Danone // 2020 Universal Registration Document

Social, Societal and Environmental Responsibility 5.8 Methodology note DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 194 5.8 METHODOLOGY NOTE CONSOLIDATION SCOPE AND COVERAGE The consolidation scope consists of all Danone subsidiaries that are fully consolidated for the preparation of the consolidated financial statements, in other words, the subsidiaries in which Danone holds, directly or indirectly, exclusive control. Nevertheless, some subsidiaries do not report all social, safety, environmental, and health and nutrition indicators. These entities were consolidated for financial reporting purposes as of December 31, 2020 and action plans are planned and/or in progress to ensure the availability and reliability of the data. Lastly, the list of subsidia- ries that do not report certain indicators may differ depending on the types of indicators. The coverage scope varies according to the indicator categories, as described in the sections below: INDICATOR SCOPE Production Site Food Safety In 2020, 191 production sites were included in the scope considered for FSSC 22000 certification. These sites correspond to the production sites for all of Danone’s Reporting Entities and do not include the production sites of co-manufacturers and suppliers. Total Company Headcount Social Indicators In 2020, 161 entities representing 99.9% of Danone’s total headcount reported social indicators. This rate may vary depending on the types of social indicators reported (see Information regarding methodologies ). Safety In 2020, 195 entities representing approximately 99.8% of Danone’s total headcount reported safety-related indicators. In addition, the safety data of subsidiaries removed from the consolidation scope as of December 31, 2020 is reported up to the date of their deconsolidation but is not included in the headcount as of December 31, 2020. Production Site Environment Danone monitors the environmental performance of its production sites using an operational control approach. In 2020, all 180 of Danone’s production sites active at end-2020 reported environmental indicators. The environmental impact of tertiary buildings (offices, research centers, etc.) is not included in the scope of consolidation (except for certain indicators, when these buildings are adjacent to production sites). Given that their greenhouse gas emissions represent less than 5% of Danone’s total scope 1 and 2 emissions, the environmental impact is considered as non-significant. Greenhouse Gases Emissions The Company’s total emissions consist of greenhouse gas emissions within the scope of responsibility: • scope 1: these comprise direct emissions from stationary combustion facilities and refrigeration units ins- talled at the industrial sites and warehouses under Danone’s operational control, as well as the employee vehicle fleet under the Company’s operational control; • scope 2: these include indirect emissions related to the production of electricity, steam, heating and cooling purchased and consumed by industrial sites and warehouses under Danone’s operational control; • scope 3: these comprise indirect emissions that are not recognized in scope 2: emissions from raw ma- terials purchasing (including agricultural upstream), packaging, production, transport and distribution, warehousing, product usage and end of useful life. Scope 1 and 2 emissions are calculated in accordance with the methodology set out in the GHG Protocol Corporate Standard. Danone has elected to consolidate scope 1 and 2 emissions in accordance with the ope- rational control approach and to include all sources of emissions from its industrial sites (see Production Site Environment Scope ), warehouses, distribution centers and corporate vehicle fleet. Emissions from offices and research centers are excluded as they represent less than 5% of Danone’s total emissions. Scope 3 emissions are calculated in accordance with the methodology set out in the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. This approach considers emissions all along the Company’s value chain. Scope 3 emissions: • upstream emissions (physical flows entering the plants) covered a scope representing approximately 96% of Danone’s production volumes in 2020; • downstream emissions (physical flows exiting the plants) covered a scope representing approximately 95% of Danone’s sales volumes in 2020. Only scope 1 and scope 2 emissions are calculated for the Danone Proviva AB (EDP, Sweden), Danone Iran (EDP, Iran), Sirma (Waters, Turkey), Damavand (Waters, Iran) and IBIC (Waters, Brunei) entities. Within the Specialized Nutrition Reporting Entity, scope 3 emissions for the Haps plant in the Netherlands and 12 sales entities, located mainly in South America, Europe and the Middle East, were included in scope 3 reporting in 2020. For the EDP Reporting Entity, scope 3 emissions from operations related to the Vega brand were excluded. Packaging In 2020, data on packaging was collected from all Danone production entities, representing 99% of Danone’s production volumes. The % recycled PET (rPET) indicator used on average by the Waters Reporting Entity in countries where local standards and regulations allow is calculated excluding China, Iran, and Turkey, where local regulations prohibit the use of recycled materials in plastic bottles.