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2021

SHOPRITE HOLDINGS LTD Sustainability Report 2021

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STAKEHOLDERS

Customers

Shareholders and financiers

Communities

Trade unions

Employees

Suppliers

Regulators

REFERENCE

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Website

GRI

King IV

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1

CONTENTS

  1. About this report
  2. CEO's foreword
  3. Social and Ethics Committee Chairperson's report
  1. Sustainability highlights

About us

08 Who we are

  1. Purpose and values
  2. Our approach to governance
  1. Materiality
  1. Risk management and compliance
  1. Our position on key sustainability issues
  2. Our alignment with legislation and best practice
  1. Our contribution to South Africa's transformation
  2. Our contribution to the United Nations SDGs
  1. Sustainability Manager's message
  1. Our response to COVID-19

Our material matters

30 Employees

38 Customer centricity

  1. Supply chain resilience and sustainability
  1. Socio-economiccontribution
  1. Environmental stewardship

Appendices

  1. Appendix 1: Compliance training
  2. Appendix 2: GRI Index

80 Appendix 3: TCFD Index

84 Appendix 4: Key sustainability indicators

  1. GHG emissions
  2. Energy usage

85 Water usage

87 Abbreviations and acronyms

Report on Shoprite Holdings Ltd's sustainability approach over the

2021 financial year running to 4 July 2021. This report is best read in conjunction with Shoprite Holdings Ltd's Integrated Annual Report 2021.

For further information on this Sustainability Report, please contact the Sustainability team on +27 (0)21 980 4000.

Website: https://www.shopriteholdings.co.za/sustainability.html

SHOPRITE HOLDINGS LTD Sustainability Report 2021

2

ABOUT THIS REPORT

The Shoprite Group's 2021 Sustainability Report details the progress made in our sustainability journey in the past financial year, for the 53 weeks from 29 June 2020 to 4 July 2021. GRI 102-50

The Group has applied the principle of materiality in the identification of material issues, which influences our ability to create shared value. While our Integrated Annual Report is our main report to shareholders and reports on value creation, our Sustainability Report complements our Integrated Annual Report by providing further details on environmental, social

3

CEO'S FOREWORD

The year under review once again posed challenges, especially as the impact of COVID-19 continued to affect our operations as well as our stakeholders. We did not let these challenges stand in the way of delivering on our affordability promise or in making progress against our sustainability commitments. Being an affordable and sustainable retailer is not an obstacle to success; it is an opportunity to live our purpose and align our strategy with the needs of our stakeholders. Over four decades of retail industry experience has proven this,

while our performance has demonstrated that the approach makes business sense.

and governance (ESG)-related material issues, to a broader range of stakeholders. To obtain a comprehensive overview of our business, strategies and performance, this report should be read with the 2021 Integrated Annual Report (IAR) and the 2021 Corporate Governance Report.

We report on sustainability-related issues annually

through our Sustainability Report. No material restatements have been made to the Shoprite Group's previous Sustainability Report published in October 2020. If you have any questions relating to this report or its contents, please contact our Sustainability team on +27 (0)21 980 4000 or

https://www.shopriteholdings.co.za/contactus.html

To access more information on our sustainability efforts throughout the year, refer to our corporate website:

https://www.shopriteholdings.co.za/sustainability.html

GRI 102-48,102-51,102-52,102-53

Our progress on our sustainability journey is measured against various goals set out in our past Sustainability Reports.

The report outlines our ESG-related commitments and progress, in line with national and international frameworks, standards and goals, including:

  • The King IV Report on Corporate Governance for South Africa, 2016 (King IVTM)
  • The GRI Standards. This Sustainability Report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core option.

GRI Index, page 75

GRI 102-54

  • The United Nations (UN) Global Compact (UNGC) and the UN Sustainable Development Goals (SDG)
  • Carbon Disclosure Project (CDP) and Task Force on Climate- related Financial Disclosure (TCFD) frameworks
    Frameworks, standards and goals, page 80

The report has been reviewed and approved by our Social and Ethics Committee and our Audit and Risk Committee in August 2021. The 2021 financial year figures used in this report have been verified through an internal audit process. Figures included refer to all operations except for our franchised businesses.

