PSA_GROUP_REGISTRATION_DOCUMENT_2017

DECLARATION ON EXTRA-FINANCIAL PERFORMANCE Corporate sustainable Development Commitment

Local sourcing is a key element of the Groupe PSA procurement policy DPEF.30 DPEF.34 DPEF.35 Given the economic challenges of its presence in host countries, the Group is committed to making supplier relationship management a key element of its strategy. It believes that deploying a responsible purchasing policy means sourcing supplies as close as possible to its production plants. That makes it possible: to reduce the Group’s carbon footprint by means of „ environmental optimisation of upstream logistics; to enrol suppliers in a forward-thinking approach to technology, „ logistics and CSR; to increase the Group’s due diligence by virtue of operational „ proximity to its partners.

Groupe PSA approach is based on individualising supplier relationships as a performance lever. It has introduced a supplier classification system which differentiates between strategic and core suppliers, and suppliers in general, for a given commodity. Purchasing as part of the Group’s strategy DPEF.34 Purchasing is a key stake for the Group’s international development and to its integration in the industrial fabric of the countries it operates in. Chapter 4 of the Group’s CSR Report presents the following in details.

ORIGIN OF PARTS (DIRECT MATERIAL AND SPARE PARTS) PURCHASED FROM TIER 1 SUPPLIERS BY GROUPE PSA PRODUCTION PLANT IN 2017

Groupe PSA PCD plants

Rest of Europe

Latin America

Europe

France

Eurasia

Origin of the Parts (Tier 1 suppliers)

Europe

90.14%

89.27% 92.44%

3.17% 19.50%

49.18% 40.10%

o/w France

17.30% 74.95%

o/w Rest of Europe

Eurasia

31.40%

0.11% 0.15% 0.01%

0.05%

Latin America

59.29%

0.20% 0.25% 0.10% 0.25%

Rest of the world

9.55% 10.33% 7.65% 65.18% 7.57%

SUPPLIERS: LINCHPINS OF THE 2.3.1.2. SUSTAINABILITY CHAIN DPEF.30 DPEF.34 DPEF.35 Groupe PSA believes that there can be no performance without responsibility, also, as a member of the Global Compact, it drafted its procurement policy in accordance with the rules laid down by the International Labour Organization (Human Rights, child and forced labour), health and safety standards, environmental practice standards (ISO 14001) and stricter regulations on the use of materials and substance emissions (REACH regulations for example). Procurement of specific materials such as conflict minerals is also the subject of particular attention. This policy is made public and can be accessed on the Group’s website. In view of the limits of its sphere of influence, Groupe PSA encourages its suppliers to share in its due diligence with regard to CSR risks in the supply chain. Groupe PSA’s procurement policy: 2.3.1.2.1 performance and responsibility The Purchasing Department determines and oversees procurement policy worldwide and provides an interface between Groupe PSA and its suppliers. Its role is to build and maintain a supplier database at the best technical, industrial and economic level. It also guarantees the quality and security of the Group’s supplies, by ensuring that suppliers comply with Group standards, particularly in terms of quality, logistics and sustainable development. It makes purchases for all Group departments (excluding Faurecia). The 858 Groupe PSA purchasing professionals, located throughout the world, apply identical processes.

The local sourcing ratio is the value of purchases for a region from Tier 1 suppliers divided by the total value of the purchases for this region. These ratios are in bold in the table above. As a proactive member of its host communities, Groupe PSA is committed to strengthening its purchasing policy near its production plants, which contributes to maintaining subcontracting activities on-site. The “Origine France Garantie” label is a guarantee for consumers that the product they are buying is French-made. In total, 15 Group vehicles are currently certified. Thanks to its deep manufacturing roots in France (1 138 048 vehicles produced in France in 2017), the Group has once again made a positive contribution to France’s trade balance, with a €5.54 billion surplus and an import-export balance in excess of 397,000 vehicles in 2017. A strong commitment: supplier clusters Focusing on the Moroccan cluster: Groupe PSA is building an engine and vehicle assembly plant at Kenitra (near Rabat) in Morocco. The production plant will have a total surface area of one hundred hectares, 40 of which will house a supplier cluster. The future plant will have an initial capacity of 90,000 vehicles per year and will create 4,500 direct jobs and 20,000 indirect jobs, in particular for equipment manufacturers. Local sourcing is projected to be 60% on start up and then 80% in years to come.

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GROUPE PSA - 2017 REGISTRATION DOCUMENT