PERNOD-RICARD - URD 2020-21

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

Impact on the Group’s strategy and financial planning

Climate-related risks and horizon

Potential financial impact and magnitude of impact Medium impact: The Group felt that this might lead to greater market share.

Type

Area of business impacted

Market

Long-term opportunity: Consumers are increasingly looking to sustainable consumption. Developing quality products that respect the environment might encourage them Short-term opportunity: Higher demand for lower emissions products and services and the incorporation of sustainability concerns to choose Pernod Ricard’s products.

Products

This factor is considered in the Group’s marketing strategy and environmental roadmap, with a focus on sustainable agriculture practices and eco-design practices (see subsections 3.3.1.1, 3.3.3.4). Innovation and digital are considered strategic priorities; different entities are working on innovative projects.

Products and services

Product & Services

High impact : This will generate new product and service offers. The Group felt that this might result in greater market share.

are strong drivers to foster innovation and increase market share.

In case of future acquisitions, divestments or access to capital, significance of climate related risk should be assessed.

RESILIENCE OF THE ORGANISATION In June 2019, the Science Based Targets (SBT) initiative approved our greenhouse gas emission reduction targets, which are aligned with a below 2°C scenario for our Scope 1 and 2 emissions and the 2°C scenario for target intensity of the Scope 3 emissions. The Group has started in 2020 a climate-related scenario analysis with a pilot in one affiliate. The objectives were the understanding of climate-related risks impacts on our operations (raw materials, packaging, production and logistics) and the building of a prospective approach for climate-related risks scenarios applicable at Group level. RISK MANAGEMENT The identification of climate-related risks and opportunities takes place in the course of the Group’s global risk mapping: global risk mapping, based on local risks identified by Group affiliates and functional risks identified by the Group’s

functions, is updated every three years by the internal audit team. This team reports to the Chairman and CEO. It also presents its results to the Executive Committee and the Audit Committee. The Group’s major risks are monitored annually; environmental risk mapping is based on a multi-criteria mapping tool. Affiliates input the data, which is then monitored at Group level. Affiliates identify and rate environmental risks throughout a product’s life cycle based on two criteria: i) severity (including potential financial impact – scored from 1 to 7) and ii) probability (scored from 1 to 5). In terms of managing these risks, each major risk identified is placed under the responsibility of a Group Director. Environmental risks and their mitigation plans are under the responsibility of the Group Operations Director. The Group’s environmental roadmap also draws up environmental action plans for the main environmental risks.

120

PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021