Our people are at the core of our operations and through teamwork they enable our sustainability plans and ambitions. As such, their wellbeing and development are our top priority. Through our training programmes, we equip them with the knowledge and skills to support their career development, as well as enabling them to make our Group more sustainable. During these challenging times we are extremely proud to have secured our employees' jobs within the Group, even when some of our stores were closed for parts of the year. By making these kinds of decisions we showed our commitment towards our employees, who have remained loyal to us in turn. We know that we can do our best when we are supported by the best.

We cannot make a meaningful difference without the collaboration and support of our various stakeholders. Increasingly, our investors are aware of the importance of environmental, social and governance issues

in our ability to create shared value. In our stores, our customers embrace the plant-based and waste reduction initiatives we offer to them. In our supply chain, our suppliers support the job opportunities and sustainable initiatives we introduce, as we welcome the new opportunities they bring to the table.

The communities we work in value our continued presence and assistance. We support food security through surplus food donations and community food gardens. We are the first responders when a crisis hits, and support children in the crucial early childhood development (ECD) phase of their lives.

Our involvement with these diverse stakeholder groups is critical to our own success, as it is undeniably linked to theirs.

The impact of unemployment - now at 32.6% as of 1 June 2021 - has been highlighted as the country struggles within a depressed economic environment. With the youth unemployment rate higher at 46.3%, we continued our focus on youth skills development through our Retail Readiness and Yes For Youth programmes. We have also increased our investment in key small and medium enterprises (SME) through our investment in Thuthuka Nathi Ventures and continue to provide market access opportunities to SMEs through our supply chain. This holistic approach to

transformation in our operations supports our industry-leading employment equity and internal promotion practices in South Africa.

Sadly, many people in our countries of operation are forced to focus on survival, especially in these challenging times. While we support them through the affordability and accessibility of our products and by building community-level resilience through our various corporate social investment (CSI) programmes, our ambition extends beyond helping them to survive. We want our business to enable people to thrive. While we cannot address systemic issues such as unemployment and food security alone, we know we must play our part in elevating individuals and communities beyond a focus on survival through shared value creation for all our stakeholders.

Many of the challenges that communities face are linked to climate change. We now know how sudden and intense the impact of a global crisis can be, as we have experienced through the COVID-19 pandemic and remain resolute in playing our role to address climate change. This year we advanced our sustainability-related commitments by setting science-based targets in response to climate change and by articulating our position on biodiversity. Our Sustainability team also improved our disclosure of sustainability-related information through better GRI alignment and reporting disclosures.

I thank every employee who has played a part in developing and supporting the programmes detailed in this report. Without their passion and commitment, the Group would neither succeed nor navigate the complexity of maximising the positive impact we have on the lives of people while minimising our impact on the environment.

I would also like to express my sincere condolences to every employee who has lost a colleague, a loved one or a friend to the COVID-19 pandemic. Our employees' commitment in the face of loss and fear brought on by the pandemic has touched me deeply. As the pandemic hits close to home, we support one another in this time of grief and hope that we may all find the strength to keep going and remain grateful for the blessings that endure.

As we continue our sustainability journey, we have our eye on the future and remain focused on innovative and new opportunities to make a difference in the lives of our employees, customers, suppliers and in the communities in which we operate. We can amplify our impact by leveraging our scale and the customer knowledge we have. We will persist in driving efficiencies in our operations to ensure we remain Africa's most accessible, innovative and affordable retailer, while reducing our impact on the environment. What we do on a day-to-day basis makes a tangible difference in the lives of millions of people, and we must ensure that this impact is positive and sustainable in the long term. 

Engelbrecht

CEO

GRI 102-14

SHOPRITE HOLDINGS LTD Sustainability Report 2021

4

SOCIAL AND ETHICS COMMITTEE

CHAIRPERSON'S REPORT

Role and responsibility

The SEC's role is to assist the Board with oversight of social and ethical matters in relation to the Group, aligned with the Group's purpose and values. The committee's responsibility covers a broad spectrum of ESG matters as set out in the Company's Act and its Terms of Reference. Fairly new to global reporting standards are the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) which the Group has embraced. The committee plays an important oversight role in terms of the Group's climate change strategy and climate-related risks

and opportunities, and reports directly to the Board on these matters.

