_278 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report Supplier failure to respect human rights Supplier assessments Supplier CSR assessments include a dedicated indicator to track their labor relations and human rights performance. The 2030 objective is that 95% of assessed suppliers are confirmed as compliant with Michelin’s labor relations and human rights standards, compared with 91% at year-end 2023. Conflict minerals Michelin diligently tracks the origin of certain minerals used in its products, even though the quantities are very small. Commonly referred to as “conflict minerals,” they include gold, tin, tantalum and tungsten. Since 2019, Michelin has also included cobalt in this approach. The Group exercises its duty of care by applying the related OECD recommendations and using the applications developed by the Responsible Minerals Initiative (RMI). The materials and components used in Group products that contain these minerals or their derivatives have been identified and their suppliers are periodically requested to submit the RMI reporting template. These forms and inventories are then verified for compliance with the RMI lists. For all these minerals, this process enables Michelin to verify that the reporting supplier works with RMI-approved smelters. Around twenty raw materials suppliers are concerned by this process. Chemicals The Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation, which the European Union introduced to mitigate the adverse impact of chemical substances on human health and the environment, stipulates that manufacturers and importers of more than one tonne of a given chemical per year must register the substance with the European Chemicals Agency (ECHA). Producers must identify and manage the risks associated with the chemicals they make and market in the EU, demonstrating to the ECHA how the substance can be safely used and informing users of the proper risk management procedures. Michelin complies with this registration requirement as a manufacturer or importer of chemicals or articles containing chemicals and verifies that the chemicals or articles it uses have been registered by the suppliers. Non-compliance with the Supplier Relations Code of Conduct The Supplier Relations Code of Conduct and dedicated training module The Supplier Relations Code of Conduct drafted in 2021 is an integral part of the Group’s Code of Ethics and applies not only to buyers, but also to any Group employee involved in supplier relations. To ensure compliance with ethical guidelines, a dedicated online training module has been rolled out across the Purchasing organization and among internal partners in contact with suppliers. It reviews current legislation and expected behavior, in line with the Michelin Purchasing Principles, and offers certain recommendations. As of end-2023, 90% of the Purchasing organization(1) had been trained. Additional training may be offered in the various regional organizations. On-time payment of supplier invoices Michelin pays careful attention to the timely payment of supplier invoices and offers a variety of effective invoicing solutions, including electronic invoicing in PDF or EDI file formats. A new unified global invoice processing platform deployed in 2021 offers new paperless solutions. Blocked invoices are tracked weekly, as are open invoices with a close due date or whose receipt has not been inputted into the information system. A payment schedule dashboard displays a number of indicators, including the percentage of invoices paid on time (POT(2), 91.9% worldwide in 2023), as well as related sub-indicators to give advance warning of potential problems. Following a review, appropriate actions are taken with the purchasing department, internal partners or the suppliers. Suppliers who submit late invoices are contacted to raise their awareness of the issue and avoid settlement delays. (1) Percentage of Purchasing employees in contact with suppliers and with more than three months on the job. (2) POT: Payment On Time.
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