Danone

Danone's governance structure is characterized by a Board of Directors model as a French corporation (société anonyme). The Company has been governed by a Board of Directors since its incorporation. The Board of Directors is responsible for determining the Company's strategic direction and overseeing its implementation by the management.

Board Composition and Responsibilities: The Board of Directors is composed of independent and non-independent directors who bring diverse expertise and experience to guide Danone's strategic decisions. The Board oversees the Company's sustainability strategy and its implementation through the Danone Impact Journey.

CEO Leadership: Antoine de SAINT-AFFRIQUE serves as Chief Executive Officer, leading the implementation of Renew Danone strategic plan and ensuring the integration of sustainability considerations into business strategy.

Mission-Driven Company Status: Danone has the status of Entreprise à Mission since July 3, 2020, following approval by the Shareholders' Meeting held on June 26, 2020. This status is recorded at the Paris Trade and Companies Register and reflects the Company's commitment to its social and environmental mission alongside financial performance.

Risk Management and Internal Controls: The administrative and management bodies maintain oversight of risk management and internal controls over sustainability reporting through dedicated committees and regular reporting mechanisms. The Company Strategy Department, supported by the Risk Committee and Advisory Committee, ensures strategic risks including sustainability risks are identified, assessed, and managed appropriately.

Sustainability Governance: The governance bodies address sustainability matters through regular review of the Danone Impact Journey progress, climate-related risks and opportunities assessment, and oversight of B Corp™ certification process. The Board receives regular updates on sustainability performance and strategic initiatives.

Information Provided to Governance Bodies: Danone's administrative, management and supervisory bodies receive comprehensive information on sustainability matters through structured reporting mechanisms:

Risk Management Reporting: The most significant risks, including sustainability-related risks, are reviewed during specific meetings of Country Management Committees and presented to the Executive Committee annually. The Head of Company Strategy presents major risks and risk mitigation plans to the Executive Committee, Audit Committee, and Board of Directors.

Strategic Risk Monitoring: The Company Strategy Department coordinates risk identification and monitoring processes, providing regular updates on:

• Strategic risks including packaging, consumer preferences, and climate change impacts
• Environmental risks such as raw materials volatility and climate change
• Operational risks including cybersecurity and food safety

Sustainability Performance Tracking: The governance bodies receive regular reporting on:

• Danone Impact Journey progress and milestones
• B Corp™ certification status (92.8% of sales covered in 2024)
• Health Star Rating performance (87.7% of sales rated ≥ 3.5 stars)
• Global Access To Nutrition Index ranking (1st place in 2024)

Climate-Related Disclosures: The Board receives updates on climate risks and opportunities assessment, updated at the beginning of 2025, covering both physical and transition risks aligned with TCFD framework.

Frequency and Format: Sustainability matters are addressed through:

• Annual strategic planning cycle integration
• Regular Risk Committee meetings throughout the year
• Annual presentations to Executive Committee and Board of Directors
• Ongoing monitoring through Country Business Unit reporting

Danone integrates sustainability-related performance into its incentive schemes through several mechanisms:

Long-term Compensation Plans: The Company has implemented various long-term compensation instruments that incorporate sustainability metrics:

• Group performance shares (GPS) subject to performance conditions including sustainability targets
• Fidelity Shares (FS) with progressive continuous employment conditions
• Group performance units (GPU) with multi-annual compensation structure

Performance Measurement Integration: Sustainability performance is embedded in compensation through:

• Danone Impact Journey milestone achievement
• B Corp™ certification progress (92.8% of sales covered by B Corp™ certification in 2024)
• Health and nutrition metrics including Health Star Rating performance (87.7% of sales rated ≥ 3.5 stars)
• Environmental targets including climate action and packaging circularity

Mission-Driven Alignment: As an Entreprise à Mission, Danone's incentive schemes are aligned with its mission to 'bring health through food to as many people as possible' and its commitment to creating both shareholder and societal value.

Executive Committee Integration: Senior leadership compensation is tied to the achievement of sustainability objectives as part of the Renew Danone strategic plan, ensuring accountability for environmental, social, and governance performance at the highest levels of the organization.

Performance Culture: The Group has evolved both short-term and long-term incentives as part of driving a performance culture while maintaining alignment with its purpose and sustainability commitments.

Due Diligence Framework: Danone maintains a comprehensive due diligence approach as part of its risk management and compliance framework. The Company has developed internal policies and procedures relating to compliance that are integrated into its internal control system.

Legal and Regulatory Compliance: As a player in the food and beverage industry active in many countries, Danone operates in a complex, changing and increasingly stringent regulatory environment. The Company has developed a General Secretary organization including General Counsel (Legal, Regulatory Affairs and Compliance) departments at local and central levels.

Compliance Management: The Group and its subsidiaries, assisted by their General Counsel teams and/or external legal advisors, take steps to:

• Ensure compliance with applicable laws and regulations
• Request administrative authorizations when necessary
• Identify new applicable regulations
• Monitor claims, litigations, and legal proceedings

Sustainability Due Diligence: Danone has implemented due diligence processes related to sustainability topics, particularly in response to emerging regulations such as:

• Corporate Sustainability Reporting Directive (CSRD)
• Corporate Sustainability Due Diligence Directive (CS3D)
• Various packaging and environmental regulations

Supply Chain Due Diligence: The Company has launched a Sustainable Sourcing Policy (SSP) in 2024, integrated into contract clauses between Danone and its direct suppliers, covering:

• Environmental standards
• Social responsibility requirements
• Human rights considerations
• Packaging circularity commitments

Risk Assessment Process: Due diligence is embedded in the annual strategic risk mapping process, which identifies, assesses, and manages material impacts, risks and opportunities across the value chain.

Risk Management Framework: Danone maintains an active risk identification and management policy aimed at protecting and developing its assets and reputation. The Company Strategy Department is responsible for identifying and monitoring strategic risks and coordinating different risk management processes.

Risk Committee Structure: The Risk Committee, composed of senior executives from key functions, ensures:

• Emerging risks are identified and qualified
• Internal and external inputs are incorporated
• Mitigation plans are elaborated and executed
• Regular supervision by the Advisory Committee (CFO, General Secretary, Company Strategy Head)

Risk Monitoring Process: Risk management operates through:

• Annual strategic risk mapping updates
• Country Management Committee reviews (at least annually)
• Regular Risk Committee meetings throughout the year
• Annual presentations to Executive Committee and Board of Directors

Internal Controls Over Sustainability Reporting: Specific controls for sustainability reporting include:

• Structured data collection and validation processes
• Regular monitoring of Danone Impact Journey progress
• Integration with financial reporting controls
• External assurance processes including statutory auditor certification

Sustainability Risk Integration: Key sustainability risks are integrated into the overall risk framework:

• Climate change impacts on value chain
• Packaging regulations and circularity requirements
• Consumer preferences evolution
• Raw materials and energy price volatility
• Regulatory compliance including CSRD requirements

Control Environment: The control environment encompasses:

• Risk management policies and procedures
• Internal control framework integration
• Regular assessment and updating of risk mitigation measures
• Coordination between Company Strategy, Finance, and operational teams

Danone's Mission and Strategy: Danone's mission is to bring health through food to as many people as possible. This mission is rooted in Danone's dual project, defined in 1972 by Group founder Antoine RIBOUD, creating both shareholder and societal value.

