To develop its mid- and long-term development strategy, Bureau Veritas carried out an in-depth study of its ecosystem.  5 STRUCTURAL TRENDS  were identified as having an impact on its development. We came across the same fundamental reality at the heart of these megatrends, which have already taken root in every region in the world: a major need to reinstate trust between consumers/citizens, businesses, governments and society as a whole.

 TREND 1  

DEMOGRAPHIC GROWTH AND RAPID URBANIZATION

We have observed two global trends. The first is sustained demographic growth. The global population is expected to increase by 2 billion by 2050, taking the population from 7.7 to 9.7 billion people. The second is rapid urbanization. Around 55% of the global population live in urban areas. This percentage is set to increase to 70% in 2050. Asia and Africa will account for a large amount of this urban population growth.

To cope with this demographic increase, cities and states must make significant investments in transportation, housing, tertiary sector buildings and aging infrastructure renovation. In a post-Covid-19 world, these investments will help kick-start responsible economic recovery. More generally, demographic growth, notably the emergence of middle classes in developing countries, gives rise to greater expectations in terms of quality, safety and the guarantee of performance and sustainability.

This trend leads to:

MORE THAN 2/3

OF THE GLOBAL POPULATION
will be urban by 2050,
and more than half of the global population
will live in Asia in 2050

 TREND 2 

INTERNATIONAL TRADE AND SUPPLY CHAIN MANAGEMENT: DISRUPTION AND RESTRUCTURING

Supply chains have become increasingly complex as a result of the globalization of the economy over the last few decades. We have seen growing numbers of suppliers and intermediaries and a reduction in visibility at each stage and process in the supply chain. The Covid- 19 pandemic highlighted these fragilities and the increased need for transparency. Not merely transparency regarding the origin and quality of products, but also their impact on health, society and the environment. Certain balances have been upset. Manufacturers are increasingly turning their attention away from China and toward Southeast Asia. We have also seen an uptick in nearshoring, close to end markets. For example, some businesses are relocating operations to Mexico to serve the North American market. This reconfiguration creates new requirements, notably the need for local hubs that can propose testing, inspection and certification services as near as possible to the production sites.

This trend leads to:

25%

OF WORLD EXPORTS
will be impacted by relocation
by 2025

 TREND 3 

NEW TECHNOLOGIES AND ACCELERATING DIGITALIZATION

AN INCREASE

OF MORE THAN

530%

IN THE AMOUNT OF DATA
by 2025, according to the
European Commission

Big Data reinforces the need for quality and flexibility within digital infrastructures. As the amount of data increases, it becomes more complicated to safely manage that data. The digitalization of the economy has made the security of systems and data sharing, as well as data protection, crucial for stakeholders. Cybersecurity regulations, by contrast, remain in their infancy. A fundamental switch from the Big Data era to the Right Data era is currently underway. Within the mass of information available, the main challenge is finding the correct, necessary and sufficient information to analyze a given situation. This means that data quality must be analyzed as soon as possible. It also reinforces the role of trusted third parties capable of validating the accuracy of the data. Bureau Veritas is using data analytics, machine learning and blockchain technologies to make its services more efficient and precise, while improving productivity and reliability. The Internet of Things (IoT) is on track to increase its value by 13% a year by 2024. This enormous growth is encouraging Bureau Veritas to develop its expertise and testing capacity in key markets by conducting regulatory and performance tests to ensure the integrity of data transmissions.

This trend leads to:

 TREND 4 

INCREASING FOCUS ON SUSTAINABILITY AND CSR

45%

OF EUROPEAN

FINANCIAL ASSETS

integrated some form
of ESG criteria
in 2020

People today expect businesses to assume responsibility and play a role in tackling major social and environmental issues. Businesses committed to transitioning to sustainable models are realizing they need to be guided by an independent and impartial expert, to help them promote their efforts to be more responsible in a secure and transparent way. Additionally, businesses offering new services and technologies need testing, inspection and certification services in order to comply with new regulations. This is particularly pertinent to those in the green energy market, for example hydrogen, wind and solar energy.

This trend leads to:

 TREND 5 

HEALTHCARE AND HYGIENE IN THE SPOTLIGHT

The importance of healthcare challenges, and the need to reinforce hospital infrastructures and continue developing structures dedicated to helping the aging population, have been emphasized in recent years. Digitalization also impacts the healthcare sector, and has resulted in an increase in connected medical devices. Finally, the priority for all businesses is to provide adequate health, safety and hygiene conditions for their employees and clients. In order to reassure their clients and users and protect their employees’ health, they must guarantee that all hygiene measures are in place, both on operational sites and in offices.

This trend leads to:

$234.5 BILLION

This is the estimated value
of the global digital health market
by 2023

BUREAU VERITAS IS A BUSINESS TO BUSINESS TO SOCIETY COMPANY, contributing to transforming the world we live in. We have played a central role in shaping long-lasting trust between businesses, governments and society since 1828, in order to forge the foundations of responsible progress.

(1) As of December 31, 2021.

“Bureau Veritas has extraordinary potential for development and great
impact over the next few years.”

When I look back on 2021 , five words come to mind to describe Bureau Veritas:

Unity, Excellence, Transparency, Trust and Commitment.

In a world still impacted by the pandemic, I would like to pay tribute to tireless efforts made by our 80,000 employees around the world. They have not only protected our business fundamentals, and also they have ensured the continuing health and safety of each other, as well as that of our clients. We have put everything in place to continue running our business under the most optimal conditions while preparing the Group’s future and helping our clients deal with their challenges. Bureau Veritas’ employees managed to navigate these unprecedented times, united by their shared values, their convictions, and their remarkable professionalism.

The transformation of the Group and its business model has launched a new era for Bureau Veritas’ development. The company is much more resilient. Its fundamentals are more solid. Its team of experts is completely devoted to delivering efficiency and excellence to their 400,000 clients around the world. Bureau Veritas boasts strong organic growth, a robust operating margin, a healthy cash flow, and its lowest recorded financial debt. In a still-restrictive context, the company has achieved an excellent performance. Therefore, during the Annual Shareholders’ Meeting, the Board of Directors will propose a dividend payment of €0.53 per share to its shareholders, which represents an increase of 47% compared to 2020.

The Board of Directors welcomes new members as existing mandates come to an end. Other Board members have supported the company for many years. This enables the Board to mix agility with the stability that comes with long-term management. In this way, we can protect the company, supporting multi-year initiatives, and remaining committed to investments that are necessary for growth. In 2021, the members of the Board of Directors worked on numerous projects within the different committees. Foremost among these projects were: 2025 Strategic Direction supervision, the roadmap of risks linked to compliance, and succession planning for the executive functions of the Group. The transparency of this governance ensures that all our stakeholders’ interests are safeguarded. It ultimately secures the company’s stability.

Bureau Veritas has extraordinary potential for development and great impact over the next few years. Firstly, the size and fragmentation of the market offer huge growth possibilities. This is true in our established markets where we have a strong presence. It is also true for our newer markets, which are emerging as a result of the energy transition, the disruption of supply chains, and the increasing digitization of commerce. Secondly, our position as an independent third-party expert has become a cornerstone of the global chain of trust. This trust, which is at the heart of our company’s purpose, is also one of our strongest values feeding our long-term growth.

At Bureau Veritas, the Board of Directors is particularly invested in responsible and ethical business practices, as well as in all commitments that the company has adopted and will adopt in the future as part of its CSR policy. These topics are at the heart of society’s aspirations and the very essence of the Group’s expertise: the Board’s members consider it essential to protect social, human and natural capitals. They guide and supervise the Group’s decisions on the path toward sustainability. We owe this commitment to our stakeholders, and we owe it to ourselves.

 ALIATOU CISSÉ 

Financial Controller District Senegal/Mali – Senegal

BUREAU VERITAS HAS UNDERGONE A MAJOR TRANSFORMATION IN RECENT YEARS. IN YOUR OPINION, WHAT HAVE BEEN THE MAIN STEPS IN THIS EVOLUTION?

 DIDIER MICHAUD - DANIEL 

Chief Executive Officer

Indeed, Bureau Veritas has substantially changed over the last few years, even if the solid nature of the company remains based on its fundamentals, and on the strengths it has built up over the decades. First of all, we have made internal changes to the way we manage our business. By strengthening our governance and processes in terms of human resources, monitoring of operations and performance, we have entered a new era that positions Bureau Veritas among the world’s leading companies.

We have also modernized our reporting, talent management and collaborative work systems, as well as our tools to improve efficiency in the field. This is particularly true for tools used in our laboratories, and for sales performance monitoring and improvement. We are also undergoing cultural transformation, with greater diversity in our talent. This enables us to respond even more effectively to the challenges facing our clients and society in general. In addition to nurturing our technical and technological expertise, we have strengthened our teams with sales professionals with a view to becoming even more relevant to our clients. And beyond diversity, we are also focusing on inclusion: more systematic inclusion of women in operational and management positions, and inclusion of people with disabilities, regardless of their origin or age.

Finally, our transformation has also significantly changed our growth profile: we are now a more diversified company because we are stronger in new and booming markets such as construction, infrastructure, renewable energies, new forms of mobility and agri-food. We are in a leadership position to address the CSR challenges of our clients around the world. We have also strengthened our presence in certain areas of the world such as China and Asia in general, Latin America and Africa, while maintaining a dominant position in our historical regions.

Aliatou, we can be proud of what we have achieved together. It opens up considerable prospects for development and positive future impact.

 DANIELA WERNECK DE MACEDO 

Marine & Offshore Operations Manager – Brazil

BUREAU VERITAS HAS CLEAR AMBITIONS FOR THE FUTURE. HOW DO YOU SEE THE NEXT FEW YEARS UNFOLDING? AND HOW DO YOU SEE THE GROUP DEVELOPING?

 DIDIER MICHAUD - DANIEL 

Chief Executive Officer

To see the future, it is essential to take stock of who we are today. For two centuries, we have supported our clients in their efforts to better manage and reduce risks in terms of health, safety, quality, environmental protection and human rights. When we think about it, nothing is more modern or critical in today’s society! So yes, we harbor great ambitions for Bureau Veritas and especially for our 80,000 employees around the world who work every day to shape the fundamentals of trust that are needed for our society to function. Their work addresses challenges that are at the heart of our DNA, and also challenges linked to the new trends that we are accompanying. What I see for Bureau Veritas in the coming years is precisely this dual picture. On the one hand, this means gaining leadership positions in activities and sectors that represent our core expertise. On the other hand, it means taking an even more innovative, proactive and agile approach by analyzing our clients’ future challenges and adapting our services to support them on new paths._______ ›

Our 2025 strategy is therefore based on three pillars. The first, “Scale,” will consist of creating value through organic growth, in particular by accelerating replication of our products and services, and improving our operational performance. With the second, “Expand,” we will capitalize on our know-how to penetrate adjacent markets such as renewable energies. With the third, “Lead,” we will sow the seeds of the future, taking full advantage of technological evolutions, positioning ourselves for future changes and investing in areas that could be the core of our business in the future. At the same time, our BV Green Line, which today accounts for more than 50% of our sales, has strong growth potential and is part of our stated desire to support our clients in achieving greater transparency and credibility in their CSR commitments. Our common culture, strong governance, capacity for innovation and the power of our brand will be critical catalysts for our development as well as for the commitment of our teams to serve our clients, shareholders and society as a whole.

“I am convinced of the relevance of our corporate mission, which is to Shape a World of Trust by ensuring responsible progress. This is the virtuous loop of a Business to Business to Society company.”

 OLIVIER PEYROT 

Vice-President, Human Resources Group Corporate Functions – France

ONE OF BUREAU VERITAS’ MAIN CHALLENGES IS RECRUITMENT. TODAY WE HAVE 80,000 TRUST MAKERS – IN THE VERY NEAR FUTURE, THERE WILL BE 90,000 OR 100,000. WHICH ADVICE WOULD YOU GIVE TO AN HR MANAGER OR A LEADER TO ATTRACT NEW TALENT?

 DIDIER MICHAUD-DANIEL 

Chief Executive Officer

For a services group like Bureau Veritas, present in 140 countries and employing around 80,000 people, nothing is more valuable than human capital: it is this perfect combination of our employees’ expertise and commitment that makes Bureau Veritas a company like no other. What are today’s talents looking for when they consider joining a new company? The pursuit of meaning, and a sense they are making a real contribution and a positive impact. Are there many companies in the world whose mission is more relevant to society’s challenges, and more valuable than ours? Shaping a World of Trust around sustainability topics! What could be more rewarding than knowing that every day, through your work, you will have a positive impact on the lives of millions of people? Every year, we recruit more than 10,000 new talents. In joining Bureau Veritas, they are certain that they can leave their mark, while embodying our values: Trusted, Responsible, Ambitious & Humble and Open & Inclusive. This is what it means to be a BV Trust Maker. To become real, this promise – this conviction – must be backed up by concrete actions. What we offer our clients, we impose on ourselves with the utmost rigor. Through the “Shaping a Better Workplace” pillar of our CSR strategy, we are doing everything we can to foster an environment that is conducive to trust and development – notably by promoting inclusion, gender equality, respect for the environment and the promotion of a fair and ethical ecosystem. We have set ourselves ambitious goals for 2025 in this regard. These include offering a large amount of training for all our employees – 35 hours per person – and ensuring that 35% of executive leadership positions are held by women. Of course, we will continue to make Ethics, Safety and Financial Control our Absolutes. They are the pillars of our shared culture.

 JING HAN 

Senior Vice-President, CIF Greater China & CIF North East Asia Operating Region – China

ON THE GROUND, I SEE BOTH INCREASED AGILITY AND RESILIENCE. CAN YOU SUMMARIZE HOW THIS HAS BEEN DEMONSTRATED ACROSS THE GROUP?

 DIDIER MICHAUD - DANIEL 

Chief Executive Officer

Indeed, in this unprecedented period, our people have shown remarkable agility and resilience. By maintaining momentum across our business, remaining committed to our clients, and accelerating in ways we had already begun, they have enabled the company to weather the crisis and emerge even stronger than before. I am extremely grateful to them. For while this crisis has confirmed the resilience of our business model – supported by the diversification we have undertaken since 2015 – it has also been a catalyst for issues such as health and hygiene, digitalization, supply chain management and sustainable development. A catalyst, if not an accelerator: more than ever, our clients depend on us, our expertise, our impartiality and our independence, to provide tangible proof of their commitments and create a basis for trust with their own clients. In addition, we have been able to offer new and innovative services – such as remote inspections – that have enabled on-site activities to continue. We have also implemented digital platforms for better supply chain traceability. Thanks to the energy of the men and women of Bureau Veritas, the Group has remained strong. Their commitment is a key enabler as we put our 2025 Strategic Direction into practice. I would also like to underline the unfailing support of our shareholders throughout this period: they are an essential cornerstone of our success, today and tomorrow.

 RAJIV SABHARWAL 

Vice-President, Business Development – Energy – USA

INTUITIVELY, I UNDERSTAND WHAT BTOBTOS IS, BUT IN PRACTICAL TERMS, WHAT DOES IT MEAN FOR US AND OUR CLIENTS?

