X5 Retail : Sustainability Report (PDF)

Sustainability

Report

2021

X5 for the future

Our approach and 2021 highlights41 Product quality and safety assurance43

Promoting healthy lifestyles48 Our plans50

Content

Chairman's statement	3
President's statement	4

About this Report		5
Report methodology 6
Determination of material topics 6
About the Company		7

Our approach, values and goals8 Business model 10 Geography of operations 13 2021 key highlights 14 Strategic highlights15

Operational, financial and sustainability highlights17

Responsible business conduct

Risk management 30

Compliance and business ethics31 Responsible supply chain36 Care for our customers38

Our plans39

Healthy lifestyles

The planet

	Employees		82
	Our approach and 2021 highlights83
	Management model86
	Corporate culture and values87
	Motivation and fair compensation89
29	Training and development90
Engagement and feedback92
	Digitisation and efficiency93
	Occupational health and safety 94
	Our plans101

	Local communities		102
40	Our approach and 2021 highlights103
Food assistance105
	Supporting children in need107
	Supporting people with disabilities108
	Assistance for lost or disoriented
	people109
	Preventing social orphanhood110
	Local community centres110
	Corporate volunteering111
52	Our plans111

X5 Group is a leading Russian food retailer that manages the retail chains Pyaterochka, Perekrestok and Karusel alongside other assets. With our ambitious '30x30' sustainability targets for the year 2030, the Group works closely with a variety of stakeholders and organisations to have the greatest possible impact. Cooperation is the key to reducing our impact on the

Sustainable development and the Company's

business18

Sustainable Development Governance Model19

Sustainable development strategy20 COVID-19 response24 Stakeholder engagement25

Our approach and 2021 highlights53 Waste management and sustainable packaging54

Reduced climate impact and energy efficiency59

TCFD disclosure65

EU taxonomy for sustainable activities75

Responsible water consumption77 Promoting responsible consumption78 Our plans80

Contacts			112
Independent practitioner's
assurance report			113
Annex			114

GRI Content Index 115 SASB Content Index 126

TCFD compliance statement and index 128 UN SDGs content index 132

environment, promoting healthy lifestyles, and helping those in need.

2

CHAIRMAN'S STATEMENT

Chairman's statement

[102-14][102-15][102-31]

Dear stakeholders,

I would like to begin by thanking you all for the engagement and support that you showed

to X5 Group's sustainable development initiatives last year.

Sustainable development is an integral part

of X5's strategy. The Company continues to fulfil all its economic, social and environmental obligations, understanding the importance of this work to its employees, partners and society. Following the principles of sustainable development takes on all the more significance in difficult circumstances, proving the real value of the work we have performed to improve working conditions and safety, and to support those

in need.

Last year, the X5 team worked tirelessly

to achieve its strategic goals: we introduced new environmental initiatives, developed our community projects and improved our approach towards management. At the end of 2021, we set up a Sustainable Development and Innovation Committee as part of the Supervisory Board

to strengthen our work in all key areas.

The Committee advises the management team on matters regarding sustainable development, the Company's digital strategy, innovation and technology1.

The Supervisory Board constantly stresses the importance of dialogue with all our stakeholders, and of adapting our policies to the current needs of society. We are certain of the importance of listening to clients, local communities, employees, investors

and the authorities, and are committed to further developing our feedback mechanisms.

X5 Group is, first and foremost, grateful to its employees for ensuring its sustainability, who every day make the Company's uninterrupted work possible. The Supervisory Board attaches great importance to its programmes to improve working conditions, create new opportunities for growth and develop inclusive and equal opportunities for self-fulfilment.

Moving forward, the Company will have to adjust its strategic goals for sustainable development given new restrictions and opportunities. But our commitment to the principles of sustainable development, and the role they play as a basis for our long-term business strategy, remains the same.

We are proud of the progress X5 has made in sustainable development. Together, we can achieve even more!

Peter Demchenkov

СHAIRMAN OF THE SUPERVISORY BOARD

1. Given the composition of the Supervisory Board following recent events, the duties and responsibilities of the Sustainable Development and Innovation Committee is included under the remit of the full Supervisory Board as of 16 March 2022.

PRESIDENT'S STATEMENT

President's statement

[102-14][102-15]

Dear stakeholders,

I am delighted to present our second Annual Sustainability Report, which details the work we achieved in 2021.

We made significant progress towards achieving our targets on the sustainable use of resources - namely, the reduction of greenhouse gas emissions, the use of renewable energy

in operations and the reduction of waste. We worked tirelessly with our supply chain and drew up recommendations for our suppliers

on sustainable packaging. A range of eco-projects in our retail chains enabled us to engage millions of customers. And we paid particular attention

to raising awareness of sustainable development among our employees through training programmes and online interactive courses.

We continued to scale up our Basket of Kindness programme: in 2021, the volume of food products donated increased by 33% relative to 2020, with 184,000 people receiving assistance. Overall, we were able to improve the results

of all our charitable and community programmes and launched new forms of assistance together with our partners. In the current uncertain environment, our food assistance programmes have proved particularly relevant, and we

plan to strengthen our work to support local communities by increasing in-house deliveries, organising additional charitable collections

and engaging volunteers. Of all the important pilot

programmes we launched last year, I would like to draw particular attention to our food-sharing programme.

One of the most important factors in maintaining the sustainability of our business has been

our strict observance of high product safety and quality standards. In this, our regular internal audits and the responsible approach of our suppliers, who have been ready to implement best practices, have been essential. We are always improving our policies and processes in this area, an approach we intend to preserve to maintain the highest quality for our customers.

We have overcome the consequences of the pandemic and are now faced with new challenges. But we continue to ensure

the affordability of our products, to create new opportunities for employment and growth, and to contribute to the achievement of global and national sustainable development goals.

Ekaterina Lobacheva

PRESIDENT

01	About
	this Report

Report methodology 6 Determination of material topics 6