PERNOD-RICARD - URD 2020-21

____ 3. SUSTAINABILITY & RESPONSIBILITY THE FOUR PILLARS OF THE GOOD TIMES FROM A GOOD PLACE ROADMAP

3.3.3.2

Climate change: reduction

on Pernod Ricard’s Operations Department to incorporate climate-related issues into the Group’s strategic plans and budgets, in compliance with its strategic guidelines. The Executive Committee, which meets twice a year on S&R topics, prepares, examines and approves all decisions related to sustainability and climate change and submits its decisions to the Board of Directors. The Committee is also tasked with reviewing climate change risks and opportunities assessed by the S&R Department and HQ experts. Role of management : the S&R Senior Steering Committee shapes Pernod Ricard’s approach to climate change, among other sustainability issues. For its part, the S&R HQ Team ensures that the strategy is effectively embedded into processes and practices. The S&R Senior Steering Committee, considered as a Top Management governance body, has nine members. They represent all the Group’s functions at the highest level: CEO, Managing Director Global Business Development, EVP Human Resources & Sustainability & Responsibility, EVP Finance, IT and Operations, Chief Sustainability Officer, VP Global Government Affairs, Group Operations Director, Global Marketing & Commercial Director and Group Communications Director. The Committee assesses and manages climate-related risks and opportunities. It creates action plans and oversees the implementation of the strategy by the Operations teams and the Global Business Development functions.

and adaptation Alignment with TCFD recommendations

Climate change is one of the most urgent challenges facing this generation. Combatting it is a major focus of Pernod Ricard’s environmental policy. The Group plans to reduce the CO 2 equivalent emissions generated throughout its supply chain and adapt its business to ensure it is resilient. For greater transparency, Pernod Ricard follows the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD). GOVERNANCE Pernod Ricard has a dedicated governance and organisational structure to ensure that climate change issues are fully incorporated into its strategy. That is why the Sustainability & Responsibility Senior Steering Committee (S&R Senior Steering Committee), chaired by Pernod Ricard’s Chairman and CEO, was created. Pernod Ricard also has a dedicated Sustainable Performance team at HQ, responsible for implementing its climate change strategy. Board supervision : the Board of Directors evaluates the appropriateness of Pernod Ricard’s S&R commitments. It also ensures that climate-related issues are incorporated into the Group’ strategy through two annual meetings. The Board relies

STRATEGY Climate-related risks and opportunities

Impact on the Group’s strategy and financial planning

Climate-related risks and horizon Policy and legal Long-term risk: Energy and GHG

Potential financial impact and magnitude of impact

Type

Area of business impacted

Transition risks

Operations & Supply Chain

Medium impact: Regulations may have an impact on direct costs, for instance if the Group had to buy carbon quotas. In Europe, the Group’s four largest distilleries are subject to the EU Emissions Trading System (EU-ETS). There may be indirect impact through increases in the price of raw materials (especially for glass manufacturing, which is an energy-intensive industry).

Pernod Ricard takes measures to reduce greenhouse gas emissions: directly at production sites through energy efficiency and renewable energy; and indirectly with its suppliers and by optimising the logistics chain.

emissions regulations may affect the Group: directly through its own operations; or indirectly through its suppliers

(especially with respect to glass, alcohol and transportation).

Reputation Long-term risk: Consumers may prefer

Products

Medium impact: The Group feels that a shift in consumer

The risk of shifting consumer preferences is factored into Group

products that are perceived as more responsible,

preferences might lead to a fall in market share.

marketing strategy. For example, Pernod Ricard eco-design policy aims to make the products more sustainable (see subsection 3.3.3.4).

and this could affect Pernod Ricard sales and market share if not anticipated.

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PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021