PERNOD RICARD - 2018-2019 Universal registration document

3.

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

Overviewof the relevant categories of the Group’s carbon footprint Pernod Ricard’s overall carbon footprint reveals that across the entire value chain, 36% of emissions are generated by the production of packaging (mainly glass) and POS materials, 29% by the production of agricultural raw materials. Next, come emissions generated by transportation (11%), the energy used on production sites (Scope 1 and Scope 2) (10%) the acquisition of fixed assets (9%) and other activities such as business travel (5%). Compared to last year, the Group's carbon footprint has increased significantly from 2.7 to 3 million tonnes of CO 2 equivalent emissions as the data exhaustivity has been improved: POS materials have been included, as well as non-traditional packaging Packaging and POS materials are the most greenhouse gas emitting activity along Pernod Ricard’s value chain. To reduce the carbon impact of these activities, the Group focuses on enhancing the eco-design of packaging, through the decrease of packaging weight and the optimisation of materials used (see subsection 3.3.3.4 “Circular packaging and distribution”). materials such as PET, ceramic, etc. Packaging and POSmaterials

Operationally, production sites must improve energy efficiency through a continuous monitoring of energy consumption and in-depth energy assessments, to set energy-efficiency targets and launch consumption reduction programmes ( i.e. : renewal of processes, technologies, etc.). Several large sites have implemented ISO 50001 certified energy management systems. Moreover, the Group is working to replace heavy fuel oil and coal with cleaner sources of energy like natural gas and plans to only use renewable electricity by 2025. This year, Scope 1 (direct CO 2 equivalent emissions) increased by 4.7% in line with the 5.7% production volume increase, whereas Scope 2 (indirect CO 2 equivalent emissions) decreased significantly from 46,270 to 35,151 tonnes due to electricity and indirect energy CO 2 equivalent emission factors update and installation of a large photovoltaic project in Australia. In terms of carbon intensity, this leads to a 5.2% reduction per unit between FY18 and FY19 for Scopes 1 and 2 carbon emissions. DISTRIBUTIONOF ENERGYCONSUMPTIONBYACTIVITY

1% Ageing

1%

Other items

1%

Vini cation only

162,195 Other items

3%

Vini cation and bottling of wines

9%

Fixed assets 277,598 Energy related to production sites (Scope 1 + Scope 2) 297,529 Transport 330,867

Bottling

Distillation 85%

Packaging and promotional items 1,085,084 890,205 Agricultural rawmaterials

SOURCES OF ENERGYUSEDBY THE PRODUCTION SITES

Agriculture practices Agriculture is the second most greenhouse gas emitting activity of Pernod Ricard’s value chain. Pernod Ricard’s products inherently rely on agriculture: building and contributing to improving agricultural standards is therefore a strategic priority for the Group. On its own land, the Group promotes regenerative agriculture, which can contribute to capturing carbon in soils. Moreover, the Group collaborates with agricultural suppliers to define preferred standards for each crop, so as to find the best solutions to reduce greenhouse gas emissions depending on the crop’s specificities. Transport Pernod Ricard seeks to optimise land transport by implementing better loading of vehicles, adjusting schedules or using efficient vehicles. In the US, the Group is also a member of Smartways Association, aiming at reducing land transportation emissions; in Europe, the Absolut Company is a member of the Clean Shipping Project. Production sites At production sites, the Group pursues actions on two fronts: improving energy efficiency and expanding less carbon-intensive energy. To encourage these transitions, the Group has introduced an internal carbon price of €50 per ton of CO 2 equivalent for investments.

4% Coal

3%

Other energy

7%

Fuel oil

18%

Electricity

68%

Natural gas

Other emissions contributing indirectly to climate change Emissions from cooling gases, some of which damages the ozone — layer. Some of these gases also increase the greenhouse effect. A programme to eliminate the most environmentally harmful refrigerant gases has been ongoing for a number of years, resulting in the complete elimination of CFCs. The programme aims to reduce the proportion of HCFC gases, with the aim of eliminating them completely by 2020;

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2018-2019

PERNOD RICARD UNIVERSAL REGISTRATIONDOCUMENT