Materiality analysis Materiality analysis underpins sustainability reporting, while providing a way to structure and prioritize our efforts to increase sustainability performance. Thus, by identifying and ranking those aspects of our activity that are significant from an ESG perspective, we can act accordingly to reduce potential negative impacts and increase positive impacts for society, the environment, and for our business. According to the latest European regulations, soon, companies will be required to undergo a double materiality assessment process to determine whether a sustainabilityrelated topic or information must be presented in the company's sustainability report. The double materiality involves examining both the impact that the aspects managed by the company generate on the environment and society (inside-out perspective) and the financial impact that these aspects generate on the organization (outside-in perspective). Assessing the materiality of the issues we manage is the first step for the entire sustainability reporting process, but also an important step towards a better understanding of our impact on the economy, the environment and society through which we have been able to: z identify topics relevant to the organization to be addressed in the sustainability report and define strategic actions. z identify and prioritize the impacts of our organization, including our value chain. We follow the evolution of the legislation in terms of financial and non-financial reporting obligations and at the same time we align ourselves with the directions set at the level of the REWE Group. Thus, given the changes that have occurred because of the EU Corporate Sustainability Reporting Directive (CSRD), at Group level we are in the process of updating and restructuring the reporting process to comply with the new reporting provisions and standards. At the same time, we wanted to continue in 2023 the directions of development of sustainability performance that we have assumed and developed in recent years, and to achieve this, we considered it necessary to continue to pursue the same material aspects. Thus, for the 2023 financial year, we have kept the same materiality analysis as in the 2022 financial year, the only update being that we have framed the material aspect "Food waste management" in the "Energy, climate and resources" pillar, compared to the "Employees and society" pillar, for greater clarity. While working on the development of the internal reporting system to meet the provisions of the CSRD, in 2023 we continued to implement improvement measures on the same materiality structure as in previous years, which allows for greater clarity in comparability and monitoring of progress. In this chapter we will present a summary of the latest materiality analysis, and for more details please refer to the chapter "Sustainability Step by Step" in the Sustainability Report for the financial year 2022. The process of preparing the sustainability report remained the same, the reporting coordination being carried out by the Sustainability Manager, with the involvement of all the departments that provide information and input data for reporting, the report being finally verified and validated by a person in charge of the REWE Group and by the CEO of PENNY Romania. Before completion, the report is rigorously checked to ensure the alignment of material topics with relevant priorities for the business, transparency in reporting progress on strategic sustainability objectives and the accuracy of the information disclosed. Further our operational strategy is guided by effective control of specific processes, with the help of operational indicators, to prevent negative impacts. At the same time, we coordinate our efforts to implement the opportunities identified in the field of sustainability through specific projects. This approach is supported and coordinated by the Sustainability Committee, which ensures integrated monitoring through our sustainability management system. 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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