_170 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report Map of the most critical non-financial risks Whether environment-, employee- or business and governancerelated, the issues in the materiality matrix have all been translated into risk families based on the internal risk assessment method (specified in more detail in section 2.1. Risk factors specific to Michelin, description and related management systems). They were then assessed and plotted by the Group’s experts according to: ● their net impact on outside stakeholders, i.e., their potential severity, assessed on multiple criteria, including their impact on the environment and people, and the risk mitigation measures deployed through existing mechanisms; ● their impact timeframe, i.e., how long the risks may occur. In the case of environmental risks, the plots reflect the main risks throughout a product’s life cycle. To impel continuous improvement, the Group has also formally defined a methodology to address double materiality factors(1), to assess the value created by the Group in the three People, Profit and Planet bottom lines. To this end, the risks presented in 2022 have been broken down this year into two categories: ● Risks, when they could have potential repercussions on the Group; • Impacts, when they could have potential repercussions on the Group’s ecosystems. Risks and Impacts are measured according to two impact scales: ● a financial, reputational and human impact scale for risks; ● an accountability scale for environmental, social and business & governance Impacts. Accountability, as defined in the ISO 26000 standard, means that an organization must be answerable for its impacts on stakeholders. The divisions on the accountability scale are determined by the amount of impact and the organization’s degree of influence on the impacted ecosystem. The risks/impacts and their remediation plans are discussed below in the following sub-sections: ● The Environment; ● Human rights and employee relations; ● Employee and contractor health, safety and security; ● Ethics and compliance. (1) See section 2.1 Risk factors specific to Michelin, description and related management systems. * Climate change. Weeks Months Years Decades Medium High Low NET IMPACT 5A • Unethical behavior 5B • Non-compliance with our supplier relations code of conduct 4 • Non-CC* environmental impacts of our raw materials 1 • Impact of the use of our products on climate change (Scope 3) 7 • Discrimination 6 • Impact of our operations on climate change (Scopes 1 and 2) 9 • Employee and contractor health and safety 2 • Supplier non-respect of human rights 3 • Supplier impacts on climate change (Scope 3) 8 • Tire product safety TIMESCALE OF IMPACTS Social Business and governance Environment
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