Constellium : Sustainability Linked Financing Framework – February 2020

SUSTAINABILITY-LINKED FINANCING FRAMEWORK

FEBRUARY 5, 2021

I.

Constellium’s Sustainability Technique

Constellium is an business chief within the manufacturing and recycling of aluminium merchandise. Constellium advantages from aluminium’s inherent sustainability traits – light-weight, sturdy, and infinitely recyclable. Constellium is a metallic fabricator and doesn’t mine bauxite, refine alumina, or smelt aluminium.

• • Constellium has lengthy positioned sustainability on the core of its enterprise. We’re dedicated to constructing a secure, sustainable, and socially accountable firm. This implies decreasing our emissions and our waste, investing within the security and variety of our individuals, supporting our communities, and adhering to accountable governance rules.

• • Security is our highest precedence. Our security outcomes are among the many greatest within the business and we stay dedicated to steady enchancment.

• • We’ll try to conduct our operations in a accountable approach, which can embody working to maximise recycling, reduce GHG emissions and waste, and repeatedly investing in our individuals.

• • To higher perceive our stakeholders’ expectations, we commonly search suggestions by means of materiality analyses.

• • Yearly, we monitor our efficiency and guarantee correct and clear disclosure of our sustainability knowledge.

CONSTELLIUM’S FOUR STRATEGIC PILLARS

Sustainability Council

Our Sustainability Council is a proper physique whose members are answerable for guiding Constellium in the direction of its sustainability targets. The Council meets three to 4 occasions a 12 months. Constellium’s sustainability staff shares the work of the Council with the Government Committee and the Board frequently.

Aligned with the Sustainable Growth Targets

Constellium strives to advertise a secure and inclusive setting the place everybody can contribute and thrive. Security is our #1 precedence. We’re dedicated to recruiting and retaining a certified and numerous pool of expertise, guaranteeing alternatives for everybody to study and develop, selling a secure and inclusive work tradition, and advancing change with our companions. We assist communities residing close to our operations, organizing packages in fields from setting to healthcare.

We have now aligned every of our 4 strategic pillars to relevant UN Sustainable Growth Targets (SDGs). In our most up-to-date materiality evaluation, eight of the SDGs have been recognized as related for Constellium.

Dedicated to Sustainable Reporting

Yearly, we monitor our efficiency and guarantee correct and clear disclosure of our sustainability knowledge. We’re additionally engaged on our 2030 sustainability technique and roadmap, which is anticipated to yield bold but achievable targets.

II.

A Sustainable Enterprise Mannequin

Growing merchandise and options with environmental advantages

Our sustainability dedication and initiatives are aware of the calls for from our prospects and from society for sustainable merchandise and options.

We profit from the inherent attributes of aluminium, a light-weight however robust metallic that’s absolutely and simply recyclable.

• • Aluminium cans are essentially the most recycled beverage containers, infinitely reborn in a

  “closed loop” course of and again on the shelf in 60 days.

• • Aluminium is a favourite materials of automotive OEMs. Sturdy and light-weight, aluminium helps advance greener mobility by enhancing gasoline financial system, decreasing CO2 emissions, and rising electrical automobile vary, whereas additionally enhancing security.

• • Aluminium can also be a cloth of selection for the aerospace market because the market calls for extra gasoline environment friendly plane.

We continually work to additional light-weight merchandise, promote recycling, enhance manufacturing processes, and cut back the footprint of aluminium merchandise over their full lifecycle.

Our R&D facilities are centered on discovering sustainability options, in partnership with our prospects. Within the packaging sector, we’re engaged on R&D initiatives to make beverage cans about 10% lighter, enhancing their carbon footprint by the identical proportion. We additionally companion with the transportation sector to develop superior options to light-weight. In automotive, we’re main a consortium of automotive producers and suppliers for the ALIVE (Aluminium Intensive Automobile Enclosures) challenge, which is growing structural aluminium battery enclosures for electrical automobiles. In aerospace, our ultra-lightweight aluminium-lithium options have been developed collectively with our prospects. Combining aluminium, copper, silver, and lithium, Airware® can ship as much as 25% weight discount.

