Employees Health Planet Communities of theUN’sSustainableDevelopmentGoals. long-term sustainabledevelopmentstrategyandgoalsbasedonfour In December2019,X5’sSupervisoryBoardapprovedtheCompany’s Progress in1H2020 STRATEGY (ESG) DEVELOPMENT SUSTAINABLE

of our employees of our for all and equal opportunities Ensure decent working conditions and use of resources Promote responsible consumption to promote lifestyles healthy and of products healthy quality selection Ensure of a the availability wide and charitable programmes and charitable increased social investments local communities through Support X5.RU

X5 GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 and accountability Improving transparency stage 1priorities(January–June2020) ESG strategyimplementation: the global spotlight. into goals sustainability own its to achieve X5’s putting anti-corruption, resolution standards, environmental protection and tocommitment labour human rights, This our movesustainability. confirmed of and corporate social responsibility area the in businesses for initiative sustainable development, an international for Compact Global UN the join to retailer Russian first the became X5 April, In APRIL development: sustainable on asection including Report, Annual 2019 its published X5 March, In MARCH communications is address forsingle e-mail all ESG-related Our units. business all by implementation projects and strategy ESG the coordinate to Department Development aSustainable up set We also basis. aquarterly on Committee the by monitored be to progress with towards sustainable development goals, to manageCommittee our progress Executive its empowered X5 January, In JANUARY overall 2023businessstrategy. 2023 willbedisclosedthisautumnaspartofX5’s programmes. Detailsofquantitativegoalsthrough fully integratedintoourstrategicdevelopment and investmentrequiredtoachievethemare 2021 to2023.Thesegoalsandtheprogrammes of X5 RetailGroup’snewbusinessstrategyfor Our ESGgoalsrunthrough2023andarepart Pages/Sustainability/X5_SR_2019_ENG.pdf

www.x5.ru/en/PublishingImages/ [email protected] . Sustainability/Reports.aspx progress local ESG against targets. their monitor to tools launching also while units, business and chains retail our of each at goals these towards progress monitor to and introduced detailed ESG dashboards goals down to business units sustainability strategic our cascaded we July, In JULY strategy. business 2023 Company’s the with integrated was strategy X5’s ESG June, In JUNE a regular basis: basis: a regular on supplemented and updated is which databook, ESG an presented X5 May, In MAY responsible initiatives. and local communities in environmentally consumption and engage consumers to promote environmentally conscious including efforts and practices, best expertise Russian retailers’ sustainability summarised Russian retailers. Participants other and employees Company’s the for workshop on sustainable development atraining hold to Union Ecological the and WWF with forces joined X5 April, In APRIL https://www.x5.ru/en/Pages/ X5.RU 2 — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 1. 2 1 sq m ofsalestotalarea by GHGemissionsper is among marketleaders X5 RetailGroup resources of use and consumption responsible Promoting GOAL X5’S Action towardsESGgoals:ourprojectsandprogress

Appendix 3 Appendix Calculation, Emissions GHG the per as breakdown Emissions date IEA factors. IEA date based method and the most up-to- location- the using 2emissions Scope X5factors. Retail Group calculates indirect greenhouse gases emission the of update the to due Report Annual 2019 the of publication the following updated been have data Emissions energy consumption. to providereal-timedataon of Pyaterochkastoresstarted 97 Low shareofenergygeneratedbyX5’s boilerhouses Length oftheheatingseasonandaverageannualtemperature Prevalence ofcentralheating SPECIFIC EMISSIONFACTORS METRO X5 RETAIL GROUP impact. climate our to limit for reducing emissions GHG through 2023 and set annual targets efficiency operational for opportunities improvingidentified the Company projects, planned investment performance and related ongoing and anFollowing audit of sustainability Protocol. the GHG with line in 2019 and 2018 for footprint 2GHG 1and Scope its calculated X5 Reducing GHGemissionsandenergyconsumption