Business Model: Danone operates in healthy and on-trend Categories growing faster than the average food and beverages sector:

Essential Dairy & Plant-Based (EDP) - 49% of Sales:

• Fresh fermented dairy products and dairy specialties
• Plant-based products (beverages, yogurt alternatives, cheese, ice creams)
• Coffee creations (creamers and ready-to-drink coffee beverages)
• More than 60% of EDP revenues from value-added functional segments (immunity, gut health, high protein)

Specialized Nutrition - 33% of Sales:

• Infant milk formulas and complementary feeding for babies and young children
• Medical nutrition for children with specific medical conditions
• Adult medical nutrition including oral nutritional supplements and tube feeding

Waters - 18% of Sales:

• Plain water, flavored water and functional beverages
• Balanced portfolio between safe and non-safe tap-water markets

Geographic Presence: Operations across five geographical zones:

• Europe (35% of sales) - largest zone with balanced portfolio across all categories
• North America (24% of sales) - strong positions in yogurt, coffee creations, plant-based
• CNAO (13% of sales) - leadership in infant formula, medical nutrition, functional beverages
• Latin America (11% of sales) - strong local and global brands
• Rest of the World (16% of sales) - emerging markets focus

Value Chain: Integrated value chain from:

• Raw materials sourcing (primarily milk, fruits, sugar)
• Production facilities (151 production sites globally)
• Distribution across multiple channels (retail, traditional, e-commerce, away-from-home, specialized)
• Research & Innovation network (2,000+ experts, 200+ clinical studies)

Competitive Positioning: Global leadership positions:

• #1 worldwide for fresh dairy products
• #1 worldwide for plant-based foods and beverages
• #2 worldwide for packaged waters
• #2 worldwide for early life nutrition
• #4 worldwide for adult medical nutrition

Strategic Transformation - Renew Danone: Four strategic pillars implemented 2022-2024:

1. Win where we are - strengthening competitiveness in core categories
2. Expand where we should be - selective expansion in segments, channels, geographies
3. Seed the future - exploring opportunities through partnerships and innovation
4. Manage our portfolio - active portfolio rotation (~9% of revenues 2022-2024)

Next Chapter Strategy: Building on fundamentals re-established 2022-2024:

• Pivoting category approach (gut health, protein, healthy hydration)
• Broadening business models (away-from-home, medical nutrition)
• Expanding geographic footprint
• More active portfolio management

Value Creation Model: Committed to long-term value compounding:

• Like-for-like net sales growth target: +3% to +5% (2025-2028)
• Structurally double-digit ROIC target
• €3 billion free cash flow ambition

Société à Mission Status: Entreprise à Mission since July 2020, integrating purpose into business model with commitment to health, nature, and social impact.

Stakeholder Engagement Framework: Danone engages with various stakeholder groups as part of its mission to bring health through food to as many people as possible and its commitment as an Entreprise à Mission.

Consumer and Patient Focus: Danone's strategy places consumers and patients at the center:

• Serving more than 500 million consumers across Europe alone
• Products designed for different life stages from infants to seniors
• Health-focused portfolio with 87.7% of volumes scoring ≥ 3.5 stars on Health Star Rating
• #1 position in 2024 Global Access To Nutrition Index (ATNi)

Customer Partnerships: Strategic collaboration with retail customers:

• Top 10 customers account for ~20% of consolidated sales
• Global partnerships based on joint business plans
• Collaboration on sustainability projects (food waste, recycling, health programs)
• Development of category growth strategies
• Channel-specific commercial strategies across mass retail, e-commerce, away-from-home

Healthcare Professional Engagement: For Specialized Nutrition:

• Ongoing relationships through medical representatives
• Engagement with general practitioners and specialists
• Present in over 90% of top-tier hospitals in China
• Collaboration with pharmacists and healthcare systems

Supplier and Partner Relationships: Value chain collaboration:

• Local milk producer agreements and cooperative partnerships
• Implementation of Sustainable Sourcing Policy (SSP) in 2024
• Support for farmers' transition to Regenerative Agriculture
• Global procurement programs for optimization

Employee Engagement: Nearly 90,000 employees across 55+ countries:

• 2024 People Survey results: 78% engagement (+7% vs FMCG norm)
• 85% intention to stay (+7% vs FMCG norm)
• HOPE Values (Humanism, Openness, Proximity, Enthusiasm) as cultural foundation
• Danone People Journey with DanSkills, DanLife, and Leadership Factory initiatives

Community and Social Impact:

• Danone Communities investment fund for social businesses
• Danone Ecosystem program for local community inclusion
• B Corp™ certification covering 92.8% of sales
• Focus on affordable nutrition access in emerging markets

Investor Relations: Commitment to dual project creating both shareholder and societal value:

• Regular communication on Renew Danone progress
• Integration of sustainability performance in financial reporting
• Transparent reporting on long-term value creation strategy

Regulatory and Government Relations: Active engagement with authorities:

• Compliance with complex regulatory environment across 55+ countries
• Participation in policy discussions on sustainability regulations
• Advocacy for circular economy initiatives and packaging regulations

NGO and Industry Partnerships: Collaborative approach to sustainability:

• Ellen MacArthur Foundation partnership on circular economy
• WWF advocacy for UN Global Plastics Treaty
• Science-Based Targets initiative participation
• Access To Nutrition Index engagement

Innovation Ecosystem: Partnership approach to Research & Innovation:

• Collaboration with universities and academic research centers
• Partnerships with suppliers and industry players
• Start-up ecosystem engagement through Danone Ventures
• Microsoft AI Academy collaboration announced in 2024

Material Impacts, Risks and Opportunities: Danone has identified material impacts, risks and opportunities through its strategic risk mapping process and sustainability assessment, integrated with its Renew Danone strategy.

Strategic Material Impacts and Risks:

1. Over-reliance on Principal Markets (Strong Risk):

• Top-5 markets account for 52% of consolidated sales
• Particular exposure to China (11% of sales, largest profit contributor)
• Geopolitical, economic and societal instability impacts
• Interaction with Strategy: Driving portfolio balance across categories and geographies; local-first organization model

2. Packaging Transition (Strong Risk):

• 1.40 million tons total packaging (0.67 million tons plastic)
• Regulatory pressures on plastic reduction and circularity
• Consumer and retailer expectations for sustainable packaging
• Interaction with Strategy: Danone Impact Journey commitment to 100% circular packaging by 2030; 30% virgin fossil-based plastic reduction by 2030

3. Fast Changes in Consumer Preferences (Strong Risk):

• Health, environmental and social consciousness driving purchase decisions
• Affordability pressures and increased scrutiny
• Demand for transparency and local sourcing
• Interaction with Strategy: Focus on health portfolio (87.7% products ≥3.5 Health Star Rating); innovation in functional segments; B Corp™ certification

Environmental Material Impacts:

4. Climate Change Impact on Value Chain (Strong Risk):

• Physical risks: soil, biodiversity, raw material availability/quality/prices
• Water availability impacts on operations and stakeholder relationships
• Transition risks: regulations, technology, market evolution, reputation
• Interaction with Strategy: Danone Impact Journey climate commitments; regenerative agriculture; watershed protection; decarbonization

