Michelin

Michelin (Compagnie Generale des Etablissements Michelin, CGEM) describes its administrative, management and supervisory bodies, with fuller detail in the Corporate Governance Report (Chapter 2). The Supervisory Board has 11 members, all non-executive, of whom 5 are women (45.5%), 8 are independent (72.7%) and 3 (27.3%) represent other aspects of diversity based on nationality. The Supervisory Board has set up an Audit Committee and a Corporate Social Responsibility (CSR) Committee, whose sustainability remits are defined in their internal rules. Every four months the CSR Committee reviews the Group's sustainability strategy, objectives, policies and commitments, coordinating with the Audit Committee to ensure a double materiality assessment is conducted. Below board level, a dedicated sustainable development organization tracks risks and drives progress, built on four governance bodies: the Group Executive Committee (including the two Managers), the Group Management Committee, the Environmental and Social Governance bodies, and the Thematic or Operational Committees. Management of sustainability matters is structured around six themes: Environment, Human Rights, Employee Health and Safety, Social Cohesion and Employee Commitment (created in 2024), Sustainable Finance and Ethics.

In 2024 the CSR Committee of the Supervisory Board discussed the following material IROs: climate transition and adaptation plans, deforestation, tire and road wear particles, and human rights in the value chain. The minutes of the annual meeting with the Corporate Stakeholders Committee were also shared with the CSR Committee. Within the operational governance structure, the Group Executive Committee guides the All Sustainable approach, reviews and approves objectives, and is informed of overviews presented to the Group Management Committee by the Governance bodies and the Group Ethics Committee; in 2024 it approved the double materiality matrix. The Group Management Committee annually reviews an overview prepared by the Vice President, Sustainable Development and Impact, which also discusses shortfalls in post-audit action plans and delays in roadmaps. The Governance bodies and Group Ethics Committee alert the Managers to shortfalls in action plans following audits and recommend corrective measures. The Chairs of the Governance bodies inform the Executive Committee of any difficulties encountered in implementing action plans following internal audits.

To align the Managers' interests with the Group's sustainability performance, their short-term (annual) and long-term (multi-year) variable compensation is subject to ESG criteria. For annual variable compensation, 20% depends on ESG performance targets: two concern People (TCIR and gender balance) and one concerns the Planet (Scope 1 and 2 CO2 emissions). The TCIR and CO2 emissions targets also apply to all Group employees eligible for variable annual compensation through the Group Bonus. For deferred variable compensation, 40% is awarded as performance shares tied to ESG targets: one target (20%) concerns the Planet through the Industrial Michelin Environmental Performance (i-MEP) indicator, and the other (20%) concerns People through the employee engagement rate. Both criteria apply to every Group employee eligible for the performance share plan. The criteria determining the Managers' variable compensation are defined by the Supervisory Board. These incentive schemes form an integral part of the compensation policies for members of the administrative, management and supervisory bodies, with terms set by CGEM's governing bodies (General Partners, Supervisory Board, Annual Shareholders Meeting).

For the eighth year in a row, in compliance with French Act No. 2017-399 of March 27, 2017, Michelin has prepared a Duty of Care Plan describing the impacts, risks and opportunities incurred by the Group and its value chain regarding the environment, health and safety, and human rights, along with measures to prevent or mitigate them. The Plan builds on information and initiatives embedded in the Group's policies, including the Code of Ethics, the Purchasing Principles, the Supplier Relations Code of Conduct, and the Health, Environment, Employee Relations, Diversity and Inclusion and Human Rights policies. A table maps the core elements of due diligence to sections of the Statement: embedding due diligence in governance, strategy and business model (4.1); engaging with affected stakeholders (4.1); identifying and assessing adverse impacts, taking action, and tracking effectiveness and communicating (across the environmental, social and governance topical sections). The Plan was enhanced by the double materiality assessment, including for risks below the materiality threshold, and its risks were addressed in that assessment. Preparation is coordinated by the Corporate Sustainable Development and Impact Department, working with Internal Control, Risk Management, Purchasing, Human Resources, Legal and Compliance.

Non-financial reporting has been part of the Group's risk management system since 2022. Milestones include creation in 2022 of a Sustainable Finance Governance Committee chaired by the General Manager; two internal audits commissioned by the General Manager in 2022 and 2023 to assess reliability of the non-financial reporting process, which led to two action plans; addition in 2023 of the risk of inaccurate or unfair reporting of non-financial data to the Group's risk database; and deployment in 2024 of an internal control system for downstream reporting phases. The first audit charted a prioritization matrix on two axes, sustainability matter and vulnerability, across each reporting stage (definition, scope, capture, collection, control, consolidation and disclosure). Control of sustainability data is now part of the Group's internal control exercise, performed through self-assessments (first line of defense) and testing (second line of defense); cases of non-compliance trigger corrective action plans within three months under line managers, validated by Internal Control, with effectiveness measured the following year. Findings of the 2022 and 2023 audits were presented to the Audit Committee, with action plan outcomes assessed in July 2024; results are presented to the Audit Committee each April. Material matters from the 2024 double materiality assessment were analyzed against the Group risk management portfolio.

For 130 years Michelin's innovation drive has made it one of the world's foremost tire manufacturers, with leadership backed by materials expertise and its ability to combine materials into composite solutions. The Group aims to build a world leader in life-changing composites. In 2021 it launched the Michelin in Motion strategic plan, with a 2030 roadmap and a 2050 vision, aligned with its All Sustainable commitment and balancing People, Profit and the Planet (the triple bottom line). The strategy is deployed across a globalized value chain from purchase of raw materials and services to distribution, use and disposal of products, and each stage has been assessed for double materiality. Upstream covers raw materials (natural rubber, synthetic rubber, reinforcing materials) and other purchases and suppliers; Michelin operations cover logistics and manufacturing; downstream covers B2B and B2C distribution, usage and end of life. The Group's workforce totals 129,832 employees, broken down as 62,239 in Europe, 36,306 in the Americas and 31,287 in the Africa-Asia-Pacific region. In 2024, 18% of total capital expenditure was committed to sustainability matters, with financial resources allocated across E1 climate change, E5 resource use and circular economy, and S1 own workforce.

Michelin defines stakeholders as people or groups impacted by its business or who may impact it, and engages them to keep corporate strategy mindful of their needs and to strengthen its duty of care process. It maintains sustained dialogue with customers, shareholders and investors, employees and employee representatives, suppliers, public authorities and trade organizations, civil society and NGOs, academia, sustainable development institutions, and local communities, with dedicated meetings scheduled annually for each category. The Corporate Stakeholders Committee, created in 2016, acts as a think tank and held an online presentation of the double materiality matrix in March 2024 and an in-person meeting on November 12 and 13, 2024. NGO engagement in 2024 included the WWF, the European Federation for Transport and Environment and the European Climate Foundation, plus the Natural Rubber Stakeholder Committee. Employee dialogue runs through the European Works Council (CEEM) and the Michelin Global Works Council (MWC), which met once in 2024. Michelin presented the CSRD and Sustainability Statement to the European Works Council on October 15, 2024, with a further consultation planned for 2025.

The 2024 double materiality matrix comprised twenty-six impacts, risks and opportunities deemed material, integrated into the Group's business model. Material environmental matters, corresponding to main impacts in product life cycle assessments, include climate change mitigation Scope 3 (E1), with Scope 3 use-phase emissions above 90% of Michelin's carbon footprint (115 million tonnes of CO2 in 2024) and a target to cut rolling resistance a further 10% by 2030 versus 2020; resource depletion (E5); climate change mitigation Scopes 1 and 2 (E1); deforestation and habitat loss (E4); end-of-life tire management (E5); and tire and road wear particles (E2). Climate change adaptation (E1) is covered by a 2024 policy. Material social matters, linked to the industrial nature and global footprint, are attracting and retaining talent (S1), employee health and safety (S1), and human rights in the value chain (S2). The primary material governance matter is business ethics (G1). Positive impacts embedded in the business model include zero-emission mobility (E1), quality and safety of products and services (S4), product circularity (E5, targeting 40% renewable and recycled materials by 2030 and 100% by 2050), and social protection (S1). Michelin determined that affected communities (ESRS S3) is not material.