As a part of our growth course of, we carry out a sustainability verify to evaluate product efficiency in opposition to a set of standards, together with well being and security, vitality, local weather, waste, and social facets.

A price chain method

Constellium’s technique extends to our provide chain. Because of this we’re a founding member of the Aluminium Stewardship Initiative (ASI), a world, multi-stakeholder, nonprofit, standards-setting and certification group. Following a whole worth chain method, ASI works in the direction of accountable manufacturing, sourcing, and stewardship of aluminium.

As a founding member of ASI, we actively helped launch its Certification program together with Efficiency Commonplace and Chain of Custody Commonplace in December 2017.

Our casting and rolling operations in Singen, Germany, obtained the ASI Efficiency and Chain of Custody Commonplace certificates in 2019 and began producing ASI licensed merchandise for our prospects in 2020.

As of December 1, 2020, our Neuf-Brisach facility in France has been absolutely licensed with the ASI Efficiency and Chain of Custody requirements. This can permit our plant to offer ASI licensed merchandise, by sourcing from ASI-certified suppliers and in addition instantly from our recycling unit. We’re dedicated to rising our websites which can be ASI licensed.

Our extrusion traces in Singen and our Automotive Buildings operations in Gottmadingen and Dahenfeld, Germany, obtained the ASI Efficiency and Chain of Custody Commonplace certificates in October 2020 and in February 2021, respectively.

III. Rationale for Sustainability-Linked Financing Framework and Alignment with the Sustainability-Linked Bond Ideas

Constellium is supportive of sustainable finance and, on this Sustainability-Linked Financing Framework, we’re dedicated to meaningfully tying our sustainability aims to our funding obligations. We consider that sustainable finance can be a powerful motivator in driving change towards a low emissions future. These financing actions may also permit our traders to companion with Constellium in attaining long run sustainability targets.

The Sustainability-Linked Bond (“SLB”) Ideas, as administered by the Worldwide Capital Market Affiliation, are voluntary course of pointers that define greatest practices for monetary devices to include forward-looking ESG outcomes and promote integrity within the growth of the Sustainability-Linked Bond market by clarifying the method for issuance of a SLB.

Our Sustainability-Linked Securities Framework is in alignment with the 5 core elements of the SLB Ideas:

1. Choice of KPI

We’re dedicated to choosing sustainability aims which can be related, core, and materials to our enterprise. Constellium could select to include a number of KPIs in its Sustainability-Linked Financing transactions. The next are examples of KPIs.

GHG Emissions Depth Discount

Rationale

Local weather change is likely one of the largest environmental, social, and financial challenges all of us face. We acknowledge the impact of human exercise on the local weather and perceive the necessity to restrict and cut back GHG emissions. Constellium is dedicated to enhancing our effectivity in the usage of pure assets, particularly vitality.

The choice of GHG emission depth is in keeping with the great evaluation of Constellium’s materials points in recent times, most not too long ago in 2019, which concerned each inner and exterior stakeholder views. Our operations, and the operations of our business, are carbon intensive, notably recycling, casting and rolling. Constellium doesn’t mine bauxite, refine alumina, or smelt aluminium. Constellium is dedicated to the UN Sustainable Growth Targets (SDGs), and this KPI contributes to SDG 13 –

Local weather Motion and SDG 9 – Industrial Innovation and Infrastructure. GHG emissions depth is due to this fact core, related, and materials to our enterprise.

Bettering vitality effectivity remains to be on the coronary heart of our efforts to restrict our carbon footprint, since most of our GHG emissions are the product of vitality use.

