Danone // 2020 Universal Registration Document

5 Social, Societal and Environmental Responsibility 5.5 Promoting sustainable, inclusive growth with suppliers 185 DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 • to implement sustainable practices with its farmers all over the world as part of its regenerative agriculture strategy: For example, Danone has pledged that 100% of its agricultural raw materials produced in France will come from regenerative agriculture by 2025 and is helping its farmers whose farms are located in water-stressed areas reduce their water consumption by 25% by 2030; • to work with its suppliers to (i) activate its circular economy com- mitment for its plastic packaging, and (ii) meet its commitment to reduce by 50% its full scope GHG emissions intensity by 2030 compared with 2015. Human rights In 2016, Danone joined the Consumer Goods Forum’s (CGF) collective effort to eradicate forced labor from its global supply chain. To this end, in 2017 Danone incorporated the three priorities set by the CGF into its Fundamental Social Principles: (i) every worker should have freedom of movement; (ii) no worker should pay for a job, and (iii) no worker should be indebted or coerced to work. In 2018, Danone formalized this commitment in the Danone statement on forced labor (see Danone’s website). The Company also supported the launch in 2020 of the CGF’s new Coalition– Working to end forced labor , which is co-sponsored by Emmanuel FABER, Danone’s Chairman and CEO (until March 14, 2021). In doing so, Danone pledged to develop and implement Human Rights Due Diligence (HRDD) systems that focus on forced labor in its operations, with the goal of achieving 100% coverage by 2025, including external workers hired by temporary work agencies or by its subcontractors to carry out regular and continuous work at its entities. In 2021, Danone will establish its roadmap based on the CGF’s guidelines. Meanwhile, in 2019 Danone participated with the OECD in the launch of the Business for Inclusive Growth coalition, which aims to scale up actions on inclusive growth, particularly as regards human rights across the value chains. In November 2020, the 40-member coalition issued a position paper reaffirming its resolve to eliminate child labor and forced labor and to respect freedom of association. To that end, the members intend to develop and mobilize tools related to (i) due diligence, (ii) helping suppliers make progress in terms of human rights, and (iii) grievance mechanisms. Governance In 2020, compliancewith the responsible purchasing and human rights programs is monitored by the Nature & Water Cycle Department, part of the Cycles and Procurement Department, under the res- ponsibility of the Chief Cycles & Procurement Officer. An update on the progress of the “human rights” pillar of the vigi- lance plan was presented to the Board of Directors’ Engagement Committee in December 2020. Due diligence in responsible procurement Danone implements responsible procurement due diligence towards its direct suppliers through its RESPECT program and also for the highest-risk agricultural raw materials in its supply chain. Scope of RESPECT program The RESPECT program applies to Danone’s direct (Tier 1) suppliers in purchasing categories other than raw milk, i.e. processed raw materials such as fruit preparations and powderedmilk, packaging, production machinery and transport and other services. Since 2017, Danone has moved this program towards a compre- hensive due diligence approach and stepped up its human rights requirements. This approach is inspired by the UnitedNations Guiding Principles on Business and Human Rights (UNGP). Labor and environmental risk-mapping In 2017, the Company updated its global materiality and risks analy- sis, which highlights the importance of responsible purchasing and respect for human rights. In 2021, this analysis has been reperformed (see 2020 Annual Integrated Report of Danone). At the same time, Danone mapped major potential risks for its 20 purchasing categories with the highest exposure in terms of social and environmental impact. The Company analyzed these risks using a checklist derived from the ISO 26000, GRI G4 and SA 8000 standards, taking into account the potential impacts of purchased products mainly from the standpoint of labor rights and human rights, but also the impacts on local communities and consumers, as well as in terms of fair trade practices and environment. This workmade it possible to identify the priority categories of goods and services purchases from the standpoint of human rights, namely (i) workers employed through outside labor providers and (ii) four agricultural raw materials (palm oil, cocoa, cane sugar and fruits), for which the potential risks primarily exist at farms and planta- tions in the upstream end of Danone’s supply chain and include, in particular, the potential risks typical of agricultural chains, such as working conditions, health and safety, forced labor and child labor. For the environment, the risk-mapping exercise confirmed the three priority categories set out in Danone’s Forest Footprint Policy (palm oil, soy, paper pulp and paper and cardboard packaging). After acquiring theWhiteWave group companies, Danone updated its risk-mapping process to include changes to its ingredient portfolio.