4 _227 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report In 2023, Michelin performed a diagnostic review of the 800 raw materials used in its tires, excluding special-purpose products used by the production plants such as maintenance products and detergents. Only one SVHC was identified with a concentration of more than 0.1% in the raw materials, and a suitable alternative was identified as a replacement. The SVHC is not quantifiable in the finished product and has been replaced in 80% of production capacity. In 2023, it was used in less than 1% of total output, in full compliance with local health and environmental regulations. It is being tracked through our process of prioritizing the most at-risk substances, with a view to replacing it entirely. Subject to these reservations, Michelin meets the criteria of paragraph f) of the European Taxonomy. Michelin will review compliance with criterion f) of the Taxonomy in 2024, taking into account the extended scope of the candidate list. Objective 6: Protection and restoration of biodiversity and ecosystems The Taxonomy Regulation requires: An Environmental Impact Assessment (EIA) or screening to be completed in accordance with Directive 2011/92/EU. Where an EIA has been carried out, the required mitigation and compensation measures for protecting the environment have been implemented. For sites/operations located in or near biodiversity-sensitive areas (including the Natura 2000 network of protected areas, UNESCO World Heritage sites and Key Biodiversity Areas, as well as other protected areas), an appropriate assessment, where applicable, has been conducted and, based on its conclusions, the necessary mitigation measures have been implemented. ● Each site’s environmental risk assessment addresses biodiversity through two criteria: ● the presence of protected natural areas; ● the presence of plant or animal species classified by the International Union for the Conservation of Nature (IUCN). Each new project on a site is also subject to an environmental risk assessment using the process defined in the Environmental and Risk Prevention Management System (SMEP), before being factored into the site’s environmental risk assessment during its regular update in compliance with the 14001 standard. ● These assessments are part of the following process: ● In 2021, Michelin renewed its commitment to easing the pressure on biodiversity from its operations across the value chain, by setting 2030 objectives for research and development, raw materials and the manufacturing facilities as part of its All Sustainable strategy. ● ISO 14001 certification of the manufacturing facilities and the continuous upgrades in Group standards ensure that the Group’s environmental policy is properly applied. For the other Taxonomy-eligible activities, the Group plans to assess compliance with the DNSH criteria in 2024, according to their materiality. 4.1.1.7 d) Compliance with minimum social safeguards (MSS) The 2020 Taxonomy Regulation specifies in Article 18 that: “The minimum safeguards referred to in point (c) of Article 3 shall be procedures implemented by an undertaking that is carrying out an economic activity to ensure the alignment with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organization on Fundamental Principles and Rights at Work and the International Bill of Human Rights.” The Group has assessed its compliance with minimum social safeguards and affirms that it upholds the highest international human rights standards both in conducting its business and in its value chain. It has been a signatory of the UN Global Compact since 2010. The Group’s approach is rooted in recognized international standards, in particular the Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights and the fundamental conventions of the International Labour Organization (ILO), in particular as concerns child labor, forced labor, non-discrimination, freedom of association and collective bargaining, and workplace health and safety. Since 2014, the approach has been coordinated by a multidisciplinary Operational Committee, overseen at the highest level of the Company by a Human Rights Governance Body chaired by the Executive Vice President & Chief Personnel Officer with input from the Executive Vice President, Engagement and Brands, both of whom are members of the Group Executive Committee. Every year since 2017, Michelin has published a Duty of Care Plan, which describes the main human rights risks incurred in Group and supply chain operations, along with the measures in place to prevent such risks. Since 2017, Michelin has been a member of Businesses for Human Rights (EDH), a French association that supports companies in their human rights commitment. By commissioning sustainability rating agency EcoVadis to conduct desktop supplier reviews, Michelin is tracking the performance of its main suppliers in 21 CSR metrics in four areas: the environment, labor relations & human rights, business ethics and responsible procurement. In this way, the Group is addressing minimum social safeguard criteria across its value chain. Each year, a growing number of Michelin suppliers are assessed by EcoVadis. In 2022, for example, 87% of assessed suppliers were confirmed as compliant with Group CSR standards and assessed suppliers accounted for 66% of Group purchases (92% of natural rubber inputs and 93% of other raw materials purchases). In October 2023, for the sixth year in a row, Michelin itself was awarded a EcoVadis score of 80/100 in Responsible Purchasing, ranking it in the top 1% of companies
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