Universal Music Group

Universal Music Group N.V. describes the role of its administrative, management and supervisory bodies through cross-references to the Board Report and Appendix. The Board is made up of executive and non-executive members, with biographies covering experience relevant to UMG's sectors, products and geographies. None of the non-executive directors represents the company's employees or other workers. The percentage of independent board members is 50%, calculated on the basis of independent non-executive directors and board members. Oversight of impacts, risks and opportunities sits with the Board and its committees, and how each body's responsibilities are reflected in terms of reference and mandates is set out under Corporate Governance. Management's role in the governance processes, controls and procedures used to monitor and oversee impacts, risks and opportunities is described under The Board, Sustainability management, including reporting lines and dedicated controls. The Audit Committee supervises the effect of the Code of Conduct. The bodies also determine whether appropriate skills and expertise are available or will be developed, supported by an induction program for non-executive directors.

UMG discloses how its administrative, management and supervisory bodies are informed about sustainability matters, with the relevant content presented under Corporate Governance, The Board, Sustainability management in the Board Report. This covers whether, by whom and how frequently the bodies are informed about material impacts, risks and opportunities, the implementation of due diligence, and the results and effectiveness of the policies, actions, metrics and targets adopted to address them. It also describes how the bodies consider impacts, risks and opportunities when overseeing strategy, decisions on major transactions and the risk management process. A list of the material impacts, risks and opportunities addressed by the bodies or their relevant committees is provided in the same section. Stakeholder input is shared with management or the Board through various channels, including the Investor Relations team, as part of the double materiality assessment process and through regular internal periodic reporting.

UMG reports on the integration of sustainability-related performance in incentive schemes, with the relevant disclosure located under Corporate Governance, The Board, Remuneration in the Board Report. The company states that incentive plans for the Executive Directors do not currently incorporate key performance indicators linked to sustainability matters. This position also applies to climate-related considerations under ESRS E1, where the same disclosure confirms that remuneration of the members of the administrative, management and supervisory bodies is not currently linked to climate-related performance. UMG therefore discloses the absence of sustainability-linked remuneration rather than describing any such scheme in place for the reporting period.

UMG provides a statement on due diligence that maps the core elements of the due diligence process to the relevant disclosures in the Sustainability Statement. Embedding due diligence in governance, strategy and business model is linked to GOV-2, GOV-3 and SBM-3. Engaging with affected stakeholders in all key steps is linked to GOV-2, SBM-2, IRO-1, G1-2, S1-1 and S1-2. Identifying and assessing adverse impacts is linked to IRO-1, SBM-3, G1-2 and S1-2. Taking actions to address those adverse impacts is linked to S1-3. Tracking the effectiveness of these efforts and communicating is linked to E1-4, E1-6, S1-4, S1-5, S1-6 and S1-16. The table therefore directs readers to where each due diligence element is described in more detail across the environmental, social and governance sections of the statement.

UMG describes its risk management and internal controls over sustainability reporting. For quantitative disclosures it uses a global data collection and consolidation platform for environmental and social demographic reporting, with built-in mathematical coherency and consistency checks that flag abnormal variation. Each reporting entity performs an initial validation, the ESG department performs a second coherency check during consolidation, and the ESG department then conducts a trend analysis validated with business unit leaders, documenting explanations for variances. For qualitative disclosures UMG maintains a centralized database for gathering, reviewing and verifying information. In 2024 UMG updated its controls to capture new CSRD data points, considering risks such as the completeness and integrity of data, accuracy of estimation results, availability of upstream and downstream value chain data, and timing. It continues to work towards full implementation and intends further improvements in 2025. Risk appetite differs by risk type, ranging from averse to seeking, and findings are reported periodically to the bodies.

UMG is Universal Music Group N.V., a Dutch-domiciled music company whose total revenue for the year was 11,834 million euros. Its inputs, outputs and outcomes are described under How UMG adds value. The value chain map sets out upstream actors (artists and songwriters, shareholders and creditors, government and elected officials, and trade associations such as IFPI and RIAA), own operations (recorded music, music publishing and merchandising), and downstream actors (content publishers, collection societies and performance rights owners, the digital supply chain, the physical supply chain and logistics, and fans). Digital service providers include Spotify, Apple and Amazon. UMG links its creative and commercial focal points to its material sustainability matters, including discovering and supporting artists, protecting its catalog, growing streaming revenue and high-growth markets, partnering on technology and responsible AI, reducing GHG emissions, advancing data and insights, and serving superfans. UMG notes it is still developing a comprehensive sustainability strategy and that current ESRS industry sector definitions do not include sectors applicable to UMG.

