Veolia

Strategy, business model and value chain

Veolia is a world leader in environmental services and offers a complete range of solutions for managing Water, Waste and Energy on five continents. In 2024, the Group operated in 56 countries, generated revenue of €44,692 million and employed 215,041 people.

Business Model

Veolia's organization is divided into seven geographic zones (France and Special Waste Europe, Central and Eastern Europe, North America, Asia Pacific, Iberia and Latin America, North America, Italy-Africa-Middle East) and an additional worldwide zone (Water technologies).

The Group operates in two key markets:

• Municipal market (44% of client base): Essential services for cities and communities
• Industrial market (56% of client base): Services for companies and service sector

Value Chain and Business Lines

Water Management (40.3% of revenue, €18,033 million)

• 111 million people supplied with drinking water
• 98 million people connected to sanitation systems
• 3,879 drinking water production plants managed
• 3,198 wastewater treatment plants managed

Water value chain activities:

• Sustainable management of water resources from abstraction to discharge
• Collection and transport of water
• Water treatment for drinking water, industrial process water, and wastewater
• Customer service through multichannel management tools
• Water treatment equipment and technologies (over 550 proprietary technologies)

Waste Management (35.0% of revenue, €15,662 million)

• 43 million people provided with collection services
• 65 million metric tons of treated waste
• 861 waste processing facilities operated
• 572,834 business customers

Waste value chain activities:

• Waste collection across all categories (household, industrial, hazardous)
• Recycling and material recovery with focus on circular economy
• Recovery of organic waste through composting and anaerobic digestion
• Waste-to-energy recovery producing steam and electricity
• Treatment of hazardous liquid waste and decontamination
• Urban and industrial cleaning services

Energy Management (24.6% of revenue, €10,997 million)

• 42 million MWh produced
• 49,037 thermal installations managed
• 604 heating and cooling networks managed
• Over 2,043 industrial sites managed

Energy value chain activities:

• Heating and cooling networks as European leader
• Bioenergy and flexibility solutions for local energy production
• Energy services for buildings and industry to reduce consumption and CO2 emissions
• Multi-business integrated offerings for industrial customers

Strategic Direction: GreenUp 2024-2027

Veolia's strategic program focuses on ecological transformation through solutions that decarbonize, depollute and regenerate resources. The strategy combines:

Three Strongholds (70% of activity):

• Municipal water
• Solid waste
• District heating

Three Growth Boosters (30% of revenue, 70% of growth):

• Water technologies and new solutions
• Hazardous waste treatment
• Bioenergy, flexibility and energy efficiency

Key Strategic Commitments for 2027:

• 30% increase in erased CO2 emissions (scope 4)
• 1.5 billion m³ freshwater saved
• 9 million metric tons of hazardous waste and pollutants treated
• Revenue growth in priority segments
• EBITDA ≥ €8 billion
• Net income growth of ~10% per year (2023-2027)

Geographic Presence and Value Creation

Revenue by geography:

• France and Special Waste Europe: 20.5%
• Europe excluding France: 41.7%
• Rest of the world: 37.8%

The Group's global presence enables replication of proven solutions across 56 countries while maintaining strong local relationships with municipalities and industrial customers.

Substances of concern and substances of very high concern

Analysis and prevention approach

In the field of chemical risk, the Group conducted an analysis on the issue of substances of concern and very high concern, through a prevention group dedicated to this subject, involving the main concerned departments (scientific and technical studies, business support, health and safety risks, procurement). After examining whether Veolia is affected by such substances, it appears to date that:

• With one exception detailed below, Veolia is not concerned with the production or marketing of these substances, and to our knowledge Veolia does not use them as input substances in technical processes;
• These substances may be involved in Veolia's operations in the form of input materials in the context of waste treatment activities, with the objective of eliminating them.

Regular investigations conducted by the chemical risk prevention group have identified the use of a substance of potential concern at one site. In order to preserve manufacturing secrets, Veolia wishes to keep precise information confidential.

As a precaution, Veolia is taking steps to replace this substance as soon as possible. Lastly, the process is designed not to discharge this substance and its residues into the site's environment.

Regulatory context

Veolia's activities are subject to comprehensive regulatory frameworks governing hazardous substances:

• REACH Regulation (EC) 1907/2006: Concerning the Registration, Evaluation, Authorization and Restriction of Chemicals. This regulation seeks to reduce the health and environmental risks associated with the manufacture and use of chemical substances and improve the management of these risks throughout the life cycle of chemical products. For the Group, as a user and producer of such substances, this involves greater cooperation and a better exchange of information with suppliers and customers.
• CLP Regulation (EC) 1272/2008: On Classification, Labeling and Packaging, harmonized the existing provisions and criteria concerning the classification, packaging and labeling of hazardous substances taking account of the adoption of the United Nations' Globally Harmonized System (GHS). As part of the Commission's strategy on sustainability in the area of chemical products, the CLP Regulation was amended by Regulation (EU) 2024/2865 of the European Parliament and of the Council of 23 October 2024.
• POPs Regulations: Regulation (EU) 2019/1021 of 20 June 2019 on persistent organic pollutants (Stockholm Convention) also has an impact on the Group's activities. Some PFAS are regulated under the REACH and POP regulations.

