A robust risk management process Michelin’s worldwide enterprise risk management (ERM) system complies with the reference framework of the French securities regulator (AMF) and the international professional standards of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Protecting all the Group’s majority-owned subsidiaries Global insurance programs covering every majority-owned Group subsidiary are in place to protect the Group from the most significant risks, including property & casualty/ business interruption, liability, accidental pollution and cyber intrusions.The Group's insurance programs are worldwide in scope. Prioritizing risks with double materiality reviews Double materiality consists of measuring and prioritizing both the risks that impact the Group and the risks that the Group potentially poses to its ecosystem. To manage it, Michelin uses a materiality matrix that reflects stakeholder perceptions, as well as the risks identified by the corporate audit and risk management system. In 2023, this double materiality scale was used in 13 audits performed during the year. The risk factors specific to the Group are described in Chapter 2, below, and the main non-financial risks in Chapter 4. The 12 highest-impact risk factors Strong Very strong Critical Very strong Critical Strong STAKEHOLDER EXPECTATIONS 27 - Responsible water management IMPORTANCE FOR MICHELIN 2.5 3.0 3.5 4.0 3.0 3.5 4.0 26 - Waste management 25 - Protecting soil quality and biodiversity 24 - Responding to environmental damage 23 - Management of employee relations 22 - Employee volunteer service 18 - Transparency and access to information 17 - Local community development 21 - Fostering workplace well-being 20 - Developing employee skills 8 - Development of new services and solutions in our new non-tire businesses 1 - Employee health and safety 2 - Quality and safety of products and services 3 - Direct contribution to climate change (Scopes 1 and 2) 4 - Environmental impact of raw materials 5 - Indirect contribution to climate change (Scope 3) 6 - Respect for human rights in the supply chain 7 - Sustainable procurement and responsible supplier relationships 9 - Diversity and equal opportunity 10 - Business ethics 11 - Collaboration with our ecosystem 12 - Data protection 13 - Responsible governance 14 - Air quality Social Business and governance Environment 15 - Eco-design of our products and services 16 - End-of-life products 19 - Attracting and retaining talent Very strong Critical nagement IMPORTANCE FOR MICHELIN 3.0 3.5 4.0 and biodiversity nmental damage oyee relations ervice ss to information lopment 21 - Fostering workplace well-being 20 - Developing employee skills 8 - Development of new services and solutions in our new non-tire businesses 1 - Employee health and safety 2 - Quality and safety of products and services 3 - Direct contribution to climate change (Scopes 1 and 2) 4 - Environmental impact of raw materials 5 - Indirect contribution to climate change (Scope 3) 6 - Respect for human rights in the supply chain 7 - Sustainable procurement and responsible supplier relationships 9 - Diversity and equal opportunity 10 - Business ethics 11 - Collaboration with our ecosystem 12 - Data protection 13 - Responsible governance 14 - Air quality Social Business and governance Environment 15 - Eco-design of our products and services 16 - End-of-life products 19 - Attracting and retaining talent Supporting efficient crisis management Led by the Internal Audit, Risk Management, Internal Control and Quality Department, the crisis management system is deployed among the executive teams through full-scale simulation exercises and training seminars, corporate procedures and methodological reference documents. On the front line to guard against cyber security risks, a Computer Emergency Response Team (CERT) tracks cyber intrusions and stands ready to respond quickly and effectively at all times across all continents. Pooling risk management To foster a shared vision and support robust management of risks and priority issues, Michelin has opted to pool its Internal Audit, Quality, Risk Management and Internal Control activities into a single corporate department. This umbrella organization also facilitates cross-team cooperation throughout the Group and across time frames. MEETING THE HIGHEST STANDARDS OF GOVERNANCE Risk management _48 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Risk management
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