UMG describes the interests and views of its stakeholders. It identifies six key stakeholder groups with whom it engages, as applicable pursuant to its double materiality assessment process: artists, fans, employees, distribution partners, public officials and shareholders. For each group the statement sets out how UMG engages and the purpose and outcome of that engagement. Examples include maintaining direct connections with artists through A&R, marketing and merchandising teams, direct-to-fan communications, employee feedback channels and lifecycle and pulse surveys, ongoing dialogue with distribution partners, advocacy and educational meetings with public officials, and investor meetings, Annual General Meetings and quarterly results webcasts with shareholders. Stakeholder input is shared with management or the Board through various channels, including the Investor Relations team, as part of the DMA process and through regular internal periodic reporting. Information on how the bodies are informed of stakeholder interests is provided under Corporate Governance, Sustainability management.

UMG's double materiality assessment identified material topics that map to three topical ESRS standards: ESRS E1 Climate Change (GHG emissions), ESRS S1 Own Workforce (attraction and retention of employees, and gender equality and equal pay), and ESRS G1 Business Conduct (supply chain management). It also identified entity-specific material topics: attraction and retention of artists; privacy and cybersecurity; and intellectual property, piracy and content protection. Diversity, inclusion and belonging is also addressed under own workforce. The assessment concluded that ESRS E2 Pollution, ESRS E3 Water and marine resources, ESRS E4 Biodiversity and ecosystems, ESRS E5 Resource use and circular economy, ESRS S2 Workers in the value chain, ESRS S3 Affected communities, and ESRS S4 Consumers and end-users were not material. For each material topic UMG presents the associated impacts, risks and opportunities, whether they are actual or potential, their value chain location and time horizon. UMG did not identify any material risks or opportunities for which there is a significant risk of a material adjustment within the next annual reporting period.

UMG describes the process used to identify and assess material impacts, risks and opportunities. It conducted its first materiality assessment in 2022 and further validated its material topics in 2023 with subject matter experts and a cross-functional group of over 100 UMG leaders. For this statement it refreshed its methodology in line with CSRD requirements. UMG applied the principle of double materiality, combining an assessment of actual and potential impacts on sustainability matters with an evaluation of the actual and potential financial effects on enterprise value over the short, medium and long term. The DMA followed four steps: understanding activities, value chain and business relationships; identifying sustainability matters drawn from Application Requirement 16 of ESRS 1 and other sources; assessing impact and financial materiality by engaging internal and external stakeholders, including artists, shareholders and distribution partners; and validating material topics through working sessions with senior leadership, the Steering Committee and the ESG team, with the final list presented to the Audit Committee. UMG leveraged its annual risk assessment, assessed its GHG footprint under the GHG Protocol, and drew on a 2022 TCFD-aligned climate analysis.

UMG provides a content index of the ESRS disclosure requirements it identified as material through its DMA process. Under ESRS E1 Climate Change it reports on the GHG emissions topic across E1-1, E1-2, E1-3, E1-4, E1-6, E1-7 and E1-8. Under ESRS S1 Own Workforce it covers attraction and retention of employees, diversity, inclusion and belonging, and gender equality and equal pay across S1-1 through S1-6, S1-9 and S1-16. Under ESRS G1 Business Conduct it reports supply chain management under G1-2. Three entity-specific topics are also disclosed: attraction and retention of artists; privacy and cybersecurity; and intellectual property, piracy and content protection. The index also lists the ESRS 2 general disclosures, including BP-1, BP-2, GOV-1 to GOV-5, IRO-1, IRO-2 and SBM-1 to SBM-3, with page references and indication of data points derived from other EU legislation. Data points not included in the index are considered not material.

UMG is developing a climate transition plan, which it aims to adopt by 2027. It has not yet established a formal transition plan. The company describes the initial groundwork steps taken: its first TCFD-aligned analysis in 2022; science-based targets approved by the SBTi in 2023 and aligned with limiting global warming to 1.5C; continued engagement with ESG working groups on material scope 3 categories and supply chain engagement; ongoing stakeholder engagement to evaluate activities affecting future GHG emissions; and a renewable energy transition analysis continued in partnership with Procurement in 2024. UMG states it is developing the expected decarbonization levers and their quantitative contributions to achieving its science-based targets as part of the transition plan. UMG confirms it is not excluded from the EU Paris-aligned Benchmarks.

UMG states it has not yet established formal climate change mitigation and adaptation policies, as these will be developed as part of its climate transition plan. The company notes it is in the process of refining its overarching environmental strategy and intends to adopt an environmental policy that aligns with and supports this overall strategy in 2025.

