Minimum safeguards

In order to comply with the European due diligence recommendations, we have been implementing a set of measures in the Group’s Companies to prevent and mitigate the adverse impacts of our activity on the environment, and in respect of human rights, labour and other social aspects.

The European Taxonomy establishes minimum safeguards such as “alignment with the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organization on Fundamental Principles and Rights at Work, and the International Bill of Human Rights”¹.

To help undertakings assess compliance with these requirements, in October 2022 the European Commission’s Platform on Sustainable Finance published the Final Report on Minimum Safeguards², identifying four topics that companies must address: human rights, corruption, taxation and fair competition. The activities carried out by Jerónimo Martins in the pursuit of compliance are described below.

Human rights in our operations³

The Jerónimo Martins Group respects human and workers’ rights, following the guidelines of the United Nations and the International Labour Organization, within the framework of the Universal Declaration of Human Rights, the Fundamental Conventions of the International Labour Organisation and other conventions, as well as the local laws in the countries where it does business.

Our actions are guided by principles such as respect for the law and human rights, honesty, integrity, transparency, diversity and inclusion, corporate social responsibility and independence from political parties. We prevent all forms of discrimination and ensure that professional development and recognition are based on merit and fairness, qualifications and equal opportunity. We promote a safe and healthy working environment and have zero tolerance for any form of harassment. We strive to guarantee the best workplace health and safety practices⁴, for the benefit of our more than 130,000 employees. We ensure freedom of association and collective bargaining⁵.

We also promote respect for the privacy of employees, working hours and the right to rest, valuing a balanced organisation of time. We seek to prevent the risks of forced and child labour, in particular through mechanisms that prevent the hiring of persons under the legally permitted employment age and have implemented measures to ensure respect for the rights of indigenous peoples.

The aforementioned human rights topics are integrated into our Code of Conduct⁶, which addresses the principles that guide our relationships with all stakeholders.

We regularly promote human rights initiatives under the Code of Conduct and applicable labour law. In 2023 we provided training on the Code of Conduct to 5,251 people, and on labour law to 7,704 employees, totalling more than 20,000 training hours.

Human and labour rights in the supply chain

With regard to the supply chain, in addition to the rules set out in the Jerónimo Martins Code of Conduct, three guiding documents are of note: the Supplier Code of Conduct, the Sustainable Sourcing Policy and the Anti-Corruption Policy⁷. Suppliers are selected based on criteria of quality, innovation capacity, price, supply capacity, performance, trust, continuity and sustainability over time.

Suppliers and other business partners undertake to conduct their business with honesty, integrity and respect for compliance with the laws of the countries where they operate and applicable international treaties. By integrating the Supplier Code of Conduct and the Anti-Corruption Policy into new business agreements, we stress the importance of reducing and remedying potential adverse impacts for the whole supply chain. Irrespective of how long they have been working with us, suppliers are also invited for training sessions in these matters promoted by Jerónimo Martins.

In relation to the Sustainable Sourcing Policy, the Group reserves the right to immediately, and unilaterally, cease business relations with suppliers whenever it becomes aware that these and/or their suppliers are engaged in the violation of human, children’s and/or workers’ rights and/or do not incorporate ethical and environmental concerns in carrying out their activities.

In global sourcing processes (products that serve Companies located in more than one country), supplier selection criteria include accepting the Sustainable Purchasing Policy, the Supplier Code of Conduct and the Anti-Corruption Policy, declaring that no forced or child labour is used in their operations, guaranteeing that working hours are in line with the law, and granting the legally required rest days. Other criteria include fair pay, promotion of a safe working environment by, for example, providing fire-fighting and personal protective equipment, emergency exits, workers’ compensation insurance and medical care for all employees, and the willingness to undergo a social audit and related training if selected.

Perishables and Private Brand suppliers are regularly audited, including in the selection phase, to follow-up on the management and control of production processes, in particular of implemented quality and food safety systems. These audits are conducted by internal teams and with the help of independent external entities. They include aspects such as food quality and safety and the incorporation of environmental and labour criteria, among other aspects.⁸

Social audits, in turn, carried out by an independent external entity, aim at monitoring and ensuring compliance with national and international law, and at encouraging the adoption of good practices shared by The Consumer Goods Forum’s (CGF) Sustainable Supply Chain Initiative. They also seek to ensure compliance with the Resolution and Priority Principles⁹, in force since 2015, of the Human Rights Coalition – Working to End Forced Labour, also from CGF.

