The outside-in perspective for the Company Inside-out perspectiv on the Environment and Society Risks Opportunities Negative impacts Positive impacts SUSTAINABLE ASSORTMENT pillar 1 Regionality and local products • Inflation puts pressure on shelf prices and may result in a decrease in the purchasing power of the consumers • Allocating significant resources to development of the regional product portfolio • If the relationship is not managed correctly contractual with the local producer, it can lead to business destabilization • There are market risks (gaps in the availability of local/regional raw materials, in the flow of supply, in the existing supply), which can lead to the failure to meet the assumed targets and even to the loss of customers • Reduction of acquisition costs with shortening the supply chain • Improving and growing the portfolio of Local suppliers • Increasing the 3RO product portfolio and reaching one of the most important own strategic indicators • Allocation of substantial resources from the small local producers for meet the quality standards required by a large retail network • Supporting the national economy through collaboration with regional producers, which leads to improved quality of life and benefits for communities Local • Shorter transport distance of them from factory to stores, thus reducing the footprint of due to freight transport • Employees have a sense of contentment through association with a sustainable company that supports national economy, while ensuring Quality products for consumers 2 Ethics in supply chain processes • Sustainable products risk not being appreciated by the cause of the lack of awareness about this Product Genre • Can reduce trust in the brand if not Ensure proper portfolio communication local products, given that there is a a growing trend to ensure that products and there is already a risk that current and potential customers are not properly informed with on the efforts made • Increasing the reputation of the company and private label • Trends to increase traceability sustainability in supply chains can be puts financial pressure on suppliers, who may need to allocate more resources in the in order to meet these criteria (certifications, testing, increasing product quality, etc.) • Greenhouse gas emissions (emissions from whole value chain) – emissions resulting from in the value chain is the largest part of the REWE Group's emissions; an analysis of the sources and possibilities for reduction is ongoing • Supporting respect for human rights and providing favorable working conditions on our supply chain, through implementation of the Supplier Code of Conduct • Reducing environmental impact by development of the sustainable product portfolio • Positive impact related to the performance of activities based on the principles of cooperation and operating standards • Food quality and safety (ensuring the fact that private label products are safe for consumers) • Access to a functional laboratory in permanence and the application of meticulous procedures screening to ensure that products are high quality and safe for consumption MESSAGE FROM THE GENERAL MANAGEMENT SUSTAINABILITY STRATEGY AND GOVERNANCE ABOUT US AND OUR VALUE CHAIN ABOUT THE REPORT THE FUTURE IS MADE TODAY SUSTAINABILITY MILESTONES SUSTAINABILITY REPORT PENNY ROMANIA 2024 48/276
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