Arkema S.A.

Reference: page 167

Arkema's CSR governance is embedded in the Group's corporate governance. The Board of Directors comprises fourteen members, of whom eight are independent directors, with the Chairman and Chief Executive Officer holding the only executive position. The Board includes six women, two directors representing employees and one director representing shareholder employees. The Group reports that 46% of Board members have CSR expertise. The CSR ambition, main challenges, impacts, risks and opportunities, related metrics and sustainable development targets are defined and validated by the Executive Committee, then presented once a year by the Director of Sustainable Development to the Audit and Accounts Committee and the Innovation and Sustainable Growth Committee, and to the Board. The Audit and Accounts Committee monitors the preparation of sustainability information, oversees internal controls and the statutory auditors, and approves the double materiality assessment process. A Sustainable Development department reports to the Executive Vice-President for Industry and CSR, and three steering committees (Product Stewardship, Industrial Ecology, CSR) guide the Group's progress.

Reference: page 167

Information provided to governance bodies is folded into the GOV-1 section. Arkema's CSR ambition, the main challenges, impacts, risks and opportunities, related potential initiatives and their monitoring, the related metrics and the sustainable development targets are defined and validated by the Executive Committee. They are presented once a year by the Director of Sustainable Development to the Audit and Accounts Committee and the Innovation and Sustainable Growth Committee as part of their respective roles, then to the Board of Directors. The Audit and Accounts Committee monitors the process of preparing sustainability information and reviews the related results, monitors the statutory auditors responsible for certifying sustainability disclosures, oversees internal control systems for sustainability information, and approves the double materiality assessment process. The Innovation and Sustainable Growth Committee assesses how Arkema's innovation and strategy contribute to environmental footprint reduction, climate objectives, responsible use of natural resources and the circular economy. Each steering committee meets twice a year, and the Executive Committee meets at least once a year to review policies.

Reference: page 168

Sustainability results are integrated into the compensation of the Chairman and Chief Executive Officer, Executive Committee members, senior executives and certain employees through criteria linked to the Group's CSR performance. Quantified CSR criteria are included in the qualitative portion of the Chairman and CEO's annual variable compensation package, with that qualitative portion accounting for up to 25% of the variable compensation. The performance shares allocated each year under the annual performance share plan to around 1,700 Group employees, including executives, also include a composite CSR criterion accounting for 30% of the final allocation. Further detail on the CSR criteria incorporated into the compensation of the Chairman and Chief Executive Officer is provided in section 3.4.2.1 of the document. CSR criteria are likewise embedded at site level, where managers are assigned an annual environmental target that serves as a criterion for their annual performance.

Reference: page 169

Arkema provides a statement on due diligence setting out the measures it has put in place to identify, prevent, mitigate and remedy potential negative impacts associated with its activities. The statement is presented as a table mapping the core elements of due diligence to the relevant sections of the Sustainability Report. Embedding due diligence in governance, strategy and business model is covered under GOV-2, GOV-3 and SBM-3. Engagement with affected stakeholders at all key steps is addressed under SBM-2, IRO-1, S1-2, S2 and G1. Identifying and assessing adverse impacts is covered by the materiality assessment of impacts in the IRO-1 section, including the summary of IROs under SBM-3, supported by studies carried out by the Group's various departments. Actions to address adverse impacts are presented in the environmental, social and anti-corruption sections under MDR-A for each ESRS topic. Tracking the effectiveness of these efforts and communicating is described in the same sections under MDR-M and MDR-T.

Reference: page 169

Arkema describes risk management and internal controls over sustainability reporting. In 2024, an assessment of the risks associated with the production of sustainability information was carried out to identify priority reporting processes for the implementation of internal controls. The Group has developed common reporting protocols and methodologies followed by all contributing teams. Data are entered by local teams, approved at various levels of responsibility and then consolidated by central teams that carry out consistency checks. Data are generally reported once a year, with interim data reported quarterly for certain issues to identify trends and trigger corrective measures, though interim data are not published. Quantitative environmental data are managed in the Reporting of Environmental and Energy Data (REED) system, safety data in the ATLAS system, and employee data in the HRIS and AREA 2 applications, each governed by dedicated reporting directives. To strengthen internal control, Arkema launched a pilot project in 2024 to analyse existing processes and define key controls, which will gradually be integrated into the overall Internal Control process described in chapter 2.2.

Reference: page 170

Arkema is a specialty materials group seeking a leadership position by offering sustainable and innovative solutions to its customers. Drawing on expertise in materials science, polymerization and formulation, it has developed three core competencies structured into three complementary segments: Advanced Materials, Adhesive Solutions and Coating Solutions. These segments serve attractive end markets including general industry, transportation and energy, consumer goods and electronics, building and construction, and health, water and nutrition. The Group has identified five key high-growth markets driven by sustainability megatrends: green energy and electric mobility, advanced electronics, sustainable lifestyle and goods, efficient buildings and homes, and health and well-being. Arkema is present in more than 50 countries with a balanced footprint across the world's three major regions and a total workforce of 21,164. Its activities correspond to the ESRS Chemicals sector, specifically the production of chemical products activity. The disclosure index records that Arkema's involvement in activities related to fossil fuel activities, and in controversial weapons, is non-material.