These social audits cover more than 120 assessment criteria, some of which considered to be of “zero tolerance” regarding aspects related to preventing forced and child labour, emergency preparedness, health and safety and, among others, combating corruption.

They are preceded by training and, after an in loco check of the infrastructure and interviews with workers, culminate in the assignment of a score. Where necessary, a corrective action plan is designed with a time limit for implementation based on severity. Audits apply to three types of activities in the agrifood sector: primary production, offshore operations and processing industry.¹⁰

As a complement to the initiatives carried out with our suppliers, we encourage the adoption of sustainability certifications. These systems follow benchmarks with environmental and/or social requirements that are confirmed by external entities and can cover one or more ingredients, the product itself and/or the packaging thereof. This certification ensures that good environmental practices are implemented in the value chain, helping, among other things, to guarantee that there has been no deforestation or conversion of high conservation value ecosystems in product manufacture, that production processes to mitigate pollution are best in class, and/or that human rights principles are respected, confirming, for instance, that there is no child labour or forced labour, and that fair payment is made to the producer. Specific symbols and labels are also used at the point of sale to facilitate the communication of these attributes to consumers, raising their awareness and encouraging them to opt for certified products¹¹.

Preventing and combating corruption

We are committed to fighting all forms of corruption, whether directly or indirectly associated with the various links in our value chain, demanding transparency and integrity in relationships between different stakeholders. In our Anti-Corruption Policy, which is an integral part of the Code of Conduct, we established the principle of zero tolerance for any behaviour involving corruption, influence peddling, receiving or offering undue advantages, or paying or receiving any benefits contrary to the laws in force in each country and Jerónimo Martins’ Code of Conduct.

We are a member of the United Nations Global Compact, which, per its ten principles, protects human and workers’ rights and establishes, in its Principle 10, that “businesses should work against corruption in all its forms, including extortion and bribery”¹². Fighting corruption and bribery is also one of the Sustainable Development Goals (Goal 16 – Peace, Justice and Strong Institutions)¹³, and one of the United Nations Guiding Principles on Business and Human Rights¹⁴. It is also included in the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises¹⁵.

The Group has a Plan for the Prevention of Corruption Risks and Related Offences¹⁶ in place, following the approval in Portugal of the General Framework for the Prevention of Corruption approved by Decree-Law No. 109-E/2021 of 9 December, a document that identifies and classifies the company’s main and potential corruption risks, considering the likelihood and impact of the risks identified. This plan also sets out the prevention and mitigation measures that the Company has implemented to minimise the likelihood and the estimated impact. An annual report about the implementation of the Plan for the Prevention of Corruption Risks and Related Offences was published in 2023 and is available on www.jeronimomartins.com.

When onboarding employees, and to make known our values and ethical principles, they are provided with a copy of the Code of Conduct and the Anti-Corruption Policy and requested to formally acknowledge receipt, thus ensuring regular communication on these issues.

Moreover, we have implemented a training programme on the Anti-Corruption Policy in two formats (e-learning and advanced training for critical functions), the content of which is periodically reviewed to ensure that it is up to date. In 2023, a total of 16,951 hours of training were provided on this topic (84.5% more than in 2022) and we reached 12,787 employees through communication campaigns. Additional training was also provided to specific target audiences on different topics related to corruption prevention, such as the Due Diligence Procedure, audit procedures focusing on corruption for auditors, and Anti-Corruption Policy procedures for sponsors and pivots. In Poland, additional courses for specific audiences were also held, such as training on compliance policies and on conflicts of interest, visits to suppliers and courtesies, as well as on procurement procedures. In Colombia, 5,059 employees had access to training on the anti-money laundering, counter-terrorism financing and data processing self-monitoring and risk management system. Training on conflicts of interest and procurement procedures was also provided at Ara.

Third-party entities that work with the Group’s Companies are also receptors of communication actions. In this regard, of note is the disclosure of the Anti-Corruption Policy to suppliers, the Supplier Code of Conduct and the Sustainable Sourcing Policy, shared on our website and/or included in contracts with third parties.

We also periodically check the effectiveness and due implementation of our internal policies, procedures, and control mechanisms by conducting, for instance, audits that include risk verification (including operational risk, which covers the risk of fraud and/or corruption) to identify possible nonconformities and opportunities for improvement¹⁷.

Taxation and fair competition

As regards tax matters, the Holding’s Fiscal Affairs Department, together with the Tax Departments of Jeronimo Martins Polska and Jeronimo Martins Colombia, assists all the Group’s Companies in complying with the laws in force and in optimising, from a tax perspective, the business units’ management activities. It also manages tax disputes and the Group’s relationship with external consultants and lawyers, as well as with the tax authorities.