5. Raw Materials and Energy Volatility (Strong Risk):

• ~€10 billion annual material costs (75% of COGS)
• Weather, regulatory, geopolitical supply/demand impacts
• Energy price volatility affecting European operations
• Interaction with Strategy: Diversified sourcing; hedging strategies; renewable energy transition (50% by 2030)

Social Material Impacts:

6. Health Through Food Mission:

• Positive impact through nutritious product portfolio
• Access to nutrition in emerging markets
• Medical nutrition for patients with specific needs
• Interaction with Strategy: Core to mission and Société à Mission status; #1 ATNi ranking; specialized nutrition growth

7. Talent Attraction and Retention (Medium Risk):

• Nearly 90,000 employees across 55+ countries
• Skills shortages in key capabilities (digital, sustainability)
• Competition for talent in emerging markets
• Interaction with Strategy: Danone People Journey; HOPE Values culture; continuous learning programs

Governance Material Impacts:

8. Regulatory Compliance (Medium Risk):

• Complex, changing regulatory environment across markets
• Sustainability regulations (CSRD, CS3D, packaging)
• Food safety and marketing practice regulations
• Interaction with Strategy: Legal and compliance organization; proactive regulatory engagement; sustainability reporting excellence

Material Opportunities:

1. Health and Nutrition Trends:

• Growing consumer focus on health, immunity, gut health
• Aging populations driving medical nutrition demand
• Plant-based and flexitarian trends
• Strategic Leverage: Leadership positions in functional dairy, plant-based, medical nutrition

2. Sustainability Leadership:

• B Corp™ certification differentiating in market
• Regenerative agriculture value creation
• Circular economy innovation
• Strategic Leverage: Pioneering sustainability position; license to operate; consumer preference

3. Digital and Technology Integration:

• E-commerce growth acceleration
• AI and data analytics capabilities
• Digital health technologies
• Strategic Leverage: Microsoft AI Academy; digital transformation; personalized nutrition

Integration with Business Model: Material impacts, risks and opportunities are fully integrated into:

• Annual strategic planning cycle
• Country Business Unit risk assessments
• Investment allocation decisions
• Innovation prioritization
• Geographic expansion choices
• Portfolio management decisions
• Sustainability target setting through Danone Impact Journey

Process for Identifying and Assessing Material Impacts, Risks and Opportunities:

Risk Identification Framework: Danone maintains a structured approach to identify and assess material impacts, risks and opportunities through the Company Strategy Department, which is responsible for identifying and monitoring strategic risks and coordinating different risk management processes.

Risk Committee Structure: The Risk Committee, composed of senior executives from key functions, ensures:

• Emerging risks are identified and qualified
• Internal and external inputs are incorporated
• Mitigation plans are elaborated and executed
• Regular supervision by Advisory Committee (CFO, General Secretary, Company Strategy Head)

Annual Strategic Risk Mapping Methodology: The risk mapping is prepared and updated annually as part of the strategic planning cycle:

Step 1: Risk Identification

• Country Business Units identify material risks with support from corporate functions
• Integration of systemic risks not perceptible at local level
• Incorporation of external trends and emerging issues

Step 2: Risk Consolidation

• Major risks consolidated at Group level
• Assessment of cross-functional and cross-geographical impacts
• Integration of sustainability and ESG-related risks

Step 3: Risk Assessment

• Ranking based on likelihood of occurrence
• Financial impact estimation at Country Business Unit and Group level
• Assessment considers both gross and net risk (after mitigation measures)

Step 4: Mitigation Planning

• Determination of preventive or corrective actions
• Global and country-specific action plans
• Resource allocation for risk management

Sustainability Impact Assessment: Specific processes for sustainability impacts include:

• Danone Impact Journey materiality assessment
• Climate risk and opportunity analysis (updated early 2025)
• Value chain impact mapping covering environmental, social and governance aspects
• Stakeholder engagement to understand external perspectives

Integration Mechanisms:

• Annual strategic planning cycle integration
• Country Management Committee reviews (minimum annually)
• Regular Risk Committee meetings throughout year
• Executive Committee annual risk review
• Board of Directors and Audit Committee presentations

External Input Sources:

• Market research and consumer insights
• Regulatory monitoring and government relations
• Industry associations and peer benchmarking
• NGO partnerships and stakeholder feedback
• Academic collaborations and scientific studies
• Investor and analyst feedback

Monitoring and Updates:

• Continuous monitoring of risk landscape evolution
• Regular updates to risk assessments based on internal and external changes
• Integration of new emerging risks (e.g., AI, quantum computing, geopolitical tensions)
• Annual validation and refresh of materiality assessment

Scope of Assessment: The process covers:

• Strategic risks (market position, consumer preferences, portfolio)
• External environment risks (climate, raw materials, currency, regulatory)
• Operational risks (cybersecurity, food safety, talent, transformation)
• Sustainability impacts across environmental, social and governance dimensions
• Value chain impacts from suppliers to consumers
• Geographic and category-specific risks and opportunities

ESRS Coverage in Sustainability Statement:

Based on Danone's materiality assessment and content provided in this Universal Registration Document, the following ESRS disclosure requirements are covered:

ESRS 2 - General Disclosures:

• All governance disclosures (GOV-1 through GOV-5)
• Strategy, business model and value chain (SBM-1 through SBM-3)
• Impact, risk and opportunity identification processes (IRO-1 and IRO-2)

Environmental Standards:

ESRS E1 - Climate Change: Covered based on climate commitments, Net-Zero targets, Scope 1-2-3 emissions, renewable energy transition, and climate risk assessment updated in early 2025.

ESRS E2 - Pollution: Covered through environmental protection commitments and operational environmental management.

ESRS E3 - Water and Marine Resources: Covered through watershed protection programs, water usage reduction commitments, and integrated water resources management.

ESRS E4 - Biodiversity and Ecosystems: Covered through regenerative agriculture initiatives, land use impacts, and nature protection commitments.

ESRS E5 - Resource Use and Circular Economy: Covered extensively through:

• Packaging circularity commitments (100% by 2030)
• Virgin fossil-based plastic reduction (30% by 2030)
• 4R strategy (Reduce, Reuse, Recycle, Reclaim)
• Resource efficiency programs

Social Standards:

ESRS S1 - Own Workforce: Covered through:

• Nearly 90,000 employees across 55+ countries
• Danone People Journey initiatives
• Health and safety programs (WISE)
• Diversity and inclusion commitments
• Employee engagement metrics (78% engagement)

ESRS S2 - Workers in the Value Chain: Covered through:

• Sustainable Sourcing Policy (SSP) launched 2024
• Farmer support and regenerative agriculture
• Supply chain human rights commitments

ESRS S3 - Affected Communities: Covered through:

• Danone Ecosystem program for local communities
• Community impact in emerging markets
• Local stakeholder engagement

ESRS S4 - Consumers and End-Users: Covered extensively through:

• Health through food mission
• Product safety and quality programs
• Nutritional profile improvements (Health Star Rating)
• Access to nutrition initiatives

Governance Standards:

ESRS G1 - Business Conduct: Covered through:

• Compliance and legal framework
• Supplier management through SSP
• Anti-corruption measures
• Transparent business practices

Materiality Assessment Results: The materiality assessment identified all major environmental, social and governance topics as material to Danone's business model and stakeholder expectations, reflecting the comprehensive nature of the Danone Impact Journey and the Company's status as an Entreprise à Mission.

