Interventions in the strategic area Sustainability is a fundamental element of our business strategy, and we are aware that our actions have an impact on people, animals, and the environment. Therefore, we strive to offer our customers sustainable products that are developed with environmental protection and ethical sourcing in mind. To respond to the complex needs of consumers and to continuously incorporate sustainability into procurement processes, the most important measures pursued in 2022 were: z Increasing the share of Romanian products: We choose products manufactured or processed in Romania for our assortment. Our strategy is to focus on food produced in Romania by local producers. z Continuous improvement of product quality: During the reporting period, we continued to focus on improving product recipes by reducing or eliminating the number of additives. z Improving the quality of packaging: We continue to strive to reduce plastic and chemicals in packaging and to use as much recycled material as possible in the packaging of our products. z Integrating transparency and sustainability into the supplier evaluation process: Suppliers are contractually obliged to comply with international and national laws and labor standards developed by the International Labor Organization. z Accountability in animal product sourcing processes: The Group pursues the ambition to implement animal welfare standards for animal products, private-label which provides assurance that a consistent animal welfare system is implemented throughout the protein supply chain. Interventions in the operational area Developing and promoting the consumption of sustainable products remain two of PENNY Romania's main objectives. The action areas of the Sustainable Assortment pillar have revised this year and are defined as follows: "Regionality and local products", "Ethics in the supply chain processes", "Animal welfare", "Packaging management", and "Promoting healthy nutrition". In 2022, our actions at the operational level focused on: z Remodeling of stores based on the "Future Store" concept. The concept is in line with our sustainability policies, and energy efficiency principles and aims to increase convenience for our employees and customers, with a focus on sustainable assortment categories. z Continue local partnerships. In 2022, we continued our close collaboration with local and regional producers to ensure that we offer our customers products processed and packaged in Romania, with the primary ingredient from Romania. Thus, 28% of our assortment during this period was 3RO assortment. z Investing in quality and local products. We want to consistently provide our customers with quality local products at affordable prices so that they can buy all the products they need quickly and efficiently from our stores every day. z Efficiency equipment. Equipping display cases with doors, using IFCO crates, and using an appropriate transport logistic service all contribute to the quality and freshness of food. z Punctuality of delivery services. In 2022, this indicator was 98.8%. z Protection of employees, customers and partners. We have paid close attention to measures to prevent and spread diseases and to maintain high-quality service in distribution and delivery, so that all food quality requirements are strictly adhered to. z Crop monitoring pilot project. We ensure the rapid entry of Romanian produce onto our stores' shelves. z Communication policies. Our conduct complies with principles developed by REWE Group and the guidelines of the National Audio-Visual Council. We respect the principles of credibility and transparency in both advertising and awareness campaigns. CORPORATE GOVERNANCE AND BUSINESS SUSTAINABLE ASSORTMENT ENERGY, CLIMATE AND RESOURCES EMPLOYEES AND SOCIETY REPORT ASSURANCE GRI & SASB INDEX
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