Michelin plotted a double materiality matrix using a methodology based on the disclosure requirements in the ESRS, particularly ESRS 1 section 3. The Group Executive Committee approved the matrix and defined a materiality threshold in April 2024. The assessment covers the entire value chain and worldwide business base, including recently acquired entities, with each impact located in the upstream or downstream value chain. The process comprises four steps: definition of ESG topics and analysis grids; identification of IROs for each topic with stakeholder consultations; consolidation and tiering of impact and financial materiality; and final validation with presentations to the CEG and CDG. Stakeholders consulted included internal stakeholders from Management, Investor Relations, Finance, Human Resources, Purchasing, Legal and Compliance, Risk Management and Strategy, plus the Corporate Stakeholders Committee. A third party supported the methodology. IROs were assessed for probability and severity. Financial materiality assesses likelihood and severity of financial effects on a scale of 1 to 5 (from less than 50 million euros to more than 900 million euros). Impact materiality assesses negative impacts (by severity, magnitude, extent and irremediability, with probability for potential impacts) and positive impacts (by scale and scope). A symmetrical threshold was set for both dimensions and validated by the Group Executive Committee. The Group reasoned in terms of gross risk over short (under a year), medium (one to five years) and long (over five years) horizons, and reviewed results against its risk map.

Michelin states that a list of the ESRS Disclosure Requirements with which the Sustainability Statement complies may be found in Appendix D, and the list of datapoints in cross-cutting and topical standards deriving from other EU legislation is in Appendix B. The Statement applies the ESRS issued in December 2023 under the CSRD, as transposed into French law. The Group did not use the option to omit information relating to intellectual property, know-how or innovation results, nor the exemption from disclosing impending developments or matters under negotiation (ESRS 2, BP-1). Certain metrics were not disclosed in this first exercise: water pollution (E2-28(a)), substances of concern (E2-5, 34), and water recycled and reused (E3-4, 28(c)); microplastics (E2-4, 28(b)) was not disclosed because the Group does not consider tire and road wear particles to be microplastics. The topical sections cover climate change (E1), pollution (E2), water and marine resources (E3), biodiversity and ecosystems (E4), resource use and circular economy (E5), own workforce (S1), workers in the value chain (S2), consumers and end users (S4) and business conduct (G1). ESRS S3 on affected communities was assessed as not material. A cross-reference table maps IROs to framework policies, specific policies and initiatives.

Michelin has been part of the Race to Zero campaign since July 2021 and its transition plan is designed to achieve net-zero emissions by 2050 across Scopes 1, 2 and required Scope 3 (excluding use-phase emissions). In June 2024 the SBTi approved the Group's targets as consistent with a pathway limiting warming to 1.5C in line with the Paris agreements, using 2019 as the baseline. Short-term 2030 targets are a 47.2% cut in Scopes 1 and 2 and a 27.5% cut in required Scope 3, rising to a 90% reduction by 2050. Decarbonization levers cover the production base, upstream purchased energy, the raw material supply chain and logistics, following the prioritizing hierarchy of avoid, reduce, reuse, recycle and renew, plus process electrification and boiler conversion away from coal. Capital expenditure committed to decarbonizing the production plants was 107 million euros in 2024, budgeted at more than 400 million euros over the next five years. For the Scope 3 use of sold products category, 119 million euros was invested in 2024 to improve tire rolling resistance, with more than 600 million euros budgeted over five years.

Michelin's climate mitigation policies build on the Michelin Environmental Policy defined and issued in 2020, which is designed to manage pollution risks and reduce the environmental footprint to total neutrality. The policy comprises dedicated sections transposing objectives and guidelines for each environmental issue, starting with climate, and is supported by a separate document defining procedures for reducing Scope 1 and 2 CO2 emissions from production plant operations. A decarbonization plan is designed to meet the 2030 and 2050 targets approved by the SBTi in June 2024 for the entire reporting scope, covering at least 95% of total Group emissions based on an inventory of all consolidated companies. Excluded Scope 1 and 2 emissions accounted for an estimated 2.4% of the Group total, and excluded required Scope 3 emissions for an estimated 2.5% in 2024. For physical risks, a dedicated Physical Climate Risks Adaptation Policy has been in place since March 2024. Aligned with Michelin's CSR policy, it reflects the Group's efforts to manage the unavoidable by improving the value chain's resilience, applies to every Group entity and covers the entire value chain, including influencing and collaborative initiatives with external stakeholders.

Actions rest on two pathways: energy sufficiency and energy transition. Each site tracks energy used per tonne of product, while released CO2 is consolidated in absolute terms at corporate level. Since 2017 all Group production plants in the European Union use renewable electricity, mainly through direct purchases backed by guarantees of origin. Energy attribute certificates have been purchased in Brazil, Serbia and China since 2021 and Thailand since 2022, with the strategy extended in 2024 to Mexico, the United States and Indonesia; in total these contracts represented more than 2,900,000 MWh and covered more than 61% of electricity consumed. By 2024, 70 production plants representing 84% of Scope 1 and 2 CO2 emissions had prepared a 2050 net zero roadmap. More than 350 projects and initiatives were carried out during the year, requiring 107 million euros in capital expenditure, with more than 400 million euros estimated over the five-year plan. Examples include two new heat pumps at Golbey in France, a 5 MWp rooftop photovoltaic array at Bad Kreuznach in Germany, and renewable sources reaching 91% of electricity at Nyiregyhaza in Hungary. A process electrification program is replacing steam curing presses with electric presses, and coal, around 6% of total energy, is being phased out as a primary source by 2030 at five remaining sites.

Michelin's targets were approved by the SBTi in June 2024 as consistent with a 1.5C scenario, with 2019 as the baseline. The short-to-medium term Scope 1 and 2 target is a 47.2% absolute reduction over 2019-2030, supported by objectives to improve production plant energy efficiency by 24% versus 2019 (MWh per tonne produced) and to eliminate coal in own or purchased heat and cooling. The required Scope 3 target, excluding use-phase emissions, is a 27.5% absolute reduction over 2019-2030, covering purchased raw materials, upstream and downstream transportation and upstream purchased energy, which accounted for more than 70% of required Scope 3 emissions in 2019. The long-term target for both Scopes 1 and 2 and required Scope 3 is a 90% absolute reduction over 2019-2050, with the goal of net-zero CO2 by 2050. Targets by lever over 2019-2030 for Scopes 1 and 2 (measured in kilotonnes) organize actions into energy efficiency, process electrification, boiler conversion and potential additional renewable electricity purchases, whose total contribution amounts to at least a 47.2% reduction in 2030. For 2050, all levers to reach net zero and their technical feasibility are being identified and assessed, without using carbon credits. A separate rolling resistance target seeks a 10% improvement over 2020-2030, with 4.3% achieved by end-2024.

Total energy consumption related to own operations was 10,407,884 MWh in 2024, down from 10,984,907 MWh in 2023, a 5.3% decline. Group production plants use mainly three energy types: fuel burned on-site, purchased steam or hot water, and electricity. Total energy consumption from fossil sources was 6,562,287 MWh in 2024 (7,434,409 MWh in 2023), representing 63% of the mix, down from 68%. Within fossil sources, coal and coal products fell to 620,827 MWh, crude oil and petroleum products to 44,211 MWh, and natural gas to 3,452,706 MWh. Energy from nuclear sources was 358,356 MWh, or 3% of the mix. Total energy from renewable sources rose to 3,487,241 MWh (3,079,993 MWh in 2023), reaching 34% of the mix versus 28% in 2023. Renewable fuel consumption was 305,375 MWh, and purchased renewable electricity, heat, steam and cooling was 3,181,865 MWh. Electricity accounted for more than 95% of renewable energy used, of which more than 85% was backed by energy attribute certificates, equal to 61% of total power consumption. Energy intensity based on net revenue was 383 MWh per million euros in 2024, down from 388.