Reference: page 171

Arkema presents consultation and open dialogue with internal and external stakeholders as prerequisites for understanding expectations, building trust, reducing CSR risks and creating value. A table summarizes the Group's dialogue with each stakeholder group, its context and purpose, the key sustainability expectations identified, and the form of dialogue. The stakeholder groups covered are customers, suppliers, research partners, the financial community, shareholders and SRI rating agencies, Group headcount and employee representative bodies, neighboring communities, civil society and NGOs, public authorities, and professional associations. Engagement methods include ongoing dialogue and key account management with customers, CSR performance assessments of suppliers, technology partnerships with academic and industrial partners, results presentations and investor days for the financial community, social dialogue and internal surveys with employees, the Common Ground initiative for local community dialogue, collaboration with NGOs including discussions on the double materiality assessment, and participation in consultations and working groups with public authorities and professional associations.

Reference: page 175

Arkema presents its material impacts, risks and opportunities as a register that links each of the Group's issues to specific impacts, risks and opportunities, the relevant ESRS standard and URD section, the value chain location (upstream, own operations, downstream) and the time horizon (short, medium, long term). The double materiality assessment enabled Arkema to identify thirteen material challenges out of the seventeen identified. The material issues span Climate, energy and greenhouse gas management (ESRS E1), Water and waste management (E3, E4, E5), Circular economy (E5), Innovation towards sustainability, Process safety and emissions management (E2), Product safety and stewardship (E2, S1, S2), Ethical and responsible sourcing (G1, S2), Health, safety and well-being of employees (S1), Talent attraction and retention, Diversity and inclusion, Governance, business ethics and transparency (G1), Sustainable solutions, and Data privacy and cybersecurity. The identified impacts and risks are monitored at the most senior level and are incorporated into the Group's overall risk map, and the results confirmed the relevance of Arkema's three CSR commitments.

Reference: page 172

Arkema describes the process used to identify and assess its material impacts, risks and opportunities through a double materiality assessment, which forms part of the Group's general risk management system. An initial assessment was conducted in 2022 with consultation of main internal and external stakeholders, and a complementary assessment was carried out in 2024 to align with CSRD requirements, both led by the Sustainable Development department. The assessment was carried out in three phases: Phase 1, preliminary analyses and definition of all sustainability topics to be considered, drawing on the ESRS topic list, sector studies, GRI and SASB standards, existing impact assessments and the duty of care procedure; Phase 2, assessment of impacts, risks and opportunities using workshops with internal experts to assess both impact materiality (scale, scope, irremediability and likelihood) and financial materiality (gross potential magnitude and likelihood); and Phase 3, consolidation of results and approval. Importance thresholds were defined to identify the material IROs, topics and sub-topics to be disclosed, and the results were presented to the Executive Committee, the Audit and Accounts Committee and the Group Risk Review Committee.

Reference: page 243

Arkema provides, in the appendices to its Sustainability Report, the list of disclosure requirements in ESRS covered by its sustainability statements, organized into General, Environmental, Social and Business Conduct information, each mapped to the relevant chapter reference. The general information block lists BP-1, BP-2, the ESRS 2 disclosures GOV-1 through GOV-5, SBM-1, SBM-2, SBM-3, IRO-1 and IRO-2. The environmental block covers ESRS E1 climate, E2 pollution, E3 water and marine resources, E4 biodiversity and ecosystems, and E5 resource use and circular economy. The social block covers ESRS S1 own workforce and S2 value chain workers, and the business conduct block covers ESRS G1. The index reflects the outcome of the double materiality assessment: ESRS S3 (affected communities) and ESRS S4 (consumers and end-users) were assessed as not material and are therefore not the subject of topical disclosure requirements. A further table maps individual datapoints to SFDR, Pillar 3, Benchmark Regulation and EU Climate Law references.

Reference: page 182

Arkema strengthened its climate plan in 2023 to align with the Paris Agreement, setting more ambitious 2030 targets on a 1.5C trajectory that were approved by the Science Based Targets initiative (SBTi). These targets pave the way for reaching Net-Zero by 2050, with the SBTi Net-Zero criterion requiring at least a 90% reduction across Scopes 1, 2 and 3 versus the baseline year. The plan is managed by the quarterly Climate Committee, coordinated by the Sustainable Development department. Decarbonisation of Scopes 1 and 2 rests on three levers: optimising and modifying production processes (around 25% of the needed reduction), improving energy efficiency through the Arkema Energy program (around 20%), and using low carbon energy (around 55%). A cumulative investment envelope of up to 400 million euros over 2022 to 2030 supports decarbonisation, of which around 180 million euros has already been made or is underway.

Reference: page 182

Arkema includes climate in its HSSEQ policy. The approach focuses on two main areas: mitigation, by reducing GHG emissions and developing lower carbon footprint solutions, and adaptation, by adjusting operations and the value chain to physical risks and regulatory changes. The Group has also adopted an energy policy aligned with its operational excellence drive, setting out energy conservation imperatives to be applied across all activities worldwide. The climate plan is governed by the Climate Committee, which meets quarterly and is coordinated by the Sustainable Development department, comprising Group Process and Energy Procurement Vice-Presidents, industrial Vice-Presidents of business lines and regional HSE Vice-Presidents. The committee leads programs to decarbonise industrial activities and monitors progress. Through the Go for the Planet program launched in 2023, Arkema runs awareness, training and empowerment phases, including Climate Fresk workshops; by end 2024 more than 7,300 employees had participated.