UMG states it has not yet established formal climate change mitigation and adaptation actions, as these will be developed as part of its climate transition plan. It describes initial groundwork actions taken: conducting its first TCFD-aligned analysis in 2022; setting science-based targets approved by the SBTi in 2023; continuing to meet with ESG working groups on material scope 3 categories and supply chain engagement; extending value chain analysis by assessing climate maturity of six key suppliers, of which three were observed to be advanced in climate-risk consideration; continuing stakeholder engagement to evaluate activities that could affect future GHG emissions; and continuing its renewable energy transition analysis in partnership with Procurement in 2024.

In 2023, UMG became the first major standalone music company to announce science-based targets approved by the SBTi. It committed to reduce absolute scope 1 and 2 GHG emissions 58% by 2032 from a 2019 base year, in line with a 1.5C trajectory, and to reduce scope 3 GHG emissions from purchased goods and services, capital goods, fuel- and energy-related activities, upstream transportation and distribution, waste generated in operations, business travel, and employee commuting by 62% per EUR value added within the same timeframe. The 2019 base year was selected as the most representative year of normal operations prior to COVID-19. The targets cover all seven GHGs and were not derived using a sectoral decarbonization approach. Progress by 2024: scope 1 and 2 market-based absolute emissions fell from 11,454 tCO2e in 2019 to 8,265 tCO2e, a 28% reduction against the 58% goal; scope 3 intensity fell from 200 to 124 tCO2e per million EUR value added, a 38% reduction against the 62% goal. UMG has not set 2030 targets, as its SBTi targets were approved before CSRD implementation.

UMG follows the GHG Protocol, with an inventory covering scope 1, scope 2 location-based, scope 2 market-based, and scope 3. In 2024 the reporting scope applied to 57 countries and 177 properties, representing 98% of the property portfolio. For 2024: gross scope 1 emissions were 1,797 tCO2e (from 4,441 in the 2019 base year); gross location-based scope 2 was 8,816 tCO2e and gross market-based scope 2 was 6,467 tCO2e; total gross scope 3 was 619,156 tCO2e, up 32% on 2023. The largest scope 3 categories in 2024 were purchased goods and services (327,454), investments (93,257), upstream transportation and distribution (90,880), business travel (50,967), and capital goods (32,153). Total GHG emissions were 629,769 tCO2e location-based and 627,420 tCO2e market-based. GHG intensity was 53.2 tCO2e per million EUR net revenue location-based and 53.0 market-based. Scope 1 splits into mobile sources (1,058) and stationary sources (739). Scope 3 categories 8, 10, 11, and 13 are excluded as not relevant to UMG.

UMG states it does not have GHG removals and storage, or GHG mitigation projects financed through carbon credits. It confirms it is not excluded from the EU Paris-aligned Benchmarks.

UMG states it does not have internal carbon pricing schemes.

UMG reports policies related to its own workforce. Its Code of Conduct, implemented by the Chief Compliance Officer, applies to every person conducting business for UMG, including employees, interns, officers, board members, and third parties such as consultants, independent contractors, and advisors. It covers workplace safety, security, and employee health, and encourages an inclusive environment that values diverse backgrounds and individual differences in race, ethnicity, gender or gender identity, sexual orientation, disability, religious affiliation, age, experience, and thought. To uphold these standards, the Board adopted a standalone Whistleblowing Policy encouraging employees and other stakeholders to report genuine concerns without fear of reprisal when acting in good faith. UMG states that respecting human rights is essential, and its Code of Conduct includes a zero-tolerance policy toward harassment, discrimination, violence, child labor, slavery, human trafficking, and unsafe working conditions, consistent with the United Nations Guiding Principles on Business and Human Rights. The Board also adopted a separate diversity and inclusion policy (the D&I Policy) under the Dutch Civil Code and the Code, setting out the elements of a diverse and inclusive composition of the Board and senior management.

UMG describes actions taken on material impacts and to pursue opportunities related to its workforce, focused on diversity, inclusion, belonging, and gender equality, and on the attraction and retention of employees. In 2024 the company continued investing in talent and cultivating a culture of belonging. Employee Resource Groups (ERGs) provide platforms for employees to network and influence programming, and all employees are encouraged to join. The ERGs include Black Label, Cultura, Prism, Utopiaa, and the Women's Network. To attract talent, UMG runs internship programs and maintains training programs, including its "The 6" series of development programs, with 2024 cohorts for people managers, director-level leaders, and senior-level leaders. A global job architecture project launched in 2023 standardizes career leveling and remuneration to address compensation disparities and support retention, particularly for early and mid-career employees most vulnerable to turnover. Globally, employee benefits support physical health, mental health awareness, and wellbeing. In the United States these include unlimited in-network mental health services at no cost, family support programs, women's health benefits, 12 weeks of paid family leave, and coverage of travel for fertility-related medical care.