In 2024, gross Scope 1 GHG emissions were 956,909 tCO2e, down 8.9% from 1,049,930 in 2023 (2019 baseline 1,725,839). Scope 1 emissions from regulated emission trading schemes were 343,448 tCO2e, or 35.9% of Scope 1. Gross location-based Scope 2 emissions were 1,972,949 tCO2e and gross market-based Scope 2 emissions were 1,069,582 tCO2e, down 15.9%. Gross market-based Scope 1 and 2 emissions totaled 2,026,491 tCO2e, down 12.7%, against the 2019 baseline of 3,439,038 and the 2030 target of -47.2%. Gross required disclosure Scope 3 emissions were 12,652,988 tCO2e, down 6.5% from 13,536,955, with the largest category being Category 1 purchased goods and services at 9,015,849 tCO2e. Gross optional disclosure Scope 3 emissions (Category 11, use of sold products) were 115,000,000 tCO2e, more than 90% of Michelin's carbon footprint, down from 130 million in 2023 due to a new calculation method. Total location-based Scopes 1, 2 and required Scope 3 emissions were 15,582,846 tCO2e; total market-based were 14,679,479 tCO2e. Biogenic CO2 from biomass combustion was around 21,400 tonnes in Scope 1 and some 41,200 tonnes in Scope 2. Market-based GHG intensity was 540 tCO2e per million euros of net revenue.

Michelin's ambitions are compatible with its 2050 net-zero target, which is being pursued without using any carbon credits to offset CO2 emissions from its direct or indirect activities, in accordance with SBTi standards. As a result, carbon credits derived from projects undertaken by the Group's investee funds are not set off against the Group's carbon footprint. In line with the prioritizing hierarchy of levers, actions are geared exclusively towards reducing CO2 emissions rather than offsetting them. On carbon allowances, a CO2 Allowance Management Committee created in 2005 tracks legislation governing carbon markets and taxes in all countries where Group production sites are located. Its role is to define carbon allowance management principles and guidelines, ensure their proper application and conduct forecasting studies. Scope 1 GHG emissions from regulated emission trading schemes were 343,448 tCO2e in 2024, representing 35.9% of Scope 1 emissions. Longer term, the Group is preparing solutions to capture and store enough CO2 to offset each year's residual emissions, consistent with the SBTi Corporate Net Zero Standard defined in October 2021.

Since 2016 Michelin has applied a standard internal carbon price to address carbon issues in capital projects, steer capital expenditure towards low-carbon solutions and prepare for the introduction of a global carbon price. It applies to any capital project likely to have a material positive or negative impact on the Group's Scope 1 and 2 CO2 emissions and is a factor in two decision-support programs: calculating the return on investment of projects by simulating the impact of monetizing carbon credits on financial rates of return, and consolidating projects with major impact on energy efficiency such as curing press insulation and lighting upgrades. The latter applies to capital projects in the legacy tire business, which accounted for 97% of the Group's Scope 1 and 2 emissions in 2024. The internal carbon price is also used by Scope 3 logistics entities as a baseline for assessing carbon-free solutions. The price is based on carbon allowance market price trends in Europe with five and ten-year projections, sensitivity analysis on project ROI, and an external benchmark from other companies via the CDP questionnaire. Set by the Managers on the proposition of the Environmental Governance body, it rose from an original 50 euros per tonne in 2016 to 100 euros in 2021 and 200 euros per tonne in 2023.

Michelin identifies physical climate risks to its business activities, assets, employees, raw materials, delivery delays and logistics costs, noting these effects may be systemic given the many interdependent inputs in manufacturing and distribution. Natural rubber is particularly exposed: a 2022 study by Forest AI and CIRAD found that under the IPCC SSP2 pathway, global warming could reduce yield potential in all current producing regions by an average of 5-20%, and more in drier regions, over the 2050-2100 period. In 2024 Michelin assessed the exposure of 721 Group facilities or sites of interest and 227 key raw material supplier sites to current conditions and projected conditions in 2030 and 2050, based on IPCC scenarios SSP2-4.5 (median rise of 2.7C by 2100) and SSP5-8.5 (4.4C). Main hazards identified are heat, flooding, water stress and strong winds. On anticipated financial effects, Michelin intends to carry out vulnerability assessments by 2030 of the sites requiring them and identify relevant local adaptation measures. These reviews will help estimate the anticipated financial effects of material physical risks. The Group is reviewing potential financial effects and, based on the pilot reviews, will gradually be able from 2025 to prepare an initial estimate of the cost of the adaptation measures. Selected actions will be progressively supported by adjustments to capital expenditure and operating expense budgets.

Pollution impacts, risks and opportunities are systemically addressed in the Group's Environmental Policy, which identifies and assesses pollution risks. The policy specifies a process to identify environmental risks, attenuate them to a tolerable level by reducing them at source or, failing that, treating the pollution, and comply with regulations. The riskiest substances are handled through a Chemical Risk Management Policy that seeks to replace them with substitutes wherever technically feasible, supported by restrictions on substance use and an HSE approval process for new raw materials. By focusing on eliminating chemical pollution at the design stage, the approach abates both industrial pollution from operations and diffuse pollution from product use. The site-focused section mitigates chronic or accidental pollution through an ISO 14001-compliant environmental management system. The policy pays particular attention to volatile organic compound (VOC) emissions, the main source of air pollution from operations, and commits that by 2050 no organic solvents will be used in tire production. While the policy does not yet specifically address wear and abrasion particles, a dedicated section is being drafted as part of the TRWP program set up in mid-2023. This reflects Michelin's long-standing objective on tire and road wear particles, the tire industry's most material pollution matter.

To mitigate air and water pollution from operations, the Group pursues its Environmental Policy's prioritizing hierarchy of levers (Avoid, Reduce, Reuse, Recycle, Renew). A directive specifies the policy's principles and guidelines, implemented mainly through ISO 14001-compliant Environmental Management Systems in production plants and research centers. Michelin financed capital projects in its production facilities in 2024, and the five-year capital expenditure plan has budgeted funds to continue deploying the strategy. For air pollution, the VOC program focuses on reducing solvent use to reach the 2030 milestone and avoiding emissions at source for the 2050 objective. Initiatives include deploying best manufacturing practices, portable flowmeters to measure solvent use in real time, optimizing spray nozzle sizes (expected to cut solvent use by around 20 to 25%), and refreshing product interfaces (expected 20% reduction). VOC-free technologies based on solvent replacements, inorganic or non-volatile solutions, and thin rubber films are in exploratory or process engineering phases. Michelin plans to phase out coal by 2030 and reduce NOx and SOx emissions through its energy-saving roadmap. For water pollution, 2024 initiatives focused on understanding the impact of effluent discharged from production plants, with material water pollutants from tire plants identified and a measurement plan deployed. Two target-setting methodologies were piloted at three plants on three continents.

The Group manages chemical risks through its Chemical Risk Management Policy, gradually eliminating substances potentially harmful to human health or biodiversity in the manufacturing and use phases. The policy is built on planning for emerging risks, identifying and assessing existing human health and environmental risks of chemicals, managing those risks with a priority focus on substitution whenever technically feasible without compromising product safety, and confirming the application and effectiveness of these practices. Objectives and action plans are prioritized to respond first to the most serious risks. A highly skilled, multi-disciplinary team monitors regulatory and scientific developments, supporting a prioritization process that focuses diagnostics, recommendations and R&D programs on the chemicals with the highest HSE risks. This prioritization process is currently being formalized, covering chemical raw materials, impurities and by-products; a 2024 study assessed the need for digital tools to support it. As regards substances of concern and very high concern (SOC/SVHC), the Group does not currently have any targets for preventing or reducing their use, because the continually changing state of toxicology and ecotoxicology knowledge makes absolute targets difficult to set. Michelin is stepping up R&D to identify and develop replacements wherever possible, in line with the European Commission's objectives. For VOCs, the Group targets a 50% reduction in solvent use by 2030 versus 2019 and full elimination of organic solvents by 2050.

