Goldman Sachs GS SUSTAIN Europe Future of Food: Digesting the EU Taxonomy In December, our European Consumer Staples sector team partnered with GS SUSTAIN to discuss the six environmental objectives of the Taxonomy and their relevance to Consumer Staples, particularly under the transition to a circular economy and the protection of biodiversity. Under the initial draft of the remaining four objectives released in August 2021, the team examined how European Food companies under scope screen on both an eligibility and alignment basis based on their interpretations of the Taxonomy technical screening criteria, and leveraging the currently available disclosures from covered companies. While the newest release of the Technical Screening Criteria for the remaining four objectives is not identical to the draft from August 2021, the alignment criteria for food and beverage remained the same. It is hard to draw exact conclusions given inconsistency in company reporting, but the team tried to assess where the most progress on achievement of the Taxonomy criteria has been made, the biggest challenges ahead, and limitations of the EU Taxonomy proposals for the CPG space. Food manufacturing companies will have to comply with rules covered under the protection and restoration of biodiversity and ecosystems and transition to a circular economy. The team assessed the alignment to the Taxonomy criteria by identifying the proportion of raw materials defined as sustainably sourced and the proportion of packaging made up of recycled content. These disclosures are not uniform, and may not always meet the full criteria needed to be aligned with the EU taxonomy, but these figures still offer insight with respect to the relative performance of each business. Updates to our EU Taxonomy Tool Our updated GS SUSTAIN EU Taxonomy Tool expands our mapping of 1,700 unique revenue segments to the 21 circular economy activities (in addition to the already-mapped 90+ climate change mitigation and adaptation (where relevant) activities) defined in the platform’s final report for the next four Environmental Objectives, and assess alignment where feasible. We also now incorporate company reported Taxonomy eligibility and alignment figures for climate change mitigation where available. Our Taxonomy eligibility and alignment framework covers >7,000 global companies where ~4,300 have some potentially eligible revenue and >700 companies have some potentially aligned revenue. 3 May 2022 24