Reference: page 184

Arkema's decarbonisation actions target Scopes 1, 2 and 3. For Scope 1 the Group optimises processes, runs systematic leak detection and emissions treatment at fluorogases facilities, uses biomethane to replace natural gas, and improves boiler energy efficiency. The Arkema Energy program, based on ISO 50001 (31 sites certified, around 54% of total energy use) and on energy audits covering facilities representing over 85% of energy consumption, has a dedicated annual capital expenditure budget of 8 million euros; in 2024, 67 capital projects were funded (33 Europe, 16 Americas, 18 Asia). Key projects include a 130 million euro acrylics purification upgrade at Carling, France, cutting site CO2 emissions by 20% by 2026. Scope 2 actions include long-term renewable electricity contracts in the US, China and France and a solid recovered fuel boiler at Lannemezan. For Scope 3, Arkema engages suppliers, increases bio-based and recycled raw materials, and develops recycling via Virtucycle.

Reference: page 182

Arkema's 2030 targets, validated by the SBTi on a 1.5C trajectory with 2019 as the base year, are a 48.5% reduction in absolute Scope 1 and 2 GHG emissions and a 54% reduction in absolute Scope 3 GHG emissions versus 2019. Having already exceeded its initial 2030 Scope 3 target in 2024, the Group set a new, more ambitious target of a 67% reduction in Scope 3 emissions by 2030 versus 2019 (corresponding to about 50 Mt CO2e). A further target is a 25% reduction in net energy purchases in EFPI terms by 2030 compared with 2012. These targets support an ambition to reach Net-Zero by 2050, defined under the SBTi criterion as at least a 90% reduction across Scopes 1, 2 and 3 versus the baseline year. In 2024, Scopes 1 and 2 emissions were 42% below 2019 and Scope 3 was 62% below the 2019 baseline.

Reference: page 190

In 2024, Arkema's total energy consumption related to its own operations was 6,900,000 MWh, up from 6,680,000 MWh in 2023. Fossil sources accounted for 4,860,000 MWh, or 70% of total consumption, comprising natural gas (3,171,500 MWh), crude oil fuel (65,500 MWh), zero coal, and 1,623,000 MWh of purchased electricity, heat, steam and cooling from fossil sources. Nuclear sources contributed 932,000 MWh (14%). Renewable sources contributed 1,108,000 MWh (16%), including 315,000 MWh of fuel from renewable sources such as biomass and 793,000 MWh of purchased renewable electricity, heat, steam and cooling. The share of low-carbon energy in total energy consumption was 30% in 2024, up from 24% in 2023 and 23% in 2022. The share of renewable electricity in total electricity was 32% and low-carbon electricity 72%. All Group activities are in high climate impact sectors, with an energy intensity of 0.72.

Reference: page 188

In 2024, gross Scope 1 GHG emissions were 1,358,000 t CO2e, up 2% on 2023, with 24% covered by regulated emission trading schemes. Gross location-based Scope 2 emissions were 1,047,000 t CO2e and gross market-based Scope 2 emissions were 787,000 t CO2e (down 17%), with 25% of Scope 2 covered by contractual instruments. Total market-based Scope 1 plus 2 emissions were 2,145,000 t CO2e, 42% below the 2019 baseline of 3,704,000. Total Scope 3 emissions were 57,705,000 t CO2e, down 19% on 2023 and 62% below the 2019 baseline of 152,400,000; the largest categories were use of sold products (18,805,000), end-of-life treatment of sold products (25,303,000), purchased goods and services (8,627,000) and processing of sold products (2,847,000). Total location-based GHG emissions were 60,110,000 t CO2e and total market-based emissions were 59,850,000 t CO2e.

Reference: page 191

Arkema applies an internal carbon price covering Scope 1 and 2 GHG emissions, expressed in CO2 equivalent terms and functioning as a shadow price. It is used across the whole Group to analyse strategic industrial investments and to steer investment decisions under the operational excellence program towards the lowest carbon solutions, comparing scenarios using different processes to assess their impact on product cost. The internal carbon price also serves to raise employee awareness, drive behavioural change, promote energy efficiency and identify low-carbon opportunities. The Executive Committee reviews the use of the internal carbon price, checks its relevance and adjusts the value if necessary. The price is currently set at 100 euros per tonne of CO2, in line with the carbon market price.

Reference: page 192

Arkema's environmental policy sits within its Group HSSEQ policy, covering management of hazardous substances throughout the value chain, prevention of industrial accidents, crisis preparation and reduction of the environmental footprint. The Group monitors air emissions and water discharges at its industrial sites, periodically conducts environmental analyses to identify impacts, and integrates environmental impact analysis from the design phase of new production units when choosing sites, processes and equipment. The policy commits the Group to reducing chemical oxygen demand in effluent, volatile organic compounds released into air, SO2 and NOx emissions, particulates, and odor and noise nuisances, while continuing soil remediation to control legacy pollution. The approach supports compliance with the do no significant harm criterion for biodiversity and ecosystems under the Group's taxonomy-eligible activities.

Reference: page 193

Arkema implements concrete actions to reduce pollution. For air, production facilities collect and treat VOC-containing effluents, commonly installing thermal oxidizers or vent scrubbing, and run regular leak detection and elimination campaigns. Acidifying substances are reduced by fueling boilers with low or ultra-low sulfur fuels or replacing fuel oil with natural gas, and by installing nitrogen oxide reduction systems or low-NOx burners. Dust is controlled by optimizing combustion and flue-gas cleaning and installing separation devices such as cyclones and filters. For water, the Optim'O program (begun 2016) reduces effluent through pretreatment, improved treatment efficiency and compliance with the CWW BREF. In 2024 specific environmental investments totaled 107 million euros and related operating expenses 134 million euros. The Group also runs crisis management procedures and soil remediation projects.

Reference: page 192

Arkema has set 2030 pollution-reduction targets expressed in EFPI (emission intensity) terms against a 2012 baseline. The Group aims for a 65% reduction in volatile organic compound (VOC) emissions and a 70% reduction in chemical oxygen demand (COD) emissions by 2030. Having reached its earlier COD target by the end of 2024, it set the new, more ambitious 70% goal. For process safety, the Group targets a process safety event rate (PSER) of 2.0 by 2030. The VOC indicator remains on track toward its 2030 target thanks to actions taken on filtration performance and process efficiency, notably at the Mont and Saint-Aubin sites in France. Targets are overseen by a steering committee chaired by the Executive Vice-President, Industry and CSR.

Reference: page 194

Arkema reports air and water pollutant emissions from its activities. Air emissions in 2024 were 2,150 tonnes of total acidifying substances (t SO2e), 2,281 tonnes of volatile organic compounds (down from 2,520 in 2023), and 122 tonnes of dust. Water emissions in 2024 were 1,256 tonnes of chemical oxygen demand (t O2) and 421 tonnes of suspended solids; COD fell sharply, particularly at Nansha in China. New CSRD-aligned metrics were quantified using the E-PRTR methodology, limited to facilities exceeding Annex II thresholds of Regulation (EC) no. 166/2006. On microplastics, the Group joined Operation Clean Sweep and deploys Optim'O measures at sites handling them; reporting on uses and quantities released to the environment will only begin in 2026 for products under REACH microplastic restriction exemptions, so this datapoint is partially disclosed.

Reference: page 198

Arkema manages substances of concern through REACH, GHS and CLP compliance, with a team of over 30 toxicological, ecotoxicological and regulatory experts. It monitors REACH substances of very high concern (SVHC). Products containing SVHCs subject to authorization or on the candidate list accounted for 3.8% of 2024 sales, up from 3.1% in 2023, covering 96% of Group sales. SVHCs subject to authorization in products on the market totaled 4,641 tonnes (11 substances); candidate-list SVHCs totaled 14,032 tonnes (53 substances), including CMR category 1A/B substances at 8,403 tonnes and PBT or vPvB substances at 914 tonnes. The Group reformulates and substitutes substances via its Archimedes portfolio program. Reporting on SVHC emissions to the environment is only partially disclosed: matches between monitored environmental pollutants and the candidate list are limited, and an action plan to identify SVHC emission types in Europe is being developed over the medium term.

Reference: page 200

Arkema has drawn up a water policy, additional to its HSSEQ policy, recognizing the importance of responsible water management to address restriction risks. Water is used in manufacturing processes to cool production installations and generate steam. The worldwide policy commits the Group to reducing its water withdrawals and adopting sustainable water management across all sites located in water-stressed areas, to reducing water discharges, and to developing innovative solutions for the sustainable use of water by its customers. The policy also includes commitments to reduce emissions into water, in particular chemical oxygen demand, suspended solids, substances of concern and microplastics. Results and targets are set periodically by a steering committee chaired by the Executive Vice-President, Industry and CSR. The Optim'O program forms part of the do no significant harm assessment for water and marine resources.

Reference: page 200

The Optim'O program, initiated in 2016, structures Arkema's water actions based on analysis of water-stress risk using the World Resources Institute Aqueduct tool with projections to 2030, process dependency on water, availability of alternative lower-risk sites, and withdrawal and production volumes. Arkema identified 22 sites representing 11% of water withdrawals and 27% of production volume warranting high or very high priority water management for 2030. Initiatives include closed loops, improved usage monitoring, flow meters, leak detection, technology changes, upgraded fire-fighting systems, rainwater recovery and recycling of scrubbing water or vapor condensates. The Lannemezan plant in France cut withdrawals by more than 2 million cu.m between 2019 and 2024; La Chambre (France) and Memphis (United States) each saved around 1 million cu.m. In 2024 CEFIC awarded Arkema a European Responsible Care Award for Optim'O.

Reference: page 200

Arkema reached its previous 2030 water target by the end of 2024 and set a new, more ambitious goal: reducing water withdrawals to 80 million cu.m by 2030. Water withdrawals decreased by 4 million cu.m in 2024, reflecting saving efforts. Analyses show that 90% of water withdrawn from the natural environment is returned as surface water, and that 90% of Group water withdrawals are attributable to just 15 industrial sites, two of which are classified as high or very high priority for water management. The target is supported by the Optim'O program and set periodically by a steering committee chaired by the Executive Vice-President, Industry and CSR.

Reference: page 200

Water is consumed in Arkema's manufacturing processes to cool installations and generate steam. The Group set a 2030 target of reducing water withdrawals to 80 million cu.m, with withdrawals falling by 4 million cu.m in 2024. Analyses indicate that 90% of water withdrawn from the natural environment is returned as surface water, and that 90% of Group withdrawals come from just 15 industrial sites, two classified as high or very high priority for water management. Twenty-two sites representing 11% of withdrawals and 27% of production volume warrant high or very high priority management for 2030. In 2024 the Group recycled and reused 1,008,000,000 cu.m of water. Site-level savings included Lannemezan (more than 2 million cu.m between 2019 and 2024) and around 1 million cu.m each at La Chambre and Memphis.

Reference: page 201

Arkema commits to protecting biodiversity within its HSSEQ policy, overseen by the Executive Vice-President, Industry and CSR, undertaking to contribute to its preservation by reducing emissions into air, water and soil. In 2023 the Group carried out a biodiversity materiality assessment with expert firm BL Evolution, drawing on the 2019 IPBES report, Science-Based Targets for Nature, France's NF X32-001 standard, the French Biodiversity Agency's guide and TNFD recommendations, covering the entire value chain and the five IPBES drivers. The main impacts are concentrated upstream, relating to water consumption, pollution and land-use change from raw material production. In 2024 Arkema redefined its biodiversity strategy around five areas (limiting direct operations' contribution to climate and pollution drivers, acting on upstream and downstream value chains, mapping site proximity to key biodiversity and protected areas, and raising employee awareness) and renewed its act4nature international commitment, having signed the charter and joined in 2021 and 2023 respectively.

Reference: page 202

Arkema contributes to biodiversity preservation through site actions reducing water withdrawals, air and water emissions and greenhouse gas emissions. In 2024 the Group set up a working group with biodiversity experts to map sites against key biodiversity zones and protected areas and to define a methodology for assessing the biodiversity footprint of sites, aiming to test it at three pilot sites by the end of 2025. Awareness-raising webinars, local events and e-learning modules were organized for the entire workforce during Sustainable Development Week. At the Lannemezan site in France, a revegetation project on about five hectares, launched in 2021 to rehabilitate a former lime production unit, saw vegetation re-grow evenly in 2024. In the upstream value chain, the Pragati initiative (since 2016) promotes sustainable castor seed production under the SuCCESS code, preserving soil and water quality and farm biodiversity.

Reference: page 201

Arkema's biodiversity strategy is based on nine targets following SMART (Specific, Measurable, Additional, Realistic, Time-bound) guidelines. Their compliance with these guidelines was reviewed and validated as part of the renewal of the Group's act4nature international commitment, undertaken by a multi-stakeholder steering committee comprising representatives of public bodies, environmental NGOs, company networks and scientific partners. The strategy targets cover limiting direct operations' contribution to climate and pollution drivers (notably reducing greenhouse gas, water COD and air VOC emissions and water withdrawals), analyzing raw materials for biodiversity impact and dependence, increasing the share of Group ImpACT+ sales, studying biodiversity footprint assessment methods for products and pilot sites, and raising employee awareness. The Group's individual commitments are published on the act4nature international website.

Reference: page 203

Arkema integrates responsible resource management throughout the value chain, preservation of non-renewable raw materials and reduction of industrial waste into its HSSEQ policy. The Group's circular economy approach rests on preserving and responsibly managing raw materials through incorporation of renewable and recycled materials in products and packaging; reducing the environmental impact of activities by optimizing raw material quantities, water and energy consumption, reducing waste and transitioning to low-carbon energy; and keeping products and materials in use through eco-design, marketing recyclable products, developing recycling channels and reducing hazardous substances in products. Life Cycle Assessment is a key metric. The program is monitored by a Circular Economy Committee meeting twice a year, comprising R&D, Sustainable Development, Processes and Environment Vice-Presidents and the Renewables and Recycling Scientific Director, supported by Industrial Ecology and Product Stewardship steering committees including Executive Committee members.

Reference: page 205

Arkema is a pioneer in biomass-derived raw materials, using castor oil to produce Rilsan high performance polyamides, with the Singapore facility expanding 100% bio-based Rilsan production since 2023 (financed by a 2020 green bond). The Group develops renewable and recycled materials through its Bio-based or biosynthesized materials innovation program, supplier collaboration and a Mass Balance approach incorporating certified bio-attributed raw materials, with new ISCC+ certifications obtained in 2024 at Taixing, Clear Lake, Villers-Saint-Paul, Sant Celoni and Changshu. New 2024 products include KizenTM LIME adhesive (minimum 80% renewable), Fast Glue Ultra+ (60% bio-based) and Reafree 40% Rpet powder coating resins. Arkema joined the Ellen MacArthur Foundation Network in 2024 and is active in CEFLEX, RECYCLASS, FPA, APR, CPRRA and the Nextloopp project. Some industrial sites use up to 70% recycled packaging, and Bostik includes a minimum 30% PCR plastic in pails and cartridges since 2021.

Reference: page 206

Arkema set medium- and long-term circular economy targets. In 2024, around 11% of Group sales came from products made from renewable or recycled raw materials (steady versus 11% in 2023 and 10% in 2022), covering products with at least 25% renewable or recycled content. The target for waste treated without recovery was 48 kg/t of production on average over 2022-2024; the 2024 figure was 44.1 kg/t (versus 47.4 in 2023 and 51.8 in 2022). The Group also targets 90% of sales covered by a life-cycle assessment by 2030; coverage reached 68% in 2024, up from 56% in 2023 and 41% in 2022. The 25% renewable or recycled content rate is used as the baseline for the substantial contribution criterion under the Plastics in primary form taxonomy category. LCAs follow ISO 14040-14044, ISO 14067 and EN 15804+A2.

Reference: page 207

Arkema's largest bio-sourced raw material by volume is castor oil. Castor seeds are among the Group's most strategic raw materials, supporting polyamide 11 (Rilsan) production and the new Singapore facility, making Arkema one of the world's leading buyers. Castor beans are grown on land not designated for food crops, mostly in India. Under the Pragati program, more than 8,000 Indian farmers have been audited and certified for sustainable castor cultivation and more than 9,000 hectares are farmed under the SuCCESS code. In 2024 the Group purchased the equivalent of 3,500,000 tonnes of raw materials. Products with at least 25% renewable or recycled content accounted for around 11% of sales. The Group is researching castor farming in other regions to increase purchasing flexibility. Some circular-economy resource-inflow metrics remain unpublished pending clarification of ESRS requirements.

Reference: page 207

Arkema manages resource outflows through eco-design, product use and end-of-life. Working with partners across the value chain, it designs solutions that keep products and materials in use and enable recycling, with a smaller carbon footprint supported by life-cycle assessment targets. In cooperation with customers and suppliers, eco-design identifies circularity drivers such as optimizing materials used, extending product lifespan, separability of components and recyclability, with training to embed these from the earliest design phases. Products extending customers' product lifespans include Kynar PVDF coatings (Kynar Aquatec reflective roofs, awarded the 2024 Solar Impulse label), Durastrength acrylic impact modifiers, and Kercoat and Opticoat glass-bottle coatings (Opticoat allowing up to 50 reuse cycles versus 20, with a 92% bio-based Opticoat 340 launched in 2024). Recycling enablers include Elium liquid thermoplastic resins, CecabaseRT and WarmGrip bitumen technologies, and the Virtucycle program via subsidiary Agiplast, with SCS-certified recycled grades under the Rilsan, Rilsamid and Pebax brands.

Reference: page 209

Through its HSSEQ policy Arkema reduces both hazardous and non-hazardous waste and recovers by-products where possible; hazardous waste is treated externally by approved specialized companies. Total waste in 2024 was 392,600 tonnes (391,400 in 2023), with 273,600 tonnes non-recycled, equal to 70%. Total hazardous waste was 183,400 tonnes, of which 119,200 tonnes were diverted from disposal, 62,300 tonnes recycled into materials, 56,900 tonnes incinerated with energy recovery, and 64,200 tonnes directed to disposal. Total non-hazardous waste was 209,200 tonnes, of which 70,000 tonnes were diverted from disposal and 56,700 tonnes recycled into materials. In 2024, 30% of waste produced worldwide was recycled on- or off-site and 18% incinerated with energy recovery. The Group met its target of an average 48 kg/t of non-recovered waste over 2022-2024, achieving 47.8 kg/t. Examples include 8,000 tonnes of desulfogypsum recycled into plasterboard at Lacq and palladium recovery at Jarrie.

Reference: page 227

Arkema's HR policy provides safe and transparent working conditions, a compensation policy that fairly rewards each employee's contribution, and social protection that supports quality of life, while maintaining and developing skills. Talent management rests on workplace equality and non-discrimination and the Group's values of simplicity, performance, solidarity, empowerment and inclusion. A global well-being policy validated by the Executive Committee is structured around health and safety, work environment, digital transformation and interpersonal relations. The Group applies a zero-tolerance policy on discrimination, formalized in a Diversity and Inclusion Charter and a Human Rights Policy. Through its HSSEQ policy, Arkema commits to preventing health and safety risks at all operations worldwide for its employees and subcontractors.

Reference: page 224

Arkema sustains permanent dialogue with employees directly and through their representatives, aimed at improving workplace quality, safety, work-life balance and atmosphere. It relies on the Arkema Cares engagement study, the SMART approach, social dialogue and collective bargaining agreements. In 2023 the global Arkema Cares survey covered 20,172 employees across five dimensions: engagement, strategy and values, employee experience, diversity and inclusion, and performance conditions. The response rate was 72% and the engagement score was 77%, two points above the Mercer industry benchmark. The Group targets an engagement score of at least 80% by 2030. The SMART approach involves 83 sites across three continents. The strategy is steered by the Executive Vice-President, Human Resources and Communication.

Reference: page 225

Arkema has set up several mechanisms to identify concerns and decisions that could negatively affect employees and to remedy them. Through channels such as management and employee representative bodies, a monitoring process identifies situations requiring attention and triggers appropriate action, with implementation and effectiveness of remediation monitored at Group, subsidiary or direct management level. The digitalization of individual interviews in the HR Information System makes employee comments accessible to line management and HR. A global psychological support and anti-harassment system rolled out in 2023 is accessible via the Eutelmed online platform, allowing employees to contact a psychologist in 60 languages confidentially and anonymously. The Group's whistle-blowing system also lets employees and other stakeholders report malfunctions.

Reference: page 232

Through its prevention and continuous improvement process, Arkema ensures a good working environment by analyzing workstation health and safety risks and studying accident typologies, applying the same expectations to subcontractors on its sites as to employees. The Safety Always in Mind and Essentials programs are deployed worldwide for both employees and subcontractors. In 2024, 57% of employees received safety training (excluding e-learning) averaging 12 hours per trained employee, and 39% took e-learning safety courses. Peer observation was in place at 96% of sites in 2024, with a 2025 target of 100%. The Group runs psychosocial risk prevention programs, ergonomics initiatives, and a STARMAP workplace risk assessment application, applied at 70% of sites at end-2024. In 2024, 97% of employees benefited from regular medical check-ups.

Reference: page 223

Arkema has set quantified social targets. By 2030, 35% of senior management and executive positions are to be held by women; the Group reached its earlier target by end-2024 and raised it to 35%. By 2035, 50% of senior management and executive positions are to be held by non-French nationals. The Group aims to increase women on the Group management committee to 30% by 2030. On employee engagement, it targets a score of at least 80% by 2030. On safety, it aims to bring the total recordable injury rate (TRIR) per million hours worked down to 0.7 by 2030, covering Group workforce and contractors on Group sites; the Group reached its prior target by end-2024.

