DANONE APPROACH ON GHG MEASUREMENT AND REDUCTION AT FARM LEVEL. Axelle Bodoy Global milk GHG manager 06/12/2017

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DANONE APPROACH ON GHG MEASUREMENT AND REDUCTION AT FARM LEVEL Axelle Bodoy Global milk GHG manager 06/12/2017

ONE PLANET, ONE HEALTH The milk cycle key contributor to the alimentation revolution Fostering sustainable agriculture Fighting climate change

PRIORITY OBJECTIVE: DANONE CLIMATE POLICY

CLIMATE POLICY: ZERO NET TRAJECTORY Decoupling growth and GHG emission => Increasing milk production efficiency: Produce more, with less!

5 principles of Cool Farm Tool THE COOL FARM TOOL 2008 2012 2016 2017 2018 Cool Farm Alliance: 38 business, non profit and academic members > First excel GHG calculator for annual crops > Creation of the supporting organization CFA > new metric: biodiversity > dairy module > water metric > perennials module > Other livestock module Farmer focussed Global CFT Science based Crops & livestock Industry backed I 6 I

Example of results from the Cool Farm Tool I 7 I

Process of implementation of the tool with farmers Q1 2017 Q2 2017 June 2017 July 2017 Aug 2017 Sept 2017 Oct 2017 Nov Dec Q1 2018 Farm data collection GHG Milk Baseline Cool Farm Tool implementation CFT Dairy module development Team trainings Farms portfolio segmentation Sampling Data collection started Data input into CFT Brazil (IBS) Corrections, aggregation Scenarios simulations 100% done 8

Intermediary results of the Cool Farm Tool % complete Nb of farms modeled 2016 FP Kg CO2eq / kg milk Lowest footprint 90% 96% 100% 83% 100% 64% 74% 10% 100% 78% 64% 100% 69% 73% 400+6 8 23 23 36 29 50 27 6 + 5 38 23 44 48 16 37 1,10 1,09 1,406 0,742 1,057 1,09 0,917 3,20 0,728 3,20 3,20 3,20 3,20 1,05 NA 0,74 0,87 1,19 Highest footprint Weighted average GAP NA 1,18 2,45 2,76 1,09 0,95 1,32 1,67-3% -12,8% +78% -50% I 9 I

GHG mitigation levers 1. Feed 2. Enteric 3. Manure fermentation management 4. Energy management 5.Sequestration 1.1 Diet 2.1 Aliments composition 3.2 Transformation 4.1 Energy saving 5.1 Above ground 1.2 Production 2.2 KPI techniques 3.1 Storage & application 4.2 Energy production 5.2 Below ground Focus 2017 Produce list of GHG reduction levers and scale of impact -> Cow Act project with Wageningen University Screening of field SWOT in each country Definition of specific actions from the list of levers by farm types in each country Test of innovative mitigation levers (ex: manure fermentation)

Milk farming efficiency & sustainability matrix 30L Yield / cow Support general interest on the environment (climate, soil health, and biodiversity ) Inclusive value creation with employees Advanced small-scale family farms High productive professional family farms CO2 specific projects Innovative tools Solids increase Soy replacement Intensive large scales dairies High investment technologies (manure), hard & soft innovation Solids increase Soy replacement Social programs workers 20L 15L 10L Secure our license to operate Increase farmers income Subsistence farming Advanced cow nutrition Support to farm size development / Co investment Innovative tools Regenerative agriculture, water and reforestation, biodiversity Low productive small-scale family farms Increase Yield with feed production and efficiency Agroecological feed diversification Cow housing / comfort Co training level 2 Low productive professional family farms Efficiency improvement focusing on feed and reproduction Solids increase Under performing farms NOT IN SOURCING TARGET Extensive large scales dairies Regenerative agriculture and climate resilience, water management Grassland management optimization Yield increase Reproduction Social programs workers 5 Training basic Increase yield water / feed Basic quality 10-30 100 300 Farm size (# heads)

MAIN GHG reduction levers per region Efficiency KPIs + yield & solids Soy replacement Manure cracking (Belgium) Reforestation + Agro-ecology (Romania + Germany) Focus on YIELD improvement Soy replacement (DanFarm) Feed yields & autonomy Reforestation + soil health (SA) Focus on YIELD improvement (Mexico) Biodigestor Wake US Manure management (Mexico) Windmill US Mc Carthy Solar pannels margarita + big farms Mex? Reforestation (Mexico) Soil Health (US) Efficiency KPIs + yield & solids Grasslands management optimization Manure management (Argentina) Reforestation (Brazil) + agro-ecology I 12 I

GHG REDUCTION LEVERS SELECTED FOR MARGARITA - MEXICO Margarita To The Max Increase milk yield: Water ad-libitum Training in diet and feeding Feeders in farms barn IA rustic cattle breeds Increase feed quality: Development of Feed purchasing platform Biodigestor: One pilot implementation with BIOBOLSA (>40 cows) Solar panels: One pilot implementation with BIOBOLSA (>40 cows) Reforestation: 30 trees / dairy cow = 840 trees per farm on average => Co-benefits: shading + forage + biodiversity Soil C sequestration: Introduce conservation agriculture / agroecological practices (>40 cows) 13