Valeo : 2021 Climate Report

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ON THE ROAD TO

LOW-CARBONM O B I L I T Y

CO N T E N T S

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COMMITTED TO

THE CLIMATE

TRANSITION

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AN INDUSTRY

TRAILBLAZER

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1. COMMITMENT SPANNING THE ENTIRE VALUE CHAIN

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HAND IN HAND WITH OTHER STAKEHOLDERS

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EXPERT GUIDE

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COMMITMENT AND

TRANSPARENCY

	V A L E O ' S F I R S T
A	C L I M A T E R E P O R T
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	s a world leader in electrification and partner to all
	automakers and new mobility players, Valeo is taking
	a further step forward and making strong commit-
	ments to the environment, in an approach that is
	central to its corporate purpose and its strategy. As it

continues to develop its range of electrification and CO emissions reduction technologies, the Group is committed to reducing the carbon footprint of its entire value chain. Its goal is to

contribute to carbon neu-
trality through 2050 and
to have cut its total emis-	his first Climate Report presents
sions by 45% by 2030*.	the commitment, trajectory,
	governance system and actions
	that Valeo is deploying to step

T up its contribution to carbon neutrality. The more technical Expert Guide details its understanding of climate change-­related developments and provides an assessment of current risks and opportunities, in line with Task Force on Climate-RelatedFinancial Disclosures (TCFD) recommendations**.

DRAWN UP IN LINE WITH TCFD RECOMMENDATIONS

This Climate Report outlines:

• how the climate challenge is factored in at the highest level of the company and the governance of Valeo's carbon plan (CAP 50);
• global mobility transformation scenarios;
• Valeo's value creation strategy;
• risks and opportunities related to climate change;

• the objectives of the CAP 50 plan to reduce CO2 emissions;
• practical initiatives taken to reduce the Group's carbon footprint (i.e., Scope 1, 2 and 3 emissions).

T his inaugural Climate Report also introduces a new way of interacting with Valeo's stakeholders, in line with the Group's renowned transparency and in compliance with regulations.

• Taking into account the emissions savings generated by Valeo electrification technologies fitted to customers' vehicles.
• See glossary, pages 71-72.

2021 Climate Report - VALEO

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VALEO IS WORKING FOR CLEANER, SAFER AND SMARTER MOBILITY

As a technology company and partner to all automakers

and new mobility players, Valeo is focusing on four key areas:

electrification, advanced driving assistance systems,

reinventing the interior experience and lighting.

VALEO PLEDGES TO CONTRIBUTE TO CARBON NEUTRALITY

A RECOGNIZED APPROACH

ENVIRONMENTAL COMMITMENT KEY FIGURES

NEARLY

BY 2030

75 %

15 %

50%

reduction in emissions relating to operating activities, plants, manufacturing processes and energy supply (Scopes 1 and 2)*

reduction in emissions relating to its supply chain (upstream Scope 3)*

reduction in emissions relating

to the use of technologies sold by the Group, including the benefits of Valeo electrification technologies (downstream Scope 3)*

BY 2050

IN EUROPE

Contribute tothe European Union's Green Deal carbon neutrality objective (Scopes 1, 2 and 3)

WORLDWIDE

Contribute tocarbon neutrality (Scopes 1, 2 and upstream 3)

Valeo is renowned for its transparency and its non-financial performance.

In 2021, the Group received

top scores from the various rating agencies, including an "A-" from the Carbon Disclosure Project (CDP Climate Change)*, powerful recognition of the maturity of Valeo's carbon reporting process, its ambitious reduction targets and the strength of the actions implemented internally.

€10BN	1/3
HAVE BEEN ALLOCATED BY VALEO	ONE IN THREE NEW CARS
SINCE 2010 TO TECHNOLOGIES	WORLDWIDE IS FITTED WITH A
THAT HELP REDUCE CO2 EMISSIONS	VALEO ELECTRIC SOLUTION THAT
€400M	HELPS REDUCE CO2 EMISSIONS60%

100

ELECTRIC AND PLUG-IN HYBRID VEHICLE MODELS WILL BE EQUIPPED WITH HIGH-VOLTAGE ELECTRIFICATION SOLUTIONS BY THE END OF 2022

These demanding targets are aligned with the reductions needed to cap global warming at 1.5°C(1). They represent a real challenge, since the aim is to reduce CO2 emissions

in absolute terms during a period of economic growth and therefore strong activity.

* See glossary, pages 71-72. (1) See "SBTi methodology", page 68.

* See glossary, pages 71-72.

MOVE UP

At the beginning of 2022,

the Group unveiled its Move Up strategic plan to accelerate in a rapidly evolving sector. Move Up means capitalizing today on tomorrow's mobility. With this plan, Valeo is building an even more solid Group, which will be both technologically stronger and operationally more efficient.