For air pollution, Michelin reported 3,825 tonnes of non-methane volatile organic compounds (NMVOCs) emitted, 693 tonnes of nitrogen oxides (NOx/NO2) emitted, and 610 tonnes of sulfur oxides (SOx/SO2) emitted. These tonnages correspond to total plant emissions exceeding the applicable threshold values in Annex II of Regulation (EC) 166/2006. VOC data are based on calculated emissions for synthetic elastomer plants and actual solvent use for tire plants, excluding R&D and remilling operations; data are not third-party validated. NOx and SOx data relate to boiler plants. NOx emissions rose 46% year-on-year at constant scope, primarily due to a 2023 measurement error at the Louisville, Kentucky plant that had underestimated emissions, plus higher coal consumption at Olsztyn, Poland. SOx emissions declined 9% year-on-year at constant scope, due to reduced coal and heavy fuel oil use at Pirot, Serbia, offsetting the Olsztyn increase. VOC emissions fell 13% in 2024, attributable to reduced VOC use at four plants, an improved VOC use ratio, and lower finished product output. For water pollution, a 2024 materiality assessment identified seven material substances (total nitrogen, total phosphorus, chemical oxygen demand, zinc, copper, lead and nickel compounds), included in a measurement plan deployed by an independent laboratory across tire production facilities. Consolidated emissions of these substances were not disclosed this year due to insufficient data.

Michelin reported a total amount of substances of very high concern (SVHC) procured of 2,047 tonnes. For substances of concern (SOC), the Group is initially focusing on measuring SVHC amounts in its operations; to disclose a sufficiently reliable SOC metric, a feasibility study is scheduled for early 2025 to identify the digital and other tools needed, and the Group expects in 2025 to indicate when it will be able to disclose SOC amounts. For SVHCs, a minimum content threshold of 0.1% was set in assessing both purchased raw materials and products placed on the market, in line with related European regulations. The Group processes around three million tonnes of raw material annually. Michelin does not produce any SVHCs, but analysis of the raw material portfolio shows some materials contain SVHCs above 0.1%; the disclosed amount corresponds to the SVHCs in these raw materials. Historically, Michelin vertically integrated production of elastomers, fabric or metal reinforcements and other components, and this in-house production accounts for most SVHC tonnages used. However, because these are consumed during manufacturing, none of the SVHCs are present above 0.1% in any finished product, and unmounted tires placed on the market contain no SVHCs in excess of 0.1%. Content was calculated from safety data sheets and purchasing data for tire operations excluding Camso, with estimates covering less than 9% of total tonnage.

Material water matters are addressed in the Group's Environmental Policy, with the Environmental Governance body supported by the Water Committee, one of its five committees. The policy affirms the 2050 water objective of having no impact on water availability in local communities. It is organized by life-cycle stage, with water-related impacts covered in two sections: one on sustainable purchasing addressing raw materials and the upstream value chain, and one on production plants, R&D centers, offices and other operating sites. The own operations section specifies the Group's 2030 target of a 33% reduction in water withdrawals versus 2019, weighted for each site's water-stress coefficient. Water consumption is managed by the Water Program supported by a multi-disciplinary expert team. The policy prohibits any newly built site from withdrawing water from non-renewable underground sources and is grounded in the prioritizing hierarchy of levers (Avoid, Reduce, Reuse, Recycle, Renew). Levers include reducing water leaks, steam consumption and evaporation, using water-saving systems, measuring and controlling consumption, and raising awareness. The 2024 Physical Climate Risks Adaptation Policy covers water stress risk across all fully consolidated subsidiaries. Upstream policies include the Sustainable Purchasing Policy and the Sustainable Natural Rubber Policy, which addresses preservation of surface and groundwater. The Group does not have a material impact on marine resources, as it does not withdraw or use seawater nor derive raw materials from marine resources.

The Group deploys an array of actions and resources to reduce water withdrawals and optimize recycling and reuse, expecting to use less freshwater and more recycled water for cooling and heating, particularly in water-stressed regions. Applications developed for tire production include the Group Transformations Program, the LEAN Water process (launched 2022, following DMAIC continuous improvement, with tools rolled out to all tire plants in 2024), the 2020-2030 Water Roadmap, a water recycling and reuse study conducted in 2023 and 2024, and the Group Water Program led by a 20-member Water Expert Team. In 2024, a prioritization matrix was charted for water projects costing more than 1 million euros. Significant projects in 2024 included Resende, Brazil (saving 27,500 cubic meters a year, 7% of withdrawals), Mexico City (78,000 cubic meters expected, around 30%), Fort Wayne, United States (49,000 cubic meters, around 16%), Shanghai (reducing rinse water use by 95.2%), and Montceau-les-Mines, France (70,000 cubic meters, 43%). Cooling circuit closures saved 877,000 cubic meters at Cuneo, Italy (26%), 52,000 at Troyes (13%), and 60,000 at Olsztyn (3%). Resources include capital spending, with the five-year capex plan budgeting further funds. High water-stress sites are weighted (one cubic meter counts as 1.5) and an internal water price of 5 euros per cubic meter, multiplied by the water-stress coefficient, prioritizes investment. Upstream actions include supplier risk mapping and audits.

For its own operations, Michelin has defined a 2030 target to reduce water withdrawals, weighted for each site's water-stress coefficient, by 33% compared to 2019 (metric: water stress multiplied by cubic meters of water withdrawn per tonne of semi-finished and finished product). The target is based on withdrawals because the tire industry is not a particularly heavy water user relative to other industries. It is aligned with the Group's commitment to have zero impact on water availability for local communities by 2050, as affirmed in the Environmental Policy. The target exceeds prevailing local standards, with plants enjoined to comply at least with their operating permit requirements. It has been set internally as an initial milestone toward the 2050 objective, and there are no plans to change targets or metrics between now and 2030. Annual reductions indicate the Group is on track, having already cut water withdrawals by more than 15%, weighted for water stress, against the 33% target. For the upstream value chain, water consumption targets have not yet been set. The Group must first review the findings of the assessments of suppliers of raw materials other than natural rubber and the data in the RubberWay application before defining upstream targets.

For own operations in 2024, Michelin reported total water consumption of 7,036,605 cubic meters, calculated as the estimated proportion of withdrawn water that is not discharged. The amount of water withdrawn was 22,468,460 cubic meters and the amount discharged was 15,431,855 cubic meters. Water consumption in high water-stress areas was 419,666 cubic meters, and water intensity based on net revenue was 259 cubic meters per million euros. Withdrawal volumes are determined from invoices or verified meters. For discharges, some sites cannot yet provide reliable data because they are not metered or invoiced, or lack a separate rainwater network. To calculate the consumption metric, a Group consumption rate was estimated from the average of 31 plants that can measure use and do not discharge more than they withdraw, accounting for 59% of withdrawn volumes, then applied to total withdrawn volume across the reporting scope. The scope covers all production sites of companies in the 2024 Sustainability Statement. Michelin's operations do not require pumping water during high-water periods for storage, so total water stored is not material. The ratio of water stress multiplied by cubic meters withdrawn per tonne of semi-finished and finished product decreased by 3.3% in 2024, and water withdrawals fell 7.3%, half due to lower output and half to project-driven gains.

Michelin addresses biodiversity in its strategy and business model through its dependency on ecosystem services, particularly those supporting natural rubber, which accounts for around 21% of the raw materials used by the Group and is not currently replaceable in industrial quantities. The Group has been engaged with the Act4nature international initiative since 2018 and renewed its commitments in 2024, setting 2030 targets across three areas: raw materials (all natural rubber assessed as deforestation-free by 2030 and review of other suppliers' biodiversity policies), research and development (life cycle assessments using biodiversity criteria for every new product by 2030), and production and research sites (eliminating pesticides and herbicides in groundskeeping and implementing biodiversity management plans by 2030). Michelin is an early adopter of the TNFD recommendations and aligns with the Kunming-Montreal Global Biodiversity Framework. Biodiversity aspects were integrated into climate scenarios and the rubber value chain in 2021, and into stress tests in 2024. A holistic assessment of the biodiversity-related resilience of the business model and strategy will be performed in 2025. The Group did not use biodiversity offsets in 2024.