We also take a collaborative approach with the tax authorities of the countries where the Group does business, participating, for instance, in various initiatives by the Portuguese Tax Authority on tax transparency and cooperative relationships.

The risks associated with tax and legal matters, as well as disputes with tax and competition authorities is constantly monitored by Management and by the Audit Committee.

With regard to fair competition, the Jerónimo Martins Group supports all efforts aimed at banning activities that restrict free trade, unfair practices or abuse of a negotiating position, and believes in strong and fair competition, supporting the development of appropriate competition laws.

Risk Management

Our Risk Management Policy and Risk Management Methodology are also noteworthy and aim at aligning the Group’s objectives and strategy with a structured and consistent assessment of the specific risks each Company is exposed to and the risks common to the Group. They also enable us to monitor emerging risks that may affect the Group and/or its Companies.

The annual risk management process, which involves around 70 managers from all the countries where the Group operates and aims at ensuring the identification, monitoring, assessment and reporting of the risks to which Jerónimo Martins and its Companies are exposed as well as the most relevant measures to mitigate them, is explained in more detail in “Other Functional Areas Responsible for Risk Control” to “Core Details on the Internal Control and Risk Management Systems Implemented in the Company Regarding the Procedure for Reporting Financial Information”.

Quarterly reviews are also carried out to ensure alignment with critical areas for the business and active monitoring of any emerging risks that may be relevant to the Group.

Based on this assessment, internal audits are planned and carried out and the strategic plans of each Company are prepared. The topics covered by the risk assessment consider aspects that could be associated with critical concerns related to corruption, reputation and human rights risks.¹⁸

Enforcement mechanisms

The Ethics Committee is the Group’s specialised body that monitors, with impartiality and independence, the disclosure and the compliance with the Code of Conduct in Portugal, Poland and Colombia.

In the light of the Whistleblowing Policy approved by the Group, the Ethics Committee provides a digital platform¹⁹ for the confidential reporting of wrongdoing, anonymously if desired.

We also have four Ethics Boards in Portugal²⁰. These Ethics Boards are independent reporting channels which, together with the Ethics Committee, are responsible for ensuring the receipt and follow-up of reports of any irregularities related to the Companies, submitted by any concerned stakeholder. The Ethics Committee and Ethics Boards act in accordance with principles of independence, impartiality, integrity, confidentiality and absence of conflicts of interest.

There are also other bodies that receive and investigate complaints on specific topics: the Anti-Mobbing, Anti-Discrimination and Sexual Harassment Committee, formed whenever there is a complaint involving these matters in Poland, and the Committee for Labour Co-existence in Colombia, which investigates complaints relating to working conditions or other labour-related issues.

Employees also have the Employee Assistance Service available to them to report, ask questions about and resolve labour-related issues, and to receive and forward requests for social support. This channel ensures confidentiality, independence and impartiality, thereby safeguarding employees against any retaliation, discrimination and/or loss of rights.

The Group’s internal control system is ensured by a group of departments dedicated to monitoring critical processes at central and operational level, involving, namely:

• the Board of Directors;
• the Audit Committee;
• the Chief Executive Officer, supported by the Managing Committee;
• the Risk Committee;
• the Internal Audit Department, which reports hierarchically to the Chairman of the Board of Directors and functionally to the Audit Committee;
• the Strategy and Risk Management Division;
• the Business Unit Risk Managers;
• all employees in charge of the execution and/or control of a given process or activity, within a business unit or the corporate structure, and who are responsible for managing the risks involved in those activities.

The Internal Audit Department assesses the quality and effectiveness of the internal control and risk management systems (operational and non-operational) determined by the Board of Directors, ensuring that they comply with the procedures and policies of the Group and its business units. This department’s mission is also to promote compliance with the laws and regulations applicable to the operations. Internal control processes are formalised in internal policies and procedures²¹.

We are currently consolidating a human rights due diligence process in line with the OECD recommendations and with European Union legislation, in the process of being approved, concerning the Directive on the due diligence of undertakings with regard to sustainability, as well as preventing and fighting corruption, in compliance with the applicable legal framework.

