1 J Sainsbury plc Values update 2019/20 Sainsbury’s Sustainability Update 2019/20 2 Welcome J Sainsbury plc Sustainability Update 2019/20

Welcome

Helping customers live well for less has been at the heart of what we do for 150 years, since John James and Mary Ann Sainsbury opened Contents the doors of our first shop in Drury Lane in 1869. Welcome...... 2 We employ 172,000 colleagues who work hard A message from our Chief Executive Officer...... 3 every day to make our customers’ lives easier Our 2020 Sustainability Plan...... 4 and provide them with great products, quality and service. Our priorities...... 6 Our customers care about wide-ranging, Our values make us different...... 8 complex issues that impact them and our A message from our Director of Sainsbury’s Brand . . . .19 wider world. They trust us to be a responsible business, whether that’s by supporting the Sustainable Development Goals...... 20 communities we serve and source from, Governance...... 21 managing our environmental impacts or contributing to a healthier, more inclusive Performance scorecard...... 23 society. Our values underpin everything we do as a business and help us strengthen relationships with all our stakeholders. They enable us to build trust, reduce operating costs, mitigate risks and attract and retain talent. This is an update on progress against our Sustainability Plan, which is structured around our values.

Find out more at www.about.sainsburys.co.uk/ making-a-difference 3 A message from our Chief Executive Officer J Sainsbury plc Sustainability Update 2019/20

Driving lasting, positive change

On conclusion of our 2020 I’m proud to say that our focus on giving per cent against our 2005 baseline, having Sustainability Plan and customers high quality food at good value achieved our 2020 reduction target a year remains as true today as it was over 150 ahead of schedule and announced an announcement of our bold new years ago when we opened our doors on industry-leading target to halve our use of Net Zero by 2040 ambition, Drury Lane. In that time, we’ve remained plastic packaging by 2025. Chief Executive Officer Mike true to our values, allowing us to drive lasting, positive change in the communities We continue to make progress on our Coupe reflects on our values, ambition to be the most inclusive retailer which have been our guiding we serve and source from. The scale of our business means we can make an important where people love to work and shop. From framework for sustainability contribution to sustainable development in setting corporate objectives to increase over the past decade. the UK and internationally. female