Reporting Boundaries: The sustainability statement covers Danone's operations across all geographical zones and business categories, with specific attention to material impacts across the value chain from raw materials to end consumers.

Omitted Disclosures: Based on the materiality assessment, no ESRS disclosure requirements have been omitted as non-material. All environmental, social and governance topics are considered material given Danone's mission-driven approach and comprehensive sustainability commitments.

Danone Climate Transition Plan:

Danone has integrated climate change mitigation into its comprehensive sustainability strategy through the Danone Impact Journey, with specific climate commitments and transition pathways.

Net-Zero Commitment: Danone is committed to achieving Net-Zero emissions across its entire value chain, with science-based targets aligned with limiting global warming to 1.5°C.

Transition Strategy Components:

1. Decarbonization Pathway:

• Scope 1 & 2 emissions reduction through operational efficiency and renewable energy
• 50% of energy from renewable sources by 2030
• Scope 3 emissions reduction through regenerative agriculture and sustainable sourcing

2. Regenerative Agriculture:

• Supporting farmers' transition to regenerative practices
• Moré Holstein farm in Spain became first B Corp™ certified farm in Europe in 2024
• Focus on soil health, biodiversity, and carbon sequestration

3. Renewable Energy Transition:

• Commitment to increase renewable energy use across operations
• Integration of renewable energy projects in production facilities
• Energy efficiency improvements in manufacturing processes

4. Packaging Decarbonization:

• 30% reduction in virgin fossil-based plastic packaging by 2030
• 100% circular packaging by 2030 (reusable, recyclable, or compostable)
• Development of low-carbon packaging alternatives

5. Value Chain Integration:

• Sustainable Sourcing Policy (SSP) launched in 2024 with climate requirements
• Supplier engagement on emission reduction targets
• Raw materials sourcing optimization for lower carbon footprint

Climate Risk Adaptation: Danone updated its climate risks and opportunities assessment in early 2025, addressing:

• Physical risks: impacts on agriculture, water resources, and operations
• Transition risks: regulatory, technology, market, and reputational changes

Governance and Implementation:

• Climate considerations integrated into strategic planning
• Regular monitoring through Company Strategy Department
• Board oversight of climate strategy and progress
• Integration with financial planning and investment decisions

Timeline and Milestones:

• 2030: 50% renewable energy, 30% virgin plastic reduction, 100% circular packaging
• 2040: 50% reduction in virgin fossil-based packaging, effective collection systems
• Long-term: Net-Zero emissions across entire value chain

Investment and Resources: Danone allocates significant resources to climate transition including:

• Research & Innovation investments in low-carbon solutions
• Capital expenditure on renewable energy and efficiency projects
• Partnership investments (e.g., Biotech Open Platform with Michelin)
• Technology development including precision fermentation

Just Transition Considerations: The transition plan considers impacts on workers and communities through:

• Support for farmers transitioning to regenerative practices
• Skills development for employees in new technologies
• Community engagement in watersheds and local ecosystems
• Affordable nutrition maintenance during transition

Climate Change Mitigation and Adaptation Policies:

Danone has established comprehensive policies for climate change mitigation and adaptation integrated within its Danone Impact Journey and corporate governance framework.

Climate Mitigation Policies:

1. Net-Zero Emissions Commitment:

• Science-based targets aligned with 1.5°C pathway
• Comprehensive value chain emission reduction strategy
• Integration of climate targets into business planning

2. Renewable Energy Policy:

• Commitment to 50% renewable energy by 2030
• Preference for renewable electricity in operations
• Investment in on-site renewable energy generation where feasible

3. Sustainable Sourcing Policy (SSP): Launched in 2024, integrating climate considerations:

• Supplier requirements for emission reduction
• Regenerative agriculture promotion
• Raw materials carbon footprint optimization
• Contract clauses with climate performance expectations

4. Packaging Climate Policy:

• 30% reduction in virgin fossil-based packaging by 2030
• 100% circular packaging by 2030
• Packaging life cycle carbon footprint reduction
• Alternative materials development and deployment

Climate Adaptation Policies:

1. Value Chain Resilience:

• Diversified sourcing to reduce climate vulnerability
• Supply chain risk assessment and management
• Raw materials security and quality protection

2. Water Resource Management:

• Integrated water resources management in watersheds
• Water usage reduction across operations
• Watershed protection programs
• Climate-resilient water sourcing strategies

3. Agricultural Adaptation:

• Support for climate-resilient farming practices
• Regenerative agriculture to enhance soil health and water retention
• Farmer training and support programs
• Crop diversification and adaptation strategies

4. Operational Adaptation:

• Infrastructure resilience to extreme weather events
• Production facility climate risk assessment
• Supply chain continuity planning
• Emergency response and business continuity procedures

Policy Governance:

• Board-level oversight of climate policies
• Executive Committee accountability for implementation
• Integration with risk management framework
• Regular policy review and updates based on scientific developments

Implementation Framework:

• Country-level adaptation of global policies
• Specific action plans by geographical zone
• Integration with operational procedures
• Performance monitoring and reporting systems

Stakeholder Engagement:

• Collaboration with suppliers on climate requirements
• Farmer support and training programs
• Industry partnerships for climate solutions
• NGO collaboration on climate advocacy

Investment Allocation:

• Capital allocation prioritizing climate-positive projects
• Research & Innovation funding for climate solutions
• Technology development and deployment
• Partnership investments in climate technologies

Policy Integration: Climate policies are integrated with:

• Overall sustainability strategy (Danone Impact Journey)
• Mission-driven company commitments (Société à Mission)
• Business strategy (Renew Danone)
• Risk management procedures
• Financial planning and performance management

Actions and Resources for Climate Change Policies:

Danone has implemented specific actions and allocated substantial resources to execute its climate change mitigation and adaptation strategies.

Mitigation Actions:

1. Renewable Energy Implementation:

• Target: 50% renewable energy by 2030
• Installation of renewable energy systems at production facilities
• Power purchase agreements for renewable electricity
• Energy efficiency improvements across operations

2. Regenerative Agriculture Program:

• Moré Holstein farm in Spain became first B Corp™ certified farm in Europe (2024)
• Farmer training and support for climate-smart practices
• Soil health improvement initiatives
• Carbon sequestration projects in agricultural operations

3. Packaging Transformation:

• 11% reduction in plastic packaging (2018-2024)
• 21% reduction in virgin fossil-based plastic (2018-2024)
• Development of alternative packaging materials
• Investment in recycling infrastructure and partnerships

4. Innovation and Technology:

• Biotech Open Platform creation with Michelin, DMC Biotechnologies, Crédit Agricole (June 2024)
• Advanced fermentation and precision fermentation development
• Microsoft AI Academy collaboration for operational optimization (July 2024)
• Research & Innovation investments in low-carbon solutions

Adaptation Actions:

1. Supply Chain Resilience:

• Diversification of sourcing to reduce single-source dependencies
• Geographic sourcing diversification
• Raw materials security programs
• Alternative supply chain development

