Sanofi : Financial Report

CORPORATE SOCIAL RESPONSIBILTY

CHAPTER 4 OF 2020 DOCUMENT D'ENREGISTREMENT UNIVERSEL

2020

Forward-Looking Statements

This report contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such product candidates, the fact that product candidates if approved may not be commercially successful, the future approval and commercial success of therapeutic alternatives, Sanofi's ability to benefit from external growth opportunities, to complete related transactions and/or obtain regulatory clearances, risks associated with intellectual property and any related pending or future litigation and the ultimate outcome of such litigation, trends in exchange rates and prevailing interest rates, volatile economic and market conditions, cost containment initiatives and subsequent changes thereto, and the impact that COVID-19 will have on us, our customers, suppliers, vendors, and other business partners, and the financial condition of any one of them, as well as on our employees and on the global economy as a whole. Any material effect of COVID-19 on any of the foregoing could also adversely impact us. This situation is changing rapidly and additional impacts may arise of which we are not currently aware and may exacerbate other previously identified risks. The risks and uncertainties also include the uncertainties discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2020. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

CHAPTER 4.

CORPORATE SOCIAL RESPONSIBILITY

Chapter 4 of 2020 Document d'Enregistrement Universel*

TABLE OF CONTENTS

4.1.	STATEMENT OF EXTRA-FINANCIAL	2
	PERFORMANCE
4.1.1.	Methodology for selecting risks and issues for	2
	the Statement of Extra-Financial Performance
	(SEFP)
4.1.2.	Table of SEFP risks and issues	3
4.2.	DETAILED DESCRIPTION OF SEFP	4
	ISSUES AND RISKS
4.2.1.	Human capital	4
4.2.2.	Access to healthcare	18
4.2.3.	Product quality	25
4.2.4.	Product safety for patients and consumers	27
4.2.5.	Medical ethics and bioethics	29
4.2.6.	Supply chain continuity	31
4.2.7.	Local Communities	33
4.2.8.	Ethics and business integrity	33
4.2.9.	Tax policy	35
4.2.10.	Environment	36
4.2.11.	Animal protection	47

4.3.	VIGILANCE PLAN	48
4.3.1.	Methodology for selecting risks for the duty of	48
	vigilance
4.3.2.	Duty of vigilance risk table	49
4.3.3.	Oversight	49
4.3.4.	Dialogue with stakeholders	49
4.3.5.	Grievance mechanism	50
4.3.6.	Fundamental human rights at work	50
4.3.7.	Employee health and safety	52
4.3.8.	Product safety for patients and consumers	56
4.3.9.	Patient safety in clinical trials	56
4.3.10.	Personal data protection	56
4.3.11.	Water resource management	57
4.3.12.	Environmental releases	57
4.3.13.	Biopiracy	57
4.3.14.	Procurement and subcontracting	58
4.4.	SANOFI'S CONTRIBUTION TO	60
	SUSTAINABLE DEVELOPMENT GOALS
4.5.	METHODOLOGICAL NOTE ON DATA	62
	REPORTING
4.5.1.	General comments	62
4.5.2.	Detailed indicators	64
4.6.	REPORT OF THE INDEPENDENT	67
	THIRD PARTY
4.7.	CORPORATE SOCIAL RESPONSIBILITY	72
	CROSS-REFERENCE TABLE

*This is a free translation into English of the "Chapitre 4, Responsabilité Sociale, Environnementale et Sociétale" of our 2020 Document d'enregistrement universel issued in French. It is provided solely for the convenience of English-speaking readers.

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CHAPTER 4.

CORPORATE SOCIAL RESPONSIBILITY

4.1. Statement of extra-financial performance

This chapter sets out for 2020 [GRI 102-51] the material issues facing Sanofi in terms of corporate social responsibility (CSR) and the identified risks, in accordance with:

• Articles L. 225-102-1 and R. 225-104 to R. 225-105-2 of the French Commercial Code, which introduced a requirement to publish a statement of extra-financial performance (SEFP) in order to transpose into French law the European Directive 2014/95/EU on the publication of non-financial information; and
• law no. 2017-399 of March 27, 2017 on the duty of vigilance of parent companies and companies acting as principals.

Tables cross-referencing the contents of this chapter to those legal disclosure requirements are provided in section 4.7, "Corporate social responsibility cross-reference tables".

Our extra-financial reporting principles are based on the guidelines of the Global Reporting Initiative (GRI) standards, under the "Core" option first attained by Sanofi in 2015. Some GRI indicators are identified in the body of this report within square brackets. A full cross- reference table, the "GRI Content Index", is available via the Document Center at www.sanofi.com.

Sanofi is also a signatory of the United Nations Global Compact, and as such discloses annually the progress achieved against the principles contained in the Compact.

A methodological note on how we report our data is provided in section 4.5.

