04 Sustainability Statement Biodiversity and ecosystems (E4) Impacts, Risks and Opportunities (IROs) Brief description Upstream value chain Downstream value chain Own operations Short-term Medium-term Long-term E4 – BIODIVERSITY AND ECOSYSTEMS Ecosystems and biodiversity Actual and potential deforestation from the expansion of rubber tree farms, the production of bio-based materials and the extraction of other materials Converting land to rubber tree farming, in response to the growing demand for natural rubber, can potentially lead to deforestation. The Group’s natural rubber purchases represent around 7% of world demand. Negative impact Contributing to the loss of habitat and land degradation, soil erosion and biodiversity loss Single-crop natural rubber farming and the production of other biosourced raw materials could harm habitats and contribute to biodiversity loss. The use of process water, the discharge of wastewater and the mismanagement of end-of-life tires could worsen soil degradation and negatively impact the biosphere. Negative impact Contributing to eutrophication through the use of fertilizers in rubber tree farming Eutrophication occurs when nutrients accumulate in a soil or aquatic environment or habitat. Among the leading causes is runoff from nitrogen fertilizers used in the cultivation of rubber trees and other crops. Negative impact Introduction The double materiality assessment identified rubber tree farming as the source of the main factors shaping Michelin’s impact on biodiversity and ecosystems. Grown primarily by our suppliers, rubber trees underpin the production of natural rubber, a critical raw material used in the manufacture of tires. Natural rubber accounts for around 21% of the raw materials used by the Group and is not currently replaceable in industrial quantities. The majority of the Group’s natural rubber inputs are sourced from village smallholders in the tropical regions of Asia (Thailand, Indonesia and Sri Lanka), West Africa (Côte d'Ivoire, Ghana and Liberia) and South America (Brazil). Michelin also directly operates two rubber plantations, in Brazil and Indonesia. This section focuses exclusively on the identified impacts and risks of rubber tree farming, including deforestation, eutrophication and habitat degradation. The other impact factors that can degrade natural habitats, such as water consumption in high water-stress areas and water pollution from Michelin production operations, the emission of tire and road wear particles (TRWP) during the tire use phase and the mismanagement of end-of-life tires, are addressed in sections 4.3 Pollution (E2), 4.4 Water and marine resources (E3) and 4.6 Resource use and circular economy (E5) of this document. 4.5.1 STRATEGY: ADDRESSING BIODIVERSITY IN THE TRANSITION PLAN AND THE BUSINESS MODEL Michelin is well aware of its dependency on ecosystem services and the need to preserve natural resources and restore biodiversity in order to conduct its business sustainably. As such, it has been engaged with the Act4nature international initiative since 2018, in a commitment to easing the pressure on biodiversity from its operations across the value chain by setting 2030 targets for research and development, natural rubber and other raw material sourcing, and its production and research sites. The Group’s biodiversity strategy, policies, vision, commitments, roadmaps, targets and metrics are all defined and managed by the Biodiversity Sector Committee as part of the Group's Environmental Governance body(1). The assessment of the resilience of the Group’s strategy and business model and its findings are presented in section 4.2.6 Resilience of the strategy for climate change mitigation, above. While certain biodiversity aspects were addressed in 2021 (integrating biodiversity protection into climate change scenarios and the natural rubber value chain) and 2024 (integrating resource preservation issues into stress tests), a holistic assessment of the biodiversity-related resilience of the business model and strategy will be performed in 2025. (1) See section 4.1.2 Governance of sustainability matters, above. Upstream Downstream OP Upstream Upstream OP Upstream OP 239 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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