 DIDIER MICHAUD - DANIEL 

Chief Executive Officer

Thank you for asking this relevant question, Rajiv. Being a Business to Business to Society company relies on three fundamental pillars. First, it means putting our clients at the heart of our mission. The very nature of our business gives us a unique positioning: we operate at the interface between companies and decision makers on the one hand, and citizens and consumers on the other. We build a bridge between the objectives of the former and the aspirations of the latter, with the ultimate goal of a positive impact for all. Second, being a BtoBtoS company means acting with humility when faced with the challenges of each era. Our two centuries of experience and our multi-sector expertise enable us to gauge the issues that companies face today in combining growth with a positive impact on society and the environment. Sometimes, depending on the sector and the nature of the business, changes toward more sustainable and virtuous models take time. It is also our role to support these transitions and to act where the shifts are the most complex. Finally, it means regarding human capital as our most valuable asset. It means creating a work environment conducive to trust and to the development of everyone. It means acting responsibly and sustainably everywhere in the world ourselves. It means fostering inclusion, gender equality and the promotion of a just and ethical ecosystem. It also means creating, through human endeavor, the right conditions for a common ambition: to leave a positive mark on the world we live in via projects that everyone can contribute toward. In this way, we can ensure that the company’s values are fully expressed. Companies now have a duty of citizenship and a societal mission that goes beyond their core business. We are here to support them, with independence and impartiality, in their desire to combine growth with a positive impact on society and the environment. I am convinced of the relevance of our corporate mission, which is to Shape a World of Trust by ensuring responsible progress. This is the virtuous loop of a Business to Business to Society company. _

For Bureau Veritas, progress only makes sense when it is responsible and inclusive. The Group is therefore committed to helping its stakeholders and value chain partners take this approach, considering that responsible progress is the fundamental bedrock for Shaping a World of Trust.

SHARE OUR VISION OF RESPONSIBLE PROGRESS

The Group has been shaping trust between businesses, governments and society since 1828, by acting as an independent, expert and impartial guarantor of its clients’ word. The Group’s employees are focus on clients and driven by society. They ensure that Bureau Veritas is a Business to Business to Society company that contributes to positively transforming the world we live.

Bureau Veritas has placed its purpose at the heart of its business model for its employees, clients, partners, shareholders and society as a whole. What does that mean in concrete terms?

Being a BtoBtoS* company means first and foremost putting our clients at the heart of our mission.

The very nature of our business gives us a unique positioning: we operate at the interface between companies and decision makers on the one hand, and citizens and consumers on the other. We build a bridge between the objectives of the former and the aspirations of the latter, with the ultimate goal of a positive impact for all.

Being a BtoBtoS company means acting with humility when faced with the challenges of each era.

Our two centuries of experience and our multi-sector expertise enable us to gauge the issues that companies face today in combining growth with a positive impact on society and the environment. Sometimes, depending on the sector and the nature of the business, changes towards more sustainable and virtuous models take time. It is also our role to support these transitions and to act where the shifts are the most complex.

Being a BtoBtoS company means regarding human capital as our most valuable asset.

It means creating a work environment conducive to trust and to the development of everyone. It means acting responsibly and sustainably everywhere in the world ourselves. It means fostering inclusion, gender equality and the promotion of a just and ethical ecosystem. It also means creating, through human endeavor, the right conditions for a common ambition: to leave a positive mark on the world we live in via projects that everyone can contribute toward. In this way, we can ensure that the company’s values are fully expressed.

TEAMWORK

Bureau Veritas’ 80,000 employees work in 140 countries and in almost all sectors of the economy. Wherever the Group is situated, Bureau Veritas cultivates an open-minded and inclusive environment. Ethics, Safety and Financial control are our Absolutes. These three Absolutes are prerequisites for the business, without which Bureau Veritas employees could not carry out their jobs. The Group’s employer brand, centered around the motto “Leave Your Mark,” was drafted in alignment with the fundamentals of the Group’s purpose. Bureau Veritas employees are guardians of integrity and act as entrepreneurs, with ambition and high standards.

They shape trust between companies and their stakeholders by striving for excellence and independence.

* Business to Business to Society

TRUST IS THE VERY FOUNDATION

upon which relationships between citizens, public authorities, and companies are built. In today’s fast-changing world, this essential link is not a given.

SHAPING A WORLD OF TRUST BY ENSURING RESPONSIBLE PROGRESS

As a global leader at the heart of economic and social issues, Bureau Veritas has a dual development model that is both sustainable and responsible. This model serves both its development ambitions and its convictions, its commitment to having a positive impact on people and the planet, and the expectations of its stakeholders. It is a forward-looking model, which creates value for all.

ACCELERATE THE PATH TO THE FUTURE

For Bureau Veritas, 2015 to 2020 was a period of profound transformation. The Group emerged from this strategic plan more diverse, more resilient, more efficient, more robust and more digital.

MORE DIVERSE AND RESILIENT

To strengthen its resilience and create growth platforms, the Group re-worked its portfolio of activities, pivoting its business model toward key markets and services that are less subject to cyclical changes. One of the main objectives of the 2015-2020 strategic plan was to diversify its businesses and to move toward markets shaped by urbanization and consumerism. In construction and infrastructure, we developed new platforms in China, Latin America, the United States and Southeast Asia while maintaining our already strong position in Europe. During this period, Bureau Veritas developed a leading position in the agri-food market, particularly in Asia – where a large percentage of the world population lives – thanks to a new hub in Singapore as well as one in Latin America. In the Oil & Gas sector, the Group strengthened its presence in Opex services. Finally, the business leveraged opportunities linked to the rapid development of the Internet of Things. We considerably strengthened our expertise and geographical presence to respond to the increased need for testing this equipment, and for developing new services surrounding connectivity and data security. With this dual diversification, both within sectors and geographically, Bureau Veritas opted for a more balanced and long-lasting growth.

MORE EFFICIENT AND ROBUST

The Group, a world leader after two decades of strong external growth, focused on strengthening its managerial teams, adapting its processes and modernizing its tools. This transformation was carried out in various ways:

MORE DIGITAL

The business’s expertise surrounding new technologies greatly increased during the last two years of the strategic plan, which highlighted 3 priorities:

* Building Information Modelling.

The structure of the portfolio is now more resilient, thanks to the rebalancing between the Capex services (investment phase relating to design and construction), Opex & Management Systems and Products. The Opex segment, consisting of recurring contracts mainly related to regulations and standards, offers long-term visibility and helps build client loyalty.

(1) As of December 31, 2021.

To put our 2025 Strategic Direction into action, and reach our ambition, we rely on solid fundamentals. These include a robust governance — which provides impetus and ensures we successfully deploy our major strategic directions — and a business model that creates value.

CREATE CONDITIONS FOR TRUST

 SELECTION CRITERIA FOR OUR DIRECTORS 

The Board of Directors believes that diversity within its Director selection process is of the utmost importance. Diversity fosters energy, creativity and performance and ensures that the Board’s debates and decisions are of the highest quality.

 PRIORITIES IN 2021 

COMPOSITION

ALDO CARDOSO

French nationality Chairman of the Board of Directors, independent

•     Board member since 2009 and Chairman since 2017, Aldo Cardoso has held various positions at Arthur Andersen, including Chief Executive Officer of Andersen Worldwide (2002-2003). Aldo Cardoso is a graduate of the École supérieure de commerce de Paris, has a Master’s degree in Business Law and is a certified public accountant in France. He is a company director.

Committees:

ANDRÉ FRANÇOIS-PONCET

French nationality Vice-Chairman of the Board of Directors and Chairman of the Strategy Committee

•     A graduate of the École des Hautes Études Commerciales and holder of an MBA from Harvard Business School, André François-Poncet began his career in 1984 at Morgan Stanley in New York. He is currently CEO of the Wendel Group.

Committees:

JÉRÔME MICHIELS

French nationality Member of the Board of Directors

•     A graduate of the École des Hautes Études Commerciales, Jérôme Michiels started his career as a consultant for Boston Consulting Group, then as Chargé d’affaires with the investment fund BC Partners. He joined Wendel at the end of 2006 and is now Deputy Managing Director, Associate Director, Financial Director and Director of Operational Resources of the Group. In 2020, he was appointed as a cybersecurity sponsor for Bureau Veritas.

Committees:

CHRISTINE ANGLADE PIRZADEH

French nationality Member of the Board of Directors

•     Having graduated with a Master’s degree in European and International Law (Paris I University) and a postgraduate degree in Communications Law (Paris II University), Christine Anglade Pirzadeh has been Director of Sustainable Development and Communication at Wendel since October 2011.

JULIE AVRANE

French nationality Member of the Board of Directors, independent

•     Former Senior Partner at McKinsey & Company in France, specializing in high technology, advanced industries and talent/the workplace of the future, Julie Avrane is a graduate of the École Nationale Supérieure des Télécommunications de Paris and the Collège des Ingénieurs. She also holds an MBA (Master in Business Administration) from INSEAD.

Committees:

CLAUDE EHLINGER

Luxembourgish nationality Member of the Board of Directors

•     A graduate of the École des Hautes Études Commerciales, Claude Ehlinger joined Wendel in 2016 as Chief Executive Officer of Oranje-Nassau, Managing Director and a member of the Investment Committee. He has been Senior Advisor since 2019. He is Chairman and independent non-executive director of LCH SA (central clearing house).

Committees:

SIÂN HERBERT-JONES

British nationality Member of the Board of Directors, independent Chair of the Audit & Risk Committee

•     With a Master of Arts in History from Oxford University and a Chartered Accountant certification in the United Kingdom, Siân Herbert-Jones began her career at PricewaterhouseCoopers before joining the Sodexo group in 1995. From 2001 to 2016, she served as Chief Financial Officer of Sodexo.

Committees:

PHILIPPE LAZARE

French nationality Member of the Board of Directors, independent

•     A graduate of the Parisla Défense École Supérieure d’Architecture, Philippe Lazare has held leading management positions in major industrial and service groups: PSA, Sextant Avionics, Air France, Eurotunnel and La Poste. Having joined Ingenico Group in 2007, he was Chairman and Chief Executive Officer until November 2018. Since the end of 2018, he has been a company director.

Committees:

PASCAL LEBARD

French nationality Chairman of the Nomination & Compensation Committee, independent

•     A graduate of the École des Hautes Études Commerciales du Nord, Pascal Lebard began his career as Business Manager at Crédit commercial de France before taking up management positions in various companies. In 2003, he joined Worms & Cie (which became Sequana in 2005) as a member of the Supervisory Board and as a member and then Chairman of the Executive Board (2004-2005). Between 2013 and 2021, he was Chairman and Chief Executive Officer of Sequana. He has been Chairman of Equerre Capital Partners since 2021.

Committees:

ANA GIROS CALPE

Spanish nationality Member of the Board of Directors, independent

•     An engineer with degrees from the Polytechnic University Barcelona and from INSEAD business school in France, Ana Giros Calpe is Senior Executive Vice-President in charge of International, Infrastructure, Performance, and Research & Development at the Suez group and member of the Executive Committee.

Committees:

FRÉDÉRIC SANCHEZ

French nationality Member of the Board of Directors, independent

•     A graduate of the École des Hautes Études Commerciales, the Institut d’études politiques de Paris and holder of a post-graduate qualification in economics (DEA) from Paris-Dauphine University, Frédéric Sanchez began his career working at Renault in Mexico and subsequently the United States, before joining Ernst & Young in 1987 as a mission manager. In 1990, he joined the Fives-Lille group (renamed Fives in 2007). In 2002, he became Chairman of the Executive Board of the company.

Committees:

LUCIA SINAPI-THOMAS

French nationality Member of the Board of Directors, independent

•     A graduate of the École Supérieure des Sciences Economiques et Commerciales, and Paris II – Panthéon Assas University (LLM, 1988), Lucia Sinapi-Thomas was admitted to the Paris bar and is a certified financial analyst. She started her career as a tax and business lawyer in 1986, before joining Capgemini in 1992. She is now Executive Director of Capgemini Ventures and a Board member at Capgemini SE.

Committees:

Bureau Veritas is a global leader in Testing, Inspection and Certification (“TIC”) services.

The Group’s mission is to reduce its clients’ risks, improve their performance and help them innovate to meet the challenges of quality, health and safety, and sustainable development. Leveraging its renowned expertise, as well as its impartiality, integrity and independence, Bureau Veritas has helped build trust between companies, public authorities and consumers for more than 190 years.

The services provided by Bureau Veritas are designed to ensure that products, assets and management systems conform to different standards and regulations in terms of quality, health, safety, environmental protection and social responsibility (“QHSE”).

Depending on its clients’ needs and on applicable regulations, standards or contractual requirements, Bureau Veritas acts:

• ●as a “third party”, i.e., an independent body issuing reports and conformity certificates for products, assets, systems, services or organizations;
• ●as a “second party” on behalf of and upon the instructions of its clients to ensure better control of the supply chain; or
• ●as a “first party” on behalf of clients seeking to ensure that the products, assets, systems or services they are producing or selling meet the requisite standards.

The services delivered by Bureau Veritas cover six areas of value creation for its clients:

Companies must be able to show that they are compliant with a large number of standards and regulations. Bureau Veritas offers them its in-depth knowledge of the standards applicable to their businesses, and as an independent third party, is able to verify their compliance. This allows them to conduct and develop their businesses in compliance with local and international regulatory requirements and to obtain and renew the licenses to operate issued by public authorities.

International trade relies among other things on third-party players who certify that the goods exchanged comply with the quality and quantities stipulated in the contract between the parties. Bureau Veritas plays a role in the trade process by testing materials, verifying that goods comply with contractual specifications and validating quantities. Exchanges of commodities, for example, are based on certificates issued by companies such as Bureau Veritas.

Capital goods or mass consumer products must comply with national and supranational standards before being sold on the market in a given country. These standards constitute technical trade barriers within the meaning of the WTO. Companies design and manufacture their products and equipment to meet the standards of several countries. In doing so, they call on Bureau Veritas to carry out tests, optimize their test plan and ultimately reduce time-to-market.

Managing risk in the areas of quality, health, safety, environment protection and social responsibility improves the efficiency and performance of organizations. Bureau Veritas helps its clients to identify and manage these risks, from project design to completion and decommissioning.

Thanks to second- and third-party testing, inspection and auditing methods, companies can determine the actual condition of their assets and launch new projects and products safe in the knowledge that costs, timing and quality are under control. During the operational phase, inspections help optimize maintenance and the useful life of industrial equipment.

The social network boom of recent years has prompted a fundamental change in how global brands are managed. Brands may quickly find themselves under fire due to the malfunction of one of the links in their supply or distribution chain. Bureau Veritas allows companies to improve their risk management, using analyses conducted by a highly reputed independent player.

