Saint-Gobain // Universal Registration Document 2021

3 An efficient and responsible Group Maximize the contribution for the planet and communities SAINT-GOBAIN UNIVERSAL REGISTRATION DOCUMENT 2021 88 Codeveloping solutions for new markets linked to the low-carbon economy In response to the challenges of population growth and urbanization, it is imperative to design sustainable solutions and contribute to the construction of resilient cities that ensure the well-being of individuals in a context of resource scarcity and climate change. New lightweight constructive methods can be used to meet these challenges. The development of prefabricated solutions or "off-site" construction favors the use of lighter construction methods using wood or metal structures, as alternatives to traditional constructions based on cement and brick. Saint-Gobain is also investing in 3D printing (see chapter 2, section The transition to a low-carbon economy is also impacting markets related to mobility and energy. Thus, the “Mobility” Business Unit is working both on solutions to support customers in the transition to vehicles that emit less and less CO2 and on adapting its offer to the development of hybrid or 100% electric vehicles. The “2050 net zero carbon 2.1.5 emissions” program In addition to the programs initiated at site level, reducing the carbon footprint of production and thus the impact of the products requires three major strategies: an internal carbon price to speed up the transition to ■ low-carbon technologies; innovation and R&D programs to coordinate and ■ expand efforts to improve manufacturing processes, reduce the energy consumptions and ensure the transition towards the use of decarbonized energies; scope 3 control to identify the main emissions factors ■ and mitigate the overall impact of the products. In 2020, and in accordance with the Group’s commitment to achieve carbon neutrality by 2050, Saint-Gobain published a roadmap with an action plan and intermediate targets for the end of 2030 (see chapter 4, section 2.1). An internal carbon price to speed up the transition to low-carbon technologies annual energy consumption of over 10 GWh. The second carbon price level is used for R&D investment in breakthrough technology. This price level is of demonstrable value in supporting low-carbon R&D projects. Setting an internal carbon price enables the current or potential impact of a regulatory carbon price on Saint-Gobain’s activities to be assessed, opportunities for growth in low-carbon sectors to be identified, investments in manufacturing and R&D to be refocused, and actions to reduce CO2 emissions to be ranked. The Group set two levels of internal carbon prices in 2016. The first internal carbon price level per ton is applied to industrial investments above a certain threshold, investments associated with a change in energy source, energy investments on an existing or greenfield site with a total Following the November 2020 publication of the 2030 roadmap, an update of the price levels was made in October 2021. The price level applicable to investments rose from €30 to €75 per ton of CO2 and the level applicable to R&D projects from €100 to €150 per ton. In addition, a specific approach applicable to significant acquisitions has been defined. It includes any effort required to ensure that the carbon impact of this acquisition is compatible with Saint-Gobain’s direct and indirect emissions target trajectory. Under the European Union Emissions Trading Scheme (EU ETS), the rules defining the free allocation of carbon allowances from 2021 have been redefined. Discussions are still underway within the framework of the "Fit for 55" package to define the trajectory after 2025. Based on current information, the Group believes that it will be able to maintain self-sufficiency in quotas in the medium term given its current stock level of more than 5.8 million tons of allocations, corresponding to 3.7 million tons of allocations in the registries at the end of 2021 plus the allocations to be received at the beginning of 2022 for the year 2021. Innovate to optimize industrial processes and promote the use of decarbonized energies In the short term, the actions performed involve the reduction of energy consumption and, in the medium and long term, the transition to the use of decarbonized energy, in particular the transition to the use of green electricity. The WCM program (see this chapter, section and the “energy” and “CO2” action plans for continuing improvement (see this chapter, section provide structure for the action plans. Short- and medium-term actions also include investments in optimization and energy efficiency processes. Pragmatically, Saint-Gobain identifies and analyzes projects for which rapid gains can be measured. The analysis also takes into account the impact on competitiveness and applies the rules related to the introduction of the internal carbon price. For example, the Group promotes the installation of energy and heat recovery systems. These low-carbon solutions can address each of the impacts of industrial production: raw materials, energy use, energy efficiency and energy recovery, and carbon capture and recovery. Finally, the development of "Industry 4.0" (see chapter 2, section, and in particular the collection and use of data, makes it possible to optimize energy consumption.