4 _225 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report Assess their potential impacts: The first assessments of the physical risks of climate change were undertaken in 2021 at a small number of pilot sites, to define the working method. In 2022, they were extended to: ● new facility projects; ● supplier sites during the new supplier approval process; ● sites involved in mergers and acquisitions. In 2023, the physical risks of climate change were assessed at the 90 priority sites. Assessments of all the Group’s existing sites are scheduled for 2024 and 2025. Define adaptation solutions capable of attenuating the most significant impacts: Solutions have already been identified as part of the supply and business continuity risk management process. Examples include: ● building strategic stocks of finished products or raw materials; ● creating a storage area at a different facility for a production plant’s output; finding a second supplier; ● process engineering a Group product for back-up production in a different plant; ● approving another raw material as a substitute. Where necessary, additional adaptation solutions will be identified starting from 2024. Define an implementation plan for these solutions: Solutions have already been implemented as part of the supply and business continuity risk management process (see above). An initial comprehensive costing of requirements for additional adaptation solutions will be carried out in 2024. Objective 3: Sustainable use and protection of water and marine resources The Taxonomy Regulation requires us to: Identify material risks related to preserving water quality or avoiding water stress caused by our activity: These risks have been identified and are regularly reviewed: ● Materiality of a water stress risk: Nine sites are located in high water stress areas according to the WRI Aqueduct Water Risk Atlas (baseline water stress index) or the WWF Water Risk Filter (water depletion aspect). Two of these sites are in Europe; ● Materiality of a water quality risk: Our manufacturing facilities are classified as installations whose activity may pose a risk or disadvantage to people and the environment (ICPE classification in France or the equivalent in other European countries). If the risk is material: Perform environmental impact assessments in line with Directive 2011/92/EU and manage the risks to achieve “good water status” and “good ecological potential”. Impact studies are required under national legislation for every project likely to have a significant impact on the environment. ● Water stress: In the past, the Michelin Group has demonstrated the ability to meet its targets for reducing water withdrawals by its facilities, including both use and discharges. In 2019, for example, it had already reduced the volume of water withdrawals by 28% compared to 2010. The 2030 objective is to reduce water withdrawals, including both use and discharges, weighted by each plant’s water stress coefficient, by 33% compared to 2019. The Group is committed to eliminating all of its impact on water availability in local communities by 2050. ● Water quality: We operate in full compliance with local legislation in every host country, particularly in Europe where each member state is responsible for transposing the provisions of the Water Framework Directive 2000/60/EU into local law. Impact studies are performed in compliance with national legislation for every project likely to have a significant impact on the environment. In 2023, a plan was launched to improve our understanding of the discharges and effluent from our facilities, exceeding the requirements of local legislation, and of the capacity of the receiving environments. The study was still underway on three pilot sites in early 2024. Michelin has responded to the CDP Water Security questionnaire since 2016 and was attributed a B score in 2023. The condition(1) that the activity does not hamper the achievement of good environmental status for marine waters or does not deteriorate marine waters that already have good environmental status, as defined in item 5 of Article 3 of Directive 2008/56/EC, does not apply to Michelin, whose operations do not discharge water directly into the sea. Objective 4: Transition to a circular economy, waste prevention and recycling The Taxonomy Regulation requires that the activity assess the availability and, whenever possible, the deployment of techniques that support: Reusing and using secondary raw materials and recovered components in fabricated products: Michelin is deeply engaged in making better use of resources and is leveraging its 4R (Reduce, Reuse, Recycle, Renew) circular economy approach to incorporate a growing percentage of renewable and recycled materials into its products (see section 4.1.1.2). This approach is grounded in eco-design practices and the use of life cycle assessments. Michelin is also fast tracking its innovations and has formed a new Operational Department to orchestrate the circularity of renewable and recycled materials. To explore this technological frontier, Michelin is continuing to invest in R&D, technologies and materials. Even more important for circularity, the Group is forging an increasingly number of partnerships with a variety of public and private sector stakeholders to support the creation of new ecosystems enabling the emergence of new value chains for these renewable and (1) Added by Delegated Regulation (EU) 2023/2485 of June 27, 2023.
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