SOMFY - Annual financial report 2019

04 MANAGEMENT BOARD MANAGEMENT REPORT

GOVERNANCE — The strategic framework of the Group’s sustainable development policy within Ambition 2030 was set out by the Strategic and Executive Committees. This policy was presented to the Supervisory Board as part of Ambition 2030. In 2019, a strengthened Sustainable Development Department was created, with effect from 1 January 2020. It is attached to the CEO and Chairman of the Management Board, and includes environmental performance and social commitment, as well as the teams from the Somfy Foundation and the Endowment Fund Les Petites Pierres. In 2019, the Steering Committee for Sustainable Development brought together the Sustainable Development Department with the HR, Communications and Procurement functions as well as the Chair of the Ethics Committee. It ensured the monitoring of the various policies implemented. It actively contributed to the Strategic Committee’s work on CSR. The various policies are communicated to the Group’s head office and its subsidiaries via coordinators or the local manager. In addition, the Human Resources Department works in coordination with the heads of the Foundation and of the Group’s Social Commitment to make the Group’s socially responsible policy a driver of commitment and belonging for employees and candidates, and it also helps to roll out these policies within the Group. Across Somfy Activités SA’s scope, the Act for Green® and Employee Commitment indicators are included in the employee incentive scheme. ASSOCIATED RISKS — The challenges related to this sustainable development policy have long been acknowledged and were already taken into consideration in the strategic plan prior to Ambition 2030 (source – Somfy 2018 Annual Financial Report). The risks were identified within the framework of the Sustainable Development Steering Committee based on ISO 9004, Managing for the Sustained Success of an Organisation - a Quality Management Approach, as well as on the basis of the materiality matrix developed across the scope of Somfy Activités SA, which complements this approach and confirms that this sustainable development policy is in line with the expectations of stakeholders. The relevance of these risks, the long-term objectives detailed previously and the policies to be implemented have all been reformulated or confirmed by the Strategic Committee as part of the work to draft Ambition 2030. This work has highlighted four types of risk for Somfy. Firstly, the issue of sustainable development is a lever that Somfy must take ownership of. Its business model and solutions help to limit the contribution of buildings to global warming, and Somfy seeks to serve the common good in both its vision and its values. These are therefore significant commitment factors for employees and stakeholders. Secondly, climate change is in itself a risk for everyone, and that we must strive to combat both collectively and individually. There also exists, for all companies, a risk to image and reputation from doing nothing or not doing enough to promote sustainable development, which is heightened for companies that claim to make a positive contribution to the fight against global warming or that they are acting in the public interest. Lastly, social, technological and environmental changes all have impacts on activities, which we must take into account and anticipate.

Themes

Major non-financial risks

Pages

Social/Human Capital

Inadequate resources in terms of talents and skills

26 28 30 30 31 34 35 37 38

Employee health and safety

Environmental

Impact of global warming on the business model Acceptability of solutions and processes

Contribution to climate change

Societal

Company reputation and image with its stakeholders Attractiveness of the company and its employments areas

Ethics and combating corruption

Risk of non-ethical behaviour and corruption

Non-compliance of the supply chain with CSR standards

Given the nature of its activities, Somfy believes that the following topics do not represent major CSR risks and do not warrant further discussion in this Management Report: combatting food waste, food poverty and animal welfare and promoting responsible, fairly traded and sustainable food consumption. Fight against tax evasion is not considered as a major CSR risk. It is developed on page 39.

25

SOMFY – ANNUAL FINANCIAL REPORT 2019