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SUSTAINABILITY & RESPONSIBILITY (S&R) PROTECTING THE PLANET

Consumption of synthetic crop protection products by hectare (active ingredient)

257 hectares of vineyards, or 4.3% of the Group’s land, is managed according to organic agriculture standards that do not use any synthetic herbicides or pesticides. In FY18, the vineyards operated by the Group used 11.4 million m 3 of water, mainly for irrigation purposes. This is done using the drip irrigation technique, which is now used for 100% of the Group’s irrigated vineyards, reducing the water supplied to what is strictly necessary. During the same period, energy consumption in these vineyards was 16,382 MWh, representing less than 1% of the consumption of the Group’s production sites. Partnership with suppliers of agricultural 3.5.3.3 products There are two aspects to the Group’s actions in respect to agricultural product purchasing: the application of the Responsible Procurement approach (see ● subsection “Monitoring law 2017-399 on the duty of vigilance”) allows us to identify and evaluate direct suppliers at risk in terms of CSR, in order to develop suitable action plans; the identification of environmental and social risks in agricultural ● activities. A study of the environmental and social conditions of the production of farm raw materials used by the Group’s Brand Companies started in 2016 ranked activities in terms of their risk level. For the activities identified as being at risk, action plans must be implemented by the affiliates, and alternatives are examined to secure supplies.

kg ai/ha

14

10.45

12

10

8

6

4.25

4.23

4

2.68 0.34

2

2.13 0.14

1.91 0.09

0

FY13

FY17

FY18

ŽŶƐƵŵƉƟŽŶ ŽĨ ƐLJŶƚŚĞƟĐ ĨƵŶŐŝĐŝĚĞƐ ƉĞƌ ŚĞĐƚĂƌĞ ;ŬŐ ĂŝͬŚĂͿ ŽŶƐƵŵƉƟŽŶ ŽĨ ŚĞƌďŝĐŝĚĞƐ ƉĞƌ ŚĞĐƚĂƌĞ ;ŬŐ ĂŝͬŚĂͿ ŽŶƐƵŵƉƟŽŶ ŽĨ ŝŶƐĞĐƟĐĚĞƐ ƉĞƌ ŚĞĐƚĂƌĞ ;ŬŐ ĂŝͬŚĂͿ

In FY18, the average amount of synthetic crop protection products per hectare was 6.24kg of active ingredient per hectare, down 4% from the previous year and 55% from 2012/13.

The direct purchasing of agricultural products by affiliates results in a number of partnership initiatives with the Group’s agricultural suppliers:

Country

Examples of partnerships with suppliers

New Zealand

100% of grape suppliers are certified using the Sustainable Wine Growing New Zealand standard.

Australia

90% of grape supplies are covered by the Entwine Australia scheme which requires that its members hold ISO 14001 certification or Freshcare. Yerevan Brandy Company helps wine growers with the management of their crop protection products. 100% of the wheat bought by The Absolut Company is produced locally in line with rigorous specifications and monitored in terms of sustainable agriculture. 100% of the barley (malted or non-malted) purchased by Irish Distillers conforms to the IGAS (Irish Grain Assurance Scheme) standard, which is equivalent to “silver” level of the “SAI Platform’s Farm Sustainability Assessment Tool”. Around 20% of this barley is also “Origin Green” certified. 100% of the barley purchased by Chivas Brothers is certified to “Scottish Quality Cereals” or “Red Tractor” standards. Kahlúa has worked with the NGO Fondo Para La Paz and Ocotempa, a Mexican coffee community, to develop a sustainable model for coffee production. This “coffee for change” programme comprises social, economic and environmental criteria to ensure that coffee growing is sustainable. Within four years, 100% of the coffee sourced by Kahlúa will be sustainably grown. The majority of the fennel used for the production of Ricard is grown by farmers in Provence in accordance with sustainable agriculture principles.

Armenia Sweden

Ireland

Scotland Mexico

France

Furthermore, the Group has made the sugar cane sector a priority for active contribution to developing this sector, in 2015 Pernod Ricard action. Sugar cane is often grown in lesser developed countries where joined the Bonsucro association, whose purpose is to develop social protection, working conditions and respect for social rights or internationally recognised responsible practices for a sustainable sugar environmental protection are not guaranteed. In addition, this sector cane sector. Through the standards that it has developed, Bonsucro has a particularly complex supply chain involving numerous operators contributes to improving the conditions of sugar cane production on from the field to the crushing plant, the distillery and the trader, plantations and in processing plants and ensures that practices are through to the end user. To demonstrate its commitment and make an traceable across the supply chain.

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