PERNOD-RICARD - URD 2021-22 EN

3. Sustainability & Responsibility The four pillars of the Good Times from a Good Place roadmap

Strategy Climate-related risks and opportunities

Potential financial impact and magnitude of impact

Impact on the Group’s strategy and financial planning

Climate-related risks and horizon

Area of business impacted

Type

Transition risks

Policy and legal Long-term risk: Energy and GHG

Operations & Supply Chain

Medium impact: Regulations may have an impact on direct costs should, for example, the Group have 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 raw material price increases (especially for glass manufacturing, which is energy-intensive).

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 that are perceived as more responsible. This could affect Pernod Ricard sales and market share if not anticipated.

Products

Medium impact: The Group feels that a shift in consumer

The risk of shifting consumer preferences is factored into the Group’s marketing strategy. For example, Pernod Ricard’s eco-design policy aims to make products more sustainable (see Subsection 3.3.3.4). variability in weather patterns, the Group uses hedging to limit the extent of seasonal volatility due to climate factors. The Group supports more resilient regenerative agricultural systems (see Subsection 3.3.1) It also includes environmental factors in its Responsible Procurement Policy and Procurement Code of Ethics (see Subsection 3.3.2.5). Water management is To face extreme

preferences might lead to a fall in market share.

Physical risks

Extreme Long-term risks: Extreme weather

Supply chain & Operations

High impact: The financial implications

variability, such as frost, hail and drought, can affect the supply and quality of agricultural raw materials and, more broadly, their price. For example, price volatility might impact grains and grapes. Wine alcohol content might increase, and different parameters might impact wine quality. precipitation patterns can affect groundwater reserves on which some production sites rely. This may ultimately impact the availability and quality of water.

of agricultural supply chain disruption could be significant. It could lead to higher prices for raw materials.

Changes in

a significant component of the Group’s

environmental strategy (see Subsection 3.3.3.3).

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Pernod Ricard Universal Registration Document 2021-2022