The “Information Office for Maritime Insurance” was founded in Antwerp, Belgium, in 1828 to collect, verify and provide shipping underwriters with information on the condition of ships and equipment. Renamed Bureau Veritas, the Company transferred its registered office to Paris and built up an international network.

To the Group’s knowledge, there is no comprehensive report covering or dealing with the markets in which it operates. As a result, and unless otherwise stated, the information presented in this section reflects the Group’s estimates, which are provided for information purposes only and do not represent official data. The Group gives no assurance that a third party using other methods to collect, analyze or compile market data would obtain the same results. The Group’s competitors may also define these markets differently.

Inspection, certification and laboratory testing services in the areas of quality, safety, performance, and social and environmental responsibility are commonly referred to as Testing, Inspection and Certification (“TIC”). TIC services encompass several types of tasks, including laboratory or on-site testing, management process audits, documentary checks, inspections across the entire supply chain and data consistency verification. These activities may be carried out on behalf of the end user or purchaser, independently of stakeholders or at the request of the manufacturer, or on behalf of public or private authorities. TIC services are called for at every stage of the supply chain and apply across all industries.

The overall TIC market depends on product and asset values and the associated risk. The TIC “intensity” corresponds to the proportion of the value of the product or asset allocated by the manufacturer of the product or the operator of the asset to control activities. In general, the TIC intensity falls within a range of between 0.1% and 0.8% of the value of the product or asset. The total estimated value of the TIC market can be calculated by multiplying the TIC intensity by the amount spent by manufacturers, operators, and the buyers and sellers of goods and products.

On a short- and medium-term basis, the size of the market mainly varies in relation to inflation, global economic activity, investment and international trade. Applying the aforementioned approach, Bureau Veritas estimated the size of the global TIC market in 2021 at close to €250 billion, based on external macroeconomic data such as investment volume per market, operational spending per market, the production value of goods and services, and the level of imports and exports.

The overall TIC market can be broken down into two segments:

• ●the accessible (outsourced) market, where services are provided by specialized private organizations or firms, such as Bureau Veritas;
• ●the internal (insourced) market, where the companies themselves perform these services as part of quality control and assurance; along with the market served by public bodies and organizations such as customs, competition authorities, port authorities or industrial health and safety authorities.

The outsourced TIC market also depends on a country’s administrative organization, whether or not it has a federal structure, and the industry concerned. Over time, these factors may have a significant impact on the size of the market, irrespective of the underlying macroeconomic conditions. The balance between insourcing and outsourcing therefore fluctuates from year to year, depending on the policies implemented by governments or changes in practices within industry sectors. This is the case in China, for example, where certain sectors are opening up gradually.

In short, the size of the accessible TIC market is the result of three factors:

• ●end-user expenditure;
• ●the TIC “intensity” of products (fairly stable in the short term but may increase in the long term due to stricter standards and regulations);
• ●the extent to which businesses subcontract these services (the trend shows that this is increasing).

From a geographical point of view, the TIC market can be split into three main regions: Europe, the Americas and Asia. Bureau Veritas is present in all of these regions thanks to the investments it has made over the past 15 years. Going forward, the Group plans to bolster its positioning, particularly in the fastest-growing markets such as China and the United States.

Bureau Veritas has an extensive global network of around 1,600 offices and laboratories in almost 140 countries.

This network is particularly well developed in countries with mature economies (e.g., France, the United States, Canada, Japan, the United Kingdom, Spain, Italy, the Netherlands, Australia and South Korea), which have a strong regulatory background and where the Group is recognized for its technical expertise and innovative production models.

Bureau Veritas is also well established in faster growing economies like China, Brazil, Chile, Colombia, the United Arab Emirates and India, where it has built solid growth platforms with a strong local presence over time. The Group continues to expand its exposure to these regions by opening new offices and laboratories and systematically developing each of its businesses in these markets.

The Group’s scale is one of its core assets, providing value and differentiation both commercially and operationally.

From a sales standpoint, its global network enables the Group to service key accounts (around one-quarter of the Group’s revenue) and thereby win major international contracts, which represent a growing part of its activity.

From an operational standpoint, the Group improves its profitability by generating economies of scale resulting in particular from sharing offices, back-office functions and IT tools, and from amortizing the cost of developing and replicating new services and industrializing inspection processes over a larger base.

The organization into regional hubs located in key countries enables the Group to spread knowledge, technical support and sales teams across a given region.

In the future, the Group aims to strengthen this network organization around regional hubs, enabling it to generate scale effects.

Bureau Veritas has built a successful global business based on its long-standing reputation for technical expertise, high quality and integrity. This reputation is one of its most valuable assets and is a competitive advantage for the Group worldwide.

Over the years, the Group has acquired skills and know-how in a large number of technical fields, as well as broad knowledge of regulatory environments. Bureau Veritas is currently accredited as a second or third party by a large number of national and international delegating authorities and accreditation bodies. The Group constantly seeks to maintain, renew and extend its portfolio of accreditations and authorizations. It is subject to regular checks and audits by authorities and accreditation bodies to ensure that its procedures, the level of qualification of its personnel and its management systems comply with the requisite standards, norms, guidelines or regulations.

Integrity, ethics, impartiality and independence are some of Bureau Veritas’ core values and are central to its brand reputation and the value proposition for its clients.

These values are the focal point of the work carried out by the TIC profession in 2003 under the leadership of the TIC Council (the international association representing independent testing, inspection and certification companies), which led to the drafting of the Group’s first Code of Ethics, published in October 2003.

Bureau Veritas’ financial model has the following four characteristics:

• ●it is based on two growth drivers: primarily organic growth, supported by growth through acquisitions. Average organic growth over the past five years (including a 6.0% decline in 2020 in the context of the crisis caused by the Covid-19 pandemic) was around 3%;
• ●it is a profitable growth model, with a high adjusted operating margin. Historically, it is slightly above 16% on average;
• ●it generates significant and regular cash flow: the Group’s free cash flow has averaged around €540 million over the last five years. It should be noted that Bureau Veritas has paid very close attention to its cash flow and liquidity – particularly in terms of its working capital requirements – especially in recent years. These efforts have been stepped up in the context of the health crisis;
• ●it is underpinned by the Group’s strategy of strict capital allocation: net debt must be maintained well below bank ratios and the Group must be able to fund acquisitions and pay dividends.

Bureau Veritas’ financial ambition is presented in section 1.4.6 – Financial and non-financial ambition of this Universal Registration Document.

Bureau Veritas classifies ships and offshore facilities by verifying their compliance with classification rules, mainly regarding structural soundness and the reliability of all related equipment. This mission is usually carried out together with the regulatory (“statutory”) certification mission.

Class and regulatory certificates are essential for operating ships. Maritime insurance companies require such certificates to provide coverage, and port authorities regularly check that valid certificates exist when ships come into port. Similarly, keeping existing offshore facilities in compliance with safety and quality standards, as well as regulatory requirements is crucial for operators.

Marine & Offshore services are designed to help clients comply with regulations, reduce risk, and increase asset lifecycles while protecting the marine environment. The Group’s services begin at the construction phase, approving drawings, inspecting materials and equipment, and surveying at the shipyard. During the operational life of the assets, Marine & Offshore experts make regular inspections and offer a comprehensive range of technical services including asset integrity management. On behalf of its clients, Bureau Veritas monitors any changes in regulations, identifies applicable standards, manages the compliance process, reviews design and execution and liaises with the competent authorities.

The Group has also diversified into several complementary services, including loss adjusting and risk assessment for the offshore industry (acquisition of MatthewsDaniel in 2014) and marine accident investigations, pre-and post-salvage advice and the re-floating of vessels (acquisition of TMC Marine Ltd. in 2016). It also created Bureau Veritas Solutions Marine & Offshore in 2018.

In 2021, 40% of Marine & Offshore revenue was generated by the classification and certification of ships under construction and 60% was generated by the surveillance of ships in service and complementary services.

The Group is a member of the International Association of Classification Societies (IACS), which brings together the 12 largest international classification societies. They classify more than 90% of world tonnage, with the remaining fleet either not classified or classified by small classification companies operating mainly at the national level.

To meet the needs of its clients, the Marine & Offshore network spans 90 countries. In addition to 18 local design approval offices located near its clients, the Group’s network of 180 control stations gives it access to qualified surveyors in the world’s largest ports. This means that inspections can be conducted on demand and without the delays that could be detrimental to the ship’s business and owner.

Bureau Veritas ranks number one worldwide in terms of the number of classed ships and number six worldwide in terms of tonnage. The Group has recognized technical expertise in all segments of maritime transport (bulk carriers, oil and chemical tankers, container ships, gas carriers, passenger ships, warships and tugs) and offshore facilities for the exploration and development of both coastal and deep-water oil and gas fields (fixed and floating platforms, offshore support vessels, drill ships, subsea facilities). The fleet classed by Bureau Veritas is highly diverse, and the Group holds a leading position in the market for highly technical ships such as liquefied natural gas (LNG)-fueled vessels, LNG or liquefied petroleum gas (LPG) carriers, FPSO/FSO floating production systems, offshore oil platforms, cruise ships, ferries, and specialized ships.

The Group has several thousands of clients, and the largest represents 0.9% of the business segment’s revenue. Key clients are:

• ●shipyards and shipbuilders around the world;
• ●equipment and component manufacturers;
• ●ship owners;
• ●oil companies and Engineering, Procurement, Installation and Commissioning (EPIC) contractors involved in the construction and operation of offshore production units;
• ●insurance companies, P&I clubs(9) and lawyers.

In millions of gross registered tonnage (GRT)

International regulations applicable to maritime safety and environmental protection continue to evolve, providing classification companies with growth opportunities. These include:

• ●new regulations to reduce greenhouse gas emissions for new and existing ships in accordance with the international conventions adopted under the aegis of the International Maritime Organization (IMO) and the European Union. To respond to these regulatory requirements and to help ship owners in their energy transition, Bureau Veritas has developed a range of dedicated services and tools. The upcoming adoption of emissions reduction goals for existing ships opens up a wide spectrum of new activities for Bureau Veritas targeting in-service fleets that will have to comply with an energy performance improvement trajectory starting in 2023;
• ●the publication by the European Commission in July 2021 of a series of measures known as the “Fit for 55” package, a milestone in the environmental transition of the freight transport industry. “Fit for 55” sets out a roadmap for achieving the European Union’s stated ambition of a 55% reduction in greenhouse gases by 2030. One of the main measures concerning shipping consists of bringing it into the emissions trading system (EU ETS). This market-based approach to reducing GHG intensity through a market instrument is rounded out by a technical measure known as FuelEU Maritime, which requires (i) ships to improve their energy efficiency by 2050 through the use of cleaner fuels and (ii) passenger lines and container ships to use on-shore power when in port as from 2030;
• ●the 2004 convention on Ballast Water Management (BWM) adopted under the aegis of the IMO, which makes it mandatory to obtain approval for ballast water treatment systems and imposes changes in ship design. These regulations came into force in September 2017 and have since been the object of various implementation measures, giving classification societies a greater role in verifying the effectiveness of ballast water management systems in various configurations, once installed on-board;
• ●the Hong Kong international convention on ship recycling, which was adopted in May 2009 and will come into force 24 months after it has been ratified by 15 countries. This should represent at least 40% of the gross tonnage of the global merchant vessel fleet;
• ●the European Ship Recycling Regulation, which came into force at the end of 2018 for new ships and as from January 1, 2021 for existing ships and those flying the flag of a non-Member State. The regulation requires ships to have on board a certified inventory of hazardous materials (IHM);
• ●regulations applicable to ships for inland navigation transporting hazardous materials. Bureau Veritas is one of three classification societies recognized by the European Union;
• ●the new International Association of Classification Societies (IACS) unified requirement concerning on-board use and application of computer-based systems, which came into force on July 1, 2016. This has since been rounded out by the Recommendation on Cyber Resilience. This issue is becoming ever more important given the corresponding increase in cyber risk, and has led the IMO to encourage governments to ensure that cyber risks are appropriately addressed in safety management systems (SMS) as from January 1, 2021. The IACS plans to consolidate its set of rules in the coming months;
• ●a global move towards a “safety case” system, which is emerging for the offshore industry and requires the expertise of an independent verification body;
• ●Regulation (EU) No. 2015/757 of the European Parliament and of the Council of the European Union dated April 29, 2015 on the monitoring, reporting and verification (MRV) of carbon dioxide emissions from maritime transport, which came into force on July 1, 2015. Monitoring plans were submitted for verification in 2017 while emissions reports are to be submitted for verification in 2019. The IMO’s mandatory Data Collection System (DCS) for tracking the fuel oil consumption of ships was also introduced in 2019. The European Union’s efforts to align the two systems have led to moves to include the shipping industry in the EU’s emissions trading system. In this respect, the MRV regulation should be central to the implementation of the aforementioned new regulations included in the “Fit for 55”;
• ●the IMO Guidelines for Ships Operating in Polar Waters, or “Polar Code”, which came into effect on January 1, 2017. The IMO has also decided to ban the use of heavy fuel oil in the Arctic region as from January 1, 2024;
• ●Annex VI (amended) of the MARPOL convention, which reduced the maximum worldwide sulfur content of fuel oil used by ships to 0.50% (from 3.50% previously) as from January 1, 2020;
• ●even though the issue of ship automation has taken a backseat to environmental considerations in the various agendas, the IMO has continued its work of identifying issues that ships with varying degrees of automated processes raise with regard to current ship safety treaties. This work will continue over the next few years, with the aim of drawing up a specific body of regulations for this type of vessel.

After the Covid-19 pandemic had severely impacted the shipping market and led to a sharp drop in orders in 2020, the winter of 2020-21 and most of 2021 saw an increase of almost 100% (versus 2020) in orders for new vessels. This surge in new orders (driven by the increase in liquefied natural gas and container shipping) and the reduction in the prices applied by shipyards, which developed their LNG expertise in parallel for large vessels in order to limit CO2 emissions, have led to full order books for the largest shipyards. This resulted in an increase in shipyard prices at the end of 2021, and therefore in a fall in new orders from ship owners. Gas transportation, very large bulk carriers (such as newcastlemax and neo-panamax) and small container ships are still enjoying good momentum in terms of new orders. Other sectors are looking ahead to a rally in global transportation volumes.

The choice of future propulsion technologies amid increasingly strict regulations on reducing greenhouse gas emissions is a subject of increasing urgency within the industry. The deadlines set by the IMO (as from 2023, and then by 2030 and 2050), entail difficult decisions for ship owners, which either need to opt for solutions still being developed, or for solutions that are not wholly satisfactory and are based on inputs that are still unknown, particularly in terms of bunkering facilities for the new, cleaner fuels. In Asia, the recovery in economic activity and shipbuilding led to an upturn in certain segments as from the fourth quarter of 2020. The hard-hit passenger ship sector (cruise liners and ferries) is showing early signs of a recovery, like the tourism industry at large. Tanker and energy markets are also showing encouraging signs of an upturn. The key players in both of these segments – major liners and oil companies – have opted for LNG fuel, currently considered the best technology for the transition. Bureau Veritas has capitalized on its LNG leadership, offering its classification services for LNG carriers, bunker vessels and other LNG-fueled vessels.