Michelin manages biodiversity through the general framework of the Group Environmental Policy, which aims to manage pollution risks and reduce the environmental footprint toward impact-neutrality at each life cycle stage. The specific issues of farming, harvesting and processing natural rubber, including deforestation and habitat degradation, are addressed by the Sustainable Natural Rubber Policy, issued in 2015 and updated in 2021. This Policy defines conditions for farming in environmental terms (zero deforestation, protection of peatlands, High Conservation Value and High Carbon Stock areas) and social and human rights terms. It is a contractual reference document appended to every natural rubber supply contract, complies with the GPSNR framework approved in 2020, and includes a zero-deforestation commitment covering national forest law compliance, protection of primary forests and HCV/HCS areas, and no conversion of natural ecosystems. It also mandates preserving water resources, judicious pesticide and fertilizer use, responsible waste management and avoiding invasive species. The Sustainable Purchasing Policy addresses Tier 1 suppliers and other raw materials. Given a lack of materiality, the Group has not defined a policy on the preservation of oceans and seas.

Michelin did not use any biodiversity offsets in 2024. In its direct operations, the Group supports its zero-deforestation commitment, being the first tire manufacturer to publish such a commitment in 2015, and ensures its owned plantations are deforestation-free. The 3,950-hectare Michelin Ecological Reserve in Bahia, Brazil, created in 2004, has reduced hunting pressure by more than 85% and spurred an almost 117% rise in wildlife over 20 years, with more than 110,000 trees across some 340 species planted to restore 300 hectares at a survival rate near 70%. Royal Lestari Utama in Indonesia manages 88,000 hectares of concessions and has committed to preserving and restoring more than 15,000 hectares, including around 3,000 prioritized for active restoration, over 20 years; more than 15,000 trees have been planted over around 100 hectares with a survival rate above 70%. In the supply chain, Michelin maps risks with the RubberWay application, has geolocated smallholder farms (98% of suppliers' farm lots by end-2024) using Global Forest Watch Pro, and launched the GPSNR in 2018. It also promotes sustainable farming practices and awareness programs across Southeast Asia, West Africa and Brazil.

To mitigate its material biodiversity and ecosystem impacts in line with the Sustainable Natural Rubber Policy and the Kunming-Montreal Global Biodiversity Framework, Michelin renewed its Act4nature international commitments in 2024 and added two new undertakings. Two targets are quantified. For deforestation, the commitment is for natural rubber volumes used by the Group to be assessed as deforestation-free across direct operations and natural rubber suppliers in Thailand, Sri Lanka, Indonesia, Cote d'Ivoire, Ghana, Liberia and Brazil; 2024 performance was 98% (excluding certain Polymer Composite Solutions operations) against a 2030 target of 100%. For pollution from pesticide use, the commitment is a reduction in pesticide use per hectare from a 2019 baseline across Group and joint venture natural rubber plantations in Brazil, Indonesia, Cote d'Ivoire, Ghana, Liberia and Nigeria; 2024 performance was -52% against a 2030 target of -70%. The targets and roadmaps were defined with the Biodiversity Sector Committee and approved by the Act4nature international Steering Committee after assessment of their SMART nature. The Group also targets eliminating pesticides and herbicides in site groundskeeping and implementing biodiversity management plans by 2030.

Michelin discloses impact metrics for its material owned, leased or managed sites in or near biodiversity-sensitive areas where they have a negative impact. At Plantacoes Michelin da Bahia, Brazil, there is one site with a total surface area of 4,578 hectares, of which a 3,950-hectare wildlife conservation area and 626 hectares are planted with rubber trees. On land cover conversion, no land has been converted to farming or deforested in the last five years; around 400 hectares of rubber trees were fallowed during this period and converted into permanent protected areas, with title to the former cropland being transferred to the conservation area, and 20 hectares of fallowed rubber tree cropland have been reforested over the past five years. At PT Royal Lestari Utama, Indonesia, there are two sites with a total surface area of 88,645 hectares, of which more than 15,000 are dedicated to biodiversity preservation or restoration. No land cover has been deforested by RLU in the last five years; the rubber trees were planted on plots deforested or degraded prior to Michelin's involvement in 2015, and since 2022, 1,025 hectares have been added to the conservation or restoration areas.

Michelin has defined several policies to address resource depletion, the circular economy and end-of-life tire management. The Group Environmental Policy is the overarching framework and incorporates the Michelin Avoid+4R process (Avoid, Reduce, Reuse, Recycle and Renew). The Eco-design Policy applies across the Group and requires attenuating environmental impacts throughout the product life cycle without transferring impacts between stages; it is based on the ISO 14006:2020 and NF X30-264:2013 standards and life cycle assessments, with the LCA application developed with Ciraig and consistent with ISO 14040 and the European Commission's PEF 3.0 methodology. More than 90% of R&D employees had been trained in recycled and renewable materials, LCAs and eco-design by the end of 2024. The Recycled and Renewable Materials commitment supports the eco-design policy by increasing the use of secondary resources and phasing out non-renewable natural resources. The Sustainable Purchasing Policy and Sustainable Natural Rubber Policy ensure ethical, traceable sourcing. End-of-life tire management follows the Lansink's Ladder waste hierarchy, prioritizing prevention, reuse and materials recovery over incineration or landfill; end-of-life tire guidelines will be defined when the Environmental Policy is revised in 2025.

Michelin advances circularity through its Avoid+4R process and a renewable or recycled materials roadmap updated annually toward its 2030 and 2050 goals. Investments committed to resource circularity projects represented 12 million euros in 2024 and are budgeted at more than 200 million euros over the next five years. Retreading and regrooving (the Reuse phase) extend tire life, enabling a truck tire to last 2.5 times longer than a new tire using only around 30% additional material; in 2024 the worldwide truck tire retreading business reused more than 220,000 tonnes of casings, around 7% of total materials used by the Group over the year. The BioButterfly project produces butadiene from ethanol, representing an 80 million euro total investment, with an industrial-scale demonstrator inaugurated at Bassens, France in January 2024. The Empreinte, BlackCycle and WhiteCycle projects develop recycling and biosourcing solutions; WhiteCycle is a 9.6 million euro, 16-partner project targeting recycling of more than two million tonnes of PET waste a year by 2030. The Enviro partnership and its joint venture with Antin are building end-of-life tire pyrolysis recycling plants in Europe, the first in Sweden with 35,000 tonnes annual capacity, targeting one million tonnes total.

Michelin's principal resource use and circular economy target is to increase the proportion of renewable and recycled materials in its tires, measured by the Renewable or Recycled Materials Ratio (RRMR). The Group is committed to using 100% renewable or recycled materials in its tires by 2050, building on a milestone of 40% by 2030. The RRMR was 28% in 2020, 29% in 2021, 30% in 2022, 28% in 2023 and 31% in 2024, and the Group states it is on track to meet the 40% milestone in 2030. A second target concerning eco-design was met in 2024, when every new tire range (Michelin-brand radial tires and Camso-brand tracks) was eco-designed with the support of life cycle assessments, a milestone toward the 2030 target of eco-designing all products and solutions. These targets are described as voluntary. In 2024, the Group did not set targets for the recovery and reuse of end-of-life tires, stating that several recovery technologies are emerging and it is too soon to determine appropriate targets for each one.

Michelin reports resource inflows for the tire manufacturing scope, covering six categories of raw materials: synthetic rubber, natural rubber, textiles, reinforcing agents, chemicals and cables. The overall total weight of products and technical and biological materials used during the reporting period was 3,077,541 tonnes (E5-4-31a). The 2024 raw materials breakdown by weight (total 3.08 Mt) was 26% fillers, 25% natural rubber, 19% synthetic rubber, 14% chemicals, 13% steel cord and 3% textile. The weight of biological materials used was 800,791 tonnes, of which 26% is sustainably sourced (E5-4-31b). The weight of secondary reused or recycled components, secondary intermediary products and secondary materials was 152,690 tonnes, representing 5% (E5-4-31c). The Renewable or Recycled Materials Ratio (RRMR) reached 31% in 2024, up three points year-on-year, with two points coming from greater use of natural rubber and one point from increased volumes of other renewable and recycled materials. Rare earths and packaging disclosures are not material. Critical materials are defined by reference to SASB.

