A positive future for the forest
6^th progress report
Policies, commitments and progress

According to the Food and Agriculture Organization of the United Nations (FAO), the main driver of tropical deforestation is the expansion of agricultural activities. Deforestation and land‑use conversion remain the leading contributor to the loss of forest areas and biodiversity. As a food retailer, we recognise that much of our supply chain depends on agricultural raw materials directly or indirectly linked to forests, and that safeguarding terrestrial ecosystems, particularly those with High Conservation Value (HCV), contributes to carbon sequestration and climate regulation.

For these reasons, since 2019 we have been part of the Forest Positive Coalition of Action (FPCoA), an initiative of The Consumer Goods Forum to strengthen the responsible management of raw materials most associated with deforestation. This commitment covers our Private Brand and perishable products containing palm oil, paper/timber, soy or beef. The Coalition acts as a mobilisation platform for companies to implement coordinated and individual measures in order to eliminate deforestation and HCV ecosystem conversion from the supply chains of these four commodities. At the same time, it promotes the adoption of sustainable management, conservation and restoration practices, ensuring alignment with the respect of human rights.

Commitment to fighting deforestation recognised in 2025

In 2025, we achieved an important milestone in the independent assessment and recognition of best practices in sustainability and corporate citizenship. We were awarded the highest score (A) by CDP for our management of commodities associated with deforestation risk under its Forests programme (palm oil, soy, beef and timber/paper).

This is the first time globally that a multinational food retailer has achieved this level of distinction, underscoring the robustness and consistency of our commitments and actions in this area.

Joining the FPCoA is part of our Sustainability Strategy and is supported by the following elements, available on the Group’s website:

• Sustainable Sourcing Policy – Aims to incorporate ethical and environmental concerns into our supply chains to gradually and sustainably mitigate the negative impacts of our activities.

• Environmental Policy – Promotes the continuous improvement of the environmental performance of our activities, products, services and supply chains, prioritising the fight against climate change and the protection of water resources, the preservation of biodiversity and the acceleration of the transition to a circular economy.

• Code of Conduct for Suppliers – Establishes the principles and ethical values that we believe our suppliers and business partners should share with us, namely the commitment to make every effort to promote the maintenance of ecosystem services, the rational use of natural and biological resources and the protection of habitats and species in the geographical areas where it operates or has influence, implementing all the necessary conservation measures both in its production processes and in the control and selection of its suppliers.

• Ethics Committee – The Group’s body responsible for monitoring the dissemination and fulfilment of the rules and principles contained in the Jerónimo Martins’ Code of Conduct and Anti-Corruption Policy in all its member companies, as well as for dealing with any potential breaches reported.

• Science Based Targets – Our short- and long-term greenhouse gas (GHG) reduction targets were approved by the Science Based Targets Initiative (SBTi) in 2024. Our plan to achieve net zero emissions include quantified targets for emissions and removals associated with agriculture, forestry and land use (FLAG), throughout the entire value chain, including those associated with the production of the main agricultural commodities at risk of deforestation incorporated into our Private Brands and perishables. This plan also includes our commitment to zero deforestation and conversion of HCV ecosystems. The commitments and actions are detailed in our Climate Transition Plan.

Through the definition of specific action plans, FPCoA focuses its activities on four commodities – palm oil, soy, paper/timber and beef – all of which are relevant for our business. For each commodity, dedicated roadmaps are defined to:

• ensure that Private Brand and perishable products follow the coalition’s environmental and social sustainability principles;

• encourage the main traders of raw materials and suppliers in the supply chains of the Coalition members to take on the same objectives in their chains;

• contribute to the preservation of ecosystems in the main production areas through multi-stakeholder initiatives;

• define specific progress indicators and publicly disclose them.

From commitment to action: focusing on ingredients

Although we committed to ensuring that, by the end of 2025, the palm oil, soy, paper/timber and beef present in our Private Brand and perishable products would be free from deforestation and ecosystem conversion (DCF – Deforestation and Conversion Free), we recognise that it has not yet been fully achieved, despite the progress we have been undertaking in close collaboration with our suppliers. This has proved particularly challenging in complex supply chains where these ingredients are present, such as palm oil present in margarine and/or soy used in animal feed to produce meat, both used in a ready to eat lasagna.  In this context, we are aligning our next steps with the FPCoA, acknowledging that full DCF compliance requires a continuous and structured journey, grounded in traceability, monitoring, responsible sourcing, producer support, and collective action – all of which remain essential to driving measurable and sustained progress beyond 2025.

In parallel, we strive to follow the guidelines from the Accountability Framework initiative, a collaborative initiative bringing together environmental and social organisations to promote ethical and deforestation‑free supply chains. Its principles emphasise that, even when proposed targets are not fully met, the priority must be to accelerate progress through improved traceability, supplier engagement and investment in critical landscapes – areas in which we continue to advance our efforts.

