PERNOD-RICARD - URD 2020-21

____ 3. SUSTAINABILITY & RESPONSIBILITY THE MAIN SUSTAINABILITY RISKS AND OPPORTUNITIES

The main sustainability risks and opportunities 3.2 In line with Directive 2014/95/EU on non-financial reporting as transposed into French law (article R. 225-105 of the French Commercial Code), Pernod Ricard publishes a “Non-Financial Statement”. This Statement requires the Group to publish its business model and information on key non-financial risks. These include risks related to the environment, employment, society, human rights, tax evasion (pursuant to Act no. 2018-898 on combatting fraud) and corruption. For more information on Pernod Ricard’s business model, please refer to Section 1 “Extracts from the integrated annual report” and for more information on the Group’s key non-financial risks please see subsections 3.2.1 and 3.2.2 below.

3.2.1 Pernod Ricard adopted the following methodology:

Presentation of the methodology

led by the Sustainability & Responsibility Department, these sustainability risks are subject to in-depth analysis through research, competitive benchmarking and internal and external stakeholder dialogue (see subsection 3.1.1.2 “Addressing stakeholder expectations across the entire business, from grain to glass”); and the Group’s materiality matrix last updated in 2020. Other key HQ experts including operations, legal, HR, public affairs and finance were also involved to confirm the top eight risks and opportunities; the identified sustainability risks and opportunities are then cross-referenced with the 2021 Group Risk Mapping to confirm and ensure consistency with the Group’s major risks in Section 4; the resulting eight non-financial risks and opportunities were subsequently presented to and signed off by the S&R Senior Steering Committee and the S&R Committee of the Board of Directors.

every three years, the main risks faced by Pernod Ricard are mapped by direct affiliates and HQ functions and then consolidated at HQ level by the Group’s Internal Audit Department. Updated in FY21, the Group’s risk mapping presents and classifies the risks according to their potential impact and occurrence across the Group’s activities. Some of these risks are specific to sustainability issues. The Group’s major risks and the process for identifying them are discussed in section 4 of this document; the same Group’s risk mapping methodology and tool is used to identify the main sustainability risks for the “Non-Financial Statement”;

3.2.2 The definitions of the eight main risks and opportunities can be found in the table below. Targets, policies, due diligence procedures, and key performance indicators are presented in detail in subsections 3.3 “The four pillars of the Good Times from a Good Place Roadmap” and 3.4 “Ethics and compliance”. In the interest of transparency, other indicators have been presented alongside the policies applied, depending on the issues addressed.

The eight risks and opportunities identified

Given the nature of our activities, we consider that the “tax evasion” referred to in article L. 225-102-1 of French Commercial Code does not constitute a major non-financial risk for the Group. It was therefore not felt necessary to explore it in this “Non-Financial Statement”. Nevertheless, “tax evasion” is discussed in subsection 3.4.1.4 “Tax policy”.

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PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021