Minimizing our footprint: our “NET-ZERO CARBON” target

In response to the climate change challenge and the associated risks linked to rising temperatures, Saint-Gobain has committed to achieving net-zero carbon emissions by 2050. The company aims to foster the development of a low-carbon economy in the regions it operates. Specifically, the goal is to assist customers in reducing CO₂ emissions by utilizing Saint-Gobain's products and solutions or by mitigating the carbon impact of their production. The focus is on advancing the decarbonization of both the construction and industrial sectors by minimizing environmental footprints and maximizing positive contributions.

Addressing climate change necessitates the decarbonization of economies. The objective is straightforward: by 2050, carbon emissions must not exceed the amount absorbed. The ambition for net-zero carbon is a tangible embodiment of Saint-Gobain's purpose: Making the world a better home.

Saint-Gobain formally committed to this goal on September 23, 2019, in New York, endorsing the UN Global Compact's "Business Ambition for 1.5°C" initiative. As the company progresses towards the 2050 target, efforts are made to elevate each interim milestone – expanding carbon reduction commitments across diverse business areas. This involves transitioning from incremental enhancements to substantial changes, with the ability to offset potential emission increases resulting from growth.

To realize carbon neutrality, Saint-Gobain has published a CO₂ roadmap. This roadmap encompasses the group's new commitments until 2030, encompassing not only direct and indirect carbon dioxide emission reductions but also reductions along its value chain. These 2030 targets have received validation from the Science-Based Targets (SBT) initiative, aligning with the group's 2050 net-zero commitment:

• 33% absolute reduction in scope 1 and 2 emissions compared to the 2017 baseline.
• 16% reduction in scope 3 emissions compared to 2017.

To achieve these objectives, Saint-Gobain will allocate an annual budget of approximately €100 million for targeted capital expenditure and research and development until 2030. This approach will guide decisions aimed at achieving carbon neutrality by 2050. Additionally, internal carbon prices have been introduced (€75/tonne for investments, €150/tonne for R&D projects) to incentivize the adoption of low-carbon technologies.

Saint-Gobain is actively pursuing various strategies to reduce direct emissions (scope 1), indirect emissions primarily related to electricity use (scope 2), and emissions along its value chain (scope 3).

These strategies involve product redesign, the incorporation of new materials, increased energy efficiency in industrial processes, transitioning to a low-carbon and renewable energy mix, collaboration with partners to reduce their emissions, and exploring carbon capture and sequestration solutions for residual emissions.

Looking ahead, these strategies are adaptable to uncertainties, considering emerging technologies, solutions, and challenges. A scenario-based approach is employed, evaluating different technical options and economic circumstances, ensuring readiness for decisive investment and development decisions by 2030 to achieve the 2050 goals. Goals are approached step by step, with the initial focus on reducing scope 1 and 2 emissions by 2025, followed by more extensive and ambitious reductions by 2030.

Reducing Carbon Intensity: Sustainable Designs and Materials

• Lightweight products, low-carbon raw materials, exploring sustainable alternatives for existing materials, and influencing partners and transport networks for greater carbon efficiency.

Optimizing Energy Use

• Adapting processes for reduced energy consumption, enhancing energy efficiency, transitioning to a less carbon-intensive energy mix, electrifying specific operations, and adopting renewable/decarbonized energy sources.

Influencing Carbon Neutrality Across the Network

• Collaboration with raw material suppliers, and transport networks to encourage decarbonization.

Exploring Carbon Capture Solutions

• Supporting innovative technologies for carbon removal through advanced chemical reactions or natural solutions, storing carbon in various mediums, from underground reservoirs to construction materials.

A 30% absolute reduction in emissions compared to actual 2017 emissions, and a 33% reduction compared to 2017 emissions adjusted for acquisitions made between 2017 and the target approval date.

A Firm Commitment to Support the Path to Carbon Neutrality

The company is implementing measures to support its roadmap toward carbon neutrality. Corporate Social Responsibility (CSR) objectives now constitute a larger proportion of long-term management incentive criteria, with the weighting increased from 15% to 20%, including a rise in CO₂ objectives from 5% to 10%.

Two internal carbon prices, recently elevated, are employed: €75 per ton for industrial investments and €150 per ton for R&D investments in breakthrough technology. Additionally, the company will allocate an annual budget of around €100 million until 2030 for targeted capital expenditure and R&D investments to achieve its targets.