WILL BE INVESTED BY 2030	OF THE GROUP'S SALES ARE
TO TRANSFORM VALEO'S	GENERATED FROM TECHNOLOGIES
PLANTS AND ENERGY SUPPLY	THAT HELP REDUCE CO2 EMISSIONS

VALEO IN FIGURES (2021)
17.3	8.7%	103,300	31
BILLION EUROS	OF ITS SALES INVESTED	EMPLOYEES	COUNTRIES
IN SALES	IN R&D
184	64	16
PLANTS	R&D CENTERS	DISTRIBUTION
		PLATFORMS

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2021 Climate Report - VALEO

2021 Climate Report - VALEO

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C O R P O R A T E P U R P O S E

As a tech company, Valeo's goal is to play a major role in the mobility of tomorrow. In keeping with today's environmental and social issues, future mobility must be greener, safer and more diverse, and must also improve the well-being and safety of citizens and consumers.

We will achieve this goal thanks to our unique positioning and leadership in technology in the areas that are driving the transformation of the automotive industry and sustainable mobility across the globe. This positioning and this leadership are rooted in our expertise, innovations and operational excellence. They are supported by our values and business ­culture and built to serve our customers, employees, shareholders and the regions where we operate.

04 2021 Climate Report - VALEO

E D I T O R I A L

"BY 2030, WE WILL BE ALMOST HALFWAY THERE: VALEO'S EMISSIONS WILL HAVE DECREASED BY 45% FROM 2019 ACROSS ITS ENTIRE VALUE CHAIN."

JACQUES ASCHENBROICH

I n February 2022, I announced the launch of our transformation plan, Move Up. Designed to consolidate our financial performance until 2025, Move Up draws on a number of funda-

T he sixth report of the Intergovernmental Panel on Climate Change (IPCC) was another reminder that cities will drive the transition. Home to more than 50% of the world's population, these fragile areas have no choice but to accelerate their adaptation to climate risks. The develop-

ment of sustainable, low-greenhouse-gas (GHG)* emission modes of transportation will be central to this effort, as demand for mobility will continue to grow.

Conscious of this essential transition and of its responsibility as a key mobility player, Valeo took a major step forward in 2021 by formally committing to contributing to carbon neutrality through 2050. By 2030, we will be halfway there: Valeo's emissions will have decreased by 45% across its entire value chain - including emissions from its suppliers, its own operating activities and the end use of its products across their whole lifespan - compared with 2019.

CHAIRMAN OF THE BOARD OF DIRECTORS

These commitments are the natural next step in Valeo's transformation in the area of carbon emissions, which I have been leading since 2009 with the aim of making the Group a key player in vehicle electrification and a company recognized for the transparency of its commitments and its sustainable development policy. As early as 2009, we were one of the first companies in the automotive industry to place a strategic focus on reducing vehicle emissions, by gradually building a comprehensive portfolio of electrification solutions.

These products represented more than 60% of our original equipment sales in 2021 and position Valeo as an undisputed leader in vehicle electrification.

Today, the mobility sector is faced with the challenge of reducing its carbon footprint across the entire value chain. While we were already pioneers in this area by making the decarbonization of our technologies a key strategic focus, we are going much further now and setting ourselves even more ambitious goals that concern our entire value chain. Our "CAP 50" plan to reduce CO2 emissions is at the heart of our corporate strategy.

Once again, we are staying ahead of the curve to anticipate a trend that is certain to be a decisive factor in tomorrow's market. It is precisely this strong sense of direction at these crucial junctures that gives Valeo its status as a sustainable mobility leader.

mentals to ensure a successful out- come. One of these success factors is the continued rollout of our CAP 50 plan. As part of

this plan to contribute to carbon neutrality, Valeo has set major intermediate targets for 2025 and 2030, with the aim of reducing all its emissions by almost half by the 2030 milestone.

This is a huge transformation project for our operations, our value chain and our products. In future years, it will involve not just Valeo but also the entire automotive industry. Our goal is to reduce the emissions within our control as a first priority and to achieve annual reductions in line with our 2030 target. A dedicated governance system has been set up, involving all the Group's functional networks, i.e., Industrial, Logistics, Purchasing, Projects, R&D, Sales, Finance, Strategy and Sustainable Development. Objectives and roadmaps have been defined for each network.

By end-2021, each of Valeo's 184 plants will have developed a dedicated roadmap. Similarly, each industrial and product platform has identified the key levers for reducing carbon emissions in the three scopes.

To support this effort, we have allocated 400 million euros to industrial projects, in addition to our R&D investments in automotive electrification over the next decade. The transformation requires a commitment from us beyond the scope of our plants and products. The carbon challenge has to be a priority that we share with our suppli- ers. That is why we aim to support their carbon transition and develop new products, materials and solutions. In our rapidly changing ecosystem, I am convinced that this plan, which is mobilizing all of Valeo's employees, will enable us to make the coming transformation successful.

"THIS PLAN IS A COLLECTIVE COMMITMENT AND WILL ENABLE US

TO MAKE THE COMING TRANSFORMATION SUCCESSFUL."

CHRISTOPHE PÉRILLAT

CHIEF EXECUTIVE OFFICER

* See glossary, pages 71-72.

* See glossary, pages 71-72.

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2021 Climate Report - VALEO

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