Universal Registration Document - Fiscal 2023

2.8.3 Green Taxonomy

Regulatory context

In accordance with the European Union (EU) regulation 2020/852 of June 18, 2020 and its delegated acts (referred to as the “Taxonomy” regulation), Sodexo is required to publish, for Fiscal 2023, performance indicators that highlight the proportion of its eligible and aligned revenues, investments (CapEx), and operating expenditure (OpEx) associated with economic activities considered to be sustainable within the meaning of this regulation⁽¹⁾ for the first two objectives mentioned in article 9 of EU regulation 2020/852:

• climate change mitigation;
• climate change adaptation;
• sustainable use and protection of water and marine resources;
• transition to a circular economy;
• pollution prevention and control;
• protection and restoration of biodiversity and ecosystems.

An economic activity is considered as “eligible” if it is included in the list of activities described in the Taxonomy delegated acts.

An activity becomes “aligned” when it meets all the technical screening criteria, consisting of specific conditions and performance objectives necessary to demonstrate substantial contribution to one of the six environmental objectives; does not significantly harm the other environmental objectives; and if the Company complies with the minimum safeguards related to human rights, corruption, taxation and fair competition.

Methodology elements

The financial information used to conduct this analysis was subject to self-assessment by country teams and additional reporting as part of the year-end closing. The indicators were reviewed and analyzed jointly by Corporate Responsibility and Finance teams, and supported by third-party experts, in order to ensure consistency of the decisions regarding eligibility and alignment, as well as consistency with Fiscal 2023 consolidated revenue, investments and operating expenses.

Results for Fiscal 2023

Taxonomy indicators for Fiscal 2023 are summarized below:

Eligibility analysis

Eligible activities

Sodexo carried out a review of its activities in its most significant countries in terms of revenues and investments (CapEx), with a view to determining which ones are likely to be eligible within the meaning of the EU Taxonomy and its delegated act for climate change mitigation. No activity was considered eligible for the climate change adaptation objective.

As of today, only some Facilities Management services provided by Sodexo are included in the EU taxonomy:

• services related to the renovation of workspaces and buildings, installation, maintenance, and repair of energy-related equipment as well as professional services related to energy performance;
• waste management services;
• road passenger transport and inland passenger water transport services.

Based on existing reporting processes, systems and estimates formulated by management and the subsidiaries, 2.7% of consolidated revenues⁽²⁾ have been identified as eligible in the meaning of the Taxonomy, compared to less than 2% in Fiscal 2022.

Eligible Investments (CapEx)

Sodexo’s eligible CapEx includes:

• CapEx directly associated with its eligible activities; and
• CapEx considered individually eligible, as defined in the Taxonomy Regulation.

The eligible CapEx identified mainly corresponds to increase of right- of-use assets related to leases on buildings and vehicles.

Following this analysis, eligible CapEx for Fiscal 2023 was assessed at 21.1% of total CapEx, compared to 7% in Fiscal 2022. Denominator amount at 428 million euros and includes additions and scope entrance of tangible and intangible assets (excluding goodwill) for 338 million euros as well as right-of-use assets for 90 million euros.

Eligible Operational Expenditure (OpEx)

Operational expenditure within the meaning of the Taxonomy Regulation is limited to costs linked to direct non-capitalized research and development, direct maintenance, and renovation of Sodexo assets (including direct cost of employees), and direct short- term leases. Given that the operational expenditure was less than 10% of Group operating expenses, Sodexo has used the exemption provided in the regulation and has not published the performance indicator for eligible OpEx.