Scope 1 tonnes of CO of 1tonnes Scope CO of 2tonnes Scope 2 2 2 % 1 0,15 2 2 e per year / sq m of area sales mof /sq year e per e per year / sq m of sales area sales mof /sq year e per 0,20 0,22 0,24 0,10 hazardous fortheenvironment. generate class1waste,whichis extremely to consuminglessenergy,weno longer containing lamps.Moreover,inaddition We discontinuedtheuseofmercury- have LEDlightinginstalled. X5 RetailGroup’sstores > 16,000 risk of accidents. rooms)space and and minimise utility the lighting and heating solutions for the selling heating and cabinets, air units, conditioning control (for refrigerators, refrigerated display energy consumption, automate equipment processes, thereby helping to reduce tosoftware integrate into existing operating special sensors, control devices and deploys which system, Store Smart the with refurbishment are now being equipped for slated stores and outlets new All 0,15 0,11 X5.RU

0,28 3 X5 RETAIL GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 Total wastebytype,2019 Total wastebyBU,2019 Other BUs account for less 1% of total waste total of 1% less for account BUs Other of solid municipal waste 90% for accounts waste Food management processes management Improving internalwaste Krasnodar Territory Offices DCs Pyaterochka retailPyaterochka chain Perekrestok retail chain Saleable food waste Solid municipal waste waste Recyclable 40 % 38 % 16 % 1,502 kt 1,502 kt

Moscow Region 3 % 1 % Voronezh Region 57 % 45 %

St Petersburg Region Novgorod Nizhny Region Samara 3 benchmarks global with line in kt, 1502 to amounted 2019 in waste total Our unit. business and type by down broken was audit the of part as calculated waste total Group’s Retail X5 practices. above the to relation in identified improvement for areas the address to begun already has Company The • • • • • strengths of our waste management: The the audit following identified 29 regions. Russian nine in facilities at the Company’s March to 2020 19 February 17 from conducted was processes management waste existing of the audit An 10 12

2 1 1 1 1 1 Peers used in the benchmarking include Tesco, , Kesko, Migros and . and Migros Kesko, Delhaize, Ahold Tesco, include benchmarking the in used Peers used in operations. returnable and reusable containers of wasteobservance pick-up schedules; andcollection sale of food waste; and sale ofcollection recyclables; waste accumulation; separate for equipped sites

Direct ImportBU Perekrestok Online Perekrestok KitchenFactory Transport BU Perekrestok DCs Perekrestok stores Pyaterochka DCs Pyaterochka store

3 FACILITIES INSPECTED . Territory Perm

• • Inventory programme: management by-laws. waste other with along place in put been has Policy Minimisation X5’s Waste area. this in efforts developed to promote and our support been has X5’s employees for programme An online waste management training 2020). October in disclosed be (to 2023 through set been have targets and metrics Annual waste reduction and recycling recycling. and boost developed to reduce waste generation Measures and programmes have been of waste management documentation review and interviews employee rooms and container sites to salesvisits areas, warehouses, utility Region Novosibirsk

X5.RU 4 X5 RETAIL GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 plastic consumption Reducing disposable made ofrecycledplastics. introduced shoppingbaskets Pyaterochka stores 1100 was sentforrecycling solid waste 400 generated byX5 Recycling ofwaste generation Preventing waste KT of recycled materials compulsory. materials of recycled content a high making counters, checkout its at sold bags plastic all for requirements the updated Perekrestok containing 35% recycled materials. bags plastic to switched has chain retail customer feedback, the Perekrestok on based and project a pilot Following and vegetables. fruits for sacks weighing reusable 145,000 sold more than 2 million reusable bags and chains X5’s 2020, retail 1H In cards. loyalty by crediting double to bonus points their weighing sacks for and fruits vegetables reusable use to and cotton raw of made eco-bags buy to customers its encourages andfruits vegetables. Pyaterochka reusable bags and weighing sacks for promote to a project implementing We are manufacturers participating in the project. in the project. participating manufacturers the from coupons discount for in exchange recycling for containers used kg of 750 over collected chains X5’s 2020, retail In 1H vending machines in installed our stores. and aluminium via containers reverse plastic used collecting start to Henkel and Coca-Cola Unilever, with up teamed Х5 courier. the to delivery during can return bagsCustomers used plastic recycling. further for bags delivery of plastic Perekrestok.ru launched the collection online the 2020, March In y-o-y. 35% up recycling, for sent boxes) and pallets containers, plastic was paper, (cardboard, operations our of part as generated waste solid of kt 400 2020, 1H In compliance temperature with and strict order quantities negotiated suppliers, with minimum smaller needs, customer to mix product the of adaptation better deliveries, demand modelling, more frequent product generation include big-data-driven waste reduce to Ways generation. waste planning is an tool important for reducing inventory of accuracy the Improving chains. engaged bymanufacturers all our retail for requirement a mandatory now is baskets in plastic recycled Using progress. in is Perekrestok by baskets such to baskets. The similar transition onwards, all new concept stores will use 2020 From plastics. recycled of made 2020— June of end the at as 1,100 than more stores— concept new Pyaterochka’s of All initiative going forward. going forward. initiative feed, and intend to develop actively this animal for products food more times three transferred chains retail our 2020, 1H In feed. tonnes for of animal13,000 unsold products over transferred we 2019, In feed. animal into recycling for date expiry the before merchandise that become unsaleable and food unsold transfer to initiative an Pyaterochka and Perekrestok launched room for improvement. further see we and y-o-y, points basis 30 by to waste of share the decrease to Company the enabled efforts these 2020, Q2 In transportation. during requirements started to use shopping baskets baskets shopping use to ​started X5.RU ​ 5 X5 RETAIL GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 4

