PSA - 2019 Universal Registration Document

DECLARATION ON EXTRA-FINANCIAL PERFORMANCE Societal commitment to sustainable development

Exercising due diligence DPEF.35 2.3.1.2.2.  DPEF.44  Groupe PSAfollows OECD Directiveson exercisinga duty of due diligence within its supplychain. This is basedon analyzingrisks (mapping)to identifyand prioritize the actual, or potential,negativeimpactsof its suppliers’activities (section 6.2.3.1 of the CSR Report). If risks are identified, Groupe PSAhas a preventionsystemwhich includesimplementing and monitoringspecificactionplans with the suppliersin question, to preventor mitigateany impacts.In the eventof actualincidents, Groupe PSAis set up to contributeto remedialactionsin resolving the issue. To enable full transparency,diligence, measures taken, andresults obtained are publishedin the annual CSR Report. Identifying CSR risks in the supply chain The numerouscrises experiencedby the automotiveindustryover the last few years have enabled the Group to develop its risk analysisprocessto improvethe abilityon early risk preventionand be more reactive once a riskhas been identified. In line with the Group’srisk policy(see section 1.),purchasescan be broken down into 724 different commodities to which the PurchasingDepartmentapplies a multi-criteria(quality, logistics, financial,CSR, etc.)risk analysisto define “Technicaland Industrial PurchasingPolicy”for each commodity.The policy is drawnup by the buyersin collaborationwith expertsfromother divisionsof the Group: financial analysts, logistics experts, quality experts, engineers, etc. Pleaserefer to the section 1.6.1.2for readingthe methodfor design thematrixof the risksentailedin the activitiesof the subcontractors andsuppliers. Steps taken toprevent risks:training andsystematic CSR Performance evaluation for suppliers Buyer trainings Every year, the Group’s purchasing school organizes training sessionsfor new buyers in Europeand in Latin America.A special CSRmodule,annuallyupdated,is deployedfor thisoccasion.In 2019 again231 peoplehavebeentrainedin Europe.In LatinAmerica.82% of GlobalPurchasing& SupplierQualitydivision(GPSQ)population were trained up, which represents an increase from the 78% reachedin 2018. In addition,eachoperationalbuyeris trainedon an ongoingbasisin developments in regulatory constraints, best practices, tools responsible purchasing (including ethics, Human Rights, environment, etc.). Followingthe Group’sdecisionto have its entireapprovedsupplier panel assessedby an externalprovider,EcoVadis,all buyers were trained in the changes to the CSR regulatoryframeworkand the Ambitionof Groupe PSA is to have90%of its supplierstrainedin the Group’s CSR risks and requirementsby 2025. To achieve this objective,it supportsits suppliersby providingthem with lots of informationand training tools to enable them to improve their practices: supplierinformationmeetingsare organizedon a monthlybasis n to informsuppliersabout the latest developments in CSR, to let themknowabout the Group’sexpectations in terms of CSR and to inform them of legal and regulatorychangesregardingCSR matters; Group’s expectations. Suppliertraining

togetherwithEcovadis,a webinarspecificallyfor suppliersbased n in Asia was provided. All relevant details regarding the Groupe PSACSRRequirementswere explained to the suppliers in additionto what neededto be done to complywith the Group's corporate levelof expectation; an e-learningtraining course on CSR principles is available on n their CSR performance evaluation platform. Formalcommitmentfromsuppliersand evaluationof their CSR performance Evaluationof suppliers’ CSR performanceis a key factor for the Groupwhenit comesto selectingsuppliersduringcalls for tenders. More than 95%of supplierselectionsweremadewith a strongCSR assessmentin 2019. This assessmentconsistscomprisessuppliers’ commitmentto complywith CSR requirementsof the Group and the resultsof assessment questionnaires andaudits. Signature of theResponsiblePurchasingPolicy The ResponsiblePurchasingPolicy outlinesthe Group’sCSR policy and sets out the commitments that suppliers working with Groupe PSAmust abide by, including respect for animal welfare (see 6.2.3.2 of CSRReport).Thepolicyis available in severallanguages on theGroupe PSA website aswellas on Group’sB2Bportal. The Group’sCSRrequirements: are based on a personalcommitmentto monitoring:since 2010, n the Group’s Code of Ethics has specifically mentioned the integrationof ethicaland environmentalcriteriainto the supplier relationship; are gathered in an ad hoc referenceguide for suppliers:these n requirementsmakeexplicitreferenceto the GlobalCompact,the Universal Declaration of Human Rights, the Declaration on FundamentalPrinciplesand Rights at Work, the Rio Declaration on the Environmentand the UnitedNationsConventionagainst Corruption; are distributedto the most importantsuppliersof the Groupand n to suppliersassociatedwith high-riskcountriesor commodities. These suppliers are asked to formally commit to comply with Groupe PSAguidelinesor to demonstratetheir compliancewith equivalentguidelines.As of end 2019, 1,486 suppliershad made this commitment,accountingfor 93% of the purchasingspend managedby the Purchasing Department; are incorporated into the fundamental principles of supplier n relationship management, in contractual documents such as purchasingcontractsandpurchasingtermsandconditions,andin the Group’spurchasing processes. 76% of the revenuegeneratedby MisterAuto (equivalentto 0.26% of the annual value of Groupe PSApurchases)consists of parts purchasedfrom major equipmentmanufacturerswho have signed the “Responsible PurchasingPolicy” astier 1suppliers. Auditsof supplier production plants to IATF (International Automotive TaskForce) standard 16949 Groupe PSArequiresthat supplierproductionplantsare certifiedto IATF 16949.This certificationis awarded for three years and the certifying body conducts an annual audit to check compliance. Major non-compliancesresult in suspensionof the certificateand supplementaryaudits to rectify non-compliances.85% of supplier productionplantsare certifiedto ISO/TS 16949or IATF 16949,and remaining siteshaveat leastISO 9001 certification.

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GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT