Danone // 2020 Universal Registration Document

Social, Societal and Environmental Responsibility 5.1 An integrated approach of sustainable business model DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 150 Governance Danone’s worldwide compliance program is approved and sup- ported by its Chairman and Chief Executive Officer as well as by its Executive Committee, under the supervision of the Compliance and Ethics Board, which is chaired by the Chief Compliance Officer. It is also reviewed at least once a year by the Audit Committee. The Chief Compliance Officer is the executive head of the Compliance function and, along with the regional directors, is responsible for designing and leading the compliance strategy and overseeing its implementation and execution worldwide. At the local level, Danone has a global network of local compliance officers and local compliance committees, chaired by the local General Manager. Responsibility for the governance of internal evaluations of alle- ged or suspected non-conformities lies with the Danone Ethics Line Committee, made up of the Chief Compliance Officer and the Global Integrity Director, Global Head of Internal Audit, Global HR Compliance and Labor Law Director, and the Chief Security Officer. In 2018, Danone created a Personal Ethics Commission whose res- ponsibilities include promoting respect and dignity for all employees and preventing issues related to harassment, violence and discrimi- nation in the workplace. In particular, this Commission reviews the key performance indicators related to human resource alerts from the Danone Ethics Line twice a year (see hereinafter). It also reports on its work to the Board of Directors’ Engagement Committee. In 2020, this Commission sponsored the development and worldwide implementation of the Company’s internal anti-harassment and non-discrimination policy. Action plans Danone has put in place a compliance program that includes a specific section on anti-corruption. This program incorporates risk assessments and their related mitigation plans, policies, procedures, controls, trainings, communication plans and due diligence on third parties. In conjunction with the alerts received through the Danone Ethics Line and the non-conformities identified during the Company’s controls and audits, mitigation plans and sanctions are put in place under the governance of the Danone Ethics Line Committee and local management. These mitigation plans can involve process improvements, disciplinary action, training and communication, and enhanced monitoring from the compliance team in the form of a steering committee responsible for overseeing the implementation of corrective measures. Regular internal controls and audits are conducted for major compliance risks such as: governance in place at every level of the Company, interactions with healthcare professionals and government officials, gifts and hospitality, sponsorships, grants and donations, public tenders and confidentiality of personal data. At the start of 2020, Danone reinforced its guidance on financial and in-kind contributions to ensure any Covid-19-related donations are properly made and approved. Danone is currently rolling out a new digital third-party due dili- gence solution. Whistleblowing system: Danone Ethics Line Danone has developed a confidential whistleblowing system for employees, suppliers and any other third parties to report their concerns, anonymously if necessary, about any violation of the Code of Business Conduct, illegal behavior, inappropriate financial practice or activity posing an environmental or human rights risk. The tool can be accessed on the internet by anyone, in any country and is available in 34 languages. When responding to alerts, Danone enforces a clear policy, as stated in its Compliance Framework Policy (2020), of not retaliating against whistleblowers if they report a genuine concern in line with the Code of Business Conduct. Employee training and information In 2020, Danone rolled out a worldwide communication campaign to remind all employees of the importance of the Code of Business Conduct and their obligation to follow it. Danone thus launched two mandatory compliance e-learning modules, one on compliance fundamentals and the other on the GDPR (General Data Protection Regulation) only for European- based employees. Both modules are in line with the OPOH frame of action which states that employees must act in an ethical way in the interest of the Company and its people. In addition to the e-learning modules, in-person training is offered at the local level. Priority is given to the businesses deemed to be at highest risk. This approach extends coverage to every Danone employee. Outcomes In 2020, Danone received 469 alerts on various issues, including human resources, corruption and fraud. None of these cases had a material impact on the Company’s consolidated accounts. As part of the rollout of the new third-party due diligence solution, over 3,000 third parties have already been vetted. Over the year 2020, 82% of Danone’s total employees have been trained at least once on compliance through an in-person training or an e-learning module. The population targeted by these trainings was the 54% of Danone employees with access to a computer; other employees were nevertheless able to take part in these training sessions this year. Focus – Fight against tax evasion Danone’s Tax Policy underscores its commitment to responsible tax management and its pledge to avoid tax schemes that are artificial, fraudulent or disconnected from actual operations. It is updated annually and can be found on Danone’s website. Danone has also implemented a code of conduct for internal use to prevent any risk of tax evasion: it defines the principles for action and the appropriate behaviors when dealing with the local autho- rities. Tax-related information and processes are also subject to internal audits. Danone’s tax function is supervised by the Vice-President Tax, who reports once a year to the Audit Committee on the main events of the year and on the Company’s tax policy. This Vice-President is supported by a core team tasked, among other missions, with per- forming quarterly performance reviews with themain regions. At the regional and local level, a network of tax officers is responsible for ensuring implementation of the tax policy and entities’ compliance with applicable regulations. Lastly, Danone is involved in discussions on taxation with its ex- ternal stakeholders. The Company thus supports the OECD’s Base Erosion and Profit Sharing initiative. Danone has also signed on to a partnership agreement with the French government as part of the “Confiance Plus” initiative, which encourages transparency in the interactions between the government and companies.