04 Sustainability Statement General information The assessment process comprises four steps: The stakeholders consulted when assessing each impact’s materiality are a faithful, comprehensive representation of all the stakeholders in Michelin’s business operations: n internal stakeholders: a large number of internal stakeholders were consulted to provide input, analyze and elaborate on the outcomes as needed. They included members of Management and of the Investor Relations, Finance, Human Resources, Purchasing, Legal and Compliance, Risk Management and Strategy departments; n the Corporate Stakeholders Committee. Impacts, risks and opportunities (IROs) were first identified and assessed for probability and severity, and then consolidated in the matrix. To position each matter, the Group used the following assessment grids: n financial materiality, which assesses the likelihood of occurrence and the potential severity of the financial effects of financial risks and opportunities on a scale of 1 to 5 (from less than €50 million to more than €900 million); n impact materiality, which assesses the negative and positive impacts, as follows: l assessing negative impacts: –for actual impacts: materiality depends on their severity, i.e., their magnitude, extent and irremediability, –for potential impacts: materiality is determined by severity and probability. In the case of a potentially negative human rights impact, the severity of the impact takes precedence over its likelihood, l assessing positive impacts: –for actual impacts, materiality depends on the scale and scope of the impact, and –for potential impacts, materiality depends on the scale, scope and likelihood of the impact. To finalize the matrix, the Group devised a scenario for each IRO identified, based on selected criteria. This approach prompted Michelin to reason in terms of “gross” risk (before the impact of mitigation initiatives) over the following time horizons: short term (less than a year), medium term (between one and five years) and long term (more than five years). The assessment was performed with the support of a third party with the expertise needed to ensure that the methodology was meaningful and reliable. To determine the materiality of sustainability matters, the Group symmetrically defined a threshold for both financial and impact materiality above which the matter is deemed to be material. In other words, any IRO whose score exceeds the defined threshold is considered to be material. The threshold was validated by the Group Executive Committee, enabling the most material matters to be prioritized. In this way, Michelin determined that ESRS S3 regarding affected communities is not material. Given its global footprint, the Group engages with all the people who live or work near its production and office sites, as well as with communities around its upstream or downstream value chain. Other matters fell short of the materiality threshold, in particular the IROs related to diversity, equity and inclusion issues and the social dialogue process. These matters, which are core values of the Group and an integral part of its social responsibility commitment, are discussed qualitatively elsewhere in this Statement The IROs resulting from the double materiality assessment were reviewed against the Group’s risk map. Going forward, a similar comparison between the risk map and the double materiality assessment will be performed every time the latter is updated. A wide range of data was used to establish the IROs, including existing regulations for the tire and automotive industries, reports from international organizations and industry associations (e.g., the Tire Industry Project globally and ETRMA in Europe) and the latest available scientific knowledge and in-house expertise, particularly in the field of materials. All these sources are available and duly explained below. A list of the ESRS Disclosure Requirements with which this Sustainability Statement complies may be found in Appendix D below. Definition of ESG topics and analysis grids Identification of IROs for each topic Consultations with stakeholders Consolidation, tiering of impact and financial materiality Final validation Presentations to the CEG and CDG 1 2 3 4 187 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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