who in participated the survey. suppliers) import direct (excluding Suppliers KEY RESULTS supply chain a responsible Developing 14 % 15 % UN SDGs towards their contribution Suppliers assessing in theirreporting non-financial information Suppliers disclosing (% ofX5’s totalprocurementturnover): suppliers. recommendations sustainability its with for line in policies procurement its updated X5 • • • hearings. The recommendations included: expert open of results the and survey environmental organisations, a supplier and public government, from materials research, available publicly of an analysis for suppliers: suppliers: for recommendations published sustainability and developed Group Retail X5 June, In and environmental organisations. merchandise, processing companies, NGOs solutions producers with of packaging and of environmentally packaging friendly discussion expert open an held X5 April, In Suppliers sustainability/suppliers.aspx account for 19.5% of Х5 Retail Group’s total retail sales. survey. surveyed companies The the in participated suppliers) import direct six (including suppliers 31 practices. development sustainable regarding their asurvey in towere take invited part suppliers import direct 15 topand our 59 suppliers April, In raw materials for packaging. packaging. for materials raw preferred least and most the specify design; lean and packaging reusable mono-materials, of use in Russia, potential recycling material, its packaging, including reusable packaging sustainable for X5’s vision reflect of responsible practices; production product categories to inform consumers forand social different certifications environmental of voluntary types list achieving www.x5.ru/en/Pages/ 4 committedtosustainablepractices based on on based