The relevant legal entities are in compliance with the schedule set by the REACH Regulation for chemicals requiring registration within the Group. After the systematic pre-registration of all substances that may be concerned, various deadlines are being monitored along with changes to the regulation and updates to its annexes.

Operational approach

Veolia's primary interaction with substances of very high concern occurs in the context of hazardous waste treatment activities, where the objective is to eliminate these substances. Veolia is the world leader in hazardous waste treatment, with extensive experience of all available techniques and the ability to operate them in a fully controlled manner.

No quantitative data on total amounts of substances of concern or substances of very high concern generated, used or procured has been disclosed in this report.

E5-4 Resource Inflows

Veolia monitors several metrics for resource inflows across its three core business lines (Water, Waste, Energy):

Resource Inflows by Business Line (2024)

Material Inflows

These inflows are divided into three main categories reflecting Veolia's core operations:

• Municipal and industrial waste sent to treatment centers for recovery applying the hierarchical principle of waste management: prevent production, identify opportunities for reuse, recycling and recovery, and if recovery is not possible, ensure treatment in accordance with applicable regulations

• Fuel used to produce energy (gas, coal, biomass): saving and conserving energy resources is a major lever in Veolia's contribution to combating climate change, notably by increasing energy efficiency at operated installations, prioritizing the use of renewable energy and energy from waste, and exploiting the energy potential of waste and wastewater

• Water taken from natural environments to produce drinking water for communities, as well as domestic and industrial wastewater which is collected and then treated before being either reused or returned to the natural environment

Additional Monitored Metrics

The Group also monitors:

• Quantity of incoming hazardous waste: Not quantified separately in main table, but a GreenUp target for 2027 of 9 million metric tons (scope impact related to disposal of RGS United States)

Circular Economy Context

Veolia's resource inflows feed into circular solutions across its value chain. The inflows from customers (waste, wastewater) are processed to produce alternative secondary materials, energy and water that reduce pressure on virgin resources. Raw water is the primary virgin resource input for drinking water production.

These resource inflows support Veolia's circular economy strategy focused on resource regeneration, including treating waste and complex pollution, waste and wastewater energy and material recovery, and industrial and regional ecology services.

Waste

Waste Management Activities

Veolia is one of the leading players in the management of liquid, solid, non-hazardous and hazardous waste. The Group operates across the entire waste life cycle, from collection to final processing and makes waste recycling and recovery a priority. Veolia plays a key role in the circular economy, developing innovative solutions to increase rates of waste recycled and recovered as materials and energy.

Key operational metrics (2024):

• 43 million people provided with collection services on behalf of local authorities
• 65 million metric tons of treated waste
• 861 waste processing facilities operated
• 572,834 business customers

Waste Collection

Due to the wide range of waste categories (household waste, non-hazardous commercial and industrial waste, construction waste, green waste, hazardous industrial and service sector waste), waste collection is a major logistics challenge. Veolia provides door-to-door household waste collections, as well as collecting waste from communal disposal points, non-hazardous commercial and industrial waste and green waste (keeping green spaces clean). It also collects hazardous waste from industrial and service sector customers, including biomedical waste from hospitals and laboratories and waste oil (e.g. from ships and gas stations).

Recycling and Material Recovery

Veolia's goal is to treat waste with a view to reintroducing it into the industrial production cycle and achieving the highest possible rate of recycling and material recovery. Veolia manages high-performance sorting centers for non-hazardous industrial waste and waste from selective collections, which guarantee recovery rates of over 50%. The Group's research and development center developed TSA2, a patented process for industrial application that enhances the performance of sorting facilities and enables the production of high-quality secondary raw materials. Thanks to a remotely operated sorting procedure, it is now possible to refine the sorting process even further to achieve recovery rates of over 95%.

Waste-to-Energy Recovery

Non-hazardous waste that cannot be recycled is transported to incineration plants or landfill sites. The incineration process produces energy in the form of steam that can either be used to power urban or industrial heating networks or converted to energy using turbines. At landfill sites, Veolia captures biogas produced by the fermentation of organic waste. This biogas may then be fed directly into a distribution network, used to produce electricity with turbines or engines, or used as fuel for vehicles.

Hazardous Waste Processing

Veolia is a world leader in processing, recycling and recovering hazardous waste and decontaminating land. Depending on the source and composition of the hazardous waste it may be incinerated or processed using physiochemical or biological techniques at specialized facilities or stabilized and buried in special landfill sites. The Group has a worldwide network of experts and resources and a full range of technologies and services for processing difficult-to-treat effluents and hazardous waste, and for soil remediation.