Reference: page 226

Total headcount at 31 December 2024 was 21,164, compared with 21,125 in 2023 and 21,116 in 2022. By gender: 15,413 male, 5,748 female, 1 other and 2 not reported. By major country: France 7,199, United States 3,397, China 2,589 and Other 7,979. Permanent employees totaled 20,427 and temporary employees 737; full-time employees totaled 20,469 and part-time 695. In 2024 there were 2,742 departures (excluding scope changes), a 9% departure rate across permanent and temporary headcount, with voluntary resignations at 4.5%. Absenteeism stood at 3.7% in 2024, down from 4.1% in 2023, with medical-reason absenteeism steady at 3%. In 2024, 32% of employees benefited from teleworking.

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Arkema facilitates the creation of employee representation bodies and collective bargaining mechanisms, as well as freedom of association, fostering regular dialogue in every entity in line with local norms and legislation. At European level, the European Group Works Council, renewed in September 2024, comprises twenty members and meets at least twice a year. In the United States, employees at unionized facilities are covered by collective bargaining agreements negotiated for an average of three years. In China, an Employee Representatives Congress of the main local subsidiary has 32 members. In 2024, 87 collective agreements were signed worldwide covering health and safety, well-being, social protection, pensions, working hours, gender equality, disability, compensation and training. Coverage data cover sites employing more than 50 people, accounting for 94% of the Group's total workforce.

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Women accounted for 27% of the Group's total headcount at 31 December 2024 and 31% of new hires across all levels. High-responsibility positions (senior managers and executives) account for around 10% of all managerial positions, with senior managers about 3% of management positions. The percentage of women senior managers and executives rose to 30% in 2024 (174 women), with men at 70% (408 men). The proportion of non-French senior managers remained stable at 40%. The Group management committee had twenty-six members at end-2024, of whom six (23%) were women. At end-2024, disabled employees were 2.4% of the global workforce. In 2024, 9% of permanent hires were employees aged 50 and over.

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All employees benefit from minimum compensation guarantees and are paid on time, in full and without deductions. A study carried out by the Group in 2024 on compensation levels in France, the United States and China confirmed that employees receive an adequate wage. This study covers the reporting scope of France, the United States and China, which accounts for 62% of the Group's workforce. This adequate-wage disclosure is therefore partial for the first reporting year, with the Group endeavoring to extend full-scope monitoring in the medium term. The compensation structure comprises a fixed base salary, an individual bonus and a collective bonus; 52% of employees receive an individual bonus and 61% are eligible for a collective bonus.

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Arkema's HR policy is built on providing social protection that contributes to employees' quality of life, alongside safe working conditions and fair compensation. Social protection is among the issues covered by collective bargaining: of the 87 collective agreements signed worldwide in 2024, topics included social protection and pensions. Arkema also encourages employee share ownership, with plans offered every two years in around 30 countries on preferential terms. In 2024, close to 8,700 current and former employees subscribed around 1 million shares amounting to nearly 62 million euros under the ninth reserved capital increase. At 31 December 2024, employees collectively owned 9.14% of outstanding shares, making them one of the Company's leading shareholders.

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The Group supports the integration and continued employability of people with disabilities through dedicated training programs and workstation modifications, and its recruitment procedures aim to offer people with disabilities various job opportunities. The measures taken in France illustrate the Group's approach, with similar measures implemented in other regions taking into account local conditions and legislation. At the end of 2024, disabled employees accounted for 2.4% of the global Group's workforce. This calculation is based on available information and takes into account the regulations in force in the countries where Arkema operates.

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Arkema's 2024 health and safety metrics: 96% of employees are covered by the Group's health and safety management system, and 71% of the workforce is covered by a system based on recognized standards and subject to internal audit. There were zero fatalities among Group employees and zero among contractor employees. The Group recorded 27 recordable work-related accidents, a recordable accident rate of 0.7, 32 cases of recordable work-related ill health (France only), and 576 days lost due to work-related accidents. The total recordable injury rate (TRIR) was 0.8 in 2024. The lost-time injury rate (LTIR) improved to 0.5 in 2024, with an average of 34 days lost per injury. The occupational illness frequency rate (OIFR) for France was 2.9 per million hours worked.

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Women accounted for 27% of the Group's workforce at 31 December 2024. In 2024, the gender pay gap averaged 5% in favor of women, account taken of the typology of Arkema's businesses, particularly in the industrial sector. This was calculated across the reporting scope for France, the United States and China, which accounts for 62% of the Group's workforce, so the figure is partial for the first reporting year, with full-scope monitoring intended in the medium term. The ratio between the remuneration of the Chairman and Chief Executive Officer and the median compensation was 99.84 in 2024, calculated across the same France, United States and China scope. Equal pay is a key factor in annual salary and career reviews across all Group companies.

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Reports received and processed under the Group's whistleblowing procedure are presented in section 4.2.4.2.5. Under the Group's duty of care plan, the system for monitoring measures and assessing their effectiveness confirmed that no risk of serious infringement to human rights and fundamental freedoms, or to employment and industrial relations, was identified in 2024. The Group is not aware of any claims made to an OECD National Contact Point for Responsible Business Conduct. Arkema applies a zero-tolerance policy towards discrimination and opposes human trafficking, forced labor, child labor, exploitation, abuse, violence, sexual harassment and bullying, with a global anti-harassment support system accessible via the Eutelmed platform.