Saint-Gobain's commitment to carbon neutrality by 2050 is deeply rooted in its extensive history of environmental impact reduction. This commitment is integral to the company's ambition to offer customers solutions for their own decarbonization efforts and reduce their environmental footprint.

In addition to striving for carbon neutrality within its operations, Saint-Gobain provides solutions to customers and end-users addressing climate and environmental challenges. In the construction sector, which contributes approximately 40% of global CO₂ emissions, Saint-Gobain develops and markets solutions to enhance building energy efficiency and low-carbon footprint solutions—such as lightweight construction materials—to replace traditional, more carbon-intensive materials.

Reducing the carbon impact of solutions revolves around three key pillars:

1. Internal carbon pricing to expedite the transition to low-carbon technologies.
2. Innovation and R&D programs to coordinate and expand efforts to enhance manufacturing processes, reduce energy consumption, and facilitate the transition to low-carbon energy.
3. Controlling Scope 3 emissions to identify key emission factors and reduce the overall impact of products.

Saint-Gobain maximizes its impact by designing, producing, and distributing materials and solutions that contribute to the decarbonization of markets. This is particularly evident in emissions avoided when using products such as solutions for energy efficiency in buildings and industries.

The company has positioned itself as a leader in light and sustainable construction markets by developing high-value construction solutions that reduce global fossil fuel use and associated greenhouse gas emissions, particularly through its insulation and glazing businesses.

~1,300 Mt avoided emissions for customers = ~ 40x the Group carbon footprint (all 3 scopes)* Solutions produced & sold in 1 year, with impact over the entire product lifespan; independently verified. This assessment considers all regions of operation, acknowledging varying needs based on location.

The overarching ambition is to ensure environmental preservation and offer clients the greatest value with minimal environmental impact. Saint-Gobain has set two objectives: zero environmental accidents and the maximum reduction of the impact of its activities on the environment through concerted efforts on five major fronts:

1. Sustainable resource management: Minimizing production residues, promoting reuse, and integrating a maximum of recycled content into products.
2. Reduction of energy consumption and greenhouse gas emissions: Achieved through industrial excellence programs, operator involvement, and the sharing of best practices.
3. Water management: Reducing water withdrawals, moving towards "zero discharge" of industrial water, starting in water-stressed areas, and ensuring no competition with local populations' access to drinking water.
4. Biodiversity preservation: Preserving, restoring, strengthening, and enhancing biodiversity across all sites.
5. Risk management: Anticipating and addressing risk factors related to environmental accidents and nuisances.

Saint-Gobain's Environmental, Health, and Safety (EHS) charter and policies, along with water management and biodiversity policies, aim to limit the negative impact of operations and products on the environment, avoiding new negative impacts on other natural environments and stakeholders.

Recognizing the collective effort required to address climate issues, Saint-Gobain supports the recommendations of the Task Force on Financial Disclosure (TCFD) and has been adhering to the Science-Based Targets (SBT) since 2018. The company actively contributes to the deployment of sustainable construction through its participation in the Green Building Councils (GBC), a network fostering sustainable buildings to minimize the sector's impact on the environment.

The transition to sustainable construction encompasses a social and inclusive dimension. Saint-Gobain maximizes its positive contribution by proposing solutions to expedite a just transition to decarbonized construction.

• Approximately 28% of global emissions come from carbon emissions during building use. Renovation plans improving building energy efficiency positively impact carbon emissions and end-users' energy bills, especially benefiting vulnerable or financially insecure populations. The Build Change program, initiated in 2022, identifies and promotes actions favoring social housing. The Saint-Gobain Foundation supports employee initiatives to enhance access to decent housing for marginalized individuals.

• Urbanization and population growth create a growing demand for housing. The development of cities, particularly in emerging countries, has led to the rise of slums. Lightweight construction offers an efficient and environmentally friendly solution to meet the need for new housing.

• The transformation of industrial processes toward carbon-free production (scope 1 and 2) involves minimal changes to jobs or site organization. The transition is supported by training and education programs on climate issues.

• Success in the Net Zero Carbon program and achieving carbon emission reduction targets necessitates changes in product formulations, incorporating low-carbon impact raw materials. This includes the use of recycled materials, leading to the establishment of new collection and processing networks for construction waste and the emergence of new business models. In certain countries, these sectors present opportunities for job creation for vulnerable individuals. For example, in France, the social and solidarity economy plays a role in glass and wood recycling. The Saint-Gobain Foundation supports work integration projects linked to the development of more circular ecosystems.