AIRBUS - 2020 Universal Registration Document

1. Information on the Company’s Activities /

1.2 Non-Financial Information

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increasingly stringent and complex laws and regulations, new scientific discoveries, delivery of defective products or the obligation to notify or provide regulatory authorities or others with required information (such as under the REACH regulation) may force it to adapt, redesign, redevelop, recertify and/or remove its products from the market. Seizures of defective products may be pronounced that could prevent delivery to the Company. In response, a Procurement Task Force has been established in order to ensure a group-wide governance for supplier management and assessment of chemical regulations and obsolescence impact. IV. Initiatives: Airbus Supplier Vigilance Plan The Company requires commitment to responsible business practices and sustainable development from all suppliers and strives to make environmental and social responsibility a core element of its sourcing and supplier management process. This joint commitment is a key element in securing success, conformance to applicable laws and a sustainable future for the aviation industry. For the Company’s Vigilance Plan for its own operations, see “– 1.2 Non-Financial Information – 1.2.1 Airbus’ Approach to Sustainability”. 1. Supply base risk mapping Social Compliance Risks Since 2018, the Procurement Responsibility & Sustainability department has carried out proactive social risk mapping in line with international guidance, internal commodity expertise and externally available country indices. The risk mapping includes risks from both a country and a purchasing category perspective considering indices such as child labour, modern slavery/forced labour, recruitment practices, working time, wages, people safety at work and freedom of association. In 2019, this social risk mapping methodology was formalised and published in an internal commodity guide applicable to the Company’s commercial aircraft business and its two Divisions. Environmental Compliance Risks In addition, the Company has carried out environmental risk mapping, taking into consideration categories such as the existence of hazardous substances, energy consumption, CO 2 emissions, water usage, waste management, air pollution and specific local Chinese environmental regulations. In 2020, this environmental risk mapping methodology was included in the internal commodity guide (see previous Section). Number of Business-Relevant External Risk Suppliers Identified in 2019 (thereof lower tiers) Based on the Company’s 2018 Sourcing Report and following application of the risk mapping methodology (described in previous Section), 412 suppliers were identified as high risk in 2019. However, taking into account the number of suppliers who had finished or are decreasing activities with the Company during this time, the number of business-relevant high risk suppliers was reduced to 397 in 2020.

Supplier Factory Visits In 2019, the Company introduced “theGembaWalk” pocketbook, applicable to commercial aircraft activities, which is a practical and visual guide for the Company’s employees when visiting the shop oor of a supplier, supporting the identification and reporting of risks or improvement opportunities observed during factory visits. A dedicated pocketbook covering environment, health & safety and human rights risks was also developed in 2019 and published on the Airbus intranet. Unfortunately, restrictions put in place during 2020 due to COVID-19 significantly reduced the effectiveness of identifying risks through supplier shop oor visits. 2. Supplier Assessment / Audit and Development Since 2019, the Company has worked with external expert companies to conduct sustainabi l ity-related, evidence- based desktop assessments and specific on-site audits. The assessments cover social compliance criteria such as human rights, labour practices, health and safety and anti-corruption as well as environmental regulations and sustainability criteria based on an environmental questionnaire developed by IAEG. During 2020, all suppliers identified as high risk following application of the Company’s risk mapping methodology in 2019 were required to undertake an evidence based desktop assessment. 50% of all those planned have been completed, whilst the remaining are in progress. The results from the assessments are being analysed and the Company is establishing a governance process to follow up on the findings. Specifically on environmental matters, the Company further fostered REACH awareness in the supply chain and engaged with suppliers to accelerate the substitution and manage the use of the most hazardous substances. In particular, regarding the REACH EHS readiness of suppliers, the Company focused on: – – engagement with 236 in situ suppliers through webinars and supplier conferences to develop their readiness to comply with enhanced REACH EHS conditions when working on the Company’s sites. Further direct exchanges with the Company’s EHS experts has been organised with 26% of them; – – evaluation of the maturity of external suppliers in the Company qualif ied processes in regards to the future enhanced protection requirements that are being def ined by the European Commission: – – out of 357 suppliers of the Company qualified processes using chromates in industrial operations, the 80 most impacting suppliers have been assessed on-site by a third party on behalf of the Company, – – in 2020, the Company engaged with those suppliers, which revealed findings and requested them to demonstrate and launch action plans for improvement. By end of 2020, the suppliers have successfully closed approximately 80% of the major findings, – – a complementary “wave 2” of suppl ier assessment considering 18 suppliers group wide was initiated in November 2020. This wave of assessments will start with supplier visits in December 2020 and the gap closure and recovery gap coverage should occur in 2021.

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Airbus / Registration Document 2020