Michelin's resource outflows center on product durability, repairability and recyclable content. For many years the Group has designed products on circular economy principles, with regrooving and retreading solutions extending the useful lives of tire casings while reducing raw material inputs; in 2024 the worldwide truck tire retreading business reused more than 220,000 tonnes of casings, around 7% of total materials used. Michelin tires deliver optimum performance from the first to the last mile, and in 2019 the Group supported a European initiative to introduce minimum safety performance standards for worn tires. Tire repairability depends on factors such as location and severity of damage, and there is currently no rating system to assess it. On recyclable content, a tire is fully recyclable within the meaning of ESRS E5-5-36c, with a rate of recyclable content of 100%. A 2019 TIP study found that 88% of end-of-life tires could be collected and reused as new material through recycling or as fuel through energy recovery. The amount of packaging is not significant, so the rate of its recyclable content is not applicable. In 2024, the Group did not set targets for the recovery and reuse of end-of-life tires.

The E5 section does not present a standalone quantified table of anticipated financial effects from resource use and circular economy impacts, risks and opportunities. The financial information disclosed relates to circularity investments under section 4.6.3.2 Resource circularity: investments committed to projects supporting resource circularity represented 12 million euros in 2024 and are budgeted at more than 200 million euros over the next five years. The BioButterfly project represents a total investment of 80 million euros, and the WhiteCycle project is a 9.6 million euro, 16-partner initiative. The Enviro/Antin joint venture is building end-of-life tire recycling plants in Europe, with the first Swedish site sized at 35,000 tonnes annual capacity and a total target of one million tonnes, backed by an agreed financing plan. The narrative frames the circular economy as both a strategic challenge and a growth driver, noting opportunities from innovation and industrial-scale sustainable materials capacity, alongside risks such as high initial investments, questionable profitability and the absence of a supportive regulatory framework. Specific monetary anticipated financial effect amounts beyond these committed and budgeted investment figures are not quantified.

Michelin's workforce strategy is built on a foundation of seven policies overseen by the Corporate Personnel Department, led by the Chief Personnel Officer, a member of the Group Executive Committee. The policies cover recruitment and hiring, people development, employee and team compensation and social protection, diversity, equity and inclusion, employee relations, health, safety and quality of worklife, and anti-harassment. Each aligns with impacts and risks identified in the double materiality assessment and with governance mechanisms including social cohesion, the European Works Council and the Human Rights and Ethics Committee. The policies are informed by international legal instruments such as the fundamental ILO conventions, the UN Guiding Principles on Business and Human Rights and the Universal Declaration of Human Rights, and guided by the Group's ethical values. Since recent years the policies have been supported by the ICARE leadership model (Inspiring, Create Trust, Awareness, Results and Empowerment), designed to ensure collective accountability so employees at every level act as leaders. The strategy is grounded in employee engagement and development, respect for people and equal opportunity regardless of social background, gender, age, ethnic origin, sexual orientation, religious beliefs, disability or physical appearance.

Michelin nurtures active, ongoing dialogue with employees throughout the year, viewing engagement and constructive social dialogue as differentiating strengths that drive operational excellence. Employee engagement is tracked through the annual global Moving Forward Together survey, which lets employees express views on the Group's progress toward strategic goals and on their daily experience; the engagement rate, calculated from four survey questions, rose from 80% in 2019 to 84.7% in 2024. Dialogue is conducted in accordance with freedom of association and the right to collective bargaining, without discrimination, with particular attention paid to countries where local culture or legislation is not conducive to employee input. Two Group employee representation organizations facilitate dialogue: the European Works Council (CEEM), set up in 1999 and meeting twice yearly, and the Global Works Council, in place since 2020 and meeting annually, which broadened its membership in July 2023 with representatives from India, Sri Lanka, Indonesia and Australia. An Employee Relations Policy (2024) sets out the general principles governing engagement. Managers receive training in the legal aspects of labor relations. Michelin has been a member of the Global Deal since 2017.

Michelin has processes in place for engaging with the workforce about health and safety issues and to enable employees to express concerns or needs without fear of reprisal. Employees can raise concerns either with their direct managers or through more confidential channels such as the ethics hotline, their representatives, their unit's personnel manager or the Medical Department. Every work-related accident is investigated to determine its cause, with a comprehensive review of technical, organizational and behavioral aspects, often conducted with employee representatives. Under the Employee Relations Policy, employees and their representatives have the right to express themselves freely, including to management, and are not subject to any form of discrimination or negative career effects as a result of their actions as representatives. The social dialogue process is designed to address employee ideas and viewpoints and encourage free expression across plants, offices, country and regional organizations. Michelin's ethics hotline is described further in the G1 Business Conduct section. Human rights policy and strategy are approved by a dedicated Human Rights Governance body that meets twice a year, co-chaired by the Chief Personnel Officer and the Executive Vice President, Engagement and Brands.

Michelin takes action across three core elements: social protection, health and safety, and attracting and retaining talent. On social protection, the Adequate Wage and Universal Social Protection Floor programs cover every Group employee worldwide, and the Michelin One Care program, designed in 2021 and covering 98% of the worldwide workforce at end 2024, provides new child leave (minimum 14 weeks maternity or adoption leave and four weeks paternity leave at full pay), access to health care, and a death benefit of at least one year's salary; an education annuity for children of deceased employees will be added on January 1, 2026. On health and safety, initiatives include ISO-compliant management systems in production plants, risk prevention professionals on site, risk assessments, workstation mapping, Life Saving Rules and a Continuous Improvement in Quality of Worklife framework; 56 million euros was committed to workforce health and safety in the production base in 2024, with over 150 million euros budgeted over five years. On talent, a Group-wide action plan defines critical jobs, manages employer appeal through cross-cutting governance and tracks the employer brand, supported by talent planning, strategic workforce planning, the Manufacture des Talents, over 240 million euros in annual training budgets, and 76 million euros of capital expenditure in 2024 for attracting and retaining talent.

Michelin reports several workforce targets. For employee engagement, the Moving Forward Together survey engagement rate reached 84.7% in 2024, having already met the target set for 2030, which must now be consolidated. For health and safety, the Group has a 2030 target of a Total Case Incident Rate (TCIR) of less than 0.5, compared with the 2024 TCIR of 1.03, and pursues the goal of setting the global standard in workplace safety. On diversity, by 2030 the Group is committed to women accounting for 35% of the 600 most senior executives, and to host-country nationals representing a greater share of top management, with a target of 50% non-French nationals among the top 100 senior managers. Diversity, equity and inclusion progress is tracked through the Diversities and Inclusion Management Index (IMDI), a composite indicator displayed in the Group's strategic scorecard. The adequate wage and Michelin One Care social protection programs are designed to cover every Group employee around the world, with the living wage commitment deployed within three years of an acquisition except in special cases.

The Group's workforce totaled 129,832 people at December 31, 2024. Data for 125,117 employees are analyzed by gender, with the difference reflecting 4,715 people who work for companies not integrated into the Group's human resources information system. By gender, the 125,117 comprised 99,518 male, 25,583 female, 2 other and 14 not reported. Two host country organizations each have more than 50 employees and account for at least 10% of the worldwide workforce: France with 20,839 employees (4,511 female, 16,327 male, 1 not reported) and the United States with 19,682 employees (3,932 female, 15,747 male, 1 other, 2 not reported). By type of work contract, the workforce included 121,610 permanent employees (24,623 female, 96,972 male, 2 other, 13 not reported) and 3,507 temporary employees (960 female, 2,546 male, 1 not reported), with no non-guaranteed hours employees. Turnover for 2024 was calculated on the basis of 122,478 employees with permanent contracts as of January 1, 2024; of these, 13,588 left during the year (7,106 voluntary separations, 4,671 involuntary separations, 1,661 retirements and 150 deaths), making for a turnover of 11%.

