2020 ESG Report

2020 Environmental, Social and Governance Report 2 2020 Kroger ESG Report Introduction Our Approach Environment Social Governance Appendix About This Report In This Report Welcome to our Kroger reports its ESG performance annually. This 5 Our Approach to ESG 24 Social report covers the Kroger family of companies’ 5 Materiality 25 Food Safety 2019 fiscal year, which ran from February 3, 2019, 6 Performance & Disclosure 26 Health & Nutrition Environmental, to February 1, 2020. Unless otherwise noted, data 9 Engagement 27 Food Access included in the report reflects this time period. 10 Contributing to the Sustainable 28 Associate Health & Safety Social and Kroger’s financial statements reflect all Kroger Development Goals 29 Diversity, Equity & Inclusion operations, including all banners and divisions, 12 Our Social Impact Plan: 30 Community Engagement unless otherwise noted in the Annual Report. Zero Hunger | Zero Waste 31 Additional Social Disclosures Governance This ESG Report incorporates most of our 13 Zero Heroes Among Us operations, except for certain data sets where 34 Governance we are still integrating banners from more recent 14 Environment 35 ESG Governance Report mergers into our tracking systems. As data 15 Climate Impact 36 Responsible Sourcing access improves or our business changes, we 17 Food Waste 37 Supply Chain Accountability will adjust our performance tracking accordingly 19 Zero Waste 38 Data Privacy & Cybersecurity and note this in the relevant report section. 20 Packaging We are pleased to share this report 22 Water 39 Appendix on our environmental, social and GRI Alignment 23 Product Sustainability 39 Material Topics Summary Table 41 Energy & Emissions Table The content in this report and on our governance (ESG) performance 42 SASB Index corresponding website has been prepared in with our shareholders, associates, accordance with the Global Reporting Initiative (GRI) Global Sustainability Reporting Standards, customers, communities, suppliers specifically the Core reporting option. We and interested non‑governmental summarize references to content that aligns with the relevant GRI disclosures in the GRI Index. organizations (NGOs). SASB Standards This report builds on Kroger’s 14-year history of Kroger is currently a member of the sustainability reporting, which has tracked our Sustainability Accounting Standards Board journey to becoming more sustainable. As our world (SASB)’s Standards Advisory Group for the Food continues to change, we will continue to invest time, and Beverage Sector. This group of volunteer resources and energy into making our operations industry experts are appointed to advise SASB on emerging issues that should be considered more efficient, using resources more responsibly in the standards development process. In 2018, and improving health, safety and well-being. SASB released 77 sector-specific standards to guide companies in identifying, managing and A cross-functional Kroger team of sustainability, communicating financially material sustainability business and functional leaders oversees the information in a way that is meaningful to company’s management approach to and investors and relevant to their sector. To review performance on ESG topics. As we near the end our disclosures against the Food Retailers and Distributors Standard, refer to our SASB Index of our journey to achieve our 2020 Sustainability at the end of this report. Goals, we are developing new performance targets for 2025, 2030 and beyond to help create a more sustainable future for people and our planet. More details about our management approach to ESG topics can be found in our 2019 Sustainability Report and online. sustainability.kroger.com 3 2020 Kroger ESG Report Introduction Our Approach Environment Social Governance Appendix Q&A How did Kroger Live We invested more than $830 million to How will Kroger lead Our Purpose in 2019? reward our Associates and safeguard our in sustainability during teams, Customers and Communities during the next decade? With the We Live Our Purpose—to Feed the Human the first four months of the COVID-19 Spirit™—in big and small ways through pandemic. We also created Sharing What We continue to accelerate toward our Kroger’s Zero Hunger | Zero Waste We’ve Learned: A Blueprint for Businesses, 2020 sustainability goals. At the same Chairman plan, our commitment to help create which captures our best practices in retail time, we are developing new ambitious Communities free of hunger and waste. operations, sourcing, supply chain and long-term targets for 2030. These include I’m proud of our Associates—together more to help others. commitments to reduce greenhouse gases and CEO we achieved our three-year goal to direct (GHGs) by 30% and transition to 100% 1 billion meals in food and