Sustainable Development Department 2005/06 Progress Report on the Global Compact Charter In line with our Global Compact Charter commitments, Rémy Cointreau’s Sustainable Development policy is currently defined as a corporate and environmental responsibility policy, which aligns corporate and environmental considerations with the Group’s economic objectives. During the 2005/06 financial year, the following were given priority: - Pursue and confirm action undertaken - Continue to train, inform, mobilise and involve our personnel, and - Share our commitments and experience with all stakeholders. Thus, our objective has been to introduce these priorities in a pragmatic manner, by positioning Rémy Cointreau as a responsible player taking tangible action, while giving all stakeholders the benefit of our experience. At the same time Rémy Cointreau has confirmed its commitment to the Global Compact Charter by becoming a member of and supporting the "Forum des Amis du Pacte Mondial en France", a non-profit-making organisation. Respect for our Global Compact Charter and the communication of its principles to our business partners are an integral part of our Sustainable Development policies and remain our major priority. We have strengthened our Sustainable Development strategy based on the following six themes and commitments, by implementing actions related to these priorities: Themes Winemaking Supplier relations Quality/Security/Environment Marketing and sales ethics Human resources Food safety and research Commitments Associated Global Compact principles Develop farming methods Principles 7, 8 and 9 which respect the environment Involve our suppliers in our Principles 1, 4, 5, 7, 8, 9 social and environmental and 10 approach Implement totally secure Principles 7, 8 and 9 manufacturing processes which protect the environment Promote communication Principles 1 and 2 and the responsible consumption of our products, targeting our customers and partners. Implement practices that Principles 1, 2, 3, 4, 5 and guarantee social equity and 6 the professional development of staff Invest continuously to Principles 7, 8 and 9 guarantee the quality and safety of products The action that we are taking in respect of these six themes is the subject of our annual Sustainable Development report, which will be available at the end of July 2006. This document will be distributed to all stakeholders and will be posted on our website. While awaiting publication of the document, we can list a number of examples of action that are representative of our Global Compact Charter commitments. 1) Winemaking: Since the beginning of the 90s, Rémy Cointreau has consistently paid attention to the cultivation of grape vines through its commitment to a reasoned winemaking policy. Today, our objective is to continue to adapt our practices in order to farm our vineyards in a sustainable and environmentally friendly manner and then share these practices with our wine-making partners. This process is based on the upgrading of our winemaking properties to environmental standards, particularly on the Cognac site. In addition, the creation of an “Environment and Water Quality” Charter confirms the commitments of our winemaking properties to responsible and sustainable processes, for example with regard to a reduction in the use of herbicides, the optimised use of vine-protecting products, the follow-up and control of water and energy consumption and the development of personnel skills. Rémy Cointreau also encourages its suppliers and partners to act in a similar way by, for example, organising open days at its winemaking properties, which enable them to demonstrate steps taken and promote technical exchanges. 2) Supplier relations: We continue to act in accordance with three major objectives: - abide by and enforce our Global Compact Charter commitments - set up a corporate and environmental audit process, and - reduce the use of materials with a low recycling rate. This year we focused, in particular, on corporate and environmental audits performed by an independent firm on our foreign suppliers. These audits were conducted as a trial measure and enable us to ensure compliance with Human Rights and working conditions as defined by law and good environmental practices. In compliance with the requirements of corporate standard SA 8000 and environmental standard ISO 14001, these audits ensure respect for and sharing of the principles of the Global Compact Charter. 3) Quality/Security/Environment: The quality of Rémy Cointreau’s products is based on permanent industrial and food safety requirements, which have always been linked to respect for and protection of the environment. For a number of years, our policy has been based on the following areas: - water and energy resource saving - reduction of emissions and waste, and - environmental certification of our sites In relation to these objectives, and in line with the Angers site, the Cognac site was ISO 14001-certified this year. This result guarantees the site’s permanent compliance with environmental regulations and confirms a commitment to water and energy consumption control, as well as waste management and recycling. Within the framework of action relating to energy resource saving and environmental impact reduction, Rémy Cointreau purchased a trial electrical vehicle for the Angers site. In addition, following the CO2 report commissioned at the Angers site in 2004 as a pilot experiment, this process was applied to all Cognac sites, including winemaking properties, as well as at our head office in Paris. The CO2 report was prepared in accordance with the benchmark method of ADEME. It highlighted the fact that our greenhouse gas emissions are very low, due to the nature of our operations. The implementation of the QSE Policy, which is part of our Sustainable Development strategy, is thus in keeping with our Global Compact Charter commitments. 4) Marketing and sales ethics: The promotion of Rémy Cointreau’s brands has always been in keeping with ethical communication with consumers, visitors and employees. Rémy Cointreau’s ambition is to encourage a responsible consumption culture and to take action to prevent risks related to excessive alcohol consumption. Within this framework, this year Rémy Cointreau created responsible consumption tools designed in accordance with the colours used in our major brands. These tools are available to our consumers at events organised by Rémy Cointreau. In addition, Rémy Cointreau created and distributed to all its employees a “Guide to responsible consumption within a professional context”. This lists good practices applied within the Group. At the same time, the Responsible Communication Committee continues to meet quarterly to validate French and world communication campaigns and mediums, thus ensuring compliance with our Responsible Communication Charter. 5) Human resources: Rémy Cointreau approaches human resources issues in a responsible manner by developing a human resources policy that is fair and linked to social dialogue. Our salary policy is very transparent and motivated by the best existing social practices, in order to reward the commitment of our personnel. Pragmatic tools that are directly accessible on the intranet guarantee fair treatment of everyone. In 2006 for instance, all employees received a summary of the Group’s remuneration policy, illustrated with concrete examples. Training is also a core aspect of action undertaken in respect of human resources. Over the past three years, a significant share of our payroll has been related to training, in particular through a management skills development training programme for executives, partly focused on self-knowledge. Rémy Cointreau continues to support social action and the commitment of its employees within the “Second Chance Foundation”. Following the creation of a facility in Reims, a second facility was opened in Cognac this year. The objective of the foundation is to offer opportunities to people with school, family or professional difficulties to recover from them. A number of our employees are committed to this and provide psychological and technical support to those who request the foundation’s help. 6) Food safety and research: Rémy Cointreau continues to undertake research work within the framework of its Sustainable Development policy. Studies carried out in partnership with the Poitiers CNRS on wood disease in the Charente vineyards were continued via a thesis financed by Rémy Cointreau. New studies were also conducted by the Rémy Cointreau laboratories on air quality at production sites. Outlook: We aim to work in a manner that is as responsible as possible, by maintaining our expertise and preserving our environment. In this respect, our action will extend to two major areas relating to the development of corporate acceptability of our activities and the longevity of Rémy Cointreau. The creation of a Corporate and Environmental Responsibility (CER) charter that includes the Global Compact Charter will formalise our commitments and promote their sharing and distribution to our employees, investors, consumers, suppliers and all stakeholders. Next year, we will continue our efforts to encourage all our employees and partners to abide by and share our Global Compact commitments. This will enhance our corporate and environmental responsibility and thus give a clear international ethical dimension to the Rémy Cointreau Group. Christian Lafage Sustainable Development Officer