Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Sustainable sourcing
• Employees
• Communities
• Health & wellness

Environmental Achievements

• Reduced GHG emissions (scope 1 and 2) by 6.9% (245.23 kg of СО₂ equivalent per square meter of total area)
• Reduced direct GHG emissions (scope 1) by 17.1% (69.12 kg of СО₂ equivalent per square meter of total area)
• Reduced total volume of food waste generated by 34.8% (38.18 kg per 1 m2 of retail space)
• Reduced total volume of waste generated by 29.4% (1.2 million tons)
• Reduced specific electricity consumption by 2.9% (291.63 kWh per square meter)
• Reduced specific heat consumption by 8.2% (138.46 000 Kcal per square meter)
• Reduced specific water consumption by 9% (0.72 m3 per square meter)
• Increased amount of recyclable materials sent for recycling by 4.4% (451 thousand tons)
• Increased recycled plastic in bags from zero to 30%, saving 4,000 tons of virgin plastic annually
• Green Office project completed at HQ, successful certification

Social Achievements

• Reduced staff turnover by 15.6 percentage points (49%)
• Magnit.Care program with 350,000 charity food parcels for vulnerable families and 150,000 loyalty cards with extra bonuses for medical staff
• First company-wide Employee Satisfaction Survey completed with 84.2% engagement rate
• 3,500 employee volunteers
• Employee satisfaction rate of 72.6%
• Social/charitable programs implemented across 100% of the company's regions
• RUB 210 million allocated for charity

Governance Achievements

• Adopted a Sustainability Strategy 2025
• Established a Sustainability Steering Committee
• Joined the UN Global Compact
• Improved corporate governance system (independent consultant assessment, Sustainable Development Strategy adoption, etc.)
• Released the first Magnit Sustainability Report
• Implemented mandatory anti-corruption training for 1,227 employees

Climate Goals & Targets

Environmental Challenges

• Regulatory risk (potential changes in environmental, talent management, health and safety regulations)
• Corruption and fraud risks
• Epidemiological risks (COVID-19)
• HSE risks (health, safety, and environment)
• Talent risk (difficulty in retaining, sourcing, or attracting qualified staff)
• Reputational risk
• Climate risk (physical risks from rising temperatures, drought, storm intensity, rising sea levels; regulatory risks; reputational risks; litigation risks)

Mitigation Strategies

• Close monitoring of regulatory changes
• Code of Business Ethics and Anti-Corruption Policy, whistleblower hotline, UN Global Compact participation, ethics training
• Close monitoring of COVID-19 spread, following public health recommendations, disinfection, remote work
• HSE training, UN Global Compact participation, fire safety checks, competency assurance, workplace assessments, Environmental Protection and Occupational Health and Safety Policy, Fire Safety Policy
• Comprehensive long-term incentive schemes, corporate training programs, social and networking opportunities, university partnerships
• Sustainability Strategy, ethics and sustainability training, stakeholder dialogue
• Energy efficiency efforts, renewable energy sources, sustainable agricultural practices, technology and seed innovation, improved construction specifications, carbon neutrality progress, GHG emissions and waste reduction, community and consumer outreach programs, relevant policies and processes, employee training

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Partnership Programs for local suppliers & farmers
• 7% direct import supplies (~700 contracts)
• 52% of SKUs supplied by 4.1 thous.local producers
• Agreement with PJSC "Rosselkhozbank" aimed at supporting and promoting farm products

Climate-Related Risks & Opportunities

Physical Risks

• Rising temperatures
• Drought
• Storm intensity
• Rising sea level

Transition Risks

• Introduction of carbon pricing
• Increased costs related to waste disposal

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Magnit selected seven SDGs as priority goals, which are relevant to its business and the focus areas based on its Strategy

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Reed Exhibitions national award for private labels
• Best Food Retailer Loyalty Program Start of the Year – Best New Project in the Field of Loyalty Marketing
• Best Short-Term Loyalty Program

Environmental Metrics

ESG Focus Areas

• Environmental stewardship
• Responsible supply chains
• Employees
• Local communities
• Healthy lifestyles and well-being

Environmental Achievements

• 78% of the Company’s own production packaging is suitable for recycling, with 32% fully recyclable and 46% potentially recyclable
• 99% total plastic generated by the logistics unit is sent for recycling
• 52.5% reduction in specific food waste generation vs base year 2019
• 26.7% reduction in GHG emissions vs the 2019 base year
• 55.5% reduction in water consumption vs the 2019 base year
• 16% reduction in energy consumption vs the 2019 base year

Social Achievements

• 79.8% employee satisfaction rate (72.1% in 2021)
• LTIFR of 0.5 and FAR of 0.0092 (Injury frequency rate of 0.79 in 2019)
• 55.4% turnover rate (64.6% in 2020)
• 7.8% employees volunteering (1.1% in 2020)
• +19.3% increase in turnover with Russian suppliers
• 905 Russian suppliers became new partners of Magnit

