E n v i r o n m e n t – Nature 2020: Nature at the heart of the Food Chain

ü Management and protection of water resources

ü Sustainable raw materials supply

ü Reduction in the quantity of waste and recycling

ü Reduction of the environmental footprint of products and activities

For Danone, healthy eating starts with healthy nature. Danone’s action has the nutrition chain at its heart. This extends from the production of raw materials from agriculture and use of water, to end of life products, passing through their industrial transformation, their packaging, their transportation and their distribution. In 2000, Danone set objectives as well as a market plan for 10 years. In 2008, the company stepped up the pace by setting an objective to reduce the intensity of greenhouse gas emissions by 30% over five years within its direct scope of responsibility, an objective it exceeded at the end of 2012.Since then, Danone has identified four essential domains around which it built a plan for 2020: climate, water, packaging, and agriculture). Each of these domains brings together ambitious initiatives: for some, Danone is already committed, others open new frontiers and set new targets; and still others set ambitions, the objectives for which Danone has given itself the next few months to finalize and make operational. Solutions will come through innovation.

GOVERNANCE ADAPRED TO GOALS

Danone’s environment strategy is rooted in governance in accordance with the company’s decision-making processes. The Nature plan is managed at several levels, beginning with a Nature Committee comprising some of the company’s key decision-makers (Managing Directors, VPs for operations, research and development, procurement, etc.). The Nature strategy is sponsored by the company’s CFO, member of the Executive Committee. In addition, every division has a Nature Committee and there are Nature managers in every subsidiary. Since 2010, Danone has involved a panel of experts and external stakeholders to organize its strategic thinking and help define its long-term road map. This panel will continue its work as the plan is rolled out. Danone also designed a Nature training module in 2013 to raise awareness on the strategy within Danone. This module will be expanded and made available to all staff in 2014.Lastly, to strengthen the connection between nature and business, Danone released a Guide to Environmental Claims in 2011 in collaboration with the Futerra agency, to encourage responsible communication by the different subsidiaries and brands. This tool is now available to Danone’s teams via a new interactive website. Water is a precious and sometimes scarce resource that must be used in harmony with local ecosystems and communities. Danone is therefore committed to preserving this indispensable resource and to respecting its natural cycles by adopting responsible practices at the local level. The concerned areas by water stress constantly increasing worldwide, the risk anticipation in local river basins is essential to ensure the sustainability of agricultural and industrial activities of Danone. The sustainable solutions include necessarily the involvement of all stakeholders on a territory. That is why Danone will publish in 2015 its new water policy presenting its strategy by 2020 on all the water cycle, from its agricultural upstream to the consumer.

The company focuses on four priorities:

• measure water footprint;

• protect;

• reduce consumption and waste;

• monitor ecosystems.

Measure water footprint.

A new tool for measuring Danone’s water footprint, developed with Quantis, expert in analysis of life cycle and environmental impacts, was tested in a pilot subsidiary, and will be deployed in all the Waters division subsidiaries by 2020. The evaluation of “water” impacts arising from agricultural practices has been integrated into the DanRISE tool (see Sustainable Agriculture)protect. Protecting water sources and respecting the cycles of nature are Danone’s two priorities. Danone has always taken great care not to withdraw more water than nature is able to naturally renew, and systematically evaluates the quality of water returned to circulation after use. Danone has also developed a new method for overseeing local water management, known as “SPRING”, in collaboration with the Ramsar convention and IUCN (International Union for Conservation of Nature), to control the local water management. It will be deployed at every site and also made available to other users.

Reduce consumption and waste

Danone seeks to set the example by continuously reducing water consumption and waste in its plants. Results are very positive, with the water consumption intensity related to the production process reduced by 4% in 2014, and down by 39% since 2000. Danone is setting a new reduction goal of 60% by 2020, and also strains to ensure that used water returned to nature is of adequate quality for downstream ecosystems and users, by implementing strict corporate standards (defined in the Danone Clean Water Guidelines).