PERNOD-RICARD - URD 2021-22 EN

Sustainability & Responsibility Ethics & compliance

EU Taxonomy 3.4.3 Overview of the EU taxonomy regulation

Stemming from the European Commission’s Action Plan for Sustainable Finance launched in 2018, the Taxonomy Regulation (1) constitutes an essential component of the EU’s efforts to achieve the objectives of the Green Deal and make Europe carbon-neutral by 2050. The new classification system for sustainable activities aims to help redirect capital flows towards a more sustainable economy. Under the Taxonomy Regulation, technical screening criteria are defined to identify activities that significantly contribute to six major environmental objectives: climate change mitigation; (i) adaptation to climate change; (ii) sustainable use and protection of water and marine (iii) resources; transition to a circular economy; (iv) pollution prevention and control; and (v) protection and restoration of biodiversity and the (vi) ecosystem. Since 1 January 2022, reporting businesses must provide financial information in their annual report on activities that are Taxonomy-eligible (when the activity is covered by the Taxonomy Regulation). Pernod Ricard is required to publish KPIs highlighting the proportion of its Taxonomy-eligible turnover, capital expenditure (Capex) and operating expenditure (Opex) resulting from products and services associated with economic activities defined as sustainable in Annexes I & II of the Climate Delegated Acts (2) . Presentation of the eligibility results The scope of calculation of the Taxonomy indicators is the consolidated financial scope as detailed in Note 7 " Consolidation scope" in Section 6.6. Turnover When considering eligible turnover for the purposes of the Taxonomy Regulation, Pernod Ricard uses a materiality threshold of 1% of the Group’s consolidated turnover. Given that the first two climate objectives applicable as of 2021 prioritise economic activities that contribute significantly to EU Greenhouse Gas (GHG) emissions, Pernod Ricard’s core business of manufacturing and selling beverages is not covered by the Climate Delegated Act. Consequently, the Group’s eligible turnover represents 0% of its 2022 consolidated turnover (€10,701 million, Section 6.1 " Consolidated annual financial statement ") (3) .

Capital expenditures (Capex) Due to the non-eligibility of its revenue-generating activities, Pernod Ricard’s eligible Capex does not include Capex directly related to its activities and only concerns Capex implemented under “individually sustainable measures”, as defined by the Taxonomy Regulation. They represent 29.1% of the Group’s acquisitions of property, plant and equipment, intangible assets and right-of-use assets in 2021 (€669 million, Section 6.6 - Note 4.1 Intangible assets and Note 4.2 Property, plant and equipment ) (4) . These eligible investments mostly relate to the following types of activities: real estate assets such as brand homes, onsite offices and 1) distilleries; leasing of vehicle fleets; 2) renewable energy technologies. 3) Operating expenditures (Opex) Opex, as defined by the Taxonomy Regulation (5) , represent less than 5% of Pernod Ricard’s total Opex in FY22. As a result, it is deemed non-material and exempt from the calculation of the numerator of Opex KPI as permitted by the regulation (6) . Links to S&R achievements & initiatives Pernod Ricard’s strong climate, biodiversity and circular economy commitments are fully embedded in its S&R strategy "Good Times from a Good Place" which covers the entire value chain, from grain to glass. Actions by Pernod Ricard that do not necessarily fall under the definition in the Taxonomy Regulation, hence resulting into non-eligible turnover, Capex and Opex should not be interpreted as reflecting the Group’s progress towards sustainability objectives, as its ambitious 2030 roadmap is aligned with the UN SDGs (7) .

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Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to promote sustainable investments and amending Regulation (EU) 2019/2088. (1) Available here. Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852. Available here. (2) Additional information on the calculation of the KPI linked to revenue is presented in the methodological note (see Section 3.6.1). (3) Additional information on the calculation of the KPI linked to investment expenditure is presented in the methodological note (see Section 3.6.1). (4) Total Opex consists of (i) direct non-capitalised costs that relate to research and development; (ii) building renovation measures, short-term lease and (5) maintenance and repair, and (iii) any other direct expenditure relating to the day-to-day servicing of property, plant and equipment by the undertaking or third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets. The exemption of Opex KPI is described in the methodological note (see Section 3.6.1). (6) For more information on the S&R commitments, targets, actions and contribution to SDGs, please see the previous pages. (7)

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Pernod Ricard Universal Registration Document 2021-2022

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