Michelin's commitment is to guarantee that every Group employee, regardless of host country or company, is paid at least the equivalent of the living wage benchmark, a factor in meeting the Sustainable Development Goals of the UN Global Compact, which the Group has upheld since 2010. Adequate wage-based compensation must enable a family of two adults and two children to meet basic needs, save for the future and purchase standard consumer goods depending on each country's standard of living, and is largely higher than a host country's legal minimum wage. To fulfill this commitment, Michelin worked with the Fair Wage Network, an independent NGO whose methodology is recognized by IDH-The Sustainable Trade Initiative, and in February 2024 became one of the first companies to earn the Fair Wage Network's Living Wage Global Employer certification. On the basis of that certification, 100% of Michelin employees in the assessed scope are paid an adequate wage. New companies, currently accounting for 3.5% of the total workforce, will be included in future certification rounds starting in February 2025. Overall, the Group discloses that 96.5% of employees were paid a living wage at year-end 2024. The living wage commitment is deployed within three years of an acquisition.

As of December 31, 2024, 68% of Group employees and temp agency workers were covered by a recognized, effective health and safety management system, meaning an ISO 45001-certified system or the Group's standard SMEP Environment and Risk Prevention Management System. Work-related accidents and illnesses are tracked in the Group's strategic scorecard by the Total Case Incident Rate (TCIR), calculated based on the number of work-related accidents and illnesses recorded per 200,000 hours worked, and the TCIR is one of the criteria for the portion of employee bonuses tied to Group performance. Compared with the 2030 target of less than 0.5, the 2024 TCIR stood at 1.03 for the year. In 2024 the Group also calculated the recordable work-related accident indicator provided for in ESRS S1-14 paragraph 88 using the Total Recordable Incident Rate (TRIR), whose scope is broader than the TCIR because it includes the RLU plantations and tracks accidents (but not occupational illness) per one million hours worked; on this basis 1,203 work-related accidents among employees and temp agency workers were recorded in 2024, for a TRIR of 5.01. The number of work-related fatalities was 0, excluding two fatalities resulting from commuting accidents during the year.

In 2024, incidents, complaints and severe human rights impacts at Michelin included 159 discrimination incidents, corresponding to the total number of confirmed cases of discrimination, including harassment, reported to the Group's whistleblowing system. In addition, there were 1,481 grievances concerning worker or human rights violations, corresponding to the total number of allegations reported to the Group's whistleblowing system, less the 159 confirmed discrimination incidents mentioned above. These allegations correspond to nine categories: bullying, sexual harassment, inappropriate behavior, human rights, health and safety issues, personal data protection, complex employee relations issues that were not resolved at the level of the manager or development partner, reprisals, and violence and threats. Further detail on the Michelin ethics hotline is provided in the G1 Business Conduct section of the report.

Michelin's value chain strategy focuses primarily on natural rubber sourcing, where human rights risks are most acute given labor-intensive farming in Southeast Asia, West Africa and Brazil, and because the tire industry accounts for around 70% of the global natural rubber market. The Group manages risks through two main procurement policies prepared under the Chief Procurement Officer. The Sustainable Purchasing Policy, updated in 2024, covers all inputs and defines sustainable purchasing principles, commitments and human rights aspects for Tier 1 suppliers. The Sustainable Natural Rubber Policy, updated in 2021 and first deployed in 2016 in partnership with WWF, covers own operations, joint ventures and the upstream supply chain, and complies with the Global Platform for Sustainable Natural Rubber (GPSNR) framework. It rests on five core pillars, including respect for people and improving farming practices, and commits Michelin to combating forced and child labor, mapping at-risk activities, deploying mitigation initiatives and maintaining a whistleblowing system. Since 2012 the Michelin Purchasing Principles supplier code of conduct mandates compliance with forced labor, child labor and safety requirements in line with ILO standards. To the Group's knowledge, no serious incidents of forced or child labor were reported in 2024 in the upstream supply chain.

The views and opinions of workers in the natural rubber value chain are addressed through three channels. First, consultations with stakeholders, in particular environmental and human rights NGOs, both when the Sustainable Natural Rubber Policy is drafted or revised and during regular meetings held roughly every two years. These meetings let participants review progress and propose new pathways focusing on the sustainable natural rubber roadmap, metrics and targets. A variety of stakeholders are invited, including NGOs and research organizations like CIRAD, customers, suppliers and, beginning in 2025, investors, with the fourth meeting held in early 2025. Second, the Global Platform for Sustainable Natural Rubber (GPSNR), of which Michelin is a founding member, brings together stakeholders from across the value chain including village smallholders, other producers and civil society representatives, and develops frameworks and standards, organizes working groups and designs joint programs. Third, Michelin maps social and environmental risks down to the smallest holder using the RubberWay mobile app, through which supply chain stakeholders including processing plants, brokers, large plantations and smallholders respond to a questionnaire about their practices in areas such as human rights, the environment, agricultural training and market transparency, creating a map of potential social and environmental risk.

If Michelin finds it may have caused a significant negative impact on value chain workers, remedial actions can be defined or approved by two governance bodies: the Human Rights Governance body, which approves the Group's human rights policy, objectives and strategy, and, where the impact occurred in the natural rubber supply chain, the Sustainable Natural Rubber Committee. If confirmed, the remediation response is defined case by case. To improve detection of adverse impacts, the Group has opened an ethics hotline accessible to Group employees, contractor employees, temporary workers and any other value chain worker, as well as customers, suppliers, service providers and outside stakeholders, via a dedicated telephone number and a secure website hosted by an independent company. Where remediation proves necessary, victims are contacted, reparation measures undertaken and prevention mechanisms strengthened; compensation may be paid depending on the situation. Employees who fail to uphold human rights are disciplined, and business partners found to have violated human rights are contacted to initiate remedial solutions, with failure to deploy corrective measures potentially resulting in termination of the relationship. For natural rubber, the GPSNR grievance mechanism may be used, and the Natural Rubber Stakeholders Committee can alert the Group to situations concerning workers.

Michelin pursues initiatives to prevent and mitigate human rights risks in the value chain. Structurally, the Sustainable Natural Rubber Policy is appended to all natural rubber purchasing contracts, while the Michelin Purchasing Principles are incorporated into general terms and conditions and all contracts, requiring suppliers to perform CSR assessments, deploy action plans and authorize on-site audits. Mapping identifies sourcing countries and purchasing categories most at risk, using RubberWay for natural rubber. Third-party CSR maturity assessments of leading Tier 1 suppliers, usually EcoVadis desktop reviews, cover forced labor and child labor; suppliers must earn a predefined score, and supplier performance on these issues is reviewed every six months. Training is a key lever, with human rights webinars, an e-learning module and buyer training, plus supplier training modules. On positive impacts, in 2024 field projects developed the skills of village smallholders and improved their living and working conditions, including the Cascade projects in Indonesia (2020-2027, with Porsche), the River project in Sri Lanka (2022-2025) and the Mahakam project in Indonesia (2022-2025). In West Africa, the SIPH joint venture runs disease prevention and best farming practice programs. In 2024 Michelin scored 90/100 in EcoVadis Responsible Purchasing and ranked No. 1 in the tiremaker category on SPOTT with nearly 81%.

Targets for managing the negative impact are presented in the Sustainable Purchasing Policy, defined by the Purchasing Department in liaison with the Human Rights Operational Committee and approved by the Human Rights Governance body, with natural rubber targets presented at the biennial meetings of the Natural Rubber Stakeholders Committee. Three targets are tracked. The first is the percentage of suppliers whose human rights score in third-party CSR maturity assessments meets the Group's standards, targeted at 95% in 2030 compared with 85% in the 2019 baseline year; as of end-2024 the figure was 93%. The second is the percentage of natural rubber volumes covered by human rights assessments, based on a representative sample of farmers mapped with RubberWay, targeted at 80% in 2025 and applying Group-wide; as of end-2024, 80% of volumes had been assessed since 2017, compared with only 7% at the end of the 2017 baseline year. The third is the number of village smallholders whose working conditions and/or livelihoods have improved as a result of remediation projects, primarily assessed through surveys, targeted at 30,000 in 2030 compared with 467 in the 2022 baseline year; as of end-2024, 6,783 farmers had reported improvements since projects launched in 2020.

