PERNOD RICARD - 2018-2019 Universal registration document

3. SUSTAINABILITY & RESPONSIBILITY The main sustainaibility risks and opportunities

Risk/opportunity

Sub-risk/opportunity Pernod Ricard production sites

Definition

Subsections of Section 3

3.3.3 CircularMaking 3.3.3.2 Climate change: reduction and adaptation

Physical risks related to climate change and natural disasters

Risks: severe weather events (tornados, floods, etc.) or natural disasters may damage physical assets at production sites. Moreover, rising temperatures and changing seasons may alter industrial processes and ingredients’ availability on the market. Pernod Ricard could be slow to react to these changes and fail to adapt its industrial sites.

3.3.3 CircularMaking 3.3.3.2 Climate change: reduction and adaptation 3.3.1. Nurturing Terroir 3.3.1.1 Improve sustainability performance and develop regenerative agriculture in our vineyards 3.3.3 CircularMaking 3.3.3.2 Climate change: reduction and adaptation 3.3.3.3 Preserve water resources 3.3.3.5 Reduce waste

Pernod Ricard suppliers Risks: these phenomena may also damage suppliers' physical assets and alter the quality, quantity and geographical localisation of agricultural rawmaterials.

Environmental impacts from Operations

Energy efficiency GHG emissions Watermanagement Wastemanagement

Risks: due to the industrial nature of it activities and the fast evolution of environmental regulations, Pernod Ricard may fail to be fully compliant with new regulations and respond to stakeholder expectations, leading to reputational damage. Moreover, the price volatility of energy may impact Pernod Ricard’s most energy-intensive activities (distilleries) and make it difficult to secure energy supply. In addition, Pernod Ricard most water-intensive activities may impact water’s availability – especially if they are located in water stressed areas and water quality. Opportunities: by reducing energy consumption and GHG emissions, Pernod Ricard can reduce its operational costs. By implementing a virtuous circular mindset, Pernod Ricard could minimise waste at every step of its value chain and help preserve natural resources. Moreover, through a good waste management system, Pernod Ricard could transform waste into a potential new rawmaterial. Risks: Pernod Ricard’s upstream activities (packaging, etc.), product transportation, product distribution and product end of life are carbon-intensive activities and may worsen Pernod Ricard’s carbon footprint and accentuate climate change. Risks: Pernod Ricard’s product quality may deteriorate (toxic contamination, alteration of taste, introduction of foreign objects into the bottles, etc.) without this being detected, leading to health hazards, reputational damage, financial liabilities and product recalls. Risks: Pernod Ricard’s reputation may be impacted by consumers’ misuse of alcohol, and Pernod Ricard’s activities may be impacted by excessive and/or punitive regulations (restrictions on sales and marketing, availability of its products, increased taxes and duties) leading to lower revenues and profits without effectively reducing the harmful use of alcohol.

3.3.3 CircularMaking 3.3.3.4 Circular packaging and distribution 3.3.3.2 Climate change: reduction and adaptation

Product and packaging environmental footprint

3.3.3 CircularMaking 3.3.3.5 Product quality and safety

Product quality

Constant high product quality

3.3.4. Responsible Hosting 3.3.4.1 Fight alcohol misuse 3.3.4.2 Responsible marketing 3.3.4.3 Consumer information 3.4. Ethics&Compliance 3.4.1.3 Transparency and integrity of strategies and influencing practices

Alcohol in Society

The harmful use of alcohol by consumers, and excessive and/or punitive alcohol regulations taken by Government to tackle the harmful use of alcohol

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2018-2019

PERNOD RICARD UNIVERSAL REGISTRATIONDOCUMENT