Groupe Renault - 2019 Universal Registration Document

RENAULT: A RESPONSIBLE COMPANY

ANNUAL GENERAL MEETING OF RENAULT ON APRIL 24, 2020

GROUPE RENAULT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

RENAULT AND ITS SHAREHOLDERS

ADDITIONAL INFORMATION

ENVIRONMENT

Outside Europe, the Group is also subject to similar regulatory constraints. In total, around 70% of the Group’s sales worldwide are thus subject to CAFE-type regulations. Beyond the Europe stake, for which the levers are presented above, the Group’s environmental midterm plan is based on three strategic axes: the development of the electrification of vehicles (100% electric, P hybrid and plug-in hybrid vehicles) and services provided by batteries to the energy sector (second life and smart charging) to enable reductions in greenhouse gas emissions while promoting the growth of renewable energy; the development of the circular economy that meets the need to P preserve natural resources and contributes to reducing the energy consumption (and, therefore, indirect greenhouse gas emissions) used in the extraction of raw materials and production of goods; lastly, the development of new electric and shared mobility P services. The Group uses an internal carbon pricing mechanism to drive the reduction in its CO 2 emissions. This internal carbon price depends on the scope considered: for vehicle projects , the definition of the carbon price notably P includes regulations on emissions in use such as CAFE and CO 2 related taxation. For example, the carbon price taken into account to make decisions on technical carbon reduction solutions in vehicle projects in Europe is around €450/metric ton. This value takes into account, among other factors, regulatory issues and tax frameworks attached to each market. for industrial installations , it takes into account multiple factors P such as expected changes in the energy market and CO 2 emissions quotas: over half of the Group’s direct emissions are concerned by the EU-ETS quota exchange system, for which the current price is around €20-25/t CO 2 . For further details on the management of EU-ETS quotas, refer to the section “Manufacturing”, below. Moreover, in the Company’s internal process, life cycle assessments (LCA) or carbon assessments are carried out regularly to assess and decide between different strategic options (for example, which mobility service model has the most positive impact on areas such as cities?) or different technological options, by model or region, for example comparative LCAs of batteries, powertrain technologies (electric, plug-in hybrid, hydrogen, LPG, NGV, biogas) or the assessment of the environmental benefits related to the circular economy. The prevailing logic in these assessments is that only vehicles or services offering mobility with the lowest possible carbon footprint will be successful in the marketplace, or be favored by regulations or taxation.

Climate scenarios To prepare its decarbonization trajectory, the Group used external benchmark data, notably the Energy Technology Perspectives of the International Energy Agency (B2DS "Beyond 2°C" scenario) and the World Automotive Powertrain Outlook developed by the specialist company, BIPE. The Group’s 2030 targets for reducing direct and indirect emissions related to the consumption of energy required for production (scopes 1 and 2) and the target for reducing emissions related to vehicle use (scope 3 "well to wheel") were officially approved by the Science-Based Targets (SBT) initiative in March 2019: Groupe Renault commits to reduce scope 1 & 2 emissions by 60% per car produced by 2030 from a 2012 base-year, and to reduce scope 3 well-to-wheel emissions by 41% per vehicle kilometer by 2030 from a 2010 base year. The SBT initiative arose from a partnership between CDP, the United Nations Global Compact program, the WRI (World Resources Institute) and WWF (World Wildlife Foundation). The aim is to verify the consistency between greenhouse gas emission reduction targets set by companies and the data from scientific research on climate. Groupe Renault was the first company in the automotive sector to have its decarbonization targets validated by the SBT initiative. Furthermore, Groupe Renault was ranked in third place out of 25 manufacturers in the World Benchmarking Alliance (WBA) and CDP rankings published in December 2019. This analysis was conducted using ACT (Assessing low-Carbon Transition) methodology developed by ADEME and CDP, which aims to assess "integration of climate change into corporate strategy, companies’ efforts to reduce greenhouse gas (GHG) emissions and how they manage their emissions". Renault is one of five companies in the sample group whose GHG reduction targets meet the Paris Agreement alignment criteria established by the International Energy Agency. This decarbonization trajectory is the Company’s reference climate scenario , and is consistent with the Paris COP21 target of keeping global warming below 2°C. This reference scenario is one of the elements of the strategy deployed across all of its activities (industrial facilities and product and service development). However, numerous uncertainties remain as to the future results of the efforts deployed to fight against climate change. In order to test the robustness of its strategy when faced with a wide range of possible futures, the Group has begun to build alternative scenarios to its reference scenario. This work builds on the forward-looking analyses that the Group conducts continuously, covering a wide range of variables that may impact the Company’s business model, including: decarbonization of energy production, public policies (regulations, taxation, regulation of road traffic, notably in cities), availability and speed of adoption of technologies, changes in the expectations of users, territories and other stakeholders, and accessibility and cost of resources. Renault has integrated into its strategic approach the ambitions for 2030-2040-2050 presented in the Green deal for Europe, published in November 2019, which aims to make Europe the first area to commit key sectors of activity (including mobility) to a path compatible with the objective of limiting global warming to 1.5°C. The scenarios for achieving carbon neutrality by 2050 for the mobility sector that underpin this ambition have been set out for the Group in terms of the vehicle offer and powertrain mix, in terms of the outlook for battery development (chemistry, production conditions and associated services), in terms of material/materials

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GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019