4 _189 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report Since 2022, these risks have been factored into long-term decisions, such as approving raw material suppliers, building or expanding production and logistics facilities and merger/ acquisition projects. In 2023, the Group’s Adapting to Physical Climate Risks Policy was posted on the Group's website(1). It is designed to adapt all the relevant value chain links by: ● 2030, for risks identified as intolerable by that date. ● 2050, for risks identified as intolerable by that date. It expresses Michelin’s principles with regards to: ● influencing and collaborating with outside stakeholders, wherever the Group deems it useful, in particular to support adaptation across the value chain; ● avoiding poor or mis-adaptation. In 2023, a study of the physical risks of climate change in 2030 and 2050 was carried out for around 100 Group facilities, including 90 that have been designated as priority, based on their number of employees and business continuity risks. The study especially underscored the need for a more granular assessment of the actual degree of vulnerability of certain facilities to heat waves and flooding. Risks related to extreme weather events have in fact long been managed as part of the Operational Continuity Plan, a comprehensive process designed to manage all of the Group’s business interruption and continuity of supply risks, whether climate-related or not. The Group’s crisis management capabilities reduce the potential impact of major crises(2). Risks impacting natural rubber supplies. Rubber tree plants can only grow in the planet’s narrow intertropical convergence zone. Although these plants are particularly resilient, they are exposed in these regions to direct and indirect climate changerelated impacts and to the increasing scarcity of arable land. Michelin teams are developing and promoting highly resilient agricultural practices, in particular to preserve soil quality and vitality by maintaining a permanent plant cover. The Group tracks and models changing climate and health conditions in the production regions, directly on the plantations it supports and in partnership with its natural rubber suppliers and the research organizations in the International Rubber Research and Development Board (IRRDB). It remains committed to shrinking the carbon footprint related to its natural rubber operations. Lastly, the Group is pursuing its research and development and eco-design programs to optimize the quantity of natural rubber used per thousand kilometers traveled by the tires. In addition to managing physical risks, the Group has opportunities to produce sustainable, responsible natural rubber(3). 4.1.1.1 d) Engagement and transparency CDP Climate Change In 2023, CDP ranked Michelin among the most forward-looking companies in the areas of transparency and combating climate change, awarding it a score of A- in recognition of its effective strategy, its success in reducing CO2 emissions and its long-term commitment to further shrinking its carbon footprint. Each year, the Michelin Group responds to the CDP Climate Change(4), CDP Water Security(5) and since 2021, the CDP Forest questionnaires. The CDP is an independent, non-financial rating organization. Michelin’s full response may be found on the CDP platform(6) and on the Group’s website. Applying the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) Since 2018, the Michelin Group has been gradually applying the recommended guidelines issued on June 29, 2017 by the TCFD and, in 2020, demonstrated its support for the task force as a signatory. Embracing TCFD principles implies driving change up, down and across the entire organization as it shifts to a market strategy and operations consistent with the below 2°C global warming scenario, while addressing the impacts arising from above 2°C scenarios. (1) https://www.michelin.com/en/sustainability/company/planet/climate-action. (2) See section 2.1 Risk factors specific to Michelin, description and related management systems/Risk 1 – Physical effects of climate change. (3) See section 4.1.4.2 c) A dedicated approach for natural rubber. (4) https://www.michelin.com/en/sustainability/company/planet/climate-action. (5) https://www.michelin.com/en/sustainability/entreprise/planet/natural-resources-preservation. (6) https://www.cdp.net/en/responses.
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