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An efficient and responsible Group Operational excellence policies

Purchasing, a competitive challenge 2.2 Purchasing is a key factor in the Group’s competitiveness and its organization is adapted to the specific features of its activities to ensure its efficiency and risks relating to the supply chain. With a global annual amount of some €29 billion for more than 250,000 active suppliers, Purchasing meets the needs of the Group’s industrial and distribution activities.

This general framework is adapted by the operational teams based on the specific features of the trade and non-trade purchases and incorporates the strategy for the development of medium- to long-term partnerships with suppliers. Following this process, the methodology to map CSR risks was reviewed in 2016, in a coordinated way. Risks connected to the country of origin and risks connected to the purchase categories are integrated. The risk on human rights, in particular the fight against the forced labor and the child labor and those connected to bribery are specfically evaluated. The risks of purchasing categories integrate environmental performance in particular carbon and water footprints and health and safety. The mapping evaluation is based on international and recognized sources. It allows for the identification and evaluation of risks connected to suppliers and thus determines priorities for action and engages a constructive dialogue for improvement. Non-trade responsible purchasing a) This CSR risk analysis deployed in the non-trade purchasing allow the identification of suppliers “at risk”. Depending on the level of risks identified, the supplier answers a questionnaire based on documentation verified and evaluated by a third party and, depending on the results; a social audit on site is organized. The entire approach forms part of a constant dialogue with the supplier and leads to the establishment of action plans and CSR performance improvement plans. The Responsible Purchasing policy is applied to non-trade suppliers via the R-Net online platform, a private website entirely dedicated to the subject of responsible purchasing. Suppliers have access to R-Net to acknowledge receipt of the Saint-Gobain Suppliers Charter, to send essential supporting documents electronically (wood certificates, quality certificates, ISO standards), to answer self-assessment questionnaires, to obtain all information on Saint-Gobain’s responsible purchasing guidelines and to access details of their CSR evaluations or, where appropriate, the social audits. For the period 2017-2021, the Group has set the objective to assess the CSR performance of almost all suppliers deemed to comprise a CSR risk and achieving annual consolidated net sales of more than €100,000 with the Group. With regard to social audits, the objective is to conduct around 40 to 50 audits a year, mainly in emerging countries. These audits may lead to de-listings if the corrective plans necessary are not implemented within the agreed periods. The Department of Non-Trade Purchasing initiated in 2016 a program to audit on site the suppliers identified at risk by the Group purchasing managers. The program is deployed in priority in emerging countries (Brazil, China, India). The objective is to propose an alternative to the CSR risk evaluation tools already in place in order to favor suppliers’ commitment.

A rigorous organization, 2.2.1 a measure of efficiency

The Purchasing Department is divided into non-trade purchases and trade purchases in order to best adapt to the specific nature of the Group’s activities. Although the Purchasing functions are based on common policies and a common base, they do not participate at the same level in the Group’s value chain: non-trade purchases are upstream of the production stage „ and all logistic aspects; trade purchases are downstream of the production stage. „ Consequently, the organizations, strategies and objectives are differentiated. Beyond the specific features connected with its activities, Saint-Gobain recognizes the major role of the Purchasing Department with regard to competitiveness and innovation. Concerned about its performance, the Group wishes to optimize the purchases of its Activities and strengthen the contribution made by the Purchasing Department in order to meet its economic objectives. To that end, the Group has endeavored to develop the professionalism of its purchasers through training activities. A training path is open to all Group purchasers within the scope of the Purchasing School. More specific training intended for trade purchasers supplements this program. This training, which is particularly important for newcomers in the Purchasing Department, provides them with tools that enable them, and their teams, to achieve behavioral excellence in their daily activities. Responsible Purchasing policy 2.2.2 The same is true for the Group’s Responsible Purchasing policy, the purpose of which is to control and reduce the environmental, social and societal risks to its supply chain. It is built on two pillars, the Purchasers Charter and the Suppliers Charter. It comprises three stages: mapping the CSR risks; including human rights, anti- „ corruption, and environment, health and safety risks; evaluating the CSR performance of suppliers to classify „ the risks; building progress plans in conjunction with suppliers. „

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