16 % 11 % practices sustainable packaging Suppliers implementing certified their Suppliers having products about them their launch. after actual details more share will we and principles, programmes rely on green New suppliers. programmes with recommendations into joint marketing sustainability its incorporating started X5 suppliers. the with directly andpublic interacting reporting their reviewing by basis aselective on performance ESG suppliers’ verify to plans the Company forward, Going sustainability. improving feedback in collection relation to and awareness supplier raising on focus forinterface supplier relations) and will also official Company’s (the Portal Supplier its on recommendations via a dedicated survey thatsuppliers follow sustainability its of arecord keep will Group Retail X5 recommendations for suppliers. of goals and X5’s sustainability strategy, for expectations joint achievement X5principles, development sustainable weresuppliers made aware of sustainability X5’s 6000 of 50% than more efforts, educational targeted our of part As website. is available publicly on the Company’s which X5’s Suppliers”, for Development “Sustainable of topic the on course training aspecial developed we August, In 15 % and quantitativetargets development a sustainable Suppliers pursuing X5.RU strategy 6 X5 RETAIL GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 5 3. 2. services/gender-pay/spotlight-on-large-retailers.html https://www.pwc.co.uk/services/human-resource- pay-gap-of-17-in-the-retail-industry/ https://www.retailgazette.co.uk/blog/2020/01/gender- data.oecd.org/earnwage/gender-wage-gap.htm benchmarks: the identify to used were sources following The of our employees employees our of all for opportunities equal and working conditions decent Ensuring GOALХ5’S in 2019 gap bygender The averagepay 0.87 lifestyles Promoting healthy GOALХ5’S , , satisfaction levels. satisfaction remuneration and boost employee their of component variable the around transparency improve to staff in-store for We remuneration adjusted programmes practices. incentive improve to and more transparent requirements competency and position its make to bands and grades of asystem introduced X5 2020, In • • • following areas: the in programmes run to continuing We are offices. and stores our at employees new sustainable development for all existing and on course training online an with along developmentsustainable principles, on briefed are employees its of 100% that sure make to effort an launched X5 benchmarks compared to international 0.87, for was average 2019 The time. result astrong is which first pay for gap the gender May,In its disclosed X5 Retail Group products by X5. X5. by products food healthy as classified SKUs of hundreds based and featuring several Moscow- eight at project apilot of part as launched corners food healthy with customers, its among lifestyles healthy promoting on embarked has Perekrestok stores. our at products fresh of share the increasing for targets set also We have mix. product branded and label private our both in foods healthy of share the raising for goals to set and chains retail our across lifestyles healthy promoting programmes develop to used criteria on based is classification The foods. of healthy classification own its develop to dietitians and nutritionists with up teamed X5 foods. of healthy classification own to develop its dietitians and nutritionists X5 teamed with up eNPS and CSI. CSI. and eNPS developing feedback including channels, employeeboosting engagement; andvalues, inclusion; including diversity developing the corporate culture and satisfaction levels. satisfaction to improve their work-life balance and workflexible arrangements to employees more offer to seeks It work. remote and office mix to employees enabling project Office aHome launched X5 2020. March from starting remotely work to employees office of 95% for arranged has Company the outbreak, COVID-19 the During areas. staff comfortable and functional more spacious, more equipped, better Pyaterochka and Perekrestok stores feature concept New areas. break staff design and arrange we way the We changed • Perekrestok: at launched been have for Training and Research). Research). and for Training from UNITAR (United Nations Institute consumption developed jointly experts with Perekrestok and Danone launched an • Basket interactive online course and Route Habit Good The use of resources. responsible consumption and rational towards them motivate and diet balanced and ahealthy support that products pick customers help to stores Perekrestok in available now are and space, shopping the in marks navigation special with Routes Habit Good are highlighted for an adult. and carbohydrates a throughout month fats proteins, calories, of intake daily that providesproducts the recommended Healthy Food Basket 5

customer awareness campaigns

is a set of food food of aset is on responsible Healthy Food X5.RU 7 X5 RETAIL GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020 of the Basket of Kindness project. Kindness of Basket of the part as need in people to them and donated sets) food 24,000 (over food of 145 tonnes nearly gathered Rus Foodbank and X5 Food aid 2020. June late to March late in launch project the since home return people 707 help to people, disoriented and lost team, whichsearch-and-rescue supports Alert Liza the and People Missing for to Search Centre the with partnered Group Retail X5 missing people Assistance for communities for localSupport GOALХ5’S 4. delivered since then. sets tea of tonnes 17 of atotal with Moscow, outside labs and 70 hospitals about to as well as coronavirus novel the laboratories engaged in research into to nine Moscow-based products confectionery and coffee tea, of sets free In April, Pyaterochka delivering started hospital. the to parcels food the delivered Rus’Foodbank volunteers packed and while project, the in costs infrastructure and food all incurred X5 project. of Kindness Basket the of part as families their and Care Emergency of Institute Research Sklifosovsky the of doctors to parcels food 3,500 over handed also we April, In thanks to online food donations. seniors for sets food 8,600 collected Rus Foodbank and X5 March, of end the Since Moscow, Vladimir and regions. Lipetsk the as well as Petersburg St and Moscow of residents elderly to food to deliver online Basket of campaign Kindness In March, we launched an unscheduled COVID-19: planned next steps in September 2020. in September steps next planned announce and will goals our sustainability towards onour progress updated to keepingWe stakeholders forward look and medicines to pensioners for free. free. for pensioners to and medicines food deliver to Front People’s Russia All- the with up teamed Pyaterochka elderly. the for service walking dog afree launched Perekrestok for pensioners. service delivery product afree launched Perekrestok.ru on a daily basis. free lunches to ambulance crews to offer aservice launched geographies our across Karusel date. to donated of 31,760 meals atotal with hospitals, Moscow five at mealsdonating ready-to-eat to doctors started Kitchen Smart Perekrestok’s April, In X5.RU 8 X5 RETAIL GROUP — ESG STRATEGY IMPLEMENTATION | PROGRESS IN 1H 2020