Bureau Veritas has continued to capture market share and the entire existing fleet also continued to grow in all segments, underlining the Group’s operational excellence. In 2022, Bureau Veritas will continue to support its ship owner, shipyard and charterer clients in transitioning to cleaner energy, lending technical expertise to solutions for today’s and tomorrow’s world. On offshore markets, extreme volatility in oil prices has threatened the profitability outlook for many projects. The result has been a virtual freeze in FPSO and drilling rig orders. However, 2021 saw a significant rise in investments from incumbent oil companies in offshore wind farm projects, for both fixed and floating wind turbines.

Ship owners and offshore operators are increasingly concerned about sustainability, while at the same time having to control costs. Against this backdrop, Bureau Veritas is concentrating on three key areas:

• ●digitalization;
• ●solutions integrated within the BV Green Line; and
• ●high value-added services.

The digital revolution in the maritime industry is gathering momentum. Through its Digital Classification services, Bureau Veritas Marine & Offshore is reinventing the role of technology in the operating model for classifying its clients’ ships and offshore facilities. By leveraging digital twin, drone, remote virtual visit, artificial intelligence and cloud platform technologies, Bureau Veritas can help its clients make safer, more effective, data-driven decisions.

Digital Classification comprises four key services:

• ●3D classification is bringing the design review and monitoring process for the construction of new vessels and offshore facilities into the digital age using a 3D model. This eliminates the need for 2D drawings and offers a collaborative solution for users to interact directly with the 3D model. Ship owners, shipyards, ship designers and Bureau Veritas can therefore work more effectively across a collaborative platform to perform calculations, exchange updated information and address classification comments.
• ●Remote inspection techniques using smart devices such as drones, crawlers and remotely operated vehicles. On-board surveyors can safely inspect hazardous or difficult-to-access areas of ships, while ship owners and operators can reduce scaffolding costs and better anticipate the extent of repairs to be planned.
• ●Optimized and predictive survey schemes allowing clients to set up inspection programs based on an analysis of risks specific to their facility and equipment, and an in-service monitoring and maintenance program based on predictions of the operating condition of their equipment. In 2021, Bureau Veritas launched the first pilot of its “BV Machinery Maintenance” digital solution. This solution is designed to facilitate the implementation of maintenance plans for ship machinery, the in-service supervision of this maintenance and its continuous improvement throughout the ship’s operation. Based on real-time data, BV Machinery Maintenance offers clients time and cost efficiencies.
• ●Remote and augmented reality surveys use digital tools to help ship owners and operators perform eligible classification inspections in a safer, more flexible and effective manner by reducing logistics costs such as transport and on-board access preparation. The remote inspection solution rolled out by Bureau Veritas is based on virtual ship visits that do not require any specific on-board equipment. The Group has also reorganized its operating teams with the launch of a network of eight remote inspection centers.

As a classification society, Bureau Veritas Marine & Offshore works with the shipping industry, from offshore operators to ship owners and port authorities. The Group is committed to reducing the environmental impact of its industry and supports its stakeholders in working towards their unique sustainability goals. Bureau Veritas helps its clients comply with environmental regulations, implement sustainable on-board solutions, and gauge their decarbonization progress, for example.

The BV Green Line of services supports the maritime industry in:

• ●developing and implementing rules and guidelines for new fuels and alternative propulsion solutions;
• ●validating the sustainable origins of alternative fuels;
• ●providing LNG expertise and project support;

• ●electrifying sea-going vessels;
• ●developing infrastructure for new fuels;
• ●onshore & offshore wind lifecycle solutions;
• ●engineering services for sustainability performance;
• ●sustainable construction in shipyards;
• ●marine pollution prevention;
• ●responsible fishing practices;
• ●ensuring the safety of the crew and passengers;
• ●on-board health, safety and hygiene protocols.

In 2021, Bureau Veritas Marine & Offshore launched its VeriSTAR Green platform. This online platform helps guide ship owners (who may or may not be BV customers) in managing and implementing IMO and EU energy efficiency regulatory requirements.

Developing strong value-added services remains an important growth driver for Bureau Veritas Marine & Offshore. These services are supported by major portfolios and brands, including Bureau Veritas Solutions Marine & Offshore, MatthewsDaniel and TMC Marine.

Bureau Veritas Solutions Marine & Offshore is a separate and independent organization providing clients with technical advice, particularly in terms of the energy transition. Since 2018, Bureau Veritas Solutions Marine & Offshore has reported growing demand for its services, as ship owners and operators look to experts to improve the performance of their assets. Bureau Veritas Solutions Marine & Offshore helps clients manage changes in regulations, particularly in the environmental field (energy transition, emissions monitoring, design support, project management support) and offers services during the shipbuilding phase (engineering, risk analysis) as well as during the asset lifecycle, using new digital tools.

2020 saw the launch of the BVS eAcademy online training platform and of the dedicated Bureau Veritas Solutions Marine & Offshore website.

In 2021, Bureau Veritas Solutions Marine & Offshore integrated the portfolio of MAC (acquired in 2015), allowing it to strengthen its service offering and international presence, particularly in the North Sea.

Its international expansion was also consolidated by the MatthewsDaniel office opened in Aberdeen (Scotland) in September 2021 and aimed at developing the range of services in the field of renewable energy.

To conduct its business, the Group has numerous licenses to operate “Authorizations”, which vary depending on the country or business concerned: accreditations, approvals, delegations of authority, official recognition, certifications or listings. These Authorizations may be issued by national governments, public or private authorities, and national or international organizations, as appropriate.

The Group is a certified founding member of the International Association of Classification Societies (IACS), which brings together the 12 largest international classification societies. At European level, Bureau Veritas is a “recognized organization” under the European Regulation on classification societies and a “notified body” under the European Directive on marine equipment. Bureau Veritas currently holds more than 150 delegations of authority on behalf of national maritime authorities.

As part of its research and innovation strategy, the Group carries out experimental development activities on strategic projects that aim to bolster its positioning or enable it to capture new markets.

The Group’s R&D strategy is rolled down through:

• ●a research partnership with the French Alternative Energies and Atomic Energy Commission (CEA), with which projects are carried out each year on issues such as cybersecurity and IoT;
• ●contracts with innovative technology start-ups and industry players to develop common interest projects, such as artificial intelligence and blockchain;
• ●its involvement in the work of the European Cyber Security Organisation (ECSO) within the context of an EU-driven public-private partnership to define the technological roadmap for the cybersecurity sector;
• ●its partnership with industrial joint research centers like IRT Jules Verne and with academic laboratories such as that of École Centrale de Nantes for developing digital solutions for innovative hydrodynamic studies;
• ●its involvement in subsidized joint projects, notably those financed by the Single Interministerial Fund, and its replies to European calls for projects;
• ●its participation in the Hydrogen Council’s IECRE System, the IEC System for Certification to Standards Relating to Equipment for Use in Renewable Energy Applications;
• ●the shift of its businesses and solutions to digital media, with the development of future inspectors and auditors and inspection/audit services.

The Group is eligible for the research tax credit in France within the framework of its business activities. This tax credit is similar to a subsidy in that it is refundable even if it exceeds the amount of tax payable. Accordingly, it is included in current operating profit.

A €2.0 million research tax credit was recognized as a subsidy in the 2021 consolidated financial statements.

A total of €7.1 million in research and development costs relating mainly to the Marine & Offshore business was recognized under expenses in 2021.

The Group’s IT department is responsible for:

• ●defining the Group’s technological architecture by outlining the standards applicable to all businesses and regions in terms of software application development and network infrastructure;
• ●selecting, implementing, deploying and maintaining integrated cross-functional solutions in all operating units (email, collaboration tools, ERP finance, client relationship management, Human Resources and production systems, etc.);
• ●guaranteeing the availability and security of the infrastructure and integrated solutions used by the Group; and
• ●managing the Group’s overall relationship with its main suppliers of equipment, software and telecommunications services.

The department is organized into six Regional Shared Services Centers, covering North America, Latin America, Europe, France/Africa, Asia and the Middle East/Pacific. These shared services centers provide different support services (network, help desks, hosting, support, etc.) to countries in their respective regions.

A Global Shared Services Center has also been set up in Noida (India) with the aim of pooling certain cross-functional operational support processes.

In 2021, operating expenses and running costs for the Group’s information systems represented around 3% of the Group’s consolidated revenue.

Since 1828, we have acted as trust makers between companies, governments and society. We are independent, impartial guarantors of our clients’ word.

Bureau Veritas is a world leader in laboratory testing, inspection and certification services. Created in 1828, the Group has close to 80,000 employees located in nearly 1,600 offices and laboratories across the globe. Bureau Veritas helps its clients improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.

Bureau Veritas is a Business to Business to Society service company that contributes to positively transforming the world we live in. We work closely with our clients to address the critical challenges they face and to link these to the emerging aspirations of society. We play a pivotal role in building and protecting companies’ reputations, supporting them as they forge the foundations of trust that is built to last.

Trust is the very foundation upon which relationships between citizens, public authorities, and companies are built. In today’s fast-changing world, this essential link is no longer a given.

Citizens and consumers are seeking out verified and verifiable information on how companies develop, produce and supply their goods and services. Decision makers across all organizations face the challenge of proving their CSR commitments in order to remain competitive and sustainable.

At Bureau Veritas, our work enables organizations to operate and innovate safely and perform better. Thanks to our unrivaled expertise, technical knowledge and worldwide presence, we support them by managing quality, safety, health and sustainability risks, to the benefit of society as a whole.

As a Business to Business to Society company, we believe that today more than ever, trust depends on evidence of responsible progress.

We bring more to the table than testing, inspection and certification. The work we do goes beyond verifying compliance and has a much wider impact.

We play a pivotal role in building and protecting companies’ reputations, supporting them as they forge the foundations of trust that is built to last.

Our mission: Shaping a World of Trust by ensuring Responsible Progress.

A Business to Business to Society company

Our employees serve our clients and are inspired by society; they make Bureau Veritas a Business to Business to Society service company that contributes to positively transforming the world we live in.

Shaping a World of Trust by ensuring Responsible Progress.

Sustainability risks and opportunities are analyzed through a process set by the Group’s Risk department. Some 40 risks and opportunities were identified using a bottom-up approach drawing on the expertise of operating and support departments. These were then assessed by impact (financial, human, business, environmental and reputational), occurrence and means for reducing them.

Sustainability risks are included in this analysis. The CSR Steering Committee took part in the selection process. A total of 13 sustainability risks were identified. These have been reviewed by the External CSR Focus Committee. Their findings are shown in the materiality matrix below.

The risks identified were reviewed first by the Audit & Risk Committee, and then by the Board, to oversee implementation of appropriate policies on reducing impacts and frequency, and improving control methods.

Non-financial risks and opportunities for Bureau Veritas are assessed by the External CSR Focus Committee and the CSR Steering Committee. The assessment findings are shown in the materiality matrix below, which was drawn up in 2021.

Most significant changes in risks and opportunities since 2018 (date of the previous risk map):

• ●New risks: Mergers and acquisitions, Market changes, Certificate counterfeiting;
• ●Higher materiality: Climate, Environmental protection, ESG services and Human Rights.

The Bureau Veritas CSR strategy was drawn up by the Group CSR department with active participation from the CSR Steering Committee representing each of the support functions in charge of one or more ESG topics.

Liaison with the Group Strategy department ensured that the CSR strategy was consistent with Bureau Veritas’ corporate strategy. The CSR strategy was submitted first to the Bureau Veritas Chief Executive Officer, then to the Strategy Committee of the Board of Directors, and finally to the Group Executive Committee.

The CSR department took charge of CSR strategy rollout across all operating groups, each setting priorities and goals on the basis of its own particular situation assessment. Action plans were drawn up with each operating group and for each region where necessary. The action plans were determined on the basis of three key factors:

• ●the degree of maturity of the local CSR management system. This is gauged by means of a “sustainability index”, attributed by self-assessment of the implementation of Bureau Veritas’ CSR policies (see 2.3.2);
• ●the performance of the local CSR management system. This is gauged by means of 19 key indicators used by the Group to monitor implementation of the CSR strategy and the achievement of objectives;
• ●local CSR cultural and regulatory characteristics.

Implementation of the CSR strategy is monitored as follows:

• ●monthly by each manager, using the Clarity solution to track the 19 key indicators and progress on the action plans;
• ●quarterly, under the Operating Reviews carried out by each operating group;
• ●annually, by the Chief Executive Officer at the management review held during the first quarter.

The Board of Directors is informed on the implementation of the CSR strategy at least once a year, and the Group Strategy Committee and the Audit & Risk Committee more regularly. The Strategy Committee monitors implementation of the CSR strategy and determines whether it needs to be adjusted to take into account any new regulatory requirements or stakeholder expectations. The Audit & Risk Committee monitors the data reporting process and the consistency and reliability of indicators.

Bureau Veritas’ sustainable development strategy is built on two key pillars:

• ●Bureau Veritas’ ESG services offering addressing needs emerging from clients’ environmental and social transitions. This is outlined in sections 2.7.2 – The BV Green Line of services and solutions, and 2.7.3 – Market changes in CSR. It reflects the Group’s business strategy;
• ●corporate social and environmental responsibility, which is reflected in Bureau Veritas’ implementation of sustainable policies to meet stakeholder expectations. This is outlined in sections 2.4.1 to 2.6.3, and detailed in the Group CSR strategy.

Through its mission and commitment, Bureau Veritas is “Shaping a World of Trust”. The Group’s sustainable development strategy is fully integrated into this objective, with the aim of “Shaping a Better World”. It is built upon three strategic axes:

• ●“Shaping a Better Workplace”;
• ●“Shaping a Better Environment”;
• ●“Shaping Better Business Practices”.

The strategy focuses on five of the UN’s Sustainable Development Goals (SDGs) and is based on three sustainability pillars: “Social & Human capital”, “Natural capital” and “Governance”. The CSR strategy addresses 20 priority subjects, as presented below.

For Group-wide policies, the strategy is managed jointly by the Group’s Sustainable Development department and CSR department, with support from the CSR Steering Committee. The implementation of CSR policies in operations is managed by the CSR departments of the operating groups.

All of the CSR policies under this strategy are covered by the management system, which is audited regularly by internal audits of the QHSE department on Quality, Health & Safety, Security and Environment. CSR topics to which the Group wishes to pay particular attention are added to the audit questionnaire of the Internal Audit teams.

The management system is reviewed annually by Executive Management and the main support functions concerned.

Bureau Veritas’ business inherently requires independence, impartiality and integrity. For this reason, ethics is one of the Group’s three “Absolutes”.

The Ethics absolute covers four major principles, set out in a Code of Ethics. These include a commitment to combat corruption. Because of its broad geographical coverage and its business of second- or third-party testing, inspection and certification, Bureau Veritas is potentially exposed to passive corruption risks in the countries most prone to this phenomenon. All corruption and influence-peddling risks are identified in a specific map, which was updated in 2021 (the previous update being in 2019).