2. Water Management:

• Integrated water resources management in watersheds
• Water usage reduction across operations
• Watershed protection programs implementation
• Water efficiency technologies deployment

3. Agricultural Support:

• Climate-resilient farming practice promotion
• Farmer support programs for adaptation
• Crop diversification initiatives
• Local agricultural system strengthening

Resource Allocation:

1. Financial Investment:

• Significant capital allocation for renewable energy projects
• Research & Innovation budget focusing on climate solutions
• Partnership investments in climate technologies
• Infrastructure upgrades for climate resilience

2. Human Resources:

• Dedicated sustainability teams across regions
• Company Strategy Department coordination
• Specialized expertise in climate science and technology
• Training programs for employees on climate action

3. Partnership Investments:

• Biotech Open Platform partnership investment
• Microsoft AI collaboration for optimization
• Ellen MacArthur Foundation strategic partnership
• Industry collaboration on climate solutions

4. Technology Development:

• Precision fermentation technology advancement
• Alternative protein development
• Packaging innovation for circularity
• Digital technologies for operational efficiency

Organizational Resources:

1. Governance Structure:

• Board oversight of climate strategy
• Executive Committee accountability
• Country-level implementation teams
• Cross-functional climate working groups

2. Monitoring and Reporting:

• Climate performance tracking systems
• Regular progress assessment
• External assurance and verification
• Stakeholder reporting and transparency

3. Capability Building:

• Employee training on climate action
• Technical expertise development
• Innovation capability enhancement
• Partnership management skills

Implementation Timeline:

• 2024: SSP launch, B Corp™ farm certification, technology partnerships
• 2030: 50% renewable energy, 30% virgin plastic reduction
• 2040: 50% virgin fossil-based packaging reduction
• Ongoing: Continuous improvement and adaptation

Performance Monitoring:

• Regular tracking of emission reduction progress
• Energy transition monitoring
• Agricultural program effectiveness assessment
• Supply chain resilience evaluation
• Financial performance integration

Climate Change Targets:

Danone has established comprehensive targets for climate change mitigation and adaptation integrated within its Danone Impact Journey and aligned with science-based approaches.

Emission Reduction Targets:

1. Net-Zero Commitment:

• Science-based targets aligned with 1.5°C pathway
• Net-Zero emissions across entire value chain
• Comprehensive Scope 1, 2, and 3 emissions coverage

2. Renewable Energy Target:

• 50% of energy from renewable sources by 2030
• Transition from fossil fuel dependency
• Integration of renewable electricity across operations

Circular Economy and Packaging Targets:

1. Virgin Fossil-Based Packaging Reduction:

• 30% reduction in virgin fossil-based packaging by 2030
• 50% reduction by 2040
• Baseline and interim milestones established

2. Circular Packaging Target:

• 100% of packaging reusable, recyclable, or compostable by 2030
• Comprehensive packaging design transformation
• Circular economy principles implementation

3. Collection System Development:

• Recover as much plastic as the Group uses by 2040
• Effective collection systems leadership
• Plastic circularity closing the loop

Agricultural and Supply Chain Targets:

1. Regenerative Agriculture:

• Support farmers' transition to regenerative practices
• Soil health and carbon sequestration enhancement
• Biodiversity protection and restoration

2. Sustainable Sourcing:

• Integration of climate targets in Sustainable Sourcing Policy (SSP)
• Supplier emission reduction requirements
• Value chain decarbonization alignment

Adaptation Targets:

1. Water Management:

• Water usage reduction across operations
• Watershed protection program implementation
• Climate-resilient water sourcing development

2. Supply Chain Resilience:

• Diversified sourcing portfolio development
• Climate risk assessment integration
• Business continuity enhancement

Target Timeline and Milestones:

2025-2028 Period:

• Like-for-like net sales growth: +3% to +5%
• Structurally double-digit ROIC
• €3 billion free cash flow target

2030 Milestones:

• 50% renewable energy achievement
• 30% virgin fossil-based packaging reduction
• 100% circular packaging implementation

2040 Long-term Targets:

• 50% virgin fossil-based packaging reduction
• Plastic recovery equivalent to usage
• Net-Zero emissions pathway achievement

Target Governance:

• Board oversight of target achievement
• Executive Committee accountability
• Annual progress monitoring and reporting
• Integration with performance management

Measurement and Reporting:

• Science-based target methodology alignment
• Regular progress assessment and communication
• External verification and assurance
• Stakeholder transparency and engagement

Target Integration: Climate targets are integrated with:

• Financial performance objectives
• Business strategy implementation
• Risk management procedures
• Innovation and investment priorities
• Stakeholder engagement activities

Performance Tracking:

• Quantitative metrics and KPIs
• Regular milestone assessment
• Course correction mechanisms
• Continuous improvement processes

Alignment with External Frameworks:

• Science-Based Targets initiative (SBTi)
• Paris Agreement objectives
• UN Sustainable Development Goals
• Industry best practice standards

Anticipated Financial Effects from Climate-Related Risks and Opportunities:

Danone has assessed the financial implications of climate-related physical and transition risks and opportunities as part of its updated climate risk assessment conducted in early 2025.

Physical Risk Financial Impacts:

1. Agricultural Supply Chain Disruption:

• Raw materials represent 75% of cost of goods sold (€10 billion annually)
• Climate impacts on milk, fruits, sugar availability and pricing
• Weather-related supply disruption affecting production costs
• Quality variations impacting product specifications and costs

2. Water Resource Risks:

• Operational disruptions at production facilities
• Increased costs for water treatment and alternative sourcing
• Potential facility closures or relocations in water-stressed regions
• Community relations costs and license to operate impacts

3. Extreme Weather Events:

• Production facility damage and business interruption
• Supply chain disruption and logistics cost increases
• Insurance premium increases and coverage limitations
• Emergency response and recovery costs

Transition Risk Financial Impacts:

1. Regulatory Compliance Costs:

• Carbon pricing and emission trading system costs
• Packaging regulations requiring design changes and material costs
• CSRD and sustainability reporting compliance costs
• Potential regulatory fines and penalties

2. Technology Transition Investments:

• Renewable energy infrastructure capital expenditure
• Packaging technology development and deployment costs
• Precision fermentation and alternative protein development
• Digital technology and AI implementation costs

3. Market Transition Risks:

• Consumer preference shifts affecting product demand
• Competitive pressure from sustainable alternatives
• Premium costs for sustainable raw materials
• Stranded assets in high-carbon technologies

Climate Opportunity Financial Benefits:

1. Market Differentiation:

• Premium pricing for sustainable products
• Market share gains from health and sustainability positioning
• B Corp™ certification competitive advantage
• First-mover advantage in regenerative agriculture

2. Operational Efficiency:

• Energy cost savings from renewable energy transition (50% by 2030)
• Resource efficiency improvements reducing material costs
• Waste reduction and circular economy cost savings
• Supply chain optimization and resilience benefits

3. Innovation and Growth Opportunities:

• New product categories and market segments
• Alternative protein and plant-based growth
• Medical nutrition expansion in aging populations
• Digital health and personalized nutrition development

Investment Requirements:

Climate Action Investments:

• Renewable energy infrastructure development
• Research & Innovation in climate solutions
• Biotech Open Platform partnership investment
• Microsoft AI Academy collaboration investment
• Regenerative agriculture farmer support programs