We’re endeavor varied initiatives to be extra vitality environment friendly together with:

• • Defining an motion plan for every website, together with operational and investment-related enhancements

• • Sharing efficient concepts and greatest practices by means of an lively vitality community to assist websites obtain their targets

• • Evaluating alternatives to extend our purchases of renewable vitality

• • Monitoring all actions on a quarterly foundation

We’ll accomplish our 2025 goal principally by means of steady enchancment in our manufacturing processes and tools. For instance, in 2020, our website in Neuf-Brisach, France, changed heavy gasoline oil with pure fuel in certainly one of our furnaces, which can cut back GHG emissions and dramatically cut back SOx emissions. Whereas we now have a excessive degree of vitality micro-management in lots of our vegetation, there are additional enhancements to make inside our operations. We additionally count on to acquire vital vitality financial savings by means of collaboration with our energy suppliers, primarily by rising our publicity to renewable vitality sources. Lastly, our degree of manufacturing is crucial, as our mills are extra environment friendly the nearer they’re to full capability.

Definition and methodology

Constellium will calculate GHG emissions depth because the tons of CO2 equal for each Scope 1 and Scope 2 emissions divided by the tons of gross sales. Scope 1 are emissions from fuels burned in our vegetation, whereas Scope 2 are the emissions related to the manufacturing of the electrical energy we use. Tons bought represents tons bought to 3rd events. This metric is measurable, quantifiable, and externally verifiable.

Enhance Recycled Aluminium Enter

Rationale

Aluminium is infinitely recyclable, whereas sustaining its materials properties, which is why 75% of the aluminium produced since its discovery remains to be in use right this moment. Utilizing scrap reduces the necessity for major aluminium and due to this fact minimizes waste, avoids useful resource depletion, and lowers greenhouse fuel emissions throughout a product’s life cycle. Recycling aluminium is way much less energy-intensive than manufacturing new metallic, requiring solely 5% of the vitality used to provide major metallic and delivering as much as 95% in CO2 financial savings.

The choice of recycling is in keeping with the great evaluation of Constellium’s materials points in recent times, most not too long ago in 2019, which concerned each inner and exterior stakeholder views. This KPI contributes to SDG 12 – Accountable Consumption and Manufacturing and SDG 13 – Local weather Motion. Recycling, and the associated advantages on emissions and vitality, are core, related, and materials to our enterprise. Maximizing our use of recycled materials is a core technique for Constellium. We use a big share of recycled aluminium within the manufacturing of our merchandise. We count on to considerably increase our recycling capabilities in Europe within the coming years.

We’re dedicated to enhancing thecontributions together with:fromaluminium recycling,

• • Rising scrap assortment charges collaboration with key stakeholders

• • Higher scrap sorting by means of partnerships

  in

• • Creating higher and extra environment friendly closed recycling loops with our prospects

• • Bettering our personal recycling processes, together with the event of latest and extra scrap-tolerant alloys

• • Partnering with our prospects and the business to advertise end-of-life recycling and lift recycling consciousness

For example, we companion in Europe with Each Can Counts to lift consciousness amongst customers about can recycling. We additionally lead a partnership with Renault, ESI3, to facilitate recycling of aluminium automotive doorways.

We additionally repeatedly work to enhance our recycling processes. Lately, our Decin plant accomplished a state-of-the-art sow casting system linked to the prevailing twin chamber furnace, designed to course of scrap that incorporates natural materials. This permits us to extend the quantity of processed scrap by 37%, whereas higher use of the dual chamber results in a 30% lower in particular vitality consumption.

Definition and methodology

Constellium will calculate recycling aluminium enter in keeping with “GRI 301-2 Recycled Enter Supplies Used”. This technique relies on enter materials used to fabricate the group’s major services and products. Recycled aluminium enter is measured in complete weight and consists of each pre-consumer and post-consumer scrap. Recycled enter contains aluminium bought from scrap remelters. This metric is measurable, quantifiable, and externally verifiable.

2. Calibration of Sustainability Efficiency Targets (SPT)

GHG Emissions Depth Discount

SPT: Tons of CO2 equal per ton of gross sales (t CO2 eq. / t of gross sales) for Scope 1 and Scope 2, equal or decrease than 0.615 for the total 12 months of 2025.

