4 _223 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report The Group has assessed the climate change adaptation objective in relation to activity 3.6, as part of a multi-objective reporting exercise. The Group was unable to assess with sufficient robustness the proportion of CapEx specifically allocated to climate change adaptation in 2023. In addition, because this proportion was estimated to be immaterial over the year, its eligibility with regard to the objective has not been reported (see, however, the analysis below concerning the climate change adaptation objective). This outcome did not have any impact on the key performance indicators. The detailed tables of these indicators, which comply with Delegated Act (EU) 2021/2178 rules concerning the content and presentation of Taxonomy-related disclosures, are presented at the end of the methodology section (4.1.1.7 e below). In respect to the climate change mitigation objective, the following activities have been identified: ● Activity 3.6: corresponds to the manufacturing of Passenger car, Light truck and Truck tires. In 2023, as in 2022, the activity excludes the manufacturing of tires with class E rolling resistance(1) (see “Activity 3.6 – rolling resistance as a technical screening criterion” below for further explanation of the assessment methodology). ● Activity 8.2: corresponds to the fleet management services and solutions activities, which include the Masternaut, Sascar and Nextraq businesses conducted under the Michelin Connected Fleet brand. The fleet management business, which relies heavily on the collection, processing and reporting of requisite data, focuses on lowering customer fuel consumption, for example by offering solutions to optimize routes or driving practices. With respect to the transition to a circular economy objective: ● Activity 5.1: corresponds to Truck tire retreading services and other activities, excluding retreading activities licensed (e.g., Recamic) or franchised (e.g., Michelin Retread Technologies) by the Group, where Michelin is not the seller of the retreaded tires. Treatment of activity 3.6 – rolling resistance as a technical screening criterion As noted in 2021 and 2022, the “manufacture of rubber tyres and tubes, retreading and rebuilding of rubber tyres” (NACE Code C2211) is not one of the economic activities listed in the Taxonomy with specific screening criteria, even though the tire industry could contribute substantially to meeting the trucking industry’s greenhouse gas emission reduction targets. Pending recognition of this economic activity with specific criteria, the Michelin Group has identified, for reporting purposes, economic activity “3.6 Manufacture of other low-carbon technologies,” as corresponding to its tire manufacturing activities, in as much as it comprises the “manufacture of technologies aimed at substantial GHG emission reductions in other sectors of the economy. The economic activities in this category could be associated with several NACE codes, in particular from C22 (...) in accordance with the statistical classification of economic activities established by Regulation (EC) No. 1893/2006.” As in 2022, and pending clarification from the European Commission, the Group is using tire rolling resistance as the technical screening criterion for activity 3.6. This is because tires play an important role in a vehicle’s energy efficiency (see pages 201-202 of the 2022 Universal Registration Document). An extensive amount of external research has demonstrated the close correlation between rolling resistance and carbon emissions(2). This means that using tires with lower or higher rolling resistance feeds through to a more or less substantial reduction in a vehicle's carbon footprint. European tire-labeling regulation EU 2020/740 provides for the objective measurement of tire rolling resistance using an EUvalidated process, comprising calculation methods, EU-approved reference laboratories and the alignment of measuring machines. Measurement results are registered in the European Commission’s EPREL energy labeling database. Michelin uses the EU ecolabel regulation to define the eligible and aligned proportion of Taxonomy activity 3.6 and considers that all the above factors enable the Group to meet the requirement for verification by an independent third party. The vast majority of tires sold outside Europe are also measured for rolling resistance, which means that the proportion of these sales meeting the screening criteria can be included in the totals. (1) See p. 201 of the 2022 Universal Registration Document for an explanation of the rolling resistance labeling scale. (2) See, for example, “Influence of Rolling Resistance on CO2” International Council on Clean Transportation (ICCT), Working Paper 2012-6, November 9, 2012; “Reducing Tire Rolling Resistance to Save Fuel and Lower Emissions,” Barrand & Bokar, SAE, Technical Paper 2008-01-0154.
RkJQdWJsaXNoZXIy NzMxNTcx