PERNOD RICARD - 2018-2019 Universal registration document

3.

SUSTAINABILITY & RESPONSIBILITY The four pillars of the Good Times from a Good Place roadmap

Strategy Climate-related risks and opportunities

Climate-related risks and horizon

Area of business impacted

Potential financial impact andmagnitude of impact

Impact on the Group’ strategy and financial planning

Type

Transition risks

Policy and legal Long-termrisk: Energy and GHG emissions — regulations could affect the Group directly through its own operations or indirectly through its suppliers (especially with respect to glass, alcohol and transportation).

Operations &Supply Chain

Medium impact: The regulations could have an — impact on direct costs, for instance if the Group had to buy carbon quotas. In Europe, the Group’s four largest distilleries are subject to the EU Emissions Trading System (EU-ETS), or indirect impacts through price increase of rawmaterials procurement (especially for glass, which is an energy intensive activity). Medium impact: The Group estimated that a shift — in consumer preferences could lead to a decrease on market share.

Pernod Ricard implements — measures to reduce greenhouse gas emissions: directly at its production sites through energy efficiency and renewable energy, and indirectly with its suppliers and the optimisation of the logistics chain (see subsections 3.3.3.2, 3.3.3.4 and 3.3.3.5). The risk of shift in consumer — preferences is taken into account in the Group marketing strategy; for example, Pernod Ricard eco-design policy aims at making the products more sustainable (see subsection 3.3.3.4). To face extreme variability in — weather patterns, the Group uses hedging tools to limit the extent of seasonal volatility due to climate factors and includes environmental factors into its Responsible Procurement Policy and its Procurement Code of Ethics (for more details, see subsections 3.3.3.1 and 3.3.3.2). Water management is a — significant component of the Group’s environmental strategy (see subsection 3.3.3.3).

Reputation Long-termrisk: Consumers may prefer — products that are perceived as more responsible, and this could affect Pernod Ricard sales and market share if it was not anticipated enough.

Products

Physical risks

Extreme Long-termrisks:

Supply chain& Operations

High impact: The financial implications due to — agricultural supply chain disruption could be significant. It could lead to an increase price of rawmaterials.

Extreme variability in weather — patterns, such as frost, hail and drought, can affect the supply and quality of agricultural raw materials and more broadly, their price. For example, market price volatility could impact grains; as for grapes, wine alcohol content could increase and different parameters could impact the wine quality. Changes in precipitation — patterns can affect the groundwater reserves on which some production sites

rely on and ultimately the availability and quality of water.

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2018-2019

PERNOD RICARD UNIVERSAL REGISTRATIONDOCUMENT