DANONE - Registration document 2015

Social, societal and environmental responsibility

5.2 Information concerning Danone's social, societal and environmental performance in compliance with the Grenelle II law

DANONE

REGISTRATION DOCUMENT 2015

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Fair trade practices

Actions taken to prevent fraud and corruption

See section 6.4

Internal control and risk management

Measures taken in support of consumer health

Consumer health is at the heart of Danone's history and its mission

of “bringing health through food to as many people as possible.”

Danone's nutrition strategy is in line with the guidelines issued by

health authorities in the various countries and formalized in Danone's

Food Nutrition and Health Charter.

A unique line of products that meet people's needs throughout

their lifetime

Most of Danone's products can be consumed on a daily basis either

because they are included in the recommended categories of the

food pyramids used in many countries (fresh dairy products and

waters), they fall under food categories governed by regulations

(early life nutrition), or they are specialized nutrition foods intended

for patients who cannot follow a normal diet (medical nutrition) (see

section 2.4

Description and strategy of the Divisions

In some cases, product composition is governed by strict regulations,

while in other cases it is governed by Danone's internal nutritional

standards based on the recommendations of public health author-

ities (World Health Organization and Eurodiet). The Nutriprogress

program created by Danone provides the ability to monitor the

nutritional quality of the product portfolio and, if necessary, launch

reformulation projects.

For example, in the Fresh Dairy Products Division, the average

amount of sugar in the portfolio of the 19 major subsidiaries, all

products included, is now 10.1 g/100 g – compared to the maximum

target defined in Danone's nutritional standards (11.5 g/100 g),

which indicates that a significant portion of the products already

comply with the target.

In the Early Life Nutrition Division, for example in the Asia-Pacific

region, 55% of infant milk formulas and growing up milks and 100%

of milks in the early childhood segment (0-6 months) now have no

added sugar.

In the Waters Division, the amount of sugar in

Aquadrinks

continues

to be reduced gradually. For example, the amount of sugar decreased

from 80 to 50 grams per liter for the Salus product line (Uruguay),

from 65 to 50 g/L for the Mizone product line (China and Indonesia),

and from 50 to 40 g/L for the Zywiec Zdroj product line (Poland)

– compared to about 110 g/L for a referent soda.

Responsible communication

In 2002 Danone introduced an internal procedure to ensure the

consistency, credibility and scientific validity of the health and

nutrition claims contained in its communications.

In terms of advertising, Danone is committed to applying the ICC

Code (International Chamber of Commerce Code for Responsible

Food and Beverage Marketing Communication). In the particular

case of communications aimed at children, Danone is committed

to restricting advertising exclusively to products adapted to their

nutritional needs. To that end, Danone has joined numerous local

and regional pledges (association of companies). In most of the

countries involved, compliance with this commitment is certified by

an external agency. For example, in 2015 Danone registered 98.7%

overall compliance with its television advertising commitments in the

seven countries audited (France, Germany, Hungary, Italy, Poland,

Portugal and Spain), and 100% of the 17 subsidiary websites audited

were in compliance. For the first time, an audit of five brand profiles

in social media was conducted in 2015 and 100%were in compliance.

Concerning early life nutrition, Danone has made a commitment to

comply with the code developed by the World Health Organization

(International Code of Marketing of Breastmilk Substitutes). To do

so, it prepares internal documents that translate the code into prin-

ciples and apply it to day-to-day operations. An independent auditor

regularly evaluates Danone's compliance with this commitment. For

example, in 2015 audits were conducted in Spain, India, Kazakhstan,

Saudi Arabia and the United Arab Emirates.

Detailed product nutrition information

Danone products include nutrition labels that comply with regula-

tions. Danone's fresh dairy products and beverages (except bottled

waters) have a more detailed label that shows the contribution of

each portion to daily requirements, an initiative of the European

inter-branch professional organization implemented at Danone

through an internal document updated in June 2014 called “Nutritional

Information provided to consumers, Corporate Guidance”. This

nutrition information is also available from the subsidiaries' con-

sumer relations departments and/or websites in Europe and some

countries outside of Europe.

Promoting a balanced diet and overall health

A large number of Danone subsidiaries organize information and

education programs intended for consumers and/or healthcare

professionals. Most of these initiatives are developed in partner-

ship with local institutions to ensure their relevance to the local

healthcare context. Danone also creates global initiatives that are

then rolled out locally.

Each Division develops programs on topics that relate to it

specifically and most subsidiaries have active programs.

Measuring Danone's nutrition and health performance

In 2011, Danone created a series of performance indicators (Scorecard)

to measure improvements and progress made regarding health

and nutrition, particularly product composition and responsible

communication, with the results publicly disclosed annually. These

indicators are consolidated for a scope of 15 countries covering

Danone's four Divisions (a total of 44 subsidiaries in 2015 repre-

senting approximately 74% of net consolidated sales). Along with

these performance indicators, the subsidiaries' application of best

practices in the marketing of products that contribute to consumer

health is monitored under the Danone Way initiative (see section 5.1

Danone social, societal and environmental approach

Measures taken to promote consumer safety

In 2014, Danone again decided to significantly increase its ability to

manage food safety. In an increasingly complex environment linked

to the emergence of new challenges brought about, for example,

by the globalization of agricultural raw materials, damage caused

to some natural environments and climate change, fraud related

to high-cost raw materials, and geopolitical issues related to food

safety (governments' ability to manage enough good-quality food to

feed its citizens in a healthy, sustainable way), Danone has expanded

its organization by creating the Food Safety function, which is part

of its General Secretary department and headed by the Chief Food

Safety Officer. This food safety team is independent of the teams

responsible for Danone's operational activities.

Through its food safety policy, Danone is committed to developing,

producing and delivering its products on a daily basis without

compromising food safety in any way. Danone's Business Conduct

Policy therefore now includes strict adherence to Danone's com-

pliance policy.