Bureau Veritas prevents these risks by means of a compliance program founded on managerial commitment, risk mapping and risk management. The risks are managed in several different ways. Prevention begins with education via a Code of Ethics, a Business Partner Code of Conduct (BPCC), and a training program. It also involves making prior checks via an authorization platform for gifts, invitations, sponsorship activities and donations, along with a third-party due diligence procedure on entering into new business relationships. There is an alert system in place to detect possible risk occurrences and a monitoring procedure involving several stages of verification, including the due diligence procedures carried out by Internal Audit as part of its annual review of the anti-corruption system. Wherever necessary, remedial measures are taken, along with penalties if applicable.

The Group’s business partners, such as intermediaries, subcontractors, joint venture associates and key suppliers, are contractually bound to apply the BPCC in their dealings with Bureau Veritas. The BPCC includes the main principles and rules of the Code of Ethics, starting with the requirement on preventing corruption, influence-peddling and conflicts of interest.

The Group’s Code of Ethics sets forth the principles and rules on which the Group bases its development and long-term growth and builds relationships of trust with its clients, employees and business partners.

The Code of Ethics applies to all Group employees and complies with the requirements of the TIC Council.

It has four core principles:

Complying with these ethical principles has become a source of pride for all employees, who must ensure that their day-to-day decisions are taken in compliance with the Code of Ethics. Disciplinary measures that may lead to dismissal may be taken against any Bureau Veritas employee who fails to comply with the principles and rules set out in the Code of Ethics.

The Code of Ethics is available on the Group’s website and regularly updated, most recently in 2020. The latest update involved a change in writing style and the inclusion of many practical examples, intended to make the Code of Ethics easier to read, understand and apply. The Bureau Veritas Code of Ethics is available in 25 languages.

The Bureau Veritas Compliance Program expresses a corporate governance commitment and includes the following components:

• ●the Group’s Code of Ethics;
• ●the BPCC;
• ●a manual of internal procedures;
• ●a corruption risk mapping process;
• ●a worldwide compulsory training program for all staff (available primarily as an e-learning module and supplemented by local training and awareness-raising initiatives);

• ●a whistleblowing procedure for internal and external ethics violations;
• ●internal and/or external due diligence procedures for business partners;
• ●control procedures, including for accounting, with the allocation of specific accounts for regulated transactions (gifts, donations, etc.);
• ●the annual certification of guidance frameworks and regular control and assessment processes, mainly conducted via an annual self-assessment campaign; and
• ●internal and external audits, including a specific audit for anti-corruption measures.

Since 2016, the e-learning module pertaining to the Compliance Program has been transferred to the Group’s dedicated MyLearning platform in order to enhance and facilitate its worldwide deployment. A new e-learning version, updated for changes in the Code of Ethics, was rolled out in 2021.

By applying dedicated internal rules and procedures, the Group takes particular care when selecting its business partners (intermediaries, joint venture partners, subcontractors, main suppliers), assesses its clients and the integrity of their actions, prohibits certain transactions, such as facilitation payments and kickbacks, and restricts others, such as donations to charitable organizations, sponsorships and gifts. After entering into a business relationship, Bureau Veritas monitors all operations and controls payments made in the most sensitive cases. In addition, the financing of political parties is prohibited.

The measures adopted to prevent both corruption and harassment and to comply with anti-trust rules and international economic sanctions are regularly improved. This is achieved by reviewing internal procedures, providing additional training and sending regular alerts through the Group’s network of Compliance Officers.

Each operating group has a dedicated manual covering its own specific legal, risk management and ethics issues designed to assist operating managers to comply with the rules applicable to the Group as a whole.

In carrying out its business, Bureau Veritas rolls out specific operational procedures for its inspectors and auditors to ensure the integrity and impartiality of its services.

The Group’s Compliance Officer is the head of Legal Affairs & Audit for the Group. He or she defines, implements and oversees the Compliance Program, assisted by a deputy and a network of Compliance Officers within each operating group. He or she also reports regularly to the Group’s Executive Committee on the progress made in action plans.

The Group’s Ethics Committee comprises the Chief Executive Officer, the Chief Financial Officer, the Human Resources Director and the Group Compliance Officer. The committee meets whenever the circumstances so require. It oversees implementation of the Compliance Program and deals with all ethical issues submitted by the Group Compliance Officer. The Group Compliance Officer reports the violations of which he or she has been made aware and provides the committee with a full yearly report on the implementation and monitoring of the Compliance Program.

The Board of Directors, through its Audit & Risk Committee, is directly involved in the governance of Bureau Veritas’ compliance actions, and specifically in efforts to counter corruption and influence peddling.

In this capacity, the Audit & Risk Committee oversees the definition and implementation of appropriate policies. It approves and monitors the implementation of an annual action plan on continuous improvement in the Group’s compliance program. It also monitors data from indicators reported to it in order to gage the program’s performance in various areas (alert hotline, training, etc.). The Group Compliance Officer submits a half-yearly activity report to the committee. The Audit & Risk Committee reports regularly on its work to the Board of Directors.

The legal representative of each legal entity (subsidiary or branch) is responsible for the application of the Code of Ethics and the Compliance Program by the employees falling within his or her authority. To this end, he or she is required to provide a copy of the Code of Ethics to all of his or her employees, ensure that they receive all necessary training, inform them of their duties in simple, practical and concrete terms, and make them aware that any violation of the Code of Ethics constitutes a serious breach of their professional obligations likely to result in disciplinary measures.

Each year, the Group carries out a compliance assessment, further to which a declaration is issued by the legal representative of each entity.

These declarations are then consolidated at the level of each operating group, after which an annual declaration of compliance is signed by each Executive Committee member responsible for an operating group. These declarations of compliance are sent to the Group Compliance Officer who issues an annual report which is presented to the Ethics Committee and subsequently to the Audit & Risk Committee.

Complying with Bureau Veritas’ ethical principles and rules is also taken into account in managers’ annual appraisals. Each manager is required to confirm compliance with the Group’s ethical standards during his or her annual appraisal. Questions, claims or comments from third parties concerning the Code of Ethics may also be sent directly to the Compliance Officer.

Compliance with the Code of Ethics is periodically reviewed by the internal auditors, who report their findings to the Group Compliance Officer and to the Audit & Risk Committee. Compliance auditing is one of the main cycles and procedures covered by the Group’s Internal Audit & Acquisitions Services department. Since 2019, Internal Audit teams have carried out a specific annual engagement to ensure the Compliance Program complies with the Sapin II law throughout the Group. Since 2021, it has carried out a similar engagement at the subsidiary level.

In addition, the Compliance Program is subject to a yearly external audit by an independent audit firm, which issues a certificate of compliance to the Group Compliance Officer, who subsequently sends it to the Compliance Committee of the TIC Council, the international association representing independent testing, inspection and certification companies. Each year, the Group Compliance Officer presents the findings of this audit to the Ethics Committee and subsequently to the Executive Committee and the Audit & Risk Committee.

If a Group employee has a question or faces an issue relating to the implementation or interpretation of the Compliance Program, he or she may contact the local Compliance Officer or ask his or her local managers for advice.

If no satisfactory solution is forthcoming, if the employee is reluctant to discuss matters with his or her line manager, or if other procedures for handling individual complaints are not applicable, the employee can follow the whistleblowing procedure dedicated to ethical issues either by directly contacting the Compliance Officer or by contacting the external professional whistleblowing hotline. The matter will be treated confidentially, and the employee’s identity will not be disclosed.

Substantial work is underway for the consolidation and continuous improvement of certain Compliance Program, control and Internal Audit processes, in response to internal feedback, changes in legislation and shifting expectations expressed by the relevant regulatory agencies.

With regard to compliance with Sapin II in particular, further measures will be defined in 2022, factoring in the results of the latest corruption and influence-peddling risk mapping exercise, conducted in 2021.

Various indicators are tracked on a quarterly basis, including:

• ●a metric to ensure that all employees receive training on the Code of Ethics; new recruits have one month in which to complete this training;
• ●a metric for declarations by operating group Compliance Officers on ethics alerts sounded and the findings of investigations carried out on a dedicated platform. Alerts are categorized according to the Code of Ethics. In 2021, there were very few alerts concerning non-compliance with the Code of Ethics section entitled “Being compliant: Conformity” and none at all relating to human rights.

As Bureau Veritas is a services company, its people are a critical asset. They include engineers, technicians and other leaders and specialists skilled in quality, health and safety, security, environmental protection, and social responsibility. The ability to attract, engage, and retain such professionals in a competitive market for talent is critical to Bureau Veritas’ success.

A specific challenge for Bureau Veritas includes attracting highly qualified talent from diverse backgrounds in order to innovate, drive change, and deliver outstanding service. The Group needs to have an engaged workforce – people who are continually learning and developing – and to create an environment in which their careers can thrive. Bureau Veritas’ Human Resources strategy is therefore designed to engage employees in a workplace culture that is inclusive, where personal development and performance are prioritized, and in which people are encouraged to be their authentic selves and perform to the best of their ability.

In addition, Bureau Veritas is committed to providing employees with the right support in many different situations, whether they impact large numbers of employees, such as Covid-19, or in cases where employees are experiencing more individual circumstances where they need assistance. The Group’s approach to well-being that is outlined later in this section includes examples of this support provided to employees.

Bureau Veritas’ HR strategy is expressed through a common framework of three key pillars, each of which has its own areas of focus. In order to remain agile, the resources assigned to each area of focus are modified depending on any developments in the business strategy and in market conditions.

The center of the HR Strategy includes reference to the Group’s culture that is defined through the Bureau Veritas Absolutes, Values, and Leadership Expectations. This serves as a reference point to ensure that any operations or projects that support any of the three pillars must align with and support the Group’s culture.

The Board of Directors and its committees are directly involved in the governance of the Bureau Veritas strategy on environmental protection in general and on countering climate change, adapting to climate change and preserving biodiversity in particular.

In this capacity, it monitors Bureau Veritas’ strategy and ensures that policies are implemented. The Strategy Committee monitors the environmental strategy and ensures that it complies at all times with regulations and is adapted to stakeholders’ expectations. The Audit & Risk Committee monitors the data reporting process and ensures that the indicators reported are consistent and reliable.

Climate change is affecting our planet like never before. Frequently we see reports of wild fires, flooding, draught and abnormal climate patterns that are generating suffering, conflicts amongst people, irreversible damage to wildlife and generating business disruptions with important costs to the organizations. In this context, it is Bureau Veritas responsibility to provide its contribution to a better planet.

We started several years ago deploying a strategy with broad actions to minimize or eliminate the impact of our activity on the environment. Decarbonizing our society is everybody´s responsibility and at Bureau Veritas, we will not be satisfied until our emissions are neutral.

The Group’s environmental footprint is influenced mainly by the electricity used in its laboratories and work-related travel (air travel first and foremost). Bureau Veritas’ programs are mainly focused on these two aspects, with the overall goal of reducing the carbon footprint.

Bureau Veritas is fully committed to fighting climate change, joining the French Business Climate Pledge launched by MEDEF, France’s largest employer federation.

Bureau Veritas’ environment policy applies to all its activities. The Group sets annual targets for reducing the environmental impact and implements specific programs to reduce its footprint.

In 2021 the Group published a dedicated Environment statement. In the past, the occupational Health and Safety commitments were blended together with the Environment. It was fundamental for us to segregate our Planet ambitions and our People aspirations. In addition, we reviewed our Eco policy defining new rules and expectations for the organization.

During the course of 2021 we also transformed our Environment reporting systems and developed a platform called GreenHub. With this we will have more accurate data, allowing us to be more granular and precise in our action plan.

Having a robust and certified management system deployed globally is critical to ensure the sustainability of the Group’s progress towards an environmentally friendly future. With this in mind, Bureau Veritas aims to grow the ISO 14001 certification footprint, which is measured through a headcount-based certified metric. In 2021, there was a twelve-point increase in the footprint versus 2019. All operating groups are making an effort to grow on this front, but the main explanation for the rise is the fact that the French entities expanded their ISO 14001 scope to cover more than 3,000 employees.

The scope of the Group’s environmental reporting has been increasing year after year, and now covers 96% of the global headcount, showcasing our willingness to be increasingly mature. The Tons of CO2 per revenue (€ million) indicator decreased in 2021 by 4.3% and the Tons of CO2 per employee indicator crept up by 3.3% when compared to 2020. With the reopening of the economies after the arrival of the vaccines for Covid-19 we had an increase in activity that explains these rises.

The following emission scopes are considered:

• ●Scope 1 – Direct emissions: sum of direct emissions resulting from burning fossil fuels such as oil and gas or from resources owned or controlled by the Group (including fleet vehicles);
• ●Scope 2 – Indirect emissions: sum of indirect emissions arising from the purchase or production of electricity;
• ●Scope 3 – Other emissions: sum of other indirect emissions resulting from work-related travel (by air, train, rental car, and personal car). Emissions relating to commuting and computers are not included.

With Bureau Veritas' business configuration, it is not surprising that purchased goods and services take the lion’s share of our scope 3 emissions. Within this category we were able to identify two main components; the emissions generated by subcontracted services (29%) and products/supplies that we acquire from our laboratories (54%). The organization is embarking on an analysis to generate granularity and obtain clarity on which products and suppliers generate the most emissions so that in the near future we are able to define a precise strategy and action plan for the footprint reduction of our suppliers.

One of the key indicators that impacts our CO2 emissions is energy consumption. In 2021, energy use represented 51% of the Group’s total emissions. This is driven mostly by our laboratories that use 88% of the total electricity consumed. In addition, we had a 4% increase versus 2020 that is explained mostly by the growth in activity when compared to the previous year. On the positive side we increased the use of green energy by 36% versus the previous year. Adhering to renewable energy sources through the renegotiation of contract supplies or the establishment of PPA´s (Power Purchase Agreements) is going to be paramount in our strategy and crucial to achieve the decarbonization of our company.

In 2021, the top energy users embarked on special reduction programs that included actions such as energy audits and energy self-assessments, the replacement of lighting systems, the optimization of heating, ventilation and air conditioning (HVAC) systems, relocation to more efficient facilities, purchase of energy from green sources, etc.

In addition, several laboratories and office buildings re-negotiated their electricity contracts to purchase renewable energy or to co-generate electricity by installing solar panels on the roofs of our facilities. We are at the beginning of this journey but expect in the short term to have these practices expanded across our locations.

Bureau Veritas encourages its entities to use green energy in order to reduce CO2 emissions, and to opt for low-energy buildings. Choosing energy-efficient buildings is recommended whenever leases are up for renewal. At the end of 2021, 23 Bureau Veritas buildings obtained the LEED or HQE certification, mainly in Asia and France.

The Group also recommends using green energy wherever possible. In Italy, all electricity consumed is from green power sources.

The other key indicator is the CO2 emissions generated by work-related travel. In 2021, it was responsible for 42% of all the Group´s emissions.

