS FUND FOR FAMILY FARMING The Livelihoods Fund for Family Farming (L3F) was launched by Danone and Mars Inc. in 2015 and joined by Veolia and Firmenich in 2016. It enables companies to secure overtime their supply, both in terms of quality and quantity by granting small farmers access to more sustainable practices and higher revenues, thanks to good connections with markets. These projects also help to preserve ecosystems through farming practices combining productivity and respect for the environment. As of December 31, 2020, investors had pledged to invest a combined total of €36 million in the Livelihoods Fund for Family Farming, with Danone accounting for €15 million of that amount. To date the fund’s investment committee has approved six projects focusing on coconut, vanilla, shea and watershed protection.