UMG reports targets related to managing impacts and opportunities for its own workforce. As enshrined in its D&I Policy, UMG is committed to improving gender diversity among senior managers and to promoting diversity and inclusion in the boardroom. Its specific aspirations were developed with input from senior management and unanimously approved by the Board, and are detailed in the Corporate Governance section of the Board report. The company has set an aspiration that by December 31, 2026, at least 20% of senior managers are female. UMG acknowledges there is room for improvement, including on gender diversity at the top management level, and notes that such improvement cannot happen overnight. Because 2024 is the first year in which UMG calculated its pay gap and annual total remuneration ratio, the company states that it has not developed targets relating to the pay gap or the annual total remuneration ratio.

UMG reports characteristics of its employees. The reporting scope covers all UMG employees, with data collected from the global human resource platform and, for pay gap and remuneration ratio, from local payroll systems. Headcount indicators are as of December 31, 2024. Total employees numbered 10,346. By gender, this was 5,370 female, 4,955 male, 6 other, and 15 not reported. By country, the United States had 3,512 employees, the United Kingdom had 1,562, and other countries had 5,272, with country breakdowns reported where UMG has 50 or more employees representing at least 10% of the total. By contract type, permanent employees totaled 9,636 (4,918 female, 4,703 male, 6 other, 9 not reported) and temporary employees totaled 710 (452 female, 252 male, 6 not reported). Employee turnover for all employees was 22% in 2024, with permanent employee turnover at 17%, temporary at 6%, and voluntary turnover at 9%. The total number of departures in 2024 was 2,265. UMG notes that of these indicators, only turnover of all employees is required by the ESRS.

UMG reports diversity metrics for its own workforce. Headcount by age group as of December 31, 2024 was 2,450 employees under 30 years old, 5,553 employees aged 30 to 50 years old, 2,313 employees over 50 years old, and 30 employees not reported, for a total of 10,346 employees. On gender diversity at the top management level, UMG defines top management as the executive directors of the Board (including the Chairman and CEO), the Chairman and CEO's direct reports who lead a label, business, or primary function, the leaders (and in some cases certain direct reports) of other key labels or businesses, and key large function leaders. UMG acknowledges room for improvement on gender diversity at the top management level and has set an aspiration for at least 20% of senior managers to be female by December 31, 2026, as reported under its targets and remuneration disclosures.

UMG reports remuneration metrics. In 2024, UMG's pay gap was 44.68%. The pay gap is calculated as the average gross hourly pay of male employees minus the average gross hourly pay of female employees, divided by the average gross hourly pay of male employees, multiplied by 100. The pay gap and remuneration ratio calculations draw on base salary, benefits in cash (base salary plus cash allowances, bonuses, commissions, cash profit-sharing, and other variable cash payments), and direct remuneration (benefits in cash plus the total fair value of all annual long-term incentives). In 2024, UMG's annual total remuneration ratio was a factor of 720.59, calculated as the annual total remuneration of the highest paid individual divided by the median employee annual total remuneration (excluding the highest paid individual). UMG acknowledges room for improvement, including on gender diversity at the top management level, and holds the aspiration that at least 20% of senior managers are female by December 31, 2026. Because 2024 is the first year these metrics were calculated, no related targets have been set. UMG is preparing for the EU Directive on Pay Transparency taking effect in 2026.

UMG manages supplier relationships through its business units, with UML overseeing suppliers of physical audio products (vinyl, CDs, DVDs) and Bravado managing merchandise suppliers. The UML and Bravado ESG working groups drive sustainability across the supply chain. The foundation of UMG's approach is the Supplier Social Responsibility Policy, overseen by the Chief Compliance Officer and SVP, Head of Sustainability, and incorporated into all global manufacturing agreements. It sets environmental, social, and ethical principles and is anchored by frameworks including the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the UN Global Compact, and the UNICEF Children's Rights and Business Principles. Bravado requires certain direct US and UK suppliers, based on spend and risk, to undergo the Sedex SMETA 2 Pillar Audit or equivalent, covering labor standards and health and safety. UMG began integrating an Environmental Exhibit into certain direct supplier agreements in 2024, requiring suppliers to set SBTi-validated science-based targets and submit annual GHG and sustainability surveys. In 2024 UMG rolled out a digital supplier guide and held one-on-one supplier meetings. Bravado also evaluates Tier 1 suppliers quarterly on product, pricing, and delivery. No specific targets have yet been set for this topic.