4 _275 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report Concerning the specific issue of climate change, in 2023, for the fourth year in a row, the CDP recognized the Michelin Group’s ability to engage its suppliers in reducing carbon emissions with a CDP Supplier Engagement Leader award. The award attests to the dedicated commitment to responsible procurement practices of all the Group’s purchasing teams and their internal partners. 4.1.4.2 b) Identifying categories and countries at risk and assessing suppliers Identifying categories and countries at risk To supplement the Group’s risk map, the Purchasing Department has mapped its social responsibility risks in the supply chain. This map ranks purchasing categories according to their CSR risks in four areas: ● The Environment, ● Human Rights, ● Health & Safety, ● Business Ethics. Aggravating factors, such as the complexity of the supply chain, have also been taken into account. The exercise also identified the countries with high environmental and human rights risks, based on third-party databases. The mapping exercise helps to prioritize the scheduling of CSR performance reviews and the deployment of preventive measures aligned with each purchasing category’s characteristics and environment(1). Of all the purchasing categories, natural rubber warrants the most attention to both its environmental and its societal impacts. This is because 90% of world’s production comes from Asia, and over 85% of the volumes are sourced from smallholders, usually on farms of less than four hectares. The supply chain is particularly complex and fragmented. As a result, a dedicated approach has been devised for natural rubber, which is described in detail at the end of this section. Supplier assessments Since 2012, Michelin has assessed its key suppliers’ CSR performance in a variety of ways, depending on the issues involved. Desktop reviews Michelin has commissioned CSR rating company EcoVadis to conduct desktop reviews of how its leading suppliers stand in 21 CSR indicators tracking their performance in the environment, labor relations & human rights, business ethics and responsible procurement. DEPLOYMENT % OF PURCHASE SPEND COVERED BY ECOVADIS SUPPLIER REVIEWS In all, 72% of the Group’s purchase spend is covered, and specifically: By purchase category 96% of natural rubber procurement 92% of other raw materials procurement around 95%(2) of raw materials sourced from countries posing environmental or human rights risks. In 2021 and 2022 respectively, Camso and Multistrada began to perform CSR assessments of their most at-risk suppliers. The process was extended to Fenner suppliers in 2023. Every year, desktop reviews are performed in additional risk categories, with a focus on those identified during the mapping phase. (1) For more information, see the Duty of Care Plan. (2) Based on an estimate for Fenner.
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