4 _165 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Scope of the report Environmental performance of acquisitions The Michelin Environmental Policy stipulates that “concerning newly created or acquired companies, the implementation plan is defined with the head of the company and submitted to the Environmental Governance body for validation.” As such, the environmental performance of Camso, Fenner and Multistrada is now being tracked and improvement targets aligned with the 2030 and 2050 objectives are being deployed. The Multistrada plant has been tracked by the i-MEP since January 1, 2023, and the Camso facilities will be integrated as of January 1, 2024. Environmental performance Camso Fenner 2023 Objective 2023 Objective Water withdrawals (cu.m) 438,889 Aligned with the objectives described in section 4.1.1.4 c) to f) 600,062(1) Being defined by the teams Waste produced (tonnes) 12,178 21,857(1) Energy consumption (GJ millions) 1.08 0.80(1) Scope 1 and 2 CO2 emissions (tonnes) 89,758 57,455(1) VOC consumption (tonnes) 571 53(1) Included in the 2023 i-MEP No, integration will take effect on January 1, 2024 No (1) Data reliability to be improved in 2024. The Group’s carbon footprint Since 2014, Michelin has used the CDP Climate Change questionnaire to disclose its annual CO2 emissions in the three scopes defined in the core Greenhouse Gas Protocol (see the following documents: "The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition)"(1) and its supplement Corporate Value Chain (Scope 3) Accounting and Reporting Standard(2)): ● Scope 1: emissions from fixed or mobile sources that are owned or controlled by the Company; ● Scope 2: emissions from the generation of purchased electricity, heating, cooling and steam consumed by the Company; ● Scope 3: emissions that are a consequence of the activities of the Company, but occur from sources not owned or controlled by the Company. The standard defines 15 activity categories, of which 13 correspond to the Group’s value chain. Of the latter, 12 have been deemed required(3) for disclosure, with the “use of sold products” category considered as optional. This is because the CO2 emissions from the use of a tire on a vehicle are indirect, as opposed to the emissions from the use of the vehicle itself. This accounting method is derived from GHG Protocol guidelines. In accordance with the GHG Protocol, Scope 1, 2 and 3 inventory is calculated for an overall base corresponding to the Group’s consolidated financial reporting, with the calculations for each Scope based on GHG Protocol methodologies and guidelines. The salient methodological points are as follows: ● Scopes 1 and 2: Calculations are based on primary data from the facilities’ energy bills and standardized CO2 emission factors. The method of calculation is documented in an internal standards manual. Results are issued as part of the iMEP indicator tracking process. Emissions excluded from inventory data account for less than 5% of Scope 1 and 2 greenhouse gas emissions. The CO2 emissions of the companies mentioned above in the section on the Environmental Performance of Acquisitions, were similarly calculated using primary data from the facilities’ energy bills and standardized CO2 emission factors. ● Scope 3: Calculations are based on secondary data, assumptions made in the absence of certain data, and current state-of-the-art CO2 emission factors found in the main databases (e.g., www.ecoinvent.org). The method of calculation is documented in an internal standards manual. Because it is difficult to obtain reliable primary data outside the boundaries of operational control, the estimated uncertainty of the results ranges from ±10% to ±30%, depending on the activity category. The results for each required Scope 3 category(3) are now updated annually(4). For each one, the 2023 scope of reporting covers the Group’s long-standing member companies, as well as all the categories material to Multistrada, Camso and Fenner. Work is underway to integrate emissions from the non-material categories, i.e., categories 6, 8, 12 and 14 for Multistrada, categories 5, 6, 8, 12 and 14 for Camso and categories 4, 5, 6, 8, 9, 12 and 14 for Fenner. (1) World Business Council for Sustainable Development and World Resources Institute. (2) World Resources Institute and World Business Council for Sustainable Development, September 2011. (3) Required Scope 3: material categories: Purchased goods and services (Cat. 1); Fuel- and energy-related activities (Cat. 3); Upstream transportation and distribution (Cat. 4); and Downstream transportation and distribution (Cat. 9). Other categories: Capital goods (Cat. 2); Waste generated in operations (Cat. 5); Business travel (Cat. 6); Employee commuting (Cat. 7); Upstream leased assets (Cat. 8); End-of-life treatment of sold products (Cat. 12); Franchises (Cat. 14); and Investments (Cat. 15). (4) Except for emissions from raw materials transportation (part of category 4: upstream transportation and distribution) due to a lack of annual data. An application for tracking these emissions is currently being introduced.
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