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Arkema is committed to respecting human rights and fundamental freedoms throughout its value chain, and works to prevent, identify and remedy any human rights violations affecting its employees or those of its suppliers and subcontractors. This commitment is reflected in its Human Rights policy. A Suppliers Code of Conduct covers respect for human rights and labor law, and suppliers are expected to comply. To prevent negative impacts and risks for workers employed at suppliers, Arkema participates in the Together for Sustainability (TfS) initiative, which pools supplier assessment procedures across the chemicals sector, and runs the Pragati program promoting basic human rights for castor bean farmers. For its upstream value chain, Arkema applies responsible sourcing policies plus a conflict minerals policy to minimize the risks of human rights violations. The HSSEQ policy includes product stewardship to prevent health impacts associated with use of its products.

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Dialogue with value chain workers is facilitated by Arkema's whistleblowing procedure, which enables any worker in the Group's value chain to report a malfunction and inform Arkema of their concerns. This input of critical information helps improve dialogue with suppliers and encourage more responsible practices throughout the value chain. For downstream workers, all Safety Data Sheets include a 24/7 hotline number and an e-mail address enabling any downstream value chain worker to communicate with Arkema. Arkema relies on an in-house team of expert toxicologists and ecotoxicologists who conduct product hazard studies and assess risks in normal conditions of use, sharing findings through Safety Data Sheets and labeling so that stakeholders are informed of the risks involved when handling the Group's products and of the appropriate conditions of use.

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The Group has implemented several measures to prevent negative impacts and risks for workers employed at its suppliers. A Suppliers Code of Conduct covering respect for human rights and labor law has been put in place, and suppliers are expected to comply. Arkema participates in the Together for Sustainability (TfS) initiative, pooling supplier assessment procedures with other chemicals companies. It runs the Pragati program promoting compliance with the basic human rights of castor bean farmers and sustainable agriculture practices. For downstream workers, the Group ensures products are received, stored and used under strict conditions to minimize exposure to chemical substances. Safety Data Sheets are prepared in some forty languages, issued regularly and after each major update, posted on the Group website or the QuickFDS platform, and even issued for products not classified as hazardous. In Europe, extended REACH compliant SDSs include exposure scenarios. Labels are printed with consistent classification regardless of country.

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Arkema places great importance on conducting business in line with principles and rules on business compliance and ethics, working in line with international conventions, prevailing laws and honest business practices. The Group's Business Conduct and Ethics Code sets out Arkema's values and the rules of conduct all employees are expected to abide by, specifying that no violence, sexual or moral harassment is tolerated, that employees must not offer or accept any undue advantage, and that they must comply with antitrust and export/import control laws and international economic sanctions. The Code and the Anti-Corruption Policy are available in 15 languages and accessible on the Group's intranet and website. The rules and procedures are sent electronically to all employees once a year, when employees sign a compliance statement. Compliance with the Code is assessed as part of the annual employee appraisal process. A Compliance Committee, reporting to the Executive Committee, oversees proper application and met four times in 2024.

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Arkema includes employee, environmental and social considerations in its procurement process and favors partners that respect its social commitments. Purchasing is managed globally, with a Responsible Purchasing Steering Committee meeting at least three times a year. The responsible procurement process is guided by the Business Conduct and Ethics Code, and a dedicated Supplier Code of Conduct covering human and employee rights, the environment, product quality and safety, and business ethics has been issued to all Group entities and is accessible on the Group's website. All new suppliers and subcontractors are informed of the code and expected to comply. Around 70% of buyers attended training or brush-up sessions in 2024. Preliminary assessments use supplier interviews and external databases, including the EcoVadis ratings platform for CSR. Through the Together for Sustainability initiative, more than 2,400 suppliers had been assessed on CSR criteria over the last three years by the end of 2024, and the percentage of purchasing spend with relevant suppliers covered by a TfS assessment reached 81% in 2024.

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Arkema rejects and prevents all forms of corruption and fraud using a zero-tolerance approach. The Anti-Corruption Policy, in line with the United Nations Convention against Corruption, defines corruption and influence peddling, provides examples of behaviors to avoid, and sets rules on gifts and hospitality. The business compliance and ethics program covers antitrust, international economic sanctions and the fight against corruption, supported by face-to-face training and e-learning modules. As of 31 December 2024, over 16,200 employees had taken the e-learning course on the Code of Conduct, including Executive Committee members and employees most exposed to risk such as those in sales and purchasing. The program includes integrity checks and due diligence on third parties, verification of business intermediaries, rules on gifts and conflicts of interest, and prior approval for exports to restricted countries. A corruption risk map is updated regularly. The Internal Audit and Internal Control department performs audits in subsidiaries to help detect possible fraud risks.

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Arkema engages with public authorities wherever it operates, with advocacy activities supporting its strategy and adhering to its values, particularly on social and environmental responsibility. Positions are communicated to public decision-makers directly or through professional associations. The Institutional Relations Department is organized by major region, with managers in Europe, the United States and China. On environmental issues, the Group aligns its institutional policy with the Paris Agreement and Arkema's carbon trajectory for 2030 validated by the SBTi. In France, Arkema is a member of MEDEF (via France Chimie) and AFEP, and belongs to professional bodies such as France Chimie, CEFIC in Europe, the American Chemistry Council, and close to 50 other specialized industry associations worldwide. Contributions to trade associations amounted to around 4.3 million euros in 2024; France Chimie and CEFIC account for 27% and 18% respectively, and between roughly 15% and 20% of fees to the main associations support lobbying. Arkema is entered in the EU Transparency Register and files reports with French HATVP and both houses of the US Congress. The Group does not finance any political party or organization.