BIC - 2019 Universal Registration Document

RISKS MANAGEMENT

Description and mitigation of main risk factors

DESCRIPTION ANDMITIGATION 2.2. OF MAIN RISK FACTORS

Risks related to Plastic and Climate Change

Plastics and Climate Change are two major risks for BIC. On the one hand, the plastic risk covers the upstream with the use of this material in BIC ® products, contributing to the depletion of a non-renewable • resource, and therefore subject to rarefaction and price volatility, and on the other hand, downstream with the issues of pollution related to plastic waste. In addition to these stakes, and although BIC ® products are not single-use, there is a growing regulatory environment regarding the use of plastics and the increasingly negative perception by consumers and citizens. On Climate Change, risks are related to increased carbon regulations, impacting BIC directly or indirectly through its suppliers or contract • manufacturers (and especially on energy and plastics that are usually fossil fuel-based), to the disruption or interruption of production activities due to extreme weather conditions or availability of natural resources (water, energy, etc.). Development of new regulations and standards regarding product environmental impact assessment and communication (including the carbon footprint) can also drive consumer behavior changes and impact Group sales. Level of risk: high Potential Impact on BIC: Examples of Risk Mitigation: rarefaction and price volatility of plastics material (and potential impact of • carbon regulations); brand image depreciation linked to plastic usage in the products; • single-use “Plastic bashing” from consumers; • increased regulations on Plastics impacting BIC's direct or indirect • operations; carbon regulations affecting operating costs (specific tax for production • activities, energy costs, raw material costs…); disruption or interruption of production activities due to extreme weather • conditions; environmental Labelling of products impacting sales. • since 2003, a Sustainable Development Program, to limit the • environmental impact of BIC’s activities ; identification and implementation of eco-design rules for products to • minimize the consumption of non-renewable raw materials. This eco-design approach is established in three parts: minimizing the quantity of material used in the manufacturing of a product while ensuring long-lasting performance, the integration of alternative materials (of recycled or vegetable origin), the development of refillable products ; launch in 2018, of “ Writing the Future, Together” strategy, with ambitious • commitments:

by 2025, the environmental and/or societal footprint of BIC® • products will be improved (“2025 Commitment: #1 Fostering sustainable innovation in BIC® products”). The ambition is based on the deployment of a comprehensive eco-design process fully integrated into the innovation processes of each product category. Through this commitment, BIC will contribute to mitigating two risks: the Plastic challenge and the Carbon footprint of its products, by 2025, BIC will use 80% renewable electricity. With this • commitment, the Group is seeking to reduce its greenhouse gas emissions by purchasing renewable energies and will also study the potential production of renewable electricity on-site. It is part of a long-term vision to operate on 100% renewable electricity. It supplements BIC’s continued efforts on energy consumption reduction and energy efficiency to limit its emissions; in 2018, BIC launched a study to review the physical risks linked to • Climate Change for all its sites and some contract manufacturers and suppliers. For the sites with higher risks, the Group will define a relevant action plan taking into account the mitigation plan already in place. All these initiatives and those mentioned in the Group’s Sustainable Development Strategy presented in Chapter 3.2.1 " - page 77, contribute to mitigating the risks.

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• BIC GROUP - 2019 UNIVERSAL REGISTRATION DOCUMENT •