Adaptation Investments:

• Supply chain diversification and resilience building
• Water management system improvements
• Climate-resilient infrastructure upgrades
• Alternative raw materials development

Financial Integration:

Strategic Planning Integration:

• Climate considerations in 2025-2028 financial guidance
• Like-for-like sales growth target: +3% to +5%
• Structurally double-digit ROIC achievement
• €3 billion free cash flow ambition

Risk Management:

• Climate risks integrated into strategic risk mapping
• Financial impact assessment in annual planning
• Insurance and hedging strategies for climate risks
• Contingency planning for extreme scenarios

Opportunity Capture:

• Investment allocation prioritizing climate-positive returns
• Portfolio management optimizing for climate resilience
• Innovation funding focused on sustainable solutions
• Partnership strategies maximizing climate opportunities

Time Horizon Assessment:

• Short-term (2025-2030): Transition costs and early opportunity capture
• Medium-term (2030-2040): Technology deployment and market benefits
• Long-term (post-2040): Full transition benefits and climate resilience

Pollution-Related Policies:

Danone has established comprehensive policies to address pollution prevention and management across its operations and value chain, integrated within its environmental management framework and Danone Impact Journey.

Environmental Protection Policies:

1. Operational Environmental Management:

• Strict environmental regulations compliance at all production sites
• Environmental standards implementation across 151 production facilities
• Energy use, water use, and waste management protocols
• Regular production site inspections for environmental protection

2. Air Quality Management:

• Emission reduction targets through renewable energy transition
• 50% renewable energy by 2030 reducing air pollution from fossil fuels
• Manufacturing process optimization to minimize air emissions
• Transportation efficiency improvements reducing logistics emissions

3. Water Pollution Prevention:

• Integrated water resources management programs
• Wastewater treatment standards at production facilities
• Water quality protection in watersheds where Danone operates
• Clean water access initiatives in communities

4. Soil Protection:

• Regenerative agriculture practices promoting soil health
• Chemical input reduction in farming systems
• Soil contamination prevention measures
• Support for organic and sustainable farming methods

Packaging and Waste Policies:

1. Circular Economy Approach:

• 100% circular packaging by 2030 (reusable, recyclable, or compostable)
• 30% reduction in virgin fossil-based packaging by 2030
• 4R strategy implementation (Reduce, Reuse, Recycle, Reclaim)
• Ellen MacArthur Foundation partnership on circular economy

2. Plastic Pollution Prevention:

• 21% reduction in virgin fossil-based plastic (2018-2024)
• Development of effective collection systems for plastic recovery
• Advocacy for UN Global Plastics Treaty with WWF
• Packaging design for pollution prevention

3. Waste Management:

• Production waste minimization programs
• Food waste reduction initiatives
• Packaging waste responsibility and management
• Recycling and recovery system development

Supply Chain Pollution Prevention:

1. Sustainable Sourcing Policy (SSP): Launched in 2024 with pollution prevention requirements:

• Environmental standards for suppliers
• Chemical use reduction in agricultural production
• Sustainable farming practice requirements
• Supply chain environmental performance monitoring

2. Agricultural Pollution Reduction:

• Support for regenerative agriculture reducing chemical inputs
• Farmer training on sustainable practices
• Integrated pest management promotion
• Biodiversity protection in agricultural systems

Chemical and Substance Management:

1. Product Safety Standards:

• Strict chemical safety protocols in product development
• Raw materials quality and safety requirements
• Packaging materials safety assessment
• Continuous monitoring of substance safety developments

2. Innovation for Pollution Prevention:

• Research & Innovation focused on cleaner technologies
• Alternative materials development reducing environmental impact
• Precision fermentation reducing resource intensity
• Biotech solutions for environmental performance

Regulatory Compliance:

1. Environmental Law Compliance:

• Comprehensive legal and regulatory monitoring
• Environmental permitting and authorization management
• Pollution control regulation adherence
• Proactive regulatory engagement on environmental standards

2. International Standards:

• ISO environmental management system implementation
• Global food safety initiative (GFSI) standards
• International environmental best practice adoption
• Third-party environmental certification participation

Stakeholder Engagement:

1. Community Relations:

• Environmental impact assessment and communication
• Local community engagement on environmental issues
• Transparency on environmental performance
• Collaborative environmental protection initiatives

2. Industry Collaboration:

• Industry partnerships for pollution prevention
• Best practice sharing and development
• Collective action on environmental challenges
• Research collaboration on pollution solutions

Policy Implementation:

• Environmental management systems at all facilities
• Regular environmental performance monitoring
• Continuous improvement programs
• Employee training and awareness programs
• Integration with business operations and strategy

Actions and Resources for Pollution Management:

Danone has implemented comprehensive actions and allocated significant resources to address pollution prevention and management across its operations and value chain.

Operational Pollution Prevention Actions:

1. Production Facility Management:

• Regular inspections of 151 production sites for environmental compliance
• Implementation of strict environmental standards and protocols
• Waste management optimization across manufacturing operations
• Energy efficiency improvements reducing pollution emissions

2. Renewable Energy Transition:

• 50% renewable energy target by 2030 reducing air pollution
• Installation of renewable energy systems at production facilities
• Power purchase agreements for clean electricity
• Fossil fuel dependency reduction across operations

3. Water Management:

• Integrated water resources management in watersheds
• Wastewater treatment system improvements
• Water usage efficiency programs
• Water quality protection initiatives

Packaging Pollution Reduction Actions:

1. Plastic Reduction Achievements:

• 21% reduction in virgin fossil-based plastic (2018-2024)
• 11% total plastic packaging reduction (2018-2024)
• Alternative packaging material development and deployment
• Circular packaging design implementation

2. Collection and Recovery Systems:

• Development of effective collection systems for plastic recovery
• Partnership with recycling infrastructure providers
• Consumer education on proper disposal and recycling
• Extended producer responsibility program participation

3. Innovation in Packaging:

• Research & Innovation investment in sustainable packaging
• Biodegradable and compostable packaging development
• Recycled content integration in packaging materials
• Packaging optimization for reduced environmental impact

Agricultural Pollution Prevention:

1. Regenerative Agriculture Program:

• Moré Holstein farm B Corp™ certification (first in Europe, 2024)
• Farmer training and support for sustainable practices
• Chemical input reduction in farming systems
• Soil health improvement initiatives

2. Sustainable Sourcing Implementation:

• Sustainable Sourcing Policy (SSP) rollout in 2024
• Supplier environmental performance requirements
• Agricultural practice improvement programs
• Supply chain environmental monitoring

Resource Allocation:

1. Financial Investment:

• Capital allocation for environmental infrastructure
• Research & Innovation budget for pollution prevention technologies
• Partnership investments in environmental solutions
• Technology development funding for cleaner processes

2. Technology and Innovation:

• Biotech Open Platform investment with Michelin and partners
• Precision fermentation technology development
• Microsoft AI Academy for operational optimization
• Advanced analytics for environmental performance monitoring

3. Human Resources:

• Dedicated environmental teams at facilities
• Specialized expertise in pollution prevention
• Training programs for environmental management
• Cross-functional environmental working groups

Partnership and Collaboration:

1. Industry Partnerships:

• Ellen MacArthur Foundation strategic partnership on circular economy
• WWF collaboration on plastic pollution advocacy
• Global Methane Hub participation
• Industry consortium participation for environmental solutions

2. Supplier Engagement:

• Environmental requirements integration in supplier contracts
• Supplier training and support programs
• Collaborative pollution prevention initiatives
• Supply chain environmental performance monitoring

Monitoring and Measurement:

1. Environmental Performance Tracking:

• Regular monitoring of pollution prevention metrics
• Environmental impact assessment and reporting
• Third-party verification of environmental performance
• Continuous improvement program implementation

2. Technology Deployment:

• Environmental monitoring systems at facilities
• Automated pollution detection and prevention systems
• Digital technologies for environmental management
• Real-time environmental performance tracking

Regulatory Compliance Actions:

1. Legal and Regulatory Management:

• Comprehensive environmental law compliance programs
• Environmental permitting and authorization management
• Proactive regulatory engagement and advocacy
• Environmental risk assessment and mitigation

2. Standards and Certification:

• ISO environmental management system implementation
• Environmental certification program participation
• Best practice adoption from international standards
• Third-party environmental auditing and verification

Community and Stakeholder Engagement:

1. Local Community Programs:

• Environmental impact communication and engagement
• Community environmental protection initiatives
• Local watershed protection programs
• Environmental education and awareness programs

2. Transparency and Reporting:

• Environmental performance disclosure and transparency
• Stakeholder engagement on environmental issues
• Public reporting on pollution prevention progress
• External assurance of environmental data and performance

Pollution-Related Targets:

Danone has established specific targets for pollution prevention and reduction integrated within its Danone Impact Journey and environmental commitments.

Air Pollution Reduction Targets:

1. Renewable Energy Transition:

• 50% of energy from renewable sources by 2030
• Reduction of air pollution from fossil fuel combustion
• Decrease in scope 1 and 2 emissions contributing to air quality improvement
• Manufacturing process optimization for reduced air emissions

2. Transportation Efficiency:

• Logistics optimization reducing transportation emissions
• Supply chain efficiency improvements
• Alternative transportation methods deployment
• Carbon footprint reduction across distribution network

Plastic Pollution Reduction Targets:

1. Virgin Plastic Reduction:

• 30% reduction in virgin fossil-based packaging by 2030
• 50% reduction by 2040
• Continued progress from 21% reduction achieved (2018-2024)
• Alternative materials adoption and deployment

2. Circular Packaging Targets:

• 100% of packaging reusable, recyclable, or compostable by 2030
• Elimination of problematic plastic packaging
• Design for recyclability implementation
• Circular economy principles integration

3. Collection and Recovery Targets:

• Recover as much plastic as the Group uses by 2040
• Effective collection system development and leadership
• Extended producer responsibility enhancement
• Plastic circularity closing the loop

Water Pollution Prevention Targets:

1. Water Management:

• Water usage reduction across operations
• Wastewater treatment improvement targets
• Water quality protection in watersheds
• Zero discharge of untreated wastewater goal

2. Watershed Protection:

• Integrated water resources management in all operating watersheds
• Community water access improvement
• Water ecosystem preservation and restoration
• Local stakeholder engagement enhancement

Agricultural Pollution Reduction:

1. Regenerative Agriculture:

• Expansion of regenerative farming practices across supply chain
• Chemical input reduction in agricultural production
• Soil health improvement and contamination prevention
• Biodiversity protection and enhancement in farming systems

2. Sustainable Sourcing:

• Implementation of Sustainable Sourcing Policy (SSP) across supply base
• Supplier environmental performance improvement targets
• Agricultural practice transformation milestones
• Supply chain pollution prevention enhancement

Waste Reduction Targets:

1. Production Waste:

• Manufacturing waste minimization across facilities
• Zero waste to landfill goals at production sites
• Waste-to-energy and recovery system implementation
• Circular economy principles in production processes

2. Food Waste:

• Food waste reduction across value chain
• Supply chain loss minimization
• Consumer food waste reduction support
• Collaborative food recovery initiatives

Chemical Management Targets:

1. Substance Safety:

• Elimination of substances of concern from products and packaging
• Alternative substance development and deployment
• Chemical footprint reduction across operations
• Safer chemistry implementation in manufacturing

2. Product Design:

• Eco-design principles integration
• Life cycle assessment improvement
• Environmental impact reduction in product development
• Sustainable ingredient sourcing enhancement

Target Timeline and Milestones:

2025-2030:

• 50% renewable energy achievement
• 30% virgin plastic reduction
• 100% circular packaging implementation
• Sustainable sourcing policy full deployment

2030-2040:

• 50% virgin fossil-based packaging reduction
• Plastic recovery equivalent to usage
• Advanced regenerative agriculture implementation
• Zero waste to landfill achievement

Measurement and Monitoring:

1. Performance Tracking:

• Regular pollution prevention metrics monitoring
• Environmental impact assessment and reporting
• Third-party verification of pollution reduction progress
• Stakeholder transparency and communication

2. Continuous Improvement:

• Annual target review and adjustment
• Best practice adoption and scaling
• Innovation integration for enhanced performance
• Stakeholder feedback integration

Integration with Business Strategy:

• Pollution targets aligned with financial performance objectives
• Integration with Renew Danone strategic plan
• Resource allocation prioritizing pollution prevention
• Risk management integration for pollution-related risks

Anticipated Financial Effects from Pollution-Related Impacts:

Danone has assessed the financial implications of pollution-related impacts, risks, and opportunities as part of its comprehensive risk management and sustainability strategy.

Pollution-Related Risk Financial Impacts:

1. Regulatory Compliance Costs:

• Environmental regulation compliance across 151 production sites
• Packaging regulations requiring design changes and material costs
• Extended Producer Responsibility (EPR) fees and requirements
• Potential fines and penalties for environmental non-compliance
• CSRD and sustainability reporting compliance costs

2. Operational Impacts:

• Air pollution control system investments and maintenance
• Wastewater treatment infrastructure costs and upgrades
• Waste management system implementation and optimization
• Environmental remediation costs for historical contamination
• Production disruptions from pollution incidents

3. Raw Materials and Supply Chain:

• Premium costs for sustainable and non-polluting raw materials
• Agricultural pollution affecting raw material quality and pricing
• Supply chain disruption from environmental contamination
• Supplier environmental compliance support costs
• Alternative sourcing costs for pollution-affected materials

Pollution Prevention Investment Requirements:

1. Technology and Infrastructure:

• Renewable energy infrastructure (50% target by 2030)
• Wastewater treatment system improvements
• Air emission control technology deployment
• Waste management system optimization
• Environmental monitoring and control systems

2. Packaging Transformation:

• Alternative packaging material development costs
• Circular packaging design and implementation
• Collection and recovery system development
• Recycling infrastructure investment and partnerships
• Research & Innovation in sustainable packaging solutions

3. Agricultural and Supply Chain:

• Regenerative agriculture program investment
• Farmer training and support for pollution prevention
• Sustainable sourcing policy implementation costs
• Supply chain environmental compliance support
• Alternative ingredient development for reduced environmental impact

Pollution-Related Opportunities:

1. Market Differentiation:

• Premium pricing for environmentally superior products
• Market share gains from environmental leadership positioning
• B Corp™ certification competitive advantage
• Consumer preference for pollution-free products
• First-mover advantage in clean technology adoption

2. Operational Efficiency:

• Energy cost savings from renewable energy transition
• Waste reduction and resource efficiency improvements
• Process optimization reducing pollution and costs
• Circular economy cost savings and revenue generation
• Environmental management system efficiency gains

3. Risk Mitigation Benefits:

• Reduced environmental liability and insurance costs
• Lower regulatory non-compliance risk and associated costs
• Enhanced license to operate and community relations
• Supply chain resilience from environmental risk reduction
• Brand protection and reputation preservation

Financial Impact Quantification:

Investment Scale:

• Material costs represent 75% of cost of goods sold (€10 billion)
• Environmental investments integrated into capital allocation
• Research & Innovation budget allocation for environmental solutions
• Partnership investments in pollution prevention technologies

Cost Mitigation:

• Energy cost savings from renewable energy (50% by 2030)
• Material efficiency improvements reducing raw material costs
• Waste reduction saving disposal and management costs
• Regulatory compliance proactivity reducing penalty risks

Revenue Enhancement:

• Market opportunities from environmental product positioning
• New product categories addressing environmental concerns
• Partnership revenue from environmental technology development
• Circular economy business model revenue streams

Risk Management Integration:

Financial Planning:

• Environmental costs integrated into annual budgeting
• Capital allocation prioritizing pollution prevention projects
• Insurance and contingency planning for environmental risks
• Long-term financial planning incorporating environmental trends

Performance Monitoring:

• Regular assessment of environmental cost and benefit impacts
• ROI analysis of pollution prevention investments
• Financial materiality assessment of environmental risks
• Stakeholder value creation from environmental performance

Strategic Alignment:

• Environmental investments aligned with business strategy
• Pollution prevention integrated into value creation model
• Long-term financial resilience through environmental stewardship
• Competitive advantage development through environmental excellence

E5-4 Resource Inflows

Danone's principal raw material needs consist primarily of:

• Materials required to produce food and beverage products, mainly milk, soy, almonds, oats, cereals, certain fruits (including fruit preparations) and vegetables. In terms of value, milk is the main raw material purchased, primarily in the form of liquid milk.
• Product packaging materials, in particular plastics and paper and board. Packaging purchases are managed through regional or global purchasing programs. As Danone's packaging data is collected and calculated based on purchased volumes, Danone's packaging inflows and outflows are considered equals.
• Energy supplies, including electricity and gas for factories and diesel for transportation.
• Water resources to produce its agricultural commodities and to manufacture products.
• Property, plant and equipment also used to manufacture the products.

Overall total weight of products and technical and biological materials used during the reporting period

Repartition of the material inflow purchases:

Percentage of biological materials that is sustainably sourced, with information on the certification scheme used

Certification methodologies:

• Certified palm oil: The RSPO certification, developed by the Roundtable on Sustainable Palm Oil, ensures deforestation and conversion-free palm oil volumes. Earthworm Foundation supports Danone in verifying certified volumes twice a year.
• Certified soybean: 100% of Alpro soybeans are ProTerra Segregated certified, covering environmental, social and non-GMO criteria.
• Certified or recycled paper: For virgin fibers, Danone focuses on sourcing certified materials that provide a vDCF assurance, with preference for FSC (Forest Stewardship Council). PEFC and SFI certifications are also accepted.
• Certified cocoa: Rainforest Alliance labelling promotes environmental responsibility, social equity and economic viability for farming communities, including guarantees on preventing deforestation and protecting biodiversity.
• Regenerative Agriculture certification: A list of criteria developed internally using the Danone Regenerative Agriculture Scorecard Assessment.

Weight in both absolute value and percentage, of secondary reused or recycled components

Additional context

Packaging volumes (2024):

• Total packaging: 1,397,960 metric tons (1.40 million tons)
• Plastic packaging: 670,107 metric tons (0.67 million tons)
• Paper and board packaging: 347,631 metric tons

Danone reports that packaging data is collected based on purchased volumes, with inflows and outflows considered equal. Primary, secondary and tertiary packaging (excluding pallets) are covered. Packaging purchased for subcontractors who manufacture finished products for Danone is excluded.

Resource outflows

Danone's packaging represented 1.40 million tons in 2024, of which plastic represented 0.67 million tons.

Circular packaging commitments

Danone is committed to offering nutritious, high-quality food and drinks in packaging that is 100% circular and low carbon. This means all packaging is designed to be safely reused, recycled, or composted, ensuring the material stays in the economy and does not become waste or pollution.

2024 Progress on packaging circularity:

• 85% of Danone's packaging was reusable, recyclable, or compostable (versus 84% in 2023)
• 8% reduction in the use of virgin fossil-based plastic (since 2020, excluding EDP Russia)
• 60% of plastic put on the market was recovered (versus 58% in 2023)

Danone Impact Journey targets

As part of the Danone Impact Journey, the Group has committed to:

• Have 100% of its packaging reusable, recyclable, or compostable by 2030
• Halve the use of virgin fossil-based packaging by 2040, with 30% reduction by 2030, accelerating reuse and recycled materials
• Lead the development of effective collection systems to recover as much plastic as Danone uses by 2040

Design and innovation initiatives

Post-Consumer Recycled (PCR) content:

• Silk plant-based beverages in 96oz bottles made with up to 50% PCR content in the United States
• STōK ready-to-drink coffee in 48oz bottles with up to 88% PCR in the United States
• Harmonization of yogurt cups for lightweighting and design for recyclability in the United States

Reusable packaging:

• Re-usable caps launched for Blédina meals in Europe
• Evian dispenser showcased during Wimbledon tennis tournament

Regulatory compliance:

• Tethered caps on all water bottles launched in Europe
• Major renovation of AQUA jugs in Indonesia, replacing polycarbonate with PET material and introducing new ergonomic design

Alternative formats:

• Introduction of Volvic sparkling flavored waters in cans in the United Kingdom

Waste

Food waste reduction program

Danone is committed to reducing food waste across its end-to-end supply chain. In 2022, the Group launched an extensive global program called Battle Against Waste, designed to deliver both sustainability and productivity targets.

2024 Performance:

• Total food waste per metric ton of product sold (excluding waste intended for animal feed and the processing of biomaterials - SDG 12.3) was reduced by 18.1% since 2020 (on a like-for-like basis)

Danone Impact Journey target

Danone has committed to halve all food waste not fit for human, animal consumption or biomaterial processing by 2030 vs 2020 (like-for-like).

Approach

The Battle Against Waste program engages:

• End-to-end supply chain stakeholders
• External partners including suppliers and customers
• Internal expertise and cross-functional teams

The program focuses on reducing waste across the value chain while maintaining nutritional quality and food safety standards.

Waste management approach

Danone's waste hierarchy follows the principles:

1. Reducing packaging usage
2. Improving the circularity of packaging that cannot be eliminated
3. Recovering what is not kept in circulation, tackling leakage, while improving working and living conditions of workers in the collection and recycling sectors

Note: Specific quantitative breakdowns of total waste by type (hazardous/non-hazardous) and disposal method are not disclosed in the reviewed sections of this report.