GRI 102-29

5

The committee routinely receives a wide range of management reports and regular attendees to meetings include the Head of Corporate Relations and Communications, the Group Sustainability Manager, the Chief Human Resources Officer, the Group Health and Safety Manager, and the Group Manager: Risk and Compliance.

The Committee guides the CEO and Executive Management team's achievement of the Group's business strategy and related responsible business and good citizenship objectives and continues to entrench and build a strong ethical culture within the Group.

It oversees and approves the Group's reporting on these matters through the annual Sustainability Report. The Sustainability Report comprehensively reports on ESG issues as it relates to the Group's material matters, and the Executive team's approach to managing the

Group's human, social and natural capitals.

GRI 102-32

Aligned with its statutory responsibilities, the committee reports annually to the Shoprite Holdings shareholders at the AGM.

In addition to its responsibilities as mentioned above, the SEC also assumes oversight with regard to the following as the responsible constituted committee on behalf of the Board of Directors.

The year under review

During FY 2021 we took the following actions to enhance our position as a responsible corporate citizen, including but not limited to the following:

General

• Monitored the implementation of our learning and development plans, corporate

social investment (CSI), occupational health and safety (OHS), and environmental

programmes. In the wake of COVID-19, health and safety-related aspects

achieved specific attention.

Planned areas of future focus

• Directors of Shoprite Holdings and Shoprite

Checkers will be requested to submit annual

declarations of interest to the Company Secretary

that notes other directorships including:

- direct or indirect interests in contracts with the

Group; and

- direct or indirect interests in Shoprite Holdings

securities.

Composition

The SEC complies with all requirements as set out in its Terms of Reference and the Companies Act and includes the following members who have the appropriate experience and qualifications for their position:

Dr Anna Mokgokong

Chairman

Independent Non-executive

Director and Lead Independent

Director

Appointed as Chairman of the

SEC on 30 November 2018

With the Group since 2012

Nonkululeko Gobodo

Independent Non-executive

Director

With the Group since 2021

Alice le Roux

Independent Non-executive

Director

Responsible citizenship

King IV Principle:

3* The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen.

The Board ensures, through the SEC, that the Group is, and is viewed to be, a responsible corporate citizen.

The SEC has provided oversight of the various programmes that the Group has implemented to ensure we promote and protect the environment and maintain the health and safety of our people, suppliers and customers. These are set out below in the year under review.

Stakeholder relationships

King IV Principle:

16* In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time.

• Conducted the committee's annual review of its Terms of Reference, which was

approved with no amendments required.

• Reviewed the Code of Conduct to ensure it aligned with all the new policies that

have been approved. It was also translated into Portuguese and French to cater

for employees within relevant territories.

• Reviewed the outcomes reported with regard to the Group's Ethics Hotline.

Policies and frameworks

  • Reviewed and approved the Group's Sexual Harassment Policy that was shared with all employees in December 2020.
  • Reviewed and approved the Group's Anti-bribery and Corruption Policy.
  • Considered a number of conflict of interest declarations since the implementation of the Conflict of Interest Policy in 2019. During the year under review the Committee referred 46% of the declarations to the Executive Committee for consideration and resolution. A revised policy was tabled and approved by the committee.
  • The current standing on the United Nations (UN) Global Compact principles was reviewed.
  • HR completed a self-assessment with reference to the International Labour Organisation's (ILO) Protocol on decent work and working conditions in respect of RSA operations. No incidents of non-compliance were reported or came to the attention of management during the reporting period.

• An ILO decent work and working conditions self-

assessment will be conducted.

• The Group's position, operations and programmes

will be aligned with the UN Sustainable

Development Goals.

• The Group's CSI programmes and partnerships

are being independently benchmarked with peers.

The outcome and recommendations from this

report will be taken under advisement for any

changes or improvements in the Group's CSI

strategy and implementation.

