Interventions in the strategic area Sustainability is a key pillar of our strategy, and we are aware of the influence we have on human communities, wildlife, and the environment. For this reason, we are committed to providing consumers with sustainable products, designed in accordance with ethical procurement rules. In 2023 we implemented sustainability measures in our procurement processes: z Increasing the share of Romanian products: We choose products manufactured or processed in Romania for the assortment. Our strategy is to focus our attention on food produced in Romania by local producers. z Continuous improvement of product quality: During the reporting period, we continued to pay attention to improving the product recipe by reducing or eliminating the number of additives. z Improving packaging quality: We continue to strive to reduce plastic and chemicals in packaging, as well as to use as much recycled material as possible in the packaging used for our products. z Integrating transparency and sustainability into the supplier evaluation process: Suppliers are contractually bound to comply with international and national laws, as well as labor standards developed by the International Labor Organization. z Supplier Code of Conduct: We have written down our principles and defined the Supplier Code of Conduct, clarifying our expectations in terms of human rights and the environment. z Responsibility in animal sourcing processes: The Group pursues the ambition to implement animal welfare standards for its private label animal products, which provide the guarantee that a consistent animal welfare system is implemented throughout the protein supply chain. Interventions in the operational area Developing and encouraging the consumption of sustainable products remains at the heart of PENNY, representing two of our fundamental goals. In the reporting year, the areas of intervention of the Sustainable Assortment pillar remained the same as in the previous year, being represented by the material aspects defined at the level of this pillar. In 2023, our operational efforts focused on: z Maintaining a fair business relationship with all our suppliers and maintaining optimal payment terms; for the reporting year, the average payment terms for invoice payments8 are: 26.64 days for freight suppliers and 30 days for service providers. z Remodeling of stores based on a new concept. The concept complies with our sustainability policies, energy efficiency principles and aims to increase comfort for our employees and customers, with a focus on sustainable assortment categories. z Continuation of local partnerships. Our cooperation with suppliers is based on partnership, responsibility, and mutual trust. In 2023 we continued to work closely with local and regional producers to ensure that we offer our customers products processed and packaged in Romania, with the primary ingredient from Romania, part of the TripleRO (3RO) assortment. Thus, at the end of 2023, 39.17% of our assortment was 3RO assortment. z Investments in quality and local products. We want to offer our customers quality local products at affordable prices on a constant basis so that they benefit from the possibility of buying all the products they need daily from our stores, in a fast and efficient way. z Evaluation and audit procedures. We carry out internal procedures and audits to assess the reliability and transparency of suppliers. Suppliers are also evaluated in terms of production and product quality. z Equipment for efficiency. Equipping display cases with doors, using CHEP pallets and IFCO crates, and using an appropriate transport logistics service all contribute to the long-lasting quality and freshness of food. z Punctuality in delivery services. In 2023 this indicator was 99.2%. z Protection for employees, customers, and collaborators. We paid close attention to measures to prevent and spread diseases and to maintaining the high quality of services in distribution and delivery, so that all food quality requirements are strictly observed. z Crop monitoring pilot project. We ensure the rapid entry of Romanian production on the shelves of our stores. z Communication policies. Our conduct complies with all the principles developed by REWE Group, as well as the directives of the National Audio-Visual Council. We respect the principles of credibility and transparency in both advertising and awareness campaigns.* * termenele medii de plată sunt calculate de la data la care începe să se calculeze termenul contractual sau statutar de plată SUSTAINABILITY STEP BY STEP CORPORATE GOVERNANCE AND BUSINESS SUSTAINABLE ASSORTMENT ENERGY, CLIMATE AND RESOURCES EMPLOYEES AND SOCIETY GRI & SASB INDEX ASSURANCE OF SELECTED NON-FINANCIAL INDICATORS
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