This SPT represents a 25% discount from the 2015 baseline of 0.808. 2015 was chosen because the baseline as this was the primary 12 months together with our main plant in Muscle Shoals, Alabama (acquired January 5, 2015). Historic knowledge for tons of gross sales is referenced on web page 8 of this Framework.

Goal commentary date for SPT: December 31, 2025

SPT Rationale

GHG emission depth discount is a key facet of our total sustainability technique. Our 2025 GHG goal is a key step in our local weather change initiative. This goal was initially set in 2019, greater than 5 years from the date of goal submission, which is consistent with greatest practices. We count on our 2025 goal to offer an intermediate step to a 2030 goal, which we are going to announce as a part of our 2030 sustainability roadmap initiative.

Our GHG emission depth goal is bold and past a “Enterprise as Traditional” trajectory. Lately, we now have made vital progress in decreasing the emissions related to our manufacturing. Our depth goal permits for quantity development, whereas considerably decreasing the depth of Scope 1 and Scope 2 CO2 emissions in every ton we promote.

Our emissions depth is under ranges of our friends. Our SPT goal of a 25% discount from a 2015 baseline is commensurate with or extra aggressive than the targets of our friends.

Elevated Recycled Aluminium Enter

SPT: Tons of recycled metallic enter equal or greater than 685 kt for the total 12 months of 2026.

This SPT represents a ten% enhance from the 2019 baseline of 624 kt. Our 2019 efficiency was roughly 3% above the 2017 and 2018 ranges.

Goal commentary date for SPT: December 31, 2026

SPT Rationale

Recycling is a key facet of our total sustainability technique. Using extra recycled metallic in our inputs will possible cut back our reliance on major metallic, which is extra vitality and emissions intensive than recycled materials. On common, recycled aluminium accounted for 38% of our product content material in 2019. Of this, 18% was post-consumer scrap (generated on the end-of-life part of completed items), and 20% was pre-consumer manufacturing scrap (generated downstream from Constellium’s operations).

Our recycled enter goal is bold and past a “Enterprise as Traditional” trajectory. Our vegetation are already extremely environment friendly at using scrap of their inputs and have actively sought to extend recycled inputs in recent times. Our 10% enhance is an bold goal as our 2019 recycling degree was above 2017 and 2018.

Aluminium Scrap

3. Sustainability-Linked Securities Traits

Except in any other case said, the proceeds of any SLB can be used for common company functions.

Our SLBs could have a sustainability-linked function associated to the non-achievement of the SPT. For instance, this might embody a coupon adjustment, a coupon step-up, elevated redemption payment, or adjustments to the tenor of the bond.

Within the case of a coupon step-up, the coupon will enhance by the quantity specified within the documentation from the primary coupon fee date following the SPT commentary date till i) maturity or ii) on the time specified within the documentation.

The bonds could have a name schedule, which can be based mostly on the step-up coupon, until in any other case said.

All monetary and/or structural traits can be detailed throughout the authorized documentation of the SLB.

Worker in Neuf-Brisach, France

4. Reporting

Constellium will publish and preserve available and simply accessible on our web site an annual Sustainability Report. This report will present up-to-date info on the benchmark, efficiency of the related KPI(s), and progress towards the SPT(s). The place possible, Constellium will present further quantitative or qualitative element enabling traders to watch the progress towards the SPT. Constellium may also make public a verification assurance certificates from an exterior verifier of the SPT after the SPT commentary date. When related, Constellium may also present info on adjustments to its sustainability technique or the governance of the KPI(s) and SPT(s).

5. Verification

The annual efficiency of the KPI(s) can be topic to verification. Verification of KPI efficiency can be performed on a restricted assurance normal by a certified supplier of third-party assurance or attestation companies.

Following a goal commentary date, a verification assurance certificates confirming whether or not the efficiency on the KPI meets the related SPT can be printed on Constellium’s web site.

Constellium commits to acquiring a Second Celebration Opinion to judge this Framework, its transparency and governance, and its alignment with the SLBP.