Governance Achievements

• Established a Sustainability Steering Committee (SSC) chaired by the Company’s CEO
• Board of Directors approved the Company’s 2025 Sustainability Strategy

Climate Goals & Targets

Environmental Challenges

• External challenges impacting social and environmental responsibility

Mitigation Strategies

• Magnit continues to make every effort to remain a socially and environmentally responsible business

Supply Chain Management

Responsible Procurement

• Careful selection of sources of products and raw materials
• Adherence to high standards at production and agricultural facilities
• Implementation of assessment tools and audits of suppliers
• Streamlining local supply chains and leveraging local sourcing

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, UN Global Compact

UN Sustainable Development Goals

• 17 UN Sustainable Development Goals (SDGs)

Magnit’s Sustainability Strategy is derived from the 10 principles of the UN Global Compact and 17 UN Sustainable Development Goals (SDGs).

Environmental Metrics

ESG Focus Areas

• Leadership in reducing environmental impact
• Building a completely responsible supply chain
• Employer No. 1 in the industry
• Positive impact on the quality of life in the country
• Improving the quality of life of consumers and local communities

Environmental Achievements

• 68% of private label packaging is recyclable
• 31% reduction in specific GHG emissions compared to the baseline level of 2019
• 18% reduction in specific electricity consumption compared to the baseline level of 2019
• 59% reduction in specific food waste generation compared to the base year 2019
• 58% reduction in specific water consumption compared to the baseline level of 2019

Social Achievements

• 81.1% level of employee satisfaction
• 25% increase in the number of participants in the pro.healthy habits club in 2023
• 300 tonnes of near-to-expire-date food donated to people in need
• Launched a comprehensive Inclusive Environment Here programme
• Trained more than 175,000 employees to work with people with disabilities

Governance Achievements

• Developed guidelines on green advertising materials and sustainable packaging for online retailers
• Updated HR Strategy focusing on increasing employee satisfaction
• Developed Russia's first voluntary standard of processed prepacks
• Integrated administrative function and development of corporate culture and brand into the HR management function
• Launched the Division for Management and Continuous Improvement of Employee Experience (EX)

Climate Goals & Targets

Environmental Challenges

• Increased competition in the labor market
• Significant shortage of employees in the market
• Changing external environment
• Water scarcity risk in Krasnodar region
• High-consequence injuries resulting from road traffic accidents, bodily harm by third parties, and health deterioration

Mitigation Strategies

• Updated HR Strategy focusing on increasing employee satisfaction and developing employee potential
• Implemented various employee retention programs
• Increased funding for social support for employees
• Implemented initiatives to cut water consumption
• Implemented additional preventive measures on road safety, developed memos and videos on emergency response, and held unscheduled briefings on immediate assistance in case of health deterioration

Supply Chain Management

Supplier Audits: 633

Responsible Procurement

• Policy on Responsible Supply Chain Management
• Agricultural contracting
• Simplified logistics scheme
• OSA Magnit on-shelf availability management system

Climate-Related Risks & Opportunities

Physical Risks

• Temperature change
• Drought
• Hurricanes
• Sea level rise

Transition Risks

• Charging for carbon dioxide emissions
• Increasing waste management costs
• Regulatory risks

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards 2021, SASB Food Retailers & Distributors standards, TCFD recommendations

Certifications: FSSC 22000 v.5.1 (for some production facilities), GOST R ISO 22000-2019 (for some production facilities), Roskachestvo certificate for organic production (for Green Line greenhouse complex)

UN Sustainable Development Goals

• SDG 2: Zero hunger
• SDG 3: Good health and well-being
• SDG 6: Clean water and sanitation
• SDG 7: Affordable and clean energy
• SDG 8: Decent work and economic growth
• SDG 12: Responsible consumption and production
• SDG 13: Climate action
• SDG 17: Partnerships for the Goals

Magnit's initiatives contribute to these goals through various programs and projects detailed in the report.

Sustainable Products & Innovation

• Organic champignons
• Recyclable packaging for Skrepyshi confectioneries
• Sugar-free or reduced-sugar marmalade and truffles

Awards & Recognition

• Environmental and Business category of the Change Management. Visionaries award from Project +1
• HR IMPACT 2023 awards
• Crystal pyramid 2023 awards
• Bema! 2023 awards
• Inter Comm 2023 awards
• Recruitment Awards 2023 awards
• Smart Pyramid Award 2023 awards
• Moscow Mayor’s Grant 2023 diploma
• Quality of Service and Consumer Rights awards
• Ecology. Large Business nomination in Visionaries. Change Management award
• Environmental Efficiency nomination in It's About People forum