Unlike sectors with simpler and relatively concentrated supply chains, our operations – as is typical in food retail – rely on long, fragmented and multi‑tier supply chains, particularly for non‑food products and processed foods. Within these complex supply chains, traceability can be especially challenging. This is the case, for example, with soy used in animal feed (such as feed for laying hens whose eggs are later used in products sold in our stores), or palm‑oil derivatives incorporated indirectly through processed ingredients, often as components within other ingredients (e.g., palm oil in margarine used in bakery products). Likewise, certain by‑products present additional challenges, as tracing them back to the original source is highly complex. In these contexts, ensuring full DCF compliance becomes significantly more challenging.

Additionally, the limited market availability of physically certified volumes (“Identity preserved” and “Segregated”) for palm oil and soy, or certification availability in the case of beef, have restrained our ability to mitigate the distance between our operations and the production of these raw materials. This reality creates an imbalance in the capacity to ensure full compliance with DCF criteria at the same pace as industries with more direct exposure to primary production. It also reinforces the relevance of collective action to drive progress in these areas.

Despite these constraints, we remain committed to map the presence of deforestation-risk ingredients in our Private Brand and perishable products, collecting information from suppliers regarding origin and sustainability certification, as well as their respective policies to address forest loss. At the same time, we recognise that the full verification of DCF status – particularly for raw materials present in long, multi-stage supply chains – requires a joint sector‑wide effort. This includes greater upstream transparency, as well as  the development of technological solutions that enable this objective in a robust, verifiable, effective and efficient way.

Monitoring and grievance management

We operate a consolidated grievance mechanism grounded in our Code of Conduct, Whistleblowing Policy and Supplier Code of Conduct. Together, these frameworks establish the principles and procedures for receiving and addressing complaints, namely across sustainability-related topics. This architecture is implemented through an independent Ethics Committee and local Ethics Offices, which act as the central bodies for managing reports submitted via multiple channels, including a dedicated confidential (and anonymous) whistleblowing platform, customer support services and the Customer Ombudsman.

All grievances are managed through a structured process defined in our Whistleblowing Policy, covering submission, secure registration, investigation and resolution. The process is governed by strict safeguards of confidentiality, independence and non‑retaliation, ensuring the protection of whistleblowers and the integrity of the system. The grievance mechanism is fully embedded in our broader risk management and sustainability due diligence framework, meaning that concerns raised by stakeholders feed directly into the identification, mitigation and remediation of impacts across our value chain.

Our policy‑based, multi‑channel grievance architecture ensures that environmental concerns – including potential deforestation-related issues – are systematically captured and addressed within a consistent monitoring and response logic, aligned with the core principles of accessibility, traceability, responsiveness and continuous improvement.

Within this context, any allegation potentially linked to our value chain can be reported, tracked, investigated and remediated through the same governance, escalation and corrective‑action pathways defined in our policies. This provides a centralised and standardised mechanism across all commodities and geographies, supports integration with supplier engagement and due diligence processes, and enables continuous learning. In 2025, no deforestation-related grievance cases were recorded.

Regarding the supply chain, we are also a member of the Human Rights Coalition of The Consumer Goods Forum (CGF). This coalition aims to ensure that, by the end of 2025, member companies have their own operations covered by due diligence systems to identify, prevent and remediate risks of human rights violations.

Human and labour rights in the supply chain

In relation to our supply chain, and in addition to the provisions set out in the Jerónimo Martins Code of Conduct, three core documents guide our approach: the Supplier Code of Conduct, the Sustainable Sourcing Policy and the Anti-Corruption Policy. [AR1]

Supplier selection is based on a set of criteria, including quality, innovation, price, supply capacity, performance, trust, continuity and long-term sustainability. Under the Sustainable Sourcing Policy, we reserve the right to immediately and unilaterally terminate commercial relationships with suppliers whenever there is evidence that they, or their own suppliers, engage in practices that abuse human, child or labour rights, or fail to incorporate ethical and environmental considerations into their activities.

Across all Group Companies, sourcing processes require suppliers to acknowledge and commit to the principles set out in the Sustainable Sourcing Policy, the Supplier Code of Conduct and the Anti-Corruption Policy. Suppliers must ensure fair wages practices, promote safe working conditions, including the provision of fire-fighting equipment, personal protective equipment, emergency exits, workplace accident insurance and medical assistance for employees. In addition, the Group carries out supplier social audits and training in this domain. In 2025, 203 potential new suppliers were assessed.

Our social audits programme was launched in 2019, covering Private Brand and perishable suppliers, using criteria based on the work carried out by the Sustainable Supply Chain Initiative, also part of CGF. For primary production suppliers, these criteria include the protection of local and indigenous populations, namely:

• suppliers must demonstrate due access to land use and access to water;

• in the event of any transfer of land ownership, this has been preceded by consultation and free, prior and informed consent (FPIC);

• in the event of any conflict over land ownership or access to water, suppliers must show evidence that the necessary parties have been involved to resolve it;

• avoid, remediate or mitigate negative impacts that may result from activities in protected and high conservation value areas, within or beyond production boundaries, that may affect the survival of local or indigenous populations;

• taking appropriate measures to maintain the quality and accessibility of surface or underground water for local and/or indigenous populations.