Universal Registration Document - Fiscal 2024

Introduction

COMPLIANCE WITH LAWS AND REGULATIONS Risk Level: Medium
Risk of non-compliance with a wide variety of laws, including labor law, anti-corruption law, data protection and privacy, and health, safety and environmental law.
Category: External Environment
COMPLIANCE WITH LAWS AND REGULATIONS

Impact

The wide range of services that Sodexo proposes and its worldwide presence means that it is subject to very specific laws and regulations for its operations at both the global and local level. For example, as a food operator, Sodexo has a legal requirement to provide accurate allergen information about the food and drinks it serves.

Changing regulatory scenarios that may also have an impact on its business include anti-corruption, and duty of vigilance and human rights regulations.

Any non-compliance of Sodexo with laws and regulations or a lack of knowledge and awareness of laws and regulations either at a country level or a global level could mean:

  • harm to employees, clients and consumers;
  • damage to Sodexo’s reputation;
  • potential financial penalties;
  • criminal action being brought against the Company and its Directors.
 Risk Level: Medium

Examples of Mitigating Activities

  • Legal teams deployed at the central and local levels, who supportoperational staff.
  • Legal teams specialized by area of expertise, having recourse to external experts.
  • Monitoring of the political, social and economic environments at global and country level to proactively identify proposed changes in laws that could impact Sodexo.
  • Group-wide mandatory training sessions for Sodexo managers in regulatory areas like anti-corruption and data protection.
  • Global Ethics and Compliance Committee ensures coordination and coherence of deployment of ethics and compliance programs amongst countries. Details of these programs are provided in section 7.3.1 "Ethics and Compliance" and 2.3 "Vigilance Plan".
  • Sodexo Speak Up offers Sodexo employees and partners a confidential way to report activities or behaviors that are contrary to the Code of conduct or illegal.
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CLIMATE DISRUPTION EXPOSURE Risk Level: Medium
Risk of Sodexo’s business being adversely affected by climate disruption
Category: External Environment
CLIMATE DISRUPTION EXPOSURE

Impact

The risk assessment carried out in Fiscal 2022 using the Task Force on Climate-Related Financial Disclosures (TCFD) framework identified that of Sodexo’s activities, its Food business had the greatest exposure to climate disruption, driven by possible interruptions to its supply chain through physical risks. For example, the increased frequency and severity of drought could mean that the agricultural industry becomes less productive, reducing its ability to meet demand and increasing costs. This would mean that Sodexo might not be able to source the products needed for client and consumer offers, resulting in reputational damage, or the products can only be bought at a much higher price, leading to loss of profitability on contracts.

In relation to transition risks, the risk assessment highlighted a risk from a shift in consumer demand – such as a move away from traditional menus and recipes to more plant-based options. If Sodexo is not able to adapt to this change, then it will lose client and consumer business, resulting in a loss of revenues and profitability.

 Risk Level: Medium

Examples of Mitigating Activities

  • Broad range of suppliers identified and utilized.
  • Adaption of menus to take account of the availability of products and their impacts.
  • Launch of the Future Food Collective; a collaborative initiative bringing Sodexo chefs together with industry experts and key suppliers to look at consumer habits. By partnering with NGOs such as the Food for Climate League, the Future Food Collective is gathering insights to develop new plant-based innovative solutions for consumers.
  • Development of sustainable and healthy recipes.
  • Roll-out of low carbon recipes in units using ingredients selected for their lower environmental impact and higher nutritional value, including plant-based and plant-forward recipes.
  • Deployment of Energy solutions to clients to increase energy savings and reduce their carbon footprint.
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6.3.2 Emerging Risks

In carrying out its risk assessment, Sodexo also considers risks arising from changes in the external environment. This includes consideration of emerging risks that are new external risks or existing external risks that have evolved with time, or have been triggered by changed circumstances. They may be perceived to be potentially significant, but might not yet be fully understood, and/or the consequences may be difficult to quantify.

Following on from Fiscal 2023, a further horizon scanning exercise was carried out in Fiscal 2024, in order to identify emerging risks at the earliest opportunity. This exercise was used to collate current risk themes and trends from external sources including industry experts, risk intelligence specialists, professional bodies and peer networks.

A mixed team of operational Directors and risk specialists met three times in the fiscal year to discuss and explore these themes and trends, and to consider their potential impact on Sodexo, and the time horizon of the risk (medium/long-term). The emerging risks mapping ("emerging risks radar") that was first established in Fiscal 2023 was refined in Fiscal 2024.