funds to our recyclable, compostable or reusable We are pleased to share Communities by 2020. How will Kroger advance diversity, Our Brands packaging by 2030. Kroger’s 2019 progress on equity and inclusion? ESG topics that matter to our How have Kroger’s investments As a Company, we believe we can and How is Kroger’s long‑term Company and stakeholders in sustainability helped must do better. We are listening deeply strategy evolving to address to our Black Associates, Customers and like you. As I reflect on the first prepare the Company for stakeholder interests? the COVID‑19 pandemic? Allies to learn more and better support the half of 2020, we are grateful advancement of racial equity. We are also We are driving the integration of key ESG for the opportunity to keep Kroger has a rich history of investing in taking deliberate action to be a catalyst topics into our business plans and decisions Communities and being there for our for change in our Communities, in part over time. Our Zero Hunger | Zero Waste our doors open and shelves Customers. Strategic investments in our through a $5 million fund in The Kroger Co. plan, for example, reflects the concept of stocked for our Customers Restock Kroger plan, including alternative Foundation to advance diversity, equity shared value in action—working collectively during the COVID‑19 shopping modalities, proved critical and inclusion. toward a common goal that is good as Customers turned to lower-contact for both business and society. pandemic. I’m incredibly shopping. Similarly, our Zero Hunger | thankful for our Associates’ Zero Waste Food Rescue and Dairy Rescue continued dedication and programs, as well as our charitable giving, service. Perhaps more than are amplifying our community support at a time when many people are struggling. ever before, we are deeply committed to our brand How does Kroger’s pandemic ethos—Fresh for EveryoneTM— response demonstrate and to advancing diversity, Our Purpose? equity and inclusion in our The coronavirus outbreak challenged us Company and Communities. to act quickly and balance the needs of many stakeholders. As always, protecting the health and safety of our Associates and Customers is our top priority. Rodney McMullen Kroger’s Chairman and Chief Executive Officer sustainability.kroger.com 4 2020 Kroger ESG Report Introduction Our Approach Environment Social Governance Appendix About Kroger Kroger is America’s favorite grocer. We are committed to delivering fresh food at a fair price, simplifying the customer experience and meaningfully giving back to the communities in which we operate. We believe no matter who or where you are, you deserve affordable, easy-to-enjoy, fresh food. This idea is embodied in a simple tagline—Fresh for EveryoneTM— that represents our egalitarian brand and underscores our commitments to our customers. In fulfilling Our Purpose to Feed the Human Spirit™, we always live by our Values: Respect Honesty We treat all with dignity We insist on truthfulness with and value the opinions and each other, with our customers, perspectives of others. with our vendors and in our business records. We expect and value openness. Diversity We seek and embrace difference in the backgrounds, cultures Integrity and ethnicities of all associates, We act in accordance with our customers and vendors. values, even when it’s difficult. Inclusion Safety We encourage and expect We protect our customers and collaboration, teamwork and each other from injury with a the active involvement of safe and secure workplace all associates. and shopping environment. Restock Kroger Plan Overview Kroger’s vision is to serve America through food inspiration and uplift, and Restock Kroger is our three-year 2,757 44 11M plan to deliver on that vision. The plan’s four key drivers will help us serve customers anything, anytime, retail distribution customers daily anywhere and are built on the foundation of running great stores: locations centers 34 1,244 $122.3B manufacturing vehicles in Total 2019 plants operated by Kroger‑owned sales the Kroger family Redefine the Grocery Partner for Develop Talent Live Our Purpose commercial fleet Develop our high- Our Purpose and Promise of companies Customer Experience Customer Value Accelerate our digital Use more capital to performance leadership guide everything we do, and ecommerce efforts, fund technology and culture through future and Kroger’s Zero Hunger applying customer data infrastructure upgrades talent development and | Zero Waste social impact 100.7M 180M and personalization to and create alternative training, and by investing in plan is how we live that associate pay and benefits. Purpose every day. miles traveled by Kroger‑owned square feet of more aspects of the revenue streams.

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