Danone // 2020 Universal Registration Document

5 Social, Societal and Environmental Responsibility 5.3 Preserve and renew the planet ’ s resources 165 DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 It also endeavors to raise biodiversity protection awareness among employees at its production sites. All these measures reduce greenhouse gas emissions from farms and increase the rate of carbon sequestration in the soils, thus contributing to Danone’s carbon neutrality objective. Empowering new generations of farmers Since farmers are the main players in the transition toward rege- nerative agriculture, Danone seeks to empower them by setting up several mechanisms. Cost Performance Model (CPM) contracts guarantee greater income stability for dairy farmers and encourage them to make the transition to these new practices. Danone also develops partnerships, for instance with the Miimosa participatory funding platform, in order to provide farmers with access to addi- tional funds and to give greater visibility to their actions. It is in this context that the Blédina brand launched “Sauvez Williams” project in 2020 to ensure the sustainability of the Williams pear industry in France. Since 2018, Danone in France has invested €40 million in upstream agriculture to support the transition to regenerative agriculture. For its Specialized Nutrition Reporting Entity, nearly 65% of its raw materials grown in France (fruit, vegetables and cereals) is in regenerative agriculture according to the criteria defined by the Company on soil health. The social innovation funds financed by Danone support also farmers towards a positive and sustainable transformation of agricultural chains. For example, the “Madre Tierra” project in Mexico enables 262 strawberry growers to receive technical and technological support as well as training on soil sustainability, water resource management, and fertilization. Similarly, Danone facilitates access to training, with 2,800 farmers trained on animal welfare since 2018. These actions all contribute to the target that Danone has fixed itself: to purchase 15% of its volume of agricultural ingredients directly from farms actively committed to a regenerative agriculture approach by the end of 2021. This is an initial key step for Danone, which aims to have all its partner farmers to adopt this approach. Respecting animal welfare Danone views animal welfare as an essential element of its strategy since animals can bring circularity to agriculture, particularly when they eat grass, food industry by-products or crop residues inedible to humans, or thanks to the use of their manure as a natural fer- tilizer for the fields. In 2019, Danone reached its target initially set for 2020, consisting of assessing animal welfare for at least 80% of the volume of fresh milk collected in the scheme, using its animal welfare assessment tool for dairy cows or via the “Validus” certi- fication. In 2020, this scheme had expanded to cover 87% of the volume of milk produced, and nearly 2,800 audits were carried out on farms, assigning a score of up to 100 points to them. The fact that the average score was 67 points emphasizes the best practices generally followed. With the signature of the Broiler Chicken Act, Danone has pledged with its suppliers to improve the rearing conditions of their broiler chickens by 2026, and the animal living conditions and crowding in general. With respect to Specialized Nutrition Reporting Entity, 100% of sheep and beef cattle had access to pasture in 2020. As for eggs and egg ingredients, more than 80% come from cage-free farms. Since the beginning of 2020, 100% of Danone’s contracts relating to eggs and egg ingredients comply with its “cage-free” pledge. Opportunities In 2020, Danone is continuing to bring together farmers, agricultu- ral experts and public and private sector partners to advance the transition to regenerative agriculture. In North America, Danone is leading a soil health improvement initiative actively involving experts and academic researchers to develop programs for the benefit of farms and communities through its subsidiary Danone North America. In December 2020, the program has almost tripled in three years to cover more than 33,000 hectares in the United States and Canada and now includes almond orchards in the central valley of California. The worldwide Farming for Generations (F4G) alliance created by Danone in 2019 includes several major players in the worldwide agriculture chain and advisers to provide a forum for peer-to-peer exchanges of information. In December 2020, F4G set up programs in 33 farms in eight countries (in Europe, Russia and the United States). The Company has also launched an information and awareness campaign using a series of online #soiltalks . The first edition, with speakers including farmers and representatives of the WWF, McKinsey & Company, the Ellen MacAr thur Foundation, the European Commission and Kiss the Ground, attracted more than 500 participants from the public and private sectors, NGOs and the agricultural world generally. CIRCULAR ECONOMY Circularity of packaging Definition In a move designed to mitigate the challenges related to pollution from packaging, Danone works with numerous value chain stakeholders to accelerate the transition to a circular economy. Policies, action plans and outcomes Packaging Policy In its Packaging Policy, Danone has pledged to ensure a transition from a linear to a circular economy for the packaging used by its Reporting Entities. This ambition was supplemented in 2020 by a series of commitments addressing environmental challenges as well as by the WeActForWater initiative by the Waters Reporting Entity (see the Danone website for more information). All these commitments are described in detail below and applied in the form of local roadmaps.