SRI – Socially Responsible Investing

Valeo’s ESG approach

For many years, Valeo has been working to reduce its impact on the environment and to make a positive contribution to Society. The Group addresses the pillars of ESG investment in the following way:

• Environment: a cleaner mobility thanks to its technologies, which contribute directly or indirectly to reducing CO₂ emissions. Valeo also has an ambitious plan to reduce emissions generated by its operations throughout its value chain (Scopes 1, 2 and 3)
• Human Capital: a safe and inclusive working environment for its employees and ongoing efforts to improve the representation of women in our businesses and on our operational committees
• Society: joint action by involving our ecosystem, in particular our suppliers and partners, in the transformation of our industry
• Governance: dual governance with independent directors making up the majority of the Board of Directors’ members, and an experienced operational management team whose annual variable compensation is indexed to targeted CSR criteria

ESG key performance indicators

In order to measure and monitor the results of its actions, the Group has introduced more than 20 priority performance indicators with targets for 2025 and/or 2030 (for more detailed information, see page 241 of the 2023 URD).

(1) In accordance with Article L.225-27-1, II of French Commercial Code.
(2) In accordance with the recommendation in Article 9.3 of the AFEP-MEDEF Code.
(3) The continuous improvement of FR1 since 2020 has encouraged the Group to adjust its 2025 target from <1.7 to <1.
(4) Lead Director position at Board level effective until January 2022.
(5) Separation of Chairman of the Board and CEO roles, announced in October 2020 and effective in January 2022.
(6) Not included in 1,700 key managers’ compensation.

Carbon neutrality contribution plan: CAP 50 plan

On February 4, 2021, Valeo unveiled a plan to contribute to carbon neutrality. Known as CAP 50, the plan covers the entire value chain, including suppliers, operating activities and the end use of products sold by the Group (direct and indirect emissions, Scopes 1, 2 and 3 emissions).

2030 CO₂ emissions reduction targets by scope validated by SBTi

Scopes 1 & 2 (-75%)

• 2019: 1.1 MtCO₂eq
• 2030 : 0.28 MtCO₂eq

Scope 3 UPSTREAM (-15%)

• 2019: 9.5 MtCO₂eq
• 2030: 8.1 MtCO₂eq

Scope 3 DOWNSTREAM (-15%)

• 2019: 39 MtCO₂eq
• 2030: 33.1 MtCO₂eq

Third-party emissions avoided thanks to Valeo technologies

In addition to its emissions reduction plan, Valeo has an additional positive impact via emissions avoided by third parties. The Group’s technologies should enable it to avoid 13.6 MtCO₂eq. in greenhouse gas emissions from third parties, equivalent to 27% of its emissions (2019 baseline).

European taxonomy

European Taxonomy reporting illustrates Valeo’s sustainable positioning thanks to its high-tech electrification, thermal and visibility solutions.

Valeo performed well in 2023, with alignment of almost 100% for each indicator (turnover, capital expenditure and operating expenditure) relating to eligible activities under the climate change mitigation objective.

For more detailed information, see pages 266 to 273 of the 2023 URD