This Sustainability-Linked Securities Framework (the “Framework”) doesn’t represent a advice concerning any securities of Constellium or any affiliate of Constellium. This Framework shouldn’t be, doesn’t include and is probably not deemed to represent a proposal to promote or a solicitation of any supply to purchase any securities issued by Constellium or any affiliate of Constellium. Specifically, neither this doc nor some other associated materials could also be distributed or printed in any jurisdiction wherein it’s illegal to take action, besides below circumstances that can lead to compliance with any relevant legal guidelines and laws. Individuals into whose possession such paperwork could come should inform themselves about, and observe any relevant restrictions on distribution. Any bonds or different debt securities which may be issued by Constellium or its associates sometimes, together with any sustainability-linked securities, shall be provided by the use of a separate prospectus or providing doc in accordance with all relevant legal guidelines, any choice to buy any such securities must be made solely on the premise of the data contained in any such prospectus or providing doc offered in reference to the providing of such securities, and never on the premise of this Framework.

The data and opinions contained in Framework are offered as of the date of this Framework and are topic to vary with out discover. None of Constellium or any of our associates assume any duty or obligation to replace or revise such statements, no matter whether or not these statements are affected by the outcomes of latest info, future occasions or in any other case. This Framework represents present Constellium coverage and intent, is topic to vary and isn’t supposed to, nor can or not it’s relied on, to create authorized relations, rights or obligations. This Framework is meant to offer non-exhaustive, common info. This Framework could include or incorporate by reference public info not individually reviewed, accepted or endorsed by the Constellium and accordingly, no illustration, guarantee or endeavor, categorical or implied, is made and no duty or legal responsibility is accepted by the Constellium as to the equity, accuracy, reasonableness or completeness of such info. None of Constellium or any of its subsidiaries or associates or any of their respective members, administrators, officers, brokers or staff nor some other individual accepts any legal responsibility by any means for any loss howsoever arising from any use of the Framework or its contents or in any other case arising in reference to the Framework.

This Framework could include “forward-looking statements” with respect to Constellium’s and its subsidiaries’ enterprise, outcomes of operations, and monetary situation and Constellium’s expectations or beliefs regarding future occasions and circumstances. You’ll be able to determine sure forward-looking statements as a result of they include phrases resembling, however not restricted to, “believes,” “expects,” “could,” “ought to,” “roughly,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “possible,” “will,” “would,” “may” and related expressions (or the unfavourable of those terminologies or expressions). All forward-looking statements contain dangers and uncertainties. Many dangers and uncertainties are inherent in Constellium’s and its subsidiaries’ business and markets. Others are extra particular to Constellium’s and its subsidiaries’ enterprise and operations. The incidence of the occasions described and the achievement of the anticipated outcomes depend upon many occasions, some or all of which aren’t predictable or inside Constellium’s management. Precise outcomes could differ materially from the forward-looking statements contained on this Framework. Any recipient of this Framework acknowledges that circumstances could change and the contents of this Framework could develop into outdated in consequence. No illustration is made as to the suitability of any sustainability-linked securities of Constellium to fulfil environmental and sustainability standards required by potential traders.

This Framework doesn’t create any legally enforceable obligations in opposition to Constellium; any such legally enforceable obligations regarding any sustainability-linked securities are restricted to these expressly set forth within the authorized documentation governing every such collection of sustainability-linked securities. Due to this fact, until expressly set forth in such authorized documentation, Constellium’s failure to stick or adjust to any phrases of this Framework, together with, with out limitation, failure to realize any sustainability targets or targets set forth herein, won’t represent an occasion of default or breach of contractual obligations below the phrases and circumstances of any such sustainability-linked securities. Components that will have an effect on Constellium’s capacity to realize any sustainability targets or targets set forth herein embody (however are usually not restricted to) market, political and financial circumstances, adjustments in authorities coverage (whether or not with a continuity of the federal government or on a change within the composition of the federal government), adjustments in legal guidelines, guidelines or laws, and different challenges.