Michelin frames quality and product safety as an unrivaled strategy to meet customer needs. End-user customers, spanning consumers, transportation businesses, and agricultural and industrial businesses, play a central role, reached through an indirect sales model based on dealers, resellers and OEM partnerships. Customer satisfaction is the bedrock of the strategy, delivered through the Michelin Quality process known as the Customer Promise Guarantee (CPG), which ensures the Group knows its customers and markets, develops aligned products, fulfills commitments and measures satisfaction. Executing the strategy is the mission of the Customer Centricity Board. Michelin is committed to upholding human rights toward every stakeholder, including consumers and end-users, as expressed in its Master Policy. Resources are dedicated to quality management, with Customer Promise Guarantee teams led by a Quality Manager in every operating region and Business Line, and around 50 people worldwide assigned to these teams. Deployment of the quality strategy is supported by three fundamental documents: the Group Quality Policy, overseen by the Group Quality Governance body and supported by the Product Monitoring Board; the Quality Statement, which moves the organization from zero product defect to 100% customer satisfaction; and the Customer Promise Guarantee approach. These documents are applied in every country where the Group markets its products.

Since 2018, the core metric in Michelin's customer dialogue process has been the Net Promoter Score (NPS), which enables the Group to gauge customer satisfaction and take corrective action as needed, and is included in the Group's strategic scorecard. Since 2020 the Group has tracked the Partner NPS, the weighted average of the OEM and dealer macro-clusters rather than end-users. The marketing, in-field customer support and sales teams are dedicated to understanding customer demands and the risks arising from specific or extreme conditions of use in the markets where products are sold, documenting this in specifications integrated into research and development. For end-users, Michelin plays a significant role in improving tire safety through active engagement in support of international standards and regulations. European legislators introduced minimum tire-performance standards through Regulation (EU) 2019/2144 and United Nations ECE Regulation 117, covering rolling resistance, noise and wet grip. Michelin views regulation as an opportunity to ensure a fair, level playing field given its technological leadership, supports the application of these standards in member countries and helps define minimum thresholds when requested. Michelin also participated in the UN working group that developed the regulatory method (R117-04) for a minimum wet grip standard on worn tires in 2024.

Michelin applies zero compromise on the safety and quality of its products, with every quality decision based on avoiding any compromise whatsoever. Because tires are a critically important vehicle safety component and conditions of use evolve, the Group deploys a system for constantly tracking the real-world performance of its products and customer service to detect even the most latent issues and respond quickly. The system is based on customer rooms located close to key markets that capture dissatisfaction and can hand problems to the Quality Platforms; Quality Platforms, generally organized by product segment, that oversee in-market product performance tracking and assess impacts on user safety using information from customer rooms, in-use safety incident reports and internal alerts; and a review by the Product Performance Monitoring Board three times a year. Where a product exposes customers to a potential or proven safety risk, the appropriate Quality Platform initiates a dedicated process supervised by the Corporate Quality Department to assess the impact, and a product recall may be decided. In 2024, across all Group brands and tire products, two voluntary recalls were issued, concerning 53 products of the roughly 200 million manufactured every year. All recalls were preventive and fully transparent, specifying model number, defect, risk assessment, root causes and corrective actions, with regulatory authorities and stakeholders informed.

Michelin takes action on material impacts through sustainable product performance, offering a safe, sustainable driving experience from the first to the last kilometer until the legal minimum tread depth is reached, meaning tires can be changed less often, saving customers money, reducing environmental impact and, for fleet owners, supporting a total cost of ownership approach. Customer satisfaction is the bedrock of the strategy, delivered through the Customer Promise Guarantee, with an objective of leading the industry in creating customer value tracked in the Group's strategic scorecard and an NPS target set for 2024. Michelin innovates with data-driven experiences: with more than a million vehicles under contract, its Connected Solutions business line delivers AI-enabled connected solutions such as EFFITIRES, MICHELIN Connected Fleet and MICHELIN Mobility Intelligence, which uses data analytics and AI to identify high-risk areas and improve road safety. On positive impact products and services, in 2023 and 2024 two major truck fleet solutions were refreshed, including the second-generation MICHELIN X MULTI ENERGY range and MICHELIN Connected Mobility, which can cut a fleet's fuel bill by up to 12% and reduce tire pressure-related roadside repairs by up to 80%. Michelin also finances road safety initiatives, including the Michelin Foundation's contribution to the UN Road Safety Fund and a partnership with UNICEF on children's road safety education in China, Cambodia and the Philippines.

The Net Promoter Score (NPS) is Michelin's core metric and target for consumers and end-users. Since 2018 the Group has used NPS to help employees measure customer satisfaction and take corrective action if needed. NPS improvement initiatives are defined by regional organizations and the Business Lines in collaboration with the Customer Promise Guarantee teams and in-house partners, with regional initiatives led by local management teams. At Group level, every Customer Centricity Board meeting includes a dedicated NPS session, and twice a year the Corporate Customer Promise Guarantee team issues a progress report on initiatives underway. Based on an NPS of 50.6 in 2020 for the original equipment passenger car tire business, the Group's executive team is committed to increasing the Partner NPS by 10 points over the 2020-2030 period. In 2024, the Partner NPS stood at 40.2, compared with 40.3 in 2020. Partner interviews in 2024 emphasized the quality of Michelin's products and brand identity, but some customers commented negatively on product pricing and availability. The NPS is included in the Group's strategic scorecard of indicators.

Michelin's business conduct is anchored in two fundamental reference documents: the Michelin Code of Ethics and the Anti-Corruption Code of Conduct. Both are prefaced by a statement from the Managers emphasizing the Group's commitment to ethics, based on each employee acting as an ambassador of Michelin's values. Subtitled Acting Ethically Every Day, the Code of Ethics sets out the Group's fundamental values of respect for facts, people, customers, shareholders and the environment, along with ethical principles and compliance procedures. It provides practical Dos and Don'ts and addresses risks such as gifts and invitations, conflicts of interest, competition law, insider trading, anti-fraud and anti-corruption, and data protection. Translated into 21 languages, it was reviewed and expanded in 2021 and applies to all employees and anyone acting on behalf of a Group unit. The Anti-Corruption Code of Conduct, introduced in 2015 and updated in 2020, sets a policy of zero tolerance for corruption or bribery. Since 2021 a single Group-wide whistleblowing system, available in 30 languages and hosted by an independent company, allows employees and outside stakeholders to report violations anonymously and confidentially, supported by the Group Whistleblowing Procedure and Group Investigations Directive.

Michelin introduced an Anti-Corruption Compliance Program (ACCP) in 2018 based on France's Sapin II Act, approved by the Group Ethics Committee and later updated. The program is designed to prevent and detect allegations and incidents of corruption, influence peddling and bribery. It is backed by top management commitment to zero tolerance, a corporate compliance team (CSG) with local relay officers, a corruption risk map based on Sapin II standards and French Anti-Corruption Agency recommendations, mechanisms for assessing third parties, an awareness program for all managers and employees with stepped-up training for those most exposed, a whistleblowing hotline, anti-corruption accounting audits and internal controls, and a system tracking disciplinary measures. Certain functions are identified as most at-risk, including purchasing, sales, customs, logistics and public affairs. Eligible employees must attend, every two years, a mandatory e-learning program on the fundamentals of the fight against corruption. In 2024 the third-party due diligence process was strengthened and the ACCP was updated. Michelin tracks a key performance indicator on anti-corruption training coverage: 79% of employees in functions-at-risk received anti-corruption training between January 1, 2023 and December 31, 2024, against a target of at least 95% by the end of 2026.

The number of convictions and the amount of fines levied for violation of anti-corruption and anti-bribery laws is tracked by each Regional Compliance Officer. In 2024, there were no convictions, and consequently no fines paid for the violation of anti-corruption laws in the Group. This attests to the Group's policy of zero tolerance for corruption and influence peddling. Confirmed cases are handled through the Group's whistleblowing and investigation framework: the Group Investigations Directive applies to all matters covered by the Code of Ethics, including incidents of corruption and bribery, and the Group may request the assistance of external investigators if necessary. Where an investigation substantiates alleged violations, the Regional Ethics Committees define and deploy action plans with remedial measures and disciplinary sanctions up to and including dismissal, and the ACCP includes a system for tracking disciplinary measures taken in response to confirmed cases of corruption or influence peddling.