SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

An efficient and responsible Group Operational excellence policies

The Group responds to market opportunities associated with the challenge of climate change through its sustainable construction strategy (see Chapter 2, Section 2). Risk management involves four major actions: a cross-business R&D program, “Improving our CO 2 „ footprint”: to coordinate and expand research and development efforts devoted to improving manufacturing processes with a view to reducing their greenhouse gas emissions; an internal carbon price: to speed up the Group’s transition „ to low-carbon technologies. It allows for the assessment of the current or potential impact of a regulatory carbon price on the Group’s activities, identification of opportunities for growth in low-carbon sectors, refocusing investments in manufacturing and R&D, and ranking actions to reduce CO 2 emissions. Saint-Gobain has set two internal carbon price levels. The first is fixed at €30 per ton and applies to industrial investments above a certain threshold, investments associated with a change in energy source, energy investments on an existing or greenfield site with a total annual energy consumption of less than 10 GWh. The second carbon price level of €100 per ton is used for R&D investment in breakthrough technology. This price level is of demonstrable value in supporting low-carbon R&D projects in particular; an Energy, Atmospheric Emissions and Climate Change „ policy: to reduce the energy consumption and the greenhouse gas emissions of its industrial processes, its infrastructures and its transport on all of its sites; an assessment of the risks associated with climate change „ and its consequences at Group level. The Group’s direct CO 2 emissions (scope 1) are mostly connected with its industrial activities. These CO 2 emissions result from the combustion of fossil fuels and chemical reactions used in the manufacturing processes (e.g. the decarbonization of carbonates in the glass fusion processes). The Group’s indirect CO 2 emissions (scope 2) are essentially connected with its electricity purchases. The use of recycled raw materials in processes makes it possible to reduce energy consumption, particularly for glass fusion. In the case of flat glass, energy consumption is reduced by 3% when the percentage of cullet is increased from 20% to 30% of raw materials. This reduction in energy consumption is accompanied by a reduction in CO 2 emissions (scope 1). The efforts made to transition to a circular economy (see Chapter 4, Section 2.3.2) will therefore have a positive effect on emissions. Since 2003, the Group’s commitment to energy efficiency and the fall in its CO 2 emissions has led it to participate in the CDP Climate Change, which aims to encourage businesses to prepare a detailed report on the risks and opportunities of climate change and provide transparent disclosure of the results. In 2016 and 2017, Saint-Gobain was awarded a score of A- in the CDP Climate Change questionnaire.

Saint-Gobain Building Distribution France has had a structure in place since January 1, 2017 to take back waste from the same types of construction materials, products and equipment, which are sold to professionals, thereby becoming the first private network of collection points for waste from construction and civil engineering sites. The network thus created also offers a solution for voluntary selling points that are not concerned by this regulatory requirement. On the international level, Saint-Gobain joined at the end of 2017 the Factor 10 program of the World Business Council for Sustainable Development relative to the circular economy. Under the sustainable resource policy, by 2019, the General Delegations will all have introduced specific circular economy roadmaps to coordinate initiatives from the Activities at local level and create synergies to step up the collection of site waste in particular and its recycling as part of the Group’s industrial processes or those of its partners. The priority waste management actions initially relate to a reduction in the quantities of production waste generated. They then relate to the recovery of production waste internally, followed by the promotion of external recovery industries (reuse, recycling or, failing that, recovery of energy by incineration) for production waste that cannot be recovered internally. Waste is landfilled as a last resort, if no other solution is possible. Progress in the reduction of production waste achieved on certain Group sites shows that “zero non-recovered waste” is an achievable ambition. The Group is also developing the recovery of waste among Activities, so that one's waste becomes the other's raw materials. Some work groups to promote the cooperation between Activities are organized. The Group is also involved in the creation of recycling networks with the help of external local partners. In connection with the Health policy and in compliance with the local regulations, the management of dangerous waste is closely monitored to protect the health of employees, residents, customers and users of its products and services. Climate change 2.3.2 The challenge of climate change is one of the Group’s strategic challenges. Given its markets and its strategic focus on sustainable construction, this challenge presents both risks and opportunities. The Strategy and CSR Committee of the Board of Directors regularly tracks the implementation of short-, medium- and long-term programs. Leadership for this challenge is provided directly by the Vice President of Sustainable Development, who is a member of the Group’s Liaison Committee; this covers risks and opportunities. Saint-Gobain’s objective is to continue to increase the benefits associated with the use of its products and solutions while reducing the carbon impact of its Activities. The Group’s strategy is thereby embedding a transition to a low-carbon economy through control of risk and the development of new market opportunities. Minimize the quantities of production waste c) and non-recovered waste

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