Sustainability Statement Climate change (E1) 04 4.2.10 A REVIEW OF THE GROUP’S EXPOSURE TO THE PHYSICAL RISKS OF CLIMATE CHANGE A review of the future physical climate risks likely to impact people and property comprises two steps to assess: (i) their exposure to projected climate-related hazards and (ii) their vulnerability to these hazards. Exposure stems from the geographical location of the people and property, while vulnerability expresses the likelihood, and to what degree, that they may be adversely impacted by future climate hazards. Michelin assessed the exposure to both current climate conditions and projected conditions in 2030 and 2050 of 721 Group facilities or sites of interest, including dealerships, and 227 key raw materials supplier sites. The main factors in selecting the Michelin sites for review were the presence of employees and the facility’s criticality to business continuity. The main factor in selecting raw materials supplier sites was their importance to business continuity. The assessments were based on two disaggregated IPCC scenarios, SPP2-4.5, which estimates the median global temperature rise at 2.7°C by 2100, and SSP5-8.5, which estimates it at 4.4°C. The climate-related hazards addressed included dry and humid heat, water stress/drought, floods, strong winds and landslides. The sites’ exposure to these climate-related hazards, both actual and projected, is consistent with the predicted climate change in each geographic zone. Based on the review findings (undergoing detailed analysis), the main climate-related hazards to which the Group and supplier sites are exposed are heat, flooding, water stress and strong/very strong winds (tornadoes, typhoons and hurricanes). 4.2.11 PHYSICAL CLIMATE RISKS ADAPTATION POLICY ISSUED IN 2024 Aligned with Michelin’s CSR policy, the Physical Climate Risks Adaptation Policy(1) reflects the Group’s best efforts to “manage the unavoidable,” by improving the value chain’s resilience to physical risks, The Policy applies to every Group entity and covers the entire value chain. It reflects the systemic, societal and multidimensional nature of climate risk impacts, which are prompting the Group, wherever and whenever necessary, to exert leverage or collaborate with stakeholders outside its value chain. Influencing initiatives are designed to spur external stakeholders to engage on the path to adaptation. Collaborative initiatives enable the Group to support adaptation measures already undertaken by external stakeholders. 4.2.12 DEDICATED INITIATIVES AND RESOURCES WITH A STRUCTURED ROADMAP TO 2030 Michelin is committed to assessing the climate risk exposure of all its own sites and other key sites in the value chain from 2025. A roadmap will be prepared during the year to identify the sites requiring a vulnerability assessment by 2030. The related metrics, which have yet to be defined, will be tracked by the Environmental Governance body. Initiatives undertaken in 2024 included: n reviewing exposure to projected climate conditions in 2030 and 2050 of 721 Group facilities or sites of interest and 227 key raw material supplier sites, based on the criteria described above; n assessing the macro-vulnerability to climate-related hazards of the first six Michelin sites, with projected risks and impacts in 2030 and 2050 and identification of any required adaptation measures. These first six reviews are also intended to develop a method for quantitatively measuring such vulnerability, which can eventually be used on the other sites as needed; n deploying climate change and climate change adaptation awareness-building and training resources. Natural rubber sourcing risks are addressed by an action plan that was pursued in 2024 and will continue in the years ahead with actions to diversify sources, improve varietal selection and encourage highly resilient farming practices. (1) Available on the Michelin Group website, https://www.michelin.com/en/sustainability/company/planet/climate-action 218 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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