Sustainability Statement Biodiversity and ecosystems (E4) 04 The dependencies of Michelin’s operations on ecosystem services are presented in the following chart: To fulfill the Group’s commitment to the Task Force on Naturerelated Financial Disclosures (TNFD), a project is underway to use and expand on the related LEAP-based assessments to improve the action prioritization and resource allocation processes. The double materiality of biodiversity and ecosystem-related impacts, risks and opportunities has been identified and assessed by applying the criteria of probability, irremediability and scale, according to the process described above (see section 4.1.4 Double materiality assessment, above). Material negative impacts and physical risks identified in the Group’s upstream value chain and rubber tree farming operations: n actual and potential deforestation from the expansion of rubber plantations and the production of biosourced materials and the extraction of other materials: Land-use change to create new cropland is one of the main drivers of deforestation in rubber-producing countries, such as Indonesia, China, Thailand, Brazil and certain West African countries. Most natural rubber farms have expanded in or around tropical forests, which are biodiversity-rich ecosystems. Deforestation can degrade natural habitats, cause biodiversity loss and disrupt essential ecosystems, such as water cycles, disease regulation and soil carbon sequestration. These impacts directly affect neighboring communities, which depend on such ecosystems for their social and economic stability. The extraction of mining raw materials is also a contributing factor in deforestation; n contributing to the loss of habitat and land degradation, soil erosion and biodiversity loss: rubber trees are primarily single-cropped, a practice that tends to homogenize the environment, which causes biodiversity loss and increases the risk of disease outbreaks, in turn leading to the greater use of pesticides; n contributing to eutrophication through the use of fertilizers in rubber tree farming and the production of other biomass-derived materials: fertilizer use is one of the main causes of eutrophication in soil and aquatic ecosystems. Although rubber trees can grow on impoverished soils, fertilizers may be used, in particular during a plantation’s initial development phase, to promote tree growth and optimize plot yield. Upstream ...for regulation purposes • Climate • Water cycle • Erosion management • Diseases and pests • Extreme weather events • Energy from biomass • Groundwater and surface water • Groundwater • Pollination • Soil quality • Natural rubber and other raw materials • Surface water • Energy • Natural bioremediation • Bioregeneration ...that enable the production of natural raw materials ...for supply purposes ...that mitigate direct impacts Production of raw materials from biomass Storage, Transport, Usage, End-of-life Production facilities Value chain Ecosystem services... MATERIAL DEPENDENCIES ON NATURE Direct Operations Downstream Direct Operations (Natural Rubber Production) Very high Level of dependence High Medium Low Very low The data establishing the dependencies of downstream operations are not yet available The above chart is not exhaustive. Weak dependencies are not included. 242 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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