CO2 emissions generated by work-related travel declined 1% in 2021 compared to 2020 and 3.5% compared to 2019. With the new normal imposed by the pandemic, Bureau Veritas restricted business travel to essential-only and even though air travel restarted in some geographies at some point in time, we want whenever possible, to hold digital meetings and work remotely, not just as a way of managing the virus but also as a way to contribute to the decarbonization of our society.

During the crisis and due to health reasons, however, as governments lifted travel bans, the Company continued to maintain air travel at an essential only status for environmental reasons. In October 2021, we updated our eco-policy in order to formalize the requirements outlined above. This crisis has proved that there are many activities that can be performed remotely and our workforce was able to adjust to a new normal. This year we successfully organized several events, that typically would be in-person, using digital technologies. With that, we were able to save CO2 emissions and set an example for the various levels of the organization on how to be frugal and energy efficient.

In the past few years we have been making enhancements to our motor vehicle policy, requiring operations worldwide to embark on the deployment of more efficient vehicles and energy saving measures. Below are some of the more relevant requirements:

• ●starting on January 2022 all newly acquired or leased vehicles for executive levels (bands I-III) will have to emit less than 60 g of CO2 per kilometer;
• ●all other new passenger vehicles must comply with the emissions limit of <130 g of CO2 per kilometer;
• ●existing passenger vehicles non-compliant with this expectation may be retained until December 2022 for owned vehicles or until the end of the contract for leased vehicles;
• ●all Group entities must include low-emissions (hybrids and hybrid plug-ins) or zero-emissions vehicles on the list of authorized vehicles proposed to employees;
• ●in addition, for safety and environmental reasons, all Group vehicles will be fitted with a telematics monitoring system by January 2022. The system will enforce compliance with traffic regulations and will promote environmentally responsible habits. Pilots deployed in Europe point to fuel savings of approximately 20%.

This represents another potential area in which Bureau Veritas can reduce its environmental impact. The Group’s priorities are to use more eco-friendly equipment and encourage widespread use of the cloud to store data. In France, for example, using virtual servers has reduced the number of physical servers by 1,300, helping to save 353 tons of CO2. Similar projects have also been undertaken in the United States.

For the past few years, the Group IT department has focused on three major areas to reduce its environmental impact:

• ●reducing energy used by data centers;
• ●reducing energy used by computer equipment;
• ●creation of innovative solutions to reduce work-related travel.

Other indicators are presented in section 2.8.1. – Sustainability indicators, of this Universal Registration Document

Origins of CO2 emissions are 51.4% from Laboratories, 42.8% from Work-related travels and 5.8% from Waste, Water, Paper and ODS (Ozone Depleting Substances).

The European Green Deal lays out a set of baseline regulations to step up Europe’s environmental transition with a view to reducing CO2 emissions by 55% by 2030 and achieving carbon neutrality by 2050, as set out in the Paris agreements.

These regulations apply to many sectors, including energy, buildings and transportation, as well as sustainability reporting in general. Bureau Veritas works with organizations in these sectors on an everyday basis.

Most of the regulations will entail an increase in industrial investments, which will require quality and safety inspections, and generate new sustainability reporting needs, which in turn will require auditing and certification by independent third parties.

To best support its clients’ projects, Bureau Veritas will be adapting its service offering to meet their needs for compliance with the new requirements of the European Green Deal regulations. Priority attention is given to the following regulations and directives:

• ●Green taxonomy;
• ●Corporate sustainability reporting directive (CSRD);
• ●Carbon border adjustment mechanism (CBAM);
• ●Energy efficiency directive (EED);
• ●Energy performance of buildings directive (EPBD);
• ●Renewable energy directive (RED).

Similar initiatives are being taken in China, the United States and many other countries that have also committed to the Paris agreements.

The indicators concern the Group’s reporting scope, unless otherwise specified. The 2021-2025 strategic plan indicators are shown in bold, in red.

The indicators presented in this section were calculated based on data collected from the Operating Groups. These data were then consolidated by the departments concerned (Human Resources, Legal Affairs and Audit, QHSE, Technical, Quality and Risks) using proven methods. Changes in methods or scope are reported systematically.

The information published in this document is mainly taken from the Group’s HR reporting system. It is published and submitted on a monthly basis to Executive Committee members and to the HR departments of the various operating groups. Within the Group HR department, a reporting team is in charge of verifying and publishing data in conjunction with the local managers.

An annual survey is also conducted among the HR Directors of the operating groups to compile the relevant qualitative information presented in section 2.5 – Social and human capital – Shaping a Better Workplace, of this Universal Registration Document.

The HR data are continuously updated in the Group HR information system (HRIS), except for the training indicators, which are updated by the local teams and are reported on a quarterly basis.

Workforce data are provided on a Group-scope basis.

Training data and data on absenteeism cover 100% of the Group’s headcount.

The data on profit-sharing agreements extend beyond Bureau Veritas SA and cover the Company’s six French subsidiaries: Bureau Veritas Services, Bureau Veritas Services France, Bureau Veritas Exploitation, Bureau Veritas Construction, Bureau Veritas GSIT and Bureau Veritas Marine & Offshore.

Detailed, regularly updated documentation is available in the Group’s IT systems. Each new user and/or contributor to HR reporting must complete training on how to collect and enter data, as well as on the online consultation of indicators. This training is provided by the Group HR department.

Year ended the December 31, 2021

To the Shareholders’ Meeting,

In our quality as an independent third party, accredited by the COFRAC under the number n° 3-1681 (scope of accreditation available on the website www.cofrac.fr), and as a member of the network of one of the Statutory Auditors of your entity (hereinafter “entity”), we conducted our work in order to provide a conclusion expressing a limited level of assurance on the compliance of the consolidated non-financial statement for the year ended December 31, 2021 (hereinafter the “Statement”) with the provisions of Article R. 225-105 of the French Commercial Code (Code de commerce) and on the fairness of the historical information (whether observed or extrapolated) provided pursuant to 3° of I and II of Article R. 225-105 of the French Commercial Code (hereinafter the “Information”) prepared in accordance with the entity’s procedures (hereinafter the “Guidelines”), included in the management report pursuant to the requirements of articles L. 225-102-1, R. 225-105 and R. 225-105-1 of the French Commercial Code (Code de commerce).

Based on the procedures performed, as described in “Nature and scope of the work”, and on the elements we have collected, we did not identify any material misstatements that would call into question the fact that the consolidated non-financial statement is not presented in accordance with the applicable regulatory requirements and that the Information, taken as a whole, is not presented fairly in accordance with the Guidelines, in all material respects.

The absence of a generally accepted and commonly used framework or established practices on which to base the assessment and measurement of information allows for the use of different, but acceptable, measurement techniques that may affect comparability between entities and over time.

Therefore, the Information should be read and understood with reference to the Guidelines, the significant elements of which are presented in the Statement.

The information may be subject to uncertainty inherent in the state of scientific or economic knowledge and the quality of external data used. Certain information is sensitive to the methodological choices, assumptions and/or estimates made in preparing it and presented in the Statement.

It is the responsibility of the Board of Directors to:

• ●select or establish appropriate criteria for the preparation of the Information;
• ●prepare a Statement in accordance with legal and regulatory requirements, including a presentation of the business model, a description of the main non-financial risks, a presentation of the policies applied with regard to these risks as well as the results of these policies, including key performance indicators and, in addition, the information required by Article 8 of Regulation (EU) 2020/852 (green taxonomy);
• ●and to implement the internal control procedures it deems necessary to ensure that the Information is free from material misstatement, whether due to fraud or error.

The Statement has been prepared in accordance with the entity’s procedures, the main elements of which are presented in the Statement (or which are available online)

On the basis of our work, our responsibility is to provide a report expressing a limited assurance conclusion on:

• ●the compliance of the Statement with the requirements of article R. 225-105 of the French Commercial Code;
• ●the fairness of the information provided in accordance with article R. 225-105 I, 3° and II of the French Commercial Code, i.e., the outcomes, including key performance indicators, and the measures implemented considering the principal risks.

As it is our responsibility to form an independent conclusion on the Information as prepared by management, we are not permitted to be involved in the preparation of the Information, as this could compromise our independence.

However, it is not our responsibility to comment on:

• ●the entity’s compliance with other applicable legal and regulatory requirements, in particular the information required by Article 8 of Regulation (EU) 2020/852 (green taxonomy), the French duty of care law and anti-corruption and tax avoidance legislation;
• ●the fairness of the information required by Article 8 of Regulation (EU) 2020/852 (green taxonomy);
• ●the compliance of products and services with the applicable regulations.

The work described below was performed in accordance with the provisions of articles A. 225-1 et seq. of the French Commercial Code, as well as with the professional guidance of the French Institute of Statutory Auditors (“CNCC”) applicable to such engagements and with ISAE 3000(5).

Our independence is defined by the requirements of article L. 822-11 of the French Commercial Code and the French Code of Ethics (Code de déontologie) of our profession. In addition, we have implemented a system of quality control including documented policies and procedures regarding compliance with applicable legal and regulatory requirements, the ethical requirements and French professional guidance.

Our verification work mobilized the skills of four people and took place between October 2021 and February 2022 on a total duration of intervention of about fifteen weeks.

We conducted ten interviews with the persons responsible for the preparation of the Statement including in particular the risk management, ethics and compliance, customer satisfaction, cybersecurity, data protection, human resources, health and safety, environment and climate plan, and supply chain management.

We planned and performed our work taking into account the risks of material misstatement of the Information.

In our opinion, the procedures we have performed in the exercise of our professional judgment enable us to provide a limited level of assurance:

• ●we obtained an understanding of all the consolidated entities’ activities and the description of the principal risks associated;
• ●we assessed the suitability of the criteria of the Guidelines with respect to their relevance, completeness, reliability, neutrality and understandability, with due consideration of industry best practices, where appropriate;
• ●we verified that the Statement includes each category of social and environmental information set out in article L. 225-102-1 III of the French Commercial Code as well as compliance with human rights and anti-corruption and tax avoidance legislation;
• ●we verified that the Statement provides the information required under article R. 225-105 II of the French Commercial Code, where relevant with respect to the principal risks, and includes, where applicable, an explanation for the absence of the information required under article L. 225-102-1 III, paragraph 2 of the French Commercial Code;
• ●we verified that the Statement presents the business model and a description of principal risks associated with all the consolidated entities’ activities, including where relevant and proportionate, the risks associated with its [their] business relationships, its [their] products or services, as well as its [their] policies, measures and the outcomes thereof, including key performance indicators associated to the principal risks;
• ●we referred to documentary sources and conducted interviews to:
  • ●assess the process used to identify and confirm the principal risks as well as the consistency of the outcomes, including the key performance indicators used, with respect to the principal risks and the policies presented, and
  • ●corroborate the qualitative information (measures and outcomes) that we considered to be the most important presented in appendix 1; concerning certain risks (risk management, ethics and compliance, cybersecurity, data protection, supply chain management), our work was carried out on the consolidating entity, for the others risks, our work was carried out on the consolidating entity and on a selection of entities: CIF Business Units included in APM Greater China, APM Pacific in Australia and Latin America in Brazil and Chile;
• ●we verified that the Statement covers the scope of consolidation, i.e., all the consolidated entities in accordance with article L. 233-16 of the French Commercial Code within the limitations set out in the Statement;
• ●we obtained an understanding of internal control and risk management procedures the entity has put in place and assessed the data collection process to ensure the completeness and fairness of the Information;

• ●for the key performance indicators and other quantitative outcomes that we considered to be the most important presented in appendix 1, we implemented:
  • ●analytical procedures to verify the proper consolidation of the data collected and the consistency of any changes in those data,
  • ●tests of details, using sampling techniques, in order to verify the proper application of the definitions and procedures and reconcile the data with the supporting documents. This work was carried out on a selection of contributing entities and covers between 23% and 25% of the consolidated data relating to the key performance indicators and outcomes selected for these tests (23% of the headcount, 24% of hours worked, 24% of greenhouse gas emissions from business travel, 25% of greenhouse gas emissions from energy consumption);
• ●we assessed the overall consistency of the Statement based on our knowledge of all the consolidated entities.

We believe that the work carried out, based on our professional judgement, is sufficient to provide a basis for our limited assurance conclusion; a higher level of assurance would have required us to carry out more extensive procedures.

Paris-La Défense, March 16, 2022

Independent third party

EY & Associés

Laurent Viste

Partner, Sustainable Development

Governance at Bureau Veritas is characterized by a high degree of transparency, effective cooperation and a perfect balance of responsibilities and powers between Executive Management and the Board of Directors. The past year was a perfect illustration of this.

Whether focused on the Strategic Direction for 2025, on succession plans for Bureau Veritas’ management bodies or on the work being carried out in connection with events facing the Company in the immediate term and going forward, the exchanges and cooperation between committees, the Board of Directors and Executive Management have been fruitful and illustrate a strong mutual trust.

At the same time, our ongoing discussions with shareholders, ESG investors and voting advisors have enriched our debates and have helped us to improve the presentation of our reports on corporate governance and executive compensation. As in previous years, we have also taken into account the recommendations and areas for improvement set out in the AMF and HCGE (High Committee on Corporate Governance) reports.

In 2021, the Board Committees were very busy. The work of the Audit & Risk Committee primarily concerned the integration of ESG reporting and risk management (compliance, cybersecurity, etc.), particularly in view of the cyber attack in November 2021. The main focus of the Nomination & Compensation Committee was preparing a succession plan for the Chief Executive Officer and determining compensation policies. The Strategy Committee ramped up its work on the Strategic Direction for 2025.

I would like to commend the commitment of our Directors during a year that called for considerable adaptability. Their flexibility, their availability faced with the increase in the number of Board meetings, and their agility, were key in a very challenging period that is still characterized by the pandemic.

Pursuant to articles L. 22-10-10 and L. 225-37-4 of the French Commercial Code (Code de commerce), this report on corporate governance, drawn up under the responsibility of the Board of Directors in accordance with article L. 225-37 of said Code, contains details of the composition of the Board and the conditions governing the preparation and organization of the Board’s work in 2021.

The report refers to the application of the principle of gender balance and also includes a list of the directorships and positions held by each Corporate Officer, the limitations of powers imposed on the Chief Executive Officer, the Corporate Governance Code to which the Company refers, a summary of delegations of authority relating to capital increases, a description of the procedure implemented to regularly assess agreements entered into in the ordinary course of business and under arm’s length conditions, the conditions for participating in Shareholders’ Meetings, and the issues likely to have an impact in the event of a public offer.

It specifies the rules and principles adopted by the Board of Directors for determining the compensation and benefits in-kind awarded to Corporate Officers. It also includes the report on the items to be submitted to a vote at the Shareholders’ Meeting called to approve the 2021 financial statements, seeking approval of the policies governing compensation due to Directors, the Chairman of the Board of Directors and the Chief Executive Officer (ex-ante vote) and the principles and criteria for determining, allocating and awarding the fixed, variable and extraordinary components of the total compensation and benefits in-kind awarded or paid to the Directors, the Chairman of the Board of Directors and the Chief Executive Officer (ex-post vote).