Communication

Details about our approach to the protection of human rights, the prevention of discrimination, the safeguarding of the right to collective bargaining, the prevention of forced and child labour, the prevention of corruption, fair taxation and competition practices, as well as the management and mitigation of the associated risks, the sustainability indicators recommended by the Global Reporting Initiative (GRI), and listed below, can be found in the “Tables of indicators” of this report:

• Management Approach: GRI 2-1 to 2-30, 3-1/2/3.
• Material Aspects: GRI 103-1/2/3.
• Anti-corruption: GRI 205-1/2.
• Anti-Competitive Practices: GRI 206-1.
• Employment: GRI 401-1/2/3.
• Labour/Management Relations: GRI 402-1.
• Health and Safety in the Workplace: GRI 403-1/2/3/4/5/6/7/8/9/10.
• Training and Education: GRI 404-1/2/3.
• Diversity and Equal Opportunity: GRI 405-1/2.
• Non-Discrimination: GRI 406-1.
• Freedom of Association and Collective Bargaining: GRI 407-1.
• Child Labour: GRI 408-1.
• Forced or Compulsory Labour: GRI 409-1.
• Security: GRI 410-1.
• Local Communities: GRI 413-1.
• Supplier Social Assessment: GRI 414-1/2.
• Public Policy: GRI 415-1.
• Customer Health and Safety: GRI 416-1/2.

¹ Regulation (UE) 2020/852 of the European Parliament and of the Council of 18 June 2020.

² “Final Report on Minimum Safeguards”, Platform on Sustainable Finance, October 2022.

³ See “Being a benchmark employer” and, in particular, “Act ethically”.

⁴ We have 92 Group-wide and local policies that accompany the entire career path of employees within the organisation and that safeguard ethical and responsible conduct in each of the human resources management processes. Of note in Portugal are the anti-harassment and anti-discrimination guidelines focused on managing and combating such situations in the workplace.

⁵ In Poland, Biedronka has a Trade Union Policy in place that sets out the main rules and guidelines for conducting effective and efficient social dialogue in line with the law and based on the principles of transparency, independence and mutual trust. In 2023, collective bargaining, applicable only to Portugal, covered 95.4% of the banner’s employees in the country.

⁶ Our Code of Conduct is available on our corporate website, on the “Ethics and Integrity” page.

⁷ Our Anti-Corruption Policy is available on our corporate website, on the “Ethics and Integrity” page.

⁸ For more information on supplier food safety and quality audits, see “Selection and monitoring of suppliers”.

⁹ The CGF priority principles (available at www.theconsumergoodsforum.com/wp-content/uploads/2018/08/Priority-Industry-Principles-One-Pager.pdf) advocating for issues considered critical in the protection of labour rights in global supply chains: freedom of movement (the ability of workers to move freely should not be restricted by their employer through abuse, threats and practices as retention of identification documents and valuable possessions); the voluntary nature of a job (no worker should pay for a job, should be aware of the terms and conditions of their work in advance, and should be paid regularly as agreed; contractual arrangements based on indebtedness or servitude are prohibited); and, contractual freedom (no worker should be indebted or coerced to work and fees or costs associated with recruitment and employment should be paid by the employer and not by placing any financial burden on a worker).

¹⁰ For more information on social audits, see “Selection and monitoring of suppliers”.

¹¹ For more information on certified products, see “Selection and monitoring of suppliers”.

¹² Available at www.unglobalcompact.org/what-is-gc/mission/principles

¹³ Of the 17 Sustainable Development Goals, goal 16 “Peace, Justice and Strong Institutions” lists as one of its targets (16.5) “substantially reduce corruption and bribery in all their forms.” Available at www.un.org/sustainabledevelopment/peace-justice/

¹⁴ The “Guiding Principles for Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework”, created in 2011, are available in several languages at www.unglobalcompact.org/library/2

¹⁵ The OECD Guidelines for Multinational Enterprises, first adopted in 1976 and updated in 2011, are available in several languages at www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htm

¹⁶ Available at www.jeronimomartins.com

¹⁷ See “Internal Control and Risk Management”.

¹⁸ See “Internal Control and Risk Management”.

¹⁹ Available at www.jeronimomartins.com and ethicscommittee.jeronimomartins.com/. For more information on the handling of complaints and resolution rate, see “Act ethically”.

²⁰ Following approval of the framework for the protection of whistleblowers, according to Directive (EU) 2019/1937 and the transposition thereof into Portuguese Law No. 93/2021, companies that have 50 or more workers must establish internal reporting channels, and those that employ between 50 and 249 workers may share resources as regards the receipt of reports and follow-up, which resulted in the establishment of four Ethics Boards for Jerónimo Martins in Portugal.

²¹ See “Individuals, Boards or Committees Responsible for Internal Audits and/or Implementation of the Internal Control Systems” to “Core Details on the Internal Control and Risk Management Systems Implemented in the Company Regarding the Procedure for Reporting Financial Information”.