Impacts, risks and opportunities management and double materiality assessment

The Jerónimo Martins Group primarily operates in the food sector, promoting safe, healthy, and affordable food solutions and products through its Companies and Private Brands. Respect for all stakeholders and a commitment to sustainable development principles are integral to its growth and value creation strategy. This approach aims to contribute to the prosperity, cohesion, and well-being of the communities served by its businesses in the short, medium and long term. For detailed information about the strategy, business model and value chain of the Group please refer to “The Jerónimo Martins Group”, “Management Report – Creating Value and Growth” and “Corporate Governance”. Information on the breakdown of total revenue by significant ESRS sector is provided in note 3.2. “Segments reporting”.

In 2023 we conducted our first double materiality assessment, in accordance with the preliminary version of the requirements established by the EU’s Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). This process began with the identification of a preliminary list of potential material topics and their impacts, risks and opportunities (IROs). A stakeholder consultation was then carried out to collect input on Jerónimo Martins’ impact on different sustainability topics.

This assessment gathered information from more than 16,600 stakeholders from nine different groups¹, in Poland, Portugal and Colombia, to assess the impact materiality along our value chain, considering both severity (scale, scope and irremediability of the impact) and likelihood of occurrence. In addition to the input from these stakeholders, the impact matrix also considered internal and external expertise. Material financial issues were identified using the Group’s risk management system². The assessment considered risks and opportunities along the value chain, based on their magnitude (potential financial impact on sales and costs) and likelihood of occurrence. Once completed, the assessment was also validated by senior managers and members of the Executive Management Team³. Based on the findings, the material topics and sub-topics were identified and the mandatory sustainability disclosure requirements for the Group’s 2023 Annual Report were outlined.

In 2024 we reviewed the assessment in accordance with the final version of the ESRS⁴ and the final versions of the implementation guidance published in May 2024 by EFRAG (European Financial Reporting Advisory Group). Stakeholders were not consulted again in 2024, but the findings of the 2023 financial year were taken into account. The IROs were again assessed and complemented with desk research and benchmark analysis. A total of 145 IROs were identified in this review, broken down as follows:

The evaluation of the IROs considered different time horizons (short, medium and long term) and the stage of the value chain in which they may occur. Of the 145 IROs analysed, 21 were evaluated as material. A total of 35 environmental, social and governance (ESG) sub-topics were identified, 10 of which were considered material to Jerónimo Martins, according to our internal thresholds, namely the ranges applicable to our Enterprise Risk Management processes.

As a result of this exercise, the following material topics were identified:

2024 Double Materiality Matrix

Note: Material topics resulting from the application of the cut-off threshold.

Below are the ten most material topics identified in 2024 as a result of the consolidated double materiality assessment:

• Product safety and quality standards
• Product affordability
• Sustainable and responsible criteria in the supply chain
• Labour rights and working conditions – own workforce
• Food waste
• Product and services innovation
• Climate change
• Packaging redesign for sustainable resource use
• Employee learning and development
• Engagement and supporting local communities

Like in 2023, the topics “Product safety and quality standards” and “Product affordability” were considered the most relevant both from an impact and financial point of view (risks and opportunities).

The topics identified directly by the consulted stakeholders (impact materiality) and which are included in our double materiality matrix are:

• Sustainable and responsible criteria in the supply chain
• Packaging redesign for sustainable resource use
• Employee learning and development
• Engagement and supporting local communities

The risk assessment highlighted the topics “Labour rights and working conditions – own workforce”⁵, “Food waste”, “Employee learning and development” and “Product and services innovation” as those with the greatest potential to have a positive or negative financial impact on the Group’s business.

We intend to repeat this assessment every three years. In the interim, and where required, adjustments will be made to ensure the assessment is kept current.

¹ Responses were collected from the representatives of nine groups: employees, consumers, suppliers and service providers, non-governmental organisations, private charities, analysts and investors, the media, sectoral associations, insurance companies, and opinion makers. For more details on the ways in which we relate to our stakeholders, visit the “Our Stakeholders” page on our website.

² For more information, see “Subsection III – Internal Control and Risk Management”.

³ For more details on the 2023 financial year, please see the 2023 Annual Report.

⁴ Published on 22 December 2023 in the Official Journal of the European Union.

⁵ The 2023 topic “Compensation and benefits” was integrated into “Labour rights and working conditions – own workforce” to align nomenclature with the sub-topics included in the ESRS.