In accordance with the above-mentioned article L. 22-10-10, Bureau Veritas has chosen to refer to the AFEP-MEDEF Corporate Governance Code of Listed Corporations (the “AFEP-MEDEF Code”). In preparing this report, Bureau Veritas also followed the recommendations of the French financial markets authority (Autorité des marchés financiers – AMF).

Each year, particular attention is paid to the activity report issued by the French High Commission for Corporate Governance (Haut Comité du Gouvernement d’Entreprise – HCGE) and to the AMF’s annual report on corporate governance and executive compensation. An analysis of the Company’s practices along with any proposals for improvement in the form of assessment grids are presented to the Nomination & Compensation Committee and to the Board of Directors.

The report was reviewed by the Nomination & Compensation Committee at its meeting of February 17, 2022. It was reviewed in draft form and approved by the Board of Directors at its meeting of February 23, 2022.

Since 2009, the Grands Prix de la Transparence, awarded by an independent panel of experts and organized by Labrador, have recognized the quality of regulatory communications provided by French companies listed on the SBF 120 index. One of the aims of these awards is to enable French issuers to evaluate their transparency on an annual basis and identify industry best practices. Each year, the criteria are reviewed and the requirements increased. In 2019, Bureau Veritas was awarded the Grand Prix de la Transparence in the “Universal Registration Document Transparency” category. This top prize is a testament to the Group’s hard work over the past few years to improve its governance practices, and to its efforts to optimize transparency in all areas of the published Universal Registration Document, for example in terms of Corporate Social Responsibility (CSR).

Bureau Veritas is committed to remaining among the top 10 for best practices in the industry.

The Company is governed by a Board of Directors which elects a Chairman and a Vice-Chairman from among its members. The roles of Chairman of the Board of Directors and Chief Executive Officer have been separate since February 13, 2012.

Aldo Cardoso has served as Chairman of the Board of Directors since March 8, 2017. He is independent of the controlling shareholder.

André François-Poncet, Chairman of the Executive Board of Wendel SE, the controlling shareholder, has served as Vice-Chairman of the Board of Directors since January 1, 2018.

The Board of Directors currently has 12 members.

Directors are appointed at the Ordinary Shareholders’ Meeting and their term of office is four years. At the end of this period, they may be reappointed for a further four-year period. However, in accordance with the by-laws, the Ordinary Shareholders’ Meeting can follow the Board’s recommendations and appoint or reappoint one or more Directors for a term of one, two or three years, thereby ensuring a gradual renewal of the Board members.

The proportion of Board members over 70 years old may not, at the close of a given Annual Ordinary Shareholders’ Meeting, exceed one-third of Board members in office.

Information on Board members’ nationality, age, business address, offices held within and outside the Company, main functions, start and end dates of terms of office, detailed biographies and a list of positions held by the Directors over the previous five years are presented below, primarily in the table entitled “Composition of the Board of Directors and the Board Committees”. The Directors agree to comply with the law as regards the holding of multiple offices and to apply the recommendation of the AFEP-MEDEF Code, which states that Directors may not hold more than four other offices outside of Bureau Veritas SA in listed French or foreign companies. Information on the number of offices held is given in the biography of each Director and of the Chief Executive Officer (section 3.2.4 – Director biographies and section 3.4.1 – Chief Executive Officer).

In order to promote diversity, the composition of the Board and the Board Committees is of particular concern to the Board of Directors. The Board bases itself on the work and recommendations of the Nomination & Compensation Committee, which regularly reviews and makes suggestions as needed regarding appropriate changes to be made in the composition of the Board and the Board Committees in line with the Group’s strategy. Before reappointing a Director or upon the departure of a Director resulting in the appointment/co-optation of a new Director, the Nomination & Compensation Committee reviews the composition of the Board and considers any expertise and experience it may need, supported by the diversity policy described below.

Having Directors from diverse backgrounds enables the Board to remain dynamic, creative and effective. Diversity also enhances the quality of the Board’s deliberations and decisions. Diversity practices are based on a policy put in place by the Group for its governing bodies to ensure balanced representation within the Board, particularly in terms of independence, gender, age and seniority, but also in terms of culture, skills, expertise and nationality.

The Board verifies that Directors together have an appropriate range of complementary skills commensurate with the Board’s long-term strategic and development goals. The desired skills cover the following range of functions: strategy, finance, operations, human resources, digital, IT, services, transport, energy, governance, international, taxation, M&A, and Corporate Social Responsibility.

The Board also seeks to maintain an appropriate mix of longer-standing and newer members, which lends it a perfect combination of dynamism and experience. It also looks to ensure that Directors’ four-year terms of office expire in different years, which also helps to maximize diversity among its members.

The Board ensures that in the presence of its controlling shareholder, more than one-third of its members are independent. In accordance with legal requirements, it also continuously strives to ensure an appropriate gender balance. In this regard, its diversity policy goes beyond the requirements of the AFEP-MEDEF Code, which recommends that one-third of Directors are independent in the presence of a controlling shareholder (within the meaning of article L. 233-3 of the French Commercial Code).

As part of the Board’s yearly self-assessment exercise, the members of the Board are also asked for their views on the Directors’ profiles and on any expertise they feel the Board lacks.

The Director selection process was applied in 2021 in connection with the departure of a Director and the reappointment of five Directors, submitted to the Shareholders’ Meeting of June 25, 2021 for approval. The Board of Directors, on the recommendation of the Nomination & Compensation Committee, asked shareholders to approve the reappointment of Ana Giros Calpe, Lucia Sinapi-Thomas, André François-Poncet and Jérôme Michiels and the appointment of Julie Avrane, and to ratify the co-optation of Christine Anglade Pirzadeh.

The Company has not appointed an employee Director insofar as it is exempt from this obligation in its position as the subsidiary of a company itself required to appoint an employee Director, within the meaning of article L. 22-10-7 of the French Commercial Code. Accordingly, it is not required to appoint an employee Director to the Nomination & Compensation Committee.

Pursuant to article L. 22-10-5 of the French Commercial Code, listed companies in which over 3% of the capital is held by employees are required to appoint one or more employee representatives to the Board of Directors. At December 31, 2021, employees held 0.77% of the Company’s capital.

Bureau Veritas strives to ensure that its Directors have a sound knowledge of the Group’s businesses, its strategy, and the challenges it faces.

At each Board of Directors’ meeting, Directors are given a presentation of one of the Group’s businesses by the Executive Committee member in charge of that business. Directors may also liaise with members of the management team during Board and Board Committee meetings.

In light of the Covid-19 pandemic, the sessions dedicated to the Group’s strategy – taking the form of a one-day “offsite” seminar involving members of the Executive Committee and the management team – could not be held and will resume as soon as possible.

No group site visits have been able to be arranged for all Board members since early 2020. Site visits will resume as soon as the health situation permits.

No additional or specific training needs were expressed during the Board’s self-assessment exercise.

Directors also receive press releases and shareholder information (Universal Registration Document, letters to shareholders) and the daily press review.

An integration and induction program for new Board members has been set up and involves:

• ●meetings with members of the Executive Committee and other key people in the organization;
• ●site visits;
• ●a welcome kit comprising:
  • ●the permanent record of the Board of Directors, which details:
    • ●the composition and functioning of the Company’s corporate bodies,
    • ●a directory of Board members,
    • ●the schedule of Board and Board Committee meetings,
    • ●the Company’s by-laws,
    • ●the Internal Regulations of the Board of Directors and its Committees,
    • ●the Insider Trading Policy,
    • ●the schedule of black-out periods,
    • ●AMF instructions relating to the transactions of executives and persons discharging managerial responsibilities, referred to in article 19 of the Market Abuse Regulation,
    • ●a guide to ongoing disclosures and the management of inside information,
    • ●the contact details of the bank managing the Company’s registered shares and of Bureau Veritas contacts,
    • ●the AFEP-MEDEF Corporate Governance Code of Listed Corporations,
    • ●the Group’s Code of Ethics,
    • ●the Universal Registration Document;
  • ●the Director’s handbook published by the IFA (French Institute of Directors).

The Board of Directors has identified the skills, experience and expertise needed to successfully perform its duties, given the nature and scope of the Company’s international operations, its medium- and long-term strategy and the risks involved.

Strategy: experience in defining strategy and successfully managing strategic issues.

International experience: previous or current experience as a Chief Executive Officer, Executive Committee member or senior executive in a large entity, or in high-level consulting or managerial functions, internationally or in a group with a global footprint. Experience acquired in international groups. International experience is also proof of the ability to successfully manage a cross-cultural environment, and time spent in a professional capacity in another country or in a corporate office in an international group.

Finance/accounting: extensive experience of corporate finance and auditing processes, financial control and reporting, risk management and insurance, accounting, cash management, taxation, mergers and acquisitions, and capital markets.

Manufacturing industry expertise: expertise in one of the Group’s vertical industries such as construction, real estate, transportation, Oil & Gas, marine & offshore, nuclear, defense, automotive, aerospace, IT, electronics and consumer products (the list is not exhaustive and is as broad and diverse as the Group’s clients). Ideally, this expertise has been acquired as a client of the Group or its competitors, but it can also derive from long-standing commercial operations in this market. It should be complemented by knowledge of the services business.

Digital: expertise or recent experience in developing and implementing technology and/or digital strategies, experience in companies with a strong technology and/or digital focus.

Knowledge of the services sector: experience of the services sector, knowledge of the Group’s businesses and competitive environment, experience in a business sector focused on innovation in BtoBtoS services.

Sustainable development – Commitment to society and human resources: experience in managing environmental, social and governance (ESG) issues and in Human Resources management. Corporate Social Responsibility is at the heart of the Group’s strategy, as a driver of progress and a key factor of competitiveness. Managing Human Resources in a Group with almost 80,000 employees (mostly highly-skilled engineers) is an ongoing challenge. Experience in executive compensation matters and in setting compensation policies to attract and retain high-potential individuals is an example of the expertise sought.

The conditions governing the preparation and organization of the work of the Board of Directors are set out in the Board’s Internal Regulations, which were last updated on June 22, 2018. These Internal Regulations represent the Governance Charter for Directors. The Code can be consulted on the Company’s website.

The Board of Directors meets as often as needed in the interests of the Company; meetings are convened by its Chairman. The Board met seven times in 2021, with six of the seven meetings held by video conference. Three information meetings were organized during the year to discuss and give briefings on topics related to strategy and cyber attacks. The session dedicated to strategy, taking the form of a one-day “offsite” seminar to discuss the Group’s new strategic plan, took place in early 2021.

The provisional annual schedule of Board of Directors’ meetings (excluding extraordinary meetings) is drawn up and sent out to each member before the end of each financial year.

The Statutory Auditors are invited to attend meetings of the Board held to finalize the annual and interim financial statements.

Each year, “executive sessions” are held (i.e., without the presence of the Chief Executive Officer). In 2021, five executive sessions were held for practical reasons following the Board of Directors’ meeting. The Directors may also meet with the Company’s key executives without the Chief Executive Officer (who is notified in advance).

For each meeting, a file covering the items on the agenda is prepared and sent to each member a few days before the meeting to allow prior examination of documents by the Directors.

During meetings, members of Executive Management give a detailed presentation of the items on the agenda. Each Director is provided with all the information needed to carry out his/her duties and can ask Executive Management to provide him/her with any useful documents (including any critical information about the Company). Presentations are followed by discussions before a vote is taken. Detailed minutes in draft form, summarizing the discussions and questions raised and mentioning the decisions and reservations made, are then sent to members for examination and comment before being formally approved by the Board of Directors.

The Directors may also be provided with useful information about the life of the Company at any time if such information is considered important or urgent.

They may also receive additional training, if they see fit, on the Group, its businesses and sector of activity.

The health crisis required immediate and agile responses in order to maintain an ongoing dialogue between Executive Management and the Board of Directors, and particularly in order for the Board to continue making decisions as to the strategic direction for the Group’s businesses and ensure that its decisions were duly implemented.

Board meetings were held mainly by video conference. The system used guaranteed that the meetings ran smoothly and that discussions remained confidential.

The Board of Directors’ migration to video conferencing was immediate and, in an emergency situation, made it easier for additional Board meetings to be scheduled. This in turn allowed the Board to remain fully functional, take the necessary decisions and keep regularly informed of developments in terms of health measures adopted by the Group.

In accordance with the provisions of the AFEP-MEDEF Code, which recommends that at least one meeting be held each year without the presence of the Executive Corporate Officers, the Internal Regulations provide that the Company’s non-executive Directors meet once a year without the Executive Directors or Company Directors being present, in order to evaluate the performance of the Chairman, the Chief Executive Officer and the Deputy Chief Executive Officer(s).

This meeting is also an opportunity to reflect on the future of the management team. Each year, “executive sessions” are held (i.e., without the presence of the Chief Executive Officer).

In 2021, five executive sessions were held for practical reasons following the Board of Directors’ meeting. The discussions focused on governance issues.

At the date this Universal Registration Document was filed, there were no service agreements between Corporate Officers or Directors and the Company or its subsidiaries providing for any benefits.

The table below summarizes the delegations of authority and authorizations relating to share capital granted by the Shareholders’ Meeting to the Board of Directors that are still in effect as of the filing date of this Universal Registration Document.

This section takes into account the regulatory measures introduced by French law No. 2019-486 of May 22, 2019 on business growth and transformation (“PACTE”) and Ordinance No. 2019-1234 of November 27, 2019 on the compensation of Corporate Officers in listed companies, as supplemented by Decree No. 2019-1235 of the same date, along with the recommendations set out in the AFEP-MEDEF Code and those issued by the French financial markets authority (AMF) on November 24, 2020 concerning corporate governance and executive compensation in listed companies.

This section was prepared by the Board of Directors in conjunction with the Nomination & Compensation Committee, and sets out:

• ●the compensation policy applicable to Corporate Officers (Directors, Chairman, Chief Executive Officer and Deputy Chief Executive Officer(s)) in respect of their corporate office, pursuant to article L. 22-10-8 I of the French Commercial Code (Code de commerce), which will be the subject of a resolution to be put to the vote at the 2022 Shareholders’ Meeting (see section 3.7.2);
• ●the report on compensation paid or awarded in 2021, as required under articles L. 22-10-34 I and II and L. 22-10-9 I (see section 3.7.3) and notably including:
  • ●the information referred to in article L. 22-10-9 I of the French Commercial Code concerning each Corporate Officer, as well as the ratios measuring compensation awarded to the Chairman and the Chief Executive Officer as a proportion of compensation paid to Group employees alongside changes in those ratios over the past five years in relation to the Group’s performance, which will be the subject of a resolution to be put to the vote at the 2022 Shareholders’ Meeting pursuant to article L. 22-10-34 I of the French Commercial Code, and
  • ●the fixed, variable and extraordinary components of the total compensation and benefits in-kind paid or awarded during the year to the Chairman and the Chief Executive Officer, which are the subject of two separate resolutions pursuant to article L. 22-10-34 II of the French Commercial Code;
• ●the standard tables summarizing the information to be disclosed in the Universal Registration Document on compensation paid or awarded to Corporate Officers by the Company or by any company included in the scope of consolidation, pursuant to article L. 233-16 of the French Commercial Code and in accordance with the AFEP-MEDEF Code and AMF recommendations in this regard (the “AMF Table(s)”) (see section 3.7.4);
• ●the reports required by articles L. 225-184 and L. 225-197-4 of the French Commercial Code on stock options and performance share awards (see section 3.8.3).