I am satisfied the committee has performed its responsibilities in accordance with its Terms of Reference and look forward to reaching the goals we have set for ourselves.

Dr Anna Mokgokong

Chairman

With the Group since 2018

To retire from the Board with effect from 15 November 2021

Wendy Lucas-Bull

Independent Non-executive Chairman

Appointed as Chairman on 16 November 2020

With the Group since her appointment as Director in October 2020

Eileen Wilton

Independent Non-executive Director

With the Group since 2021

Anton de Bruyn

Executive Director, CFO

With the Group since 2000

The Group's reputation is of utmost importance to the Board. The Board strives to achieve the appropriate balance between the various stakeholder groups, in the best interest of the Group. Every effort is made to ensure transparent and effective communication with stakeholders that is essential for building and maintaining confidence.

The SEC governs stakeholder relationships, communication and reporting, and delegates responsibility for execution to management.

During the year under review the SEC reviewed the Group's stakeholder engagement. There has been a notable increase in engagement through social media channels that can be attributed to the COVID-19 pandemic and the lockdown regulations. Effective and efficient dispute resolution forms part of the Group's legal and regulatory processes.

Our stakeholders, Integrated Annual Report, pages 52 to 55

* Alignment to King Code on Corporate Governance.

Regulation

  • Reviewed the five-year Employment Equity (EE) Plan for the period 1 July 2020 to 30 June 2025 for the three reportable business units: Shoprite, Transpharm and Freshmark.
  • Monitored broad-based black economic empowerment (B-BBEE) compliance, projections and planning to continue the journey to improve the Group's B-BBEE recognition level. To date we have invested R94.0 million into Thuthuka Nathi Ventures (Pty) Ltd, of which R64.1 million has been successfully deployed in three supplier development initiatives. A further R50.5 million has been committed towards future initiatives.
  • Considered the impact of new or proposed environmental legislation with specific reference to the Climate Change Bill as well as the National Environmental Management Waste Act No. 59 of 2008 and feedback on actions taken or planned by business units, where required, to comply with legislation.
  • No significant fines, non-monetary sanctions or identification of non-compliance with environmental laws and/or regulations were reported during the period under review.

GRI 307-1

Meetings3

The SEC held three scheduled meetings as determined by its Terms of Reference during the year under review.

SHOPRITE HOLDINGS LTD Sustainability Report 2021

6

SUSTAINABILITY HIGHLIGHTS

Employees

Employed 142 602 people

Invested R485 million in training, through 2 890 833 training hours

Customer centricity

Won 17 awards recognising customer and brand excellence

Sold 72.8 million loaves of our

600 g in-house bread at R4.99

Launched a R5 pack of sanitary pads to keep young girls in school

Provided more than R5 billion in personalised savings to more than 20 million Xtra Savings members

Launched K'nect, our new virtual mobile network

Supply chain resilience and sustainability

Committed R50 million to future SME development initiatives

Directed 9.16% of supplier spend to black businesses and 5.54% to black woman-owned businesses

7

Socio-economic contribution

Invested R274 million into the communities in which we operate in South Africa

Donated R138 million in surplus food and goods

Supported 149 community food gardens to build community-levelfood security since inception of the programme

Served 4 873 133 hot meals

through our Mobile Soup Kitchens

Supported 103 ECD centres, benefiting 5 062 children

Served 152 795 meals per day to vulnerable communities through our CSI programmes

Environmental stewardship

Committed to science-based targets

Reduced our carbon emission intensity by 5.2% Reduced our water use intensity by 6.1%

Increase the installed capacity of our solar photovoltaic (PV) systems by 350%

Electricity consumption reduced by 126 million kWh through our light-emitting diode (LED) lamp replacement project since inception

Recycled 40 327 tons of cardboard from stores and DCs Diverted 8 207 tons of plastic waste from landfills

45% of our private-label products have on-pack recycling labels (OPRL)

Paid R1.37 million in rebates to our customers for using our reusable Planet bags since inception

1Surplus donations are recorded at cost price.

SHOPRITE HOLDINGS LTD Sustainability Report 2021

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Shoprite Holdings Ltd. published this content on 18 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 October 2021 11:31:09 UTC.