Strategic Commitment

As part of the GreenUp 2024-2027 strategic program, Veolia has committed to treat 9 million metric tons of hazardous waste and pollutants by 2027, representing one of the three key "booster" growth areas alongside decarbonized local energy and water technologies.

Business conduct policies and corporate culture

Purpose of the Company

Veolia was one of the first French groups to define its purpose, adopted by its Board of Directors in April 2019. The Group's purpose was drawn up in consultation with its various stakeholders and approved by the Board of Directors, and articulates why Veolia exists and what it does and how, for the benefit of all its stakeholders.

The purpose states the fundamental way in which Veolia will act. It is both the direction in which the Group is heading and a means to show the extent of its ambition and to give its actions a firmer long-term foundation.

Veolia's Purpose: "Ecological transformation means acting to reconcile human progress and environmental protection.

We develop and implement locally solutions to depollute vital resources and preserve them from depletion, solutions to decarbonise our ways of living and producing and adapt them to the consequences of climate change.

All over the world, attuned to local cultures, we strive to improve the health and quality of life of communities.

At Veolia, we tackle economic, social and environmental issues as an inseparable whole to the benefit of the largest number of people."

Multifaceted Performance Framework

Veolia has committed to a multifaceted performance which takes into account the economic and financial, commercial, human resources, corporate social and environmental performance. Under the 2024-2027 GreenUp strategic program, 15 progress objectives were defined for 2027.

This commitment is broken down in all Group processes, so that the multifaceted performance objectives drive the management of activities. The related progress indicators are regularly audited and measured by independent third-party bodies and are included in the calculation of Veolia senior executive variable compensation.

Ethics and Integrity

2024 Results:

• Ethics and integrity metric: 86% of respondents to the Voice of Resources survey positively answered the question "Does Veolia act ethically in my country and satisfy compliance rules in its activities?"
• The result remains solid, but slightly below the 2023 reference (88%) due to drops in positive answers from some Business Units: Japan (-13 pts), Bulgaria (-10 pts), Nordic countries (-9 pts), RVD (-4 pts)
• 2027 Target: ≥ 83% positive responses

Governance Structure

Board of Directors Composition (as of December 31, 2024):

• 14 Directors and 1 Non-voting member
• Average age: 62 years
• Gender diversity: 54.5% female directors (excluding employee representatives)
• Independence: 64% independence rate (excluding employee representatives)
• International representation: 5 non-French directors
• Employee representation: 2 employee directors and 1 director representing employee shareholders

Skills Matrix of Directors:

• CSR expertise: 14 directors
• Experience in Veolia's businesses: 11 directors
• International experience: 11 directors
• Public affairs: 11 directors
• Bank Finance: 10 directors
• Digital: 6 directors
• R&D: 8 directors
• Industry: 7 directors

Board Committees:

1. Accounts and Audit Committee: 5 members, 100% independent, 95% attendance
2. Nominations Committee: 4 members, 50% independent, 100% attendance
3. Compensation Committee: 6 members, 60% independent, 79% attendance
4. Research, Innovation and Sustainable Development Committee: 5 members, 50% independent, 100% attendance
5. Purpose of the Company Committee: 7 members, 80% independent, 100% attendance

Management Structure

Executive Committee Composition:

• Chief Executive Officer: Estelle Brachlianoff
• Deputy CEO Finance and Purchasing: Emmanuelle Menning
• Chief Legal Officer: Éric Haza
• Multiple Senior Executive Vice Presidents covering different geographic regions and business areas

Corporate Culture and Values

Veolia's corporate culture is anchored in its Purpose and multifaceted performance approach. The company emphasizes:

• Usefulness: All projects prioritize usefulness for long-term prosperity
• Ecological transformation: Focus on solutions that decarbonize, depollute and regenerate resources
• Stakeholder value creation: Commitment to creating value for all stakeholders including customers, employees, communities, and shareholders
• Local adaptation: Solutions attuned to local cultures while maintaining global standards
• Employee engagement: 88% employee engagement rate in 2024, maintaining excellence above the 85% target

Management of Purpose Implementation

From creation to implementation, Veolia's Purpose has been supported and steered at the Company's highest level:

• Board oversight: Board of Directors validates Purpose objectives and monitors performance through the Purpose Committee
• Executive management: Group Executive Committee and Management Committee directly monitor implementation
• Steering structure: Purpose steering committee monitors progress and proposes new actions
• External validation: Critical Friends Committee of independent experts provides regular input
• Local implementation: Network of Purpose Officers in Business Units supports local teams
• Employee mobilization: Employees engaged through internal networks and special events

Fifteen metrics relating to multifaceted performance objectives are included in the remuneration of at least 16,000 Group managers to unite all employees around this ambition.