The compensation policy for each category of Corporate Officer is reviewed each year to ensure that they comply with applicable regulations, market practices, recommendations of the AFEP-MEDEF Code and of the AMF, and that shareholders’ remarks and the votes cast by shareholders at Annual Shareholders’ Meetings are duly taken into account.

These policies were last reviewed on February 23, 2022 by the Board of Directors, following a recommendation of the Nomination & Compensation Committee. Pursuant to article L. 22-10-8 of the French Commercial Code, each policy is put to the vote of shareholders at the Shareholders’ Meeting. If shareholders reject the policies, the last policies approved will continue to apply.

The overall compensation structure is in line with the Group’s strategy and objectives to achieve a fair balance between each component of compensation in order to improve performance and competitiveness over the medium and long term.

The Chief Executive Officer’s compensation consists of clearly established components, each linked to a specific objective.

The policy, mechanisms and levels of compensation awarded to the Chief Executive Officer are set consistently with those applicable to the Group’s other executives and managers.

Each year, the Nomination & Compensation Committee reviews and assesses the appropriateness of the compensation packages and particularly the criteria relating to the award of variable compensation for the coming year.

To do so, it considers the factors set out in the chart below:

In order to establish an appropriate level of compensation for each category of Corporate Officer, the Nomination & Compensation Committee relies on the recommendations of an independent external consulting firm to benchmark compensation practices and adopt best governance principles. The ability to attract, motivate and retain world-class executives through competitive compensation is essential to the Group’s success.

Given the Group’s unique characteristics within the SBF 120 index and the European TIC sector, as well as its broad geographic footprint spanning nearly 140 countries across the globe, the benchmarking study was based on the following peer groups:

• ●CAC 40 and Next 20 companies;
• ●similar-sized companies in the Services sector;
• ●companies in the international TIC sector.

The Board of Directors decided not to introduce a clawback clause for variable compensation, as it considers it unnecessary given the demanding annual objectives underpinning the variable portion. Payment of variable compensation for a given year is subject to the approval of the Shareholders’ Meeting pursuant to article L. 22-10-34 II of the French Commercial Code.

The rules governing the Chief Executive Officer’s compensation are simple by choice.

Each year, the Nomination & Compensation Committee recommends financial and non-financial performance criteria and specific levels of objectives to the Board of Directors. The criteria and levels selected are consistent with the Group’s strategy.

The compensation policy has three main objectives:

The structure and level of executive compensation is benchmarked each year against the practices of companies with similar characteristics, challenges and environments, with the help of independent consulting firms. The markets serving as a benchmark in the analysis are the CAC 60 (CAC 40 companies and the top 20 companies of the SBF 120) and the international TIC market.

Performance-based variable pay is a key component of the executive compensation policy. The performance criteria used to determine the annual bonus and long-term incentive plans are demanding, and are aligned with the Group’s strategy and the interests of its shareholders.

The compensation policy is designed to attract, motivate and retain the Group’s high-performing employees and to meet the expectations of shareholders and other stakeholders, particularly by tying compensation to the Group’s performance. This policy is aligned with the Company’s interests and respects Corporate Social Responsibility concerns, thereby ensuring the continuity of the Group’s business.

The compensation policy applicable to Executive Committee members is reviewed annually by the Nomination & Compensation Committee and the Board of Directors, and is in line with the principles and objectives used to determine the compensation policy for the Chief Executive Officer.

Compensation awarded to Executive Committee members consists of:

• ●fixed compensation;
• ●annual variable compensation;
• ●a long-term incentive plan with the implementation of stock option and/or performance share awards subject to presence and performance conditions.

The performance criteria support the Group’s strategy and take into account the Group’s financial and operating performance as well as criteria related to Bureau Veritas’ Corporate Social Responsibility.

These principles and objectives underpin the compensation structure applicable to all Group employees.

Compensation for all Group employees is made up of fixed compensation and short- and long-term variable components. The short- and long-term variable components compensate individual and collective (financial and CSR) performance. Each employee is eligible for some or all of these components according to his or her responsibilities, skills and performance within the Group.

In compliance with the principles of the compensation policy, the Nomination & Compensation Committee applies a strict process when preparing executive compensation so as to enable the Board of Directors to make informed decisions.

The compensation policy for Corporate Officers is reviewed annually by the Board of Directors. As part of its review, the Board of Directors – based on the work of the Nomination & Compensation Committee – discusses whether it believes the policy should be revised (in terms of structure, components, level of compensation, etc.) in light of developments within the Group or its markets, and any particular events impacting the Group or its organization. This review is also an opportunity for the Board to assess and ensure that this policy remains consistent and relevant with respect to the objectives set for each category of Corporate Officer.

In accordance with the provisions of article L. 22-10-8 III of the French Commercial Code, the Board of Directors, acting on the recommendation of the Nomination & Compensation Committee, may choose not to apply the compensation policy for Corporate Officers on a temporary basis if this decision is in the Company’s interests and if it is necessary to ensure the Company’s continuity or viability. Events that could give rise to this situation include any event beyond the control of Bureau Veritas that cannot be reasonably foreseen or quantified at the date the compensation policy is determined.

Based on a recommendation of the Nomination & Compensation Committee, and to the extent warranted by unforeseeable circumstances beyond the Company’s control and/or circumstances that have a significant impact on a component of variable compensation, the Board of Directors may use its discretionary powers of judgment in determining the components of the variable compensation due to the Chairman and the Chief Executive Officer. This provision enables the Board of Directors to ensure consistency between the application of the compensation policy, the performance and input of executives, and the actual performance and interests of the Company.

For each of the executives, these discretionary powers apply to the predefined components of compensation.

The Nomination & Compensation Committee will thereby be able to propose any duly justified amendments or adjustments to the Board of Directors. If it deems it necessary to amend the executive compensation policy, the Board of Directors may decide to submit the policy adjustments or amendments to the shareholders for approval.

The Board of Directors, on the recommendation of the Nomination & Compensation Committee, previously exercised its discretionary powers in the context of the global health and economic crisis by deciding to remove the 2020 margin requirement in the Group’s long-term incentive plans for 2018 and 2019. This change to the long-term contractual profit-sharing plans allowed Bureau Veritas to maintain the appeal of the plans without triggering automatic vesting (all awards under the 2019 plans are subject to a margin requirement for 2021). This decision thereby enabled the Group to secure the ongoing commitment of the plan’s 500 high-performing beneficiaries at the height of the health crisis, along with the continuity of the Company’s performance.

The Board of Directors also considered the practical application of the compensation policy if there were to be a change in governance or a new Corporate Officer appointed during the year, either to replace an outgoing Corporate Officer (executive or Director), or to strengthen executive management or the Board of Directors as a whole.

In such circumstances:

• ●in the case of a Director, compensation would be determined in accordance with the compensation policy applicable to Directors (see section 3.7.2.1 below); the Board would therefore take into account the date on which the Directors’ term of office starts;
• ●in the case of a Chairman, Executive Corporate Officer, Chief Executive Officer or Deputy Chief Executive Officer, compensation would be set in accordance with the specific compensation policy applicable to the category concerned. The Board of Directors would conduct an overall analysis of the situation of the Corporate Officer in question (skills, experience, role, whether or not he or she works for the Group, etc.) and of the Group (context of the appointment, impact on governance, performance, etc.), in order, in the case of an Executive Corporate Officer, to determine the objectives for the variable portion, level of performance, maximum and weighting in relation to the annual fixed compensation, subject to the ceilings set out in the compensation policy applicable to the Chief Executive Officer and Deputy Chief Executive Officers (if any) (see section 3.7.2.3 below).

The Nomination & Compensation Committee has five members, four of whom are independent.

The Board of Directors and the Nomination & Compensation Committee are responsible for preventing and managing any conflicts of interest that may arise in the decision-making process, in particular when deciding the compensation of the Corporate Officers. The Chief Executive Officer is involved in the work of the committee, except for any agenda items that concern him. Similarly, the Chairman does not participate in the deliberations concerning his compensation and abstains from participating in discussions on the policy that concerns him.

As part of the dialogue with its shareholders, Bureau Veritas organizes meetings with investors and voting advisory agencies before the Shareholders’ Meeting and throughout the year on topics related to governance and executive compensation. Each year, the Group reviews its policy in light of this feedback.

In 2021, these meetings provided an opportunity to present to investors and proxies the changes in the compensation policy for Bureau Veritas’ Corporate Officers, submitted to shareholders for approval at the Shareholders’ Meeting of June 25, 2021.

Thanks to the quality of shareholder dialogue within the Group as reported to the Nomination & Compensation Committee, shareholders regularly support the compensation policy put to their vote at the Shareholders’ Meeting, along with the clarification of certain elements and information contained in the compensation policies, the “Say on Pay” or the report on compensation.

The Nomination & Compensation Committee reviewed these issues as of June 2021 and decided that:

• ●Corporate Social Responsibility (CSR) targets should apply to the variable portion of compensation for all Group executives. These targets were already included in the objectives for the annual variable compensation awarded to the Chief Executive Officer and the members of the Executive Committee;
• ●CSR-related targets should be introduced for the Group’s long-term incentive plans in 2022;
• ●as part of ongoing efforts to improve the transparency of information on executive pay, the compensation policies and the report on executive compensation were reviewed by the Nomination & Compensation Committee to further improve transparency. A detailed description of the long-term incentive scheme is provided in section 3.8.3.

In accordance with French law, shareholders are asked to vote on the following:

• ●the 2022 compensation policy for Directors, as presented in section 3.7.2.1 (ex-ante vote);
• ●the 2022 compensation policy for the Chairman of the Board of Directors, as presented in section 3.7.2.2 (ex-ante vote);
• ●the 2022 compensation policy for Executive Corporate Officers applicable to the Chief Executive Officer and to any Deputy Chief Executive Officers, as presented in section 3.7.2.3 (ex-ante vote);
• ●the report on executive compensation (covering Directors, the Chairman of the Board and the Chief Executive Officer) paid or awarded in 2021, as presented in section 3.7.3 (ex-post vote);
• ●the “Say on Pay” relating to the Chief Executive Officer, as presented in section 3.7.3.4;
• ●the “Say on Pay” relating to the Chairman of the Board, as presented in section 3.7.3.4.

As of the publication date of this Universal Registration Document, the interests of Corporate Officers and Directors in the capital of Bureau Veritas were as follows:

Didier Michaud-Daniel, Chief Executive Officer, holds 559,225 shares, representing 16.7 times his annual compensation for 2021. at a per-share value of €26.88 (the reference price on June 22, 2021).

Didier Michaud-Daniel, Chief Executive Officer, also holds 1,470,960 stock subscription and purchase options granted under the July 15, 2015, June 21, 2016, June 21, 2017, June 22, 2018, June 21, 2019, June 26, 2020 and June 25, 2021 plans.

A detailed description of stock subscription and purchase option plans is provided below in section 3.8.3.3 – Stock subscription and purchase options, of this Universal Registration Document.

Investors are advised to carefully read the financial and non-financial risks described in this section, as well as the other information contained in this Universal Registration Document, before taking any investment decisions.

In accordance with Regulation (EU) No. 2017/1129 (“Prospectus III”) and in compliance with the ESMA Guidelines, at the date this Universal Registration Document was filed, the risks presented below are the main risks considered specific to the Bureau Veritas Group and/or to its securities that Bureau Veritas believes could have a significant net impact on the Group, its businesses, its financial position, its earnings and/or its outlook should they materialize. The occurrence of one or more of these risks could result in a decrease in the value of the Company’s shares, and investors could lose all or part of their investment.

The Group’s various operating departments, as well as support functions both in and outside France, identify and assess risk along with the related risk management procedures on an ongoing basis. Reports are regularly submitted to the Executive Committee and to the Board of Directors’ Audit & Risk Committee. They help to prepare and update the risk map described in section 4.2 – Internal control and risk management procedures, of this Universal Registration Document.

The Group has also taken out various insurance policies, as described in further detail in section 4.3 – Insurance, of this Universal Registration Document. The Group’s insurance strategy is to best protect the Group’s employees and assets against the occurrence of identified major insurable risks that may affect it.

In any event, other risks that Bureau Veritas does not consider to be specific to its businesses as they generally also concern other issuers in varying degrees, regardless of their activities, such as risks related to the climate, international economic sanctions or exchange rate fluctuations, could also have an adverse impact on the Group, its businesses, its financial position, its earnings and/or its outlook. Other risks may exist or may come to exist that are not known by Bureau Veritas at the date of this Universal Registration Document or that are presented in other sections of the Universal Registration Document and considered at that date unlikely to have a significant adverse impact on the Group, its businesses, its financial position, its earnings and/or its outlook should they materialize.

In 2020, as part of the work to update the Group’s risk map, all Group-wide processes for preparing the map were reviewed. This task involved all operating groups and support functions (see section 4.2.1 – Organization and general approach to internal control and risk management, of this Universal Registration Document). A total of 40 key risks were identified, including risks specific to the Group’s businesses.

As a result of the update to the Group’s 2020 risk map:

• ●cybersecurity risk is now included in the risk factors, in the “Risks related to the Group’s operations and activities” category;
• ●the seven risks discussed in the 2019 Universal Registration Document published in March 2020 correspond to other risks specific to the Group and are described below;
• ●the implementation of the action plans in 2021 did not have any impact on the categories in which risk factors are classified since the 2020 Universal Registration Document was filed in March 2021.

The risk factors shown below are sorted into the following three categories:

• ●risks related to the Group’s operations and activities;
• ●risks related to human capital;
• ●risks related to acquisitions.

Risks are classified within their respective category in decreasing order of importance as determined by the Company based on the probability that the risks will materialize and the estimated extent of their impact on the Group, its businesses, its financial position, its earnings and/or its outlook, and after applying any risk mitigation measures. The order of importance as determined by Bureau Veritas could change at any time, in light of new external facts or circumstances, developments in the Group’s businesses, or changes in the impact of measures to manage and mitigate risks.

For certain risks, references are made to specific chapters or sections of this Universal Registration Document in which they are discussed in more detail. Internal control and risk management procedures in place within the Group are described in section 4.2 – Internal control and risk management procedures, of this Universal Registration Document.

Risk factors are assessed in terms of (i) frequency or probability of occurrence, (ii) gross impact (i.e., the impact if there were no risk prevention or mitigation measures), and (iii) the level of control of the organization. The table below shows the results of this net impact risk assessment. Each of the risk factors shown is ranked “low”, “medium”, or “high” on the risk scale.