SUSTAINABLE BUSINESS MODEL EXPLAINING THE IMPACT We have adopted a sustainable business model because we are fully aware that only through an ethical approach to business with respect for all human rights and responsible business practices, we can be close to the needs of our stakeholders. We enter partnerships and collaborations by embracing the principle of transparency and address our consumers on the commercial sector using responsible marketing means. Environmental and social responsibility has long earned a special place in our business strategy and we are promoters of sustainability as a whole. HOW WE CONTROL THE IMPACT Collaboration and partnerships Our business model is a balanced one; we create local partnerships on the principle of transparency and we address our consumers using responsible marketing means. We are aware that our desire of differentiating ourselves from the competition can be achieved by meeting the needs of several stakeholder groups. Consumer education Educating our consumers is essential. Both about how to shop responsibly as well as what healthy eating means, or the importance of sport for health. Through our campaigns, we encourage the passion for cooking and through this the purchase of fresh products from our stores. Innovation and digitization At PENNY, innovation comes in the form of store remodeling in the Future Store format, with the goal to make our customers' shopping experience as pleasant as possible. We are constantly working on improving the retail range, internal processes, new communication and payment tools and ways to streamline online ordering. The store infrastructure increasingly includes digital elements, such as headset communication systems for employees, electronic price tags, electronic monitoring of fresh bake-off stock or discounts applied using the PENNY digital card. We have developed new partnerships to be close to consumers through the E-Commerce platform. Also, to meet customer needs, we launched a cash withdrawal service at cash registers in 2022. We have installed the first self-checkout tills in selected stores and, for now, we are analyzing customer feedback to see if it is a suitable option for them. OUR IMPACT AND PERFORMANCE IN FIGURES Respecting and enforcing labor, social and environmental as well as human rights standards is one of our most important responsibilities. We source a large number of products through supply chains or suppliers and service providers from many countries around the world. For this reason, we have also set ourselves clear and transparent rules, which we have imposed on ourselves and which our suppliers and service providers must respect. Our objectives are in particular: z Sustainability z Environmental and climate protection z Fair and transparent working conditions z Animal welfare and biodiversity conservation z Human rights z Food and product safety Our supply chain strategy is complemented by our digital complaints system, in accordance with the provisions of the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz). Our employees, employees of suppliers and service providers, customers and others have the option – completely anonymously – to submit reports of violations of our supply chain requirements and the Supply Chain Due Diligence Act. Our complaints system is managed by our complaints team, which is available to all our employees and business partners for all questions related to supply chain issues. We promote our products in strict compliance with legal requirements as well as ethical and cultural standards. Truthfulness, accuracy and transparency are the fundamental principles we follow in every communication or marketing action we undertake. We apply our own company-wide code of conduct, which is aligned with international sustainability regulations, standards and trends. SUSTAINABILITY REPORT PENNY ROMANIA 2022 62/250 SUSTAINABILITY STRATEGY ABOUT US AND OUR VALUE CHAIN THE FUTURE IS MADE TODAY SUSTAINABILITY HIGHLIGHTS MESSAGE FROM THE GENERAL DIRECTORS CONTENTS SUSTAINABILITY STEP BY STEP
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