Danone : 2021 Danone Mission Committee Report

Dan�e

MISSION COMMITTEE

APRIL 2021

D A N O N EM I S S I O N C O M M I T T E E R E P O R T

In June of last year, Danone shareholders approved a proposal for Danone company to adopt the Entreprise à Mission status with overwhelming support. Since then, the Mission Committee has been actively working with Danone to bring this legal status to fruition. Though we are still in the formative phase, I am happy to share on behalf of the Mission Committee our inaugural report.

You may imagine that the recent changes in the governance of Danone company have generated many questions from the Mission Committee Members as well as from the media and the public about the continuation of Danone ESG journey. The newly appointed non-executive Chairman of Danone, Gilles Schnepp, issued a clear message confirming the determination of the Board to continue steering the company according to the model of Entreprise à Mission. However, we have asked to be provided with further and more detailed reassurance, beyond those general statements. As Mission Committee Members, it is our duty to make sure we can contribute to support Danone Company progress towards its Mission, with the right means, governance and ambition, so as to fulfill our monitoring and surveillance responsibilities vis a vis you, the shareholders. Your trust is not a given, we must deserve it and we are determined to act with this in mind.

Let me also underline that this report does not represent a final model for assessing the company's fulfillment of its Mission, as much remains to be defined. It does provide, however, valuable information about the progress of setting up the groundwork and a view on what is yet to come, which is particularly important in the current context the company is going through. More than ever before, the need to find new, sustainable models of business that work for a broad array of stakeholders is urgent. The intellectual and policy spheres have undertaken analyses and created valuable conceptual models, but it is up to companies like Danone to put these ideas into practice, to refine them successfully, and scale them up. This is why Danone's endeavor as an Entreprise à Mission is worthy of not only attention and support but also solid and unbiased reporting.

The Mission Committee, which I have the privilege to chair, does the important work of monitoring the process of accomplishing Danone's Mission. In doing so, we must ensure that Danone's KPIs are strategic, ambitious, understandable and robust, allowing for accurate monitoring and the ability of us to inform you about progress. Over the last 9 months, the Mission Committee has worked with Danone to define a primary set of indicators, beginning with a review of Danone's stated "Mission" intentions: to improve health, the environment, and social inclusion. We chose, after due deliberation, what we believe are the most useful KPIs from an existing pool, trying to properly combine precision and measurability in order to verify Danone's accomplishments during this first year.

Moving forward, the Mission Committee will ensure that the process evolves to become more impact oriented. The future indicators will have to reflect not only the way Danone changes its processes but also whether it creates the broader impact and outcomes it intends. The Mission Committee is looking forward to diving deeper into how Danone operates. It may intervene more, beyond simple verification, recommending ways Danone's "Mission" could be achieved more ambitiously, working closely with Danone Management teams, and making sure that going beyond profitability as it is traditionally measured is a purpose that is shared at all levels of the company's governance. An exciting journey ahead, in a context which is clearly more challenging than a year ago. Until that time, I offer you on behalf of the Mission Committee our first shareholder report.

PASCAL LAMY

1

D A N O N EM I S S I O N C O M M I T T E E R E P O R T

TABLE OF

CONTENTS

#1	A NEW LEGAL STATUS IN THE FRENCH LAW	03

#2 DANONE COMPANY JOURNEY

Purpose and objectives	04
The Mission Committee	05
The independent third party	07

#3	A LOOK AT THE ACTIVITY OF THE 1ST YEAR
	Induction program	08
	Meetings of the Mission Committee	09
	Key Performance Indicators and targets for the first year	11

#4	UPCOMING VERIFICATIONS	14

"This report constitutes the annual report from the Mission Committee to the shareholders' meeting of Danone to be held on April 29th 2021, established in accordance with Article L. 210-10 3° of the French Commercial Code."

2

D A N O N EM I S S I O N C O M M I T T E E R E P O R T

#1	A NEW LEGAL STATUS
	IN THE FRENCH LAW

The French "société à mission" status is defined by Article

L.210-10 of the French Commercial Code, introduced by the

May 22nd, 2019 Law, commonly known as the "PACTE" Law.

It requires that a company adopting the status:

define a purpose ("raison d'être") and write it into the company's by-laws;

include social and environmental objectives aligned with that purpose in its by-laws as well;

create a Mission Committee responsible for monitoring progress made towards achieving these objectives;

appoint an independent third party to verify that the mission is carried out.

3

D A N O N EM I S S I O N C O M M I T T E E R E P O R T

#2	DANONE COMPANY
	JOURNEY

In June 2020, Danone became the first publicly listed company to adopt the French "Entreprise à Mission" status, with the support of more than 99% of shareholders at its Annual General Meeting . The status was officially embedded in Danone's Articles of Association and registered in July 2020. Both events confirmed Danone's long-standing dual socio-economic project and commitment to sustainable development, as well as signaling a step forward in the pursuit of a model of sustainable value creation for all its stakeholders.

PURPOSE AND OBJECTIVES

Danone defined 'Bringing health through food to as many people as possible' as its purpose in 2005, followed by setting the global B Corp ambition in 2015, and defined the 'One Planet. One Health' framework of action in 2017. The social and environmental objectives that Danone adopted as an "Entreprise à Mission" (called the "Mission") are aligned with the United Nations' Sustainable Development Goals, and cover 4 dimensions:

Impact people's health locally with a portfolio of healthier products, with brands encouraging better nutritional choices, and by promoting better dietary habits.

Preserve and renew the planet's resources by supporting regenerative agriculture, protecting the water cycle, and strengthening the circular economy of packaging, across its entire ecosystem in order to contribute to the fight against climate change.

Entrust Danone's people to create new futures: building on a unique social innovation heritage, give each employee the opportunity to impact the decisions of the Company, both locally and globally.

Foster inclusive growth by ensuring equal opportunities within the Company, supporting the most vulnerable partners in its ecosystem, and developing everyday products accessible to as many people as possible.

4