This chapter forms an integral part of the French-languageRapport de Gestion (Management Report). It has been verified by an independent third party, whose report is presented in section 4.6.

4.1. Statement of Extra-Financial Performance

[GRI 102-11]

4.1.1. Methodology for selecting risks and issues for the Statement of Extra-Financial Performance (SEFP)

The principal SEFP risks and issues were identified by our Corporate Social Responsibility (CSR) department, in collaboration with our Risk Management department, on the basis of (i) Sanofi's material risks and issues and (ii) material issues identified in the industry-specific standard (Biotechnology & Pharmaceuticals) issued by the Sustainability Accounting Standards Board (SASB).

Our materiality and extra-financial risk matrices were updated by an independent third party in 2020 as part of a review of our CSR strategy. This review identified issues that have assumed higher importance in light of the Covid-19 crisis. The outcome of that process is a list of eight SEFP risks and four SEFP issues, as summarized in the table in section 4.1.2.

Policies and action plans for each of those risks are described in section 4.2.

A cross-reference table showing all the information required in the SEFP, including the presentation of the business model, is provided in section 4.7, "Corporate social responsibility cross-reference tables".

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CHAPTER 4.

CORPORATE SOCIAL RESPONSIBILITY

4.1. Statement of extra-financial performance

4.1.2. Table of SEFP risks and issues

[GRI 102-46, GRI 103-1]

Category

Social

Societal

			Risk mentioned
			in Item 3.D,
			"Risk Factors",
			of our 2020
			Annual Report	Section in this
Field or activity	Type	Description	on Form 20-F	chapter
Human capital	Issue	We rely on the commitment and expertise of our people to attain our		4.2.1.
		strategic objectives in a fast-changing, highly competitive environment.		Human capital
Attracting and	Risk	Risk that we will be unable to attract, integrate or retain people with the	x	4.2.1.
retaining talent		necessary profiles and skillsets, which could adversely affect our ability to		Human capital
		implement our strategy and attain our objectives.
Access to	Issue	An integrated approach to access to healthcare, combined with		4.2.2. Access to
healthcare		philanthropy, can generate opportunities for growth, innovation, and		healthcare
		unique partnerships.
Product pricing	Risk	Risk that our pricing policy will mean access to our products does not meet	x	4.2.2. Access to
		the expectations of certain stakeholders and/or the market, undermining		healthcare
		our commitment to patients and the healthcare system.
Product quality *	Risk	Risk that we will fail to comply with good clinical, laboratory,	x	4.2.3. Product
		manufacturing, distribution and pharmacovigilance practices and other		quality
		regulatory requirements relating to product quality through the entire life
		cycle of our healthcare products, or that other quality issues will arise that
		could have an adverse effect on patients or healthcare professionals.
Product safety for	Risk	Risk of product safety breaches, from first administration in clinical trials on	x	4.2.4.
patients and		humans through to the end of the product's life cycle, that could have an		Product safety for
consumers *		adverse effect on patients or healthcare professionals.		patients and
				consumers
Animal protection *	Risk	We must comply with ethical standards and principles that are essential to		4.2.11. Animal
		the responsible use of animals in scientific and medical activities.		protection
Supply chain	Risk	Risk of supply chain interruptions, product recalls or loss of inventories	x	4.2.6.
continuity *		due to unforeseen events, which could harm society (patients and		Supply chain
		healthcare professionals) and damage our reputation.		continuity
Local Communities	Issue	With operations in more than 100 countries worldwide, we must manage		4.2.7.
		our economic, social and environmental impact so that we make a positive		Communities and
		contribution to the places around our sites and support the sustainable		places
		development of communities.
Ethics and	Risk	Risk of non-compliance with the laws and regulations applicable to our	x	4.2.8. Ethics and
business integrity		operations in jurisdictions where we do business, in particular those		business integrity
		relating to combatting and preventing corruption and fraud; and also of
		non-compliance with pharmaceutical industry codes of conduct or our own
		values and ethical policies.

	Climate change	Issue	Climate change generates risks as diverse as the impact of extreme		4.2.10.2. Climate
	and carbon		weather events on our infrastructure and supply chain; scarcity of		change: towards
	footprint		resources; carbon taxes, and their financial impact; and the direct or		carbon neutrality
			indirect repercussions for human health.
Environment
	Environmental	Risk	Risk that discharges and emissions from our industrial and R&D	x	4.2.10.5.
	releases *		operations will adversely affect the environment or human health, or will		Environmental
			not be appropriately managed by our own staff or by our suppliers or		releases
			subcontractors.

• Indicates risks that apply not only to our own operations, but also to those of our suppliers, subcontractors and partners. See section 4.3.14, "Procurement and subcontracting", for measures taken to manage risks within our supply chain relating to employee health and safety, environmental releases and human rights.

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