PERNOD RICARD - Universal Registration Document 2019-2020

3. SUSTAINABILITY & RESPONSIBILITY The four pillars of the good times from a good place roadmap

Water consumption and performance

ORIGIN OF THE WATER CONSUMPTION BY INDUSTRIAL SITES (M 3 )

BREAKDOWN OF WATER CONSUMPTION BY ACTIVITY

Ageing 1 %

Other items 1 %

Public network 25%

Vini cation only 2 %

Vini cation and bottling of wines 4 %

Ground water 45%

Bottling 11 %

River, lake or dam, other source 30%

Distillation 81 %

Water resource preservation strategy tailored to meet local challenges Because water resources are unevenly distributed, risk levels vary depending on the location of the Group’s production sites and dedicaded co-packing activities. To better understand and identify priorities, sites have been categorised as extremely high risk, high risk and low-medium risk, using an internal Water Risk Index. The Group aims to replenish the water used by its sites located in high-risk areas through local projects to preserve the water ecosystems. This led to support watershed management by improving access to safe water and sanitation, promoting sustainable water use and integrated water resources management among communities.

To reduce direct water consumption at production sites, the Group focuses its efforts on two main drivers: i) setting up systems to measure and monitor water use, and ii) identifying measures to save, reuse and recycle water. This year, continuous improvements in water efficiency measures led to a reduction of water use per litre of pure alcohol produced in distilleries, down by 1.36% compared to last year. Throughout the value chain, the drip irrigation technique is used in all irrigated vineyards operated by the Group. This reduces the water used to what is strictly necessary. Moreover, given the predominance of agricultural raw materials in Pernod Ricard’s water footprint  (1) , the Group works locally with the affiliates’ suppliers to establish sustainable agriculture standards that minimise water consumption (see subsection 3.3.1.2 “Promote and develop resilient agricultural supply chains”).

Area’s risk level

Pernod Ricard situation

Extremely high risk

8 sites (India, Armenia, Mexico and China). — 5.6% of the Group’s total water consumption. — 7 sites (Armenia, Australia, Spain and France). — 5.3% of the Group’s total water consumption. — 33 sites. — 9.7% of the Group’s total water consumption. — 42 sites. — 79.4% of the Group’s total water consumption. —

High risk

Medium risk

Low risk

Treatment of waste water To reduce the pollutants released into the natural environment and make sure that the water discharge by production sites does not damage surrounding ecosystems or other natural resources, production sites are fitted with different technologies such as aerobic, anaerobic treatments, filtration, etc., depending on waste water quality requirements. The Group will also explore innovative projects for treating this waste water. FY20, 77% of waste water was discharged into a public sewerage system, 17% was discharged into the environment following treatment, and 6% was recycled for vineyard irrigation.

10 Indian dedicated co-packers are located in high risk areas and are concerned by the Group water resource preservation strategy. To date, the water resource preservation strategy has been launched on sites located in “Extremely high risk” areas. Indian sites have already implemented water projects in their watersheds. They are actively engaged with communities through the development of water replenishment projects in order to support water conservation and also provide or improve access to safe water and sanitation. Other sites are in the process of finding a project partner and investigating water project options. The water benefits methodology and calculation associated to each project must be checked by a third party.

(1) Analysis of the Group’s water footprint indicates that by far the most water-intensive activity in the value chain is the supply of agricultural raw materials, representing 99% of the Group’s water consumption. In comparison, the direct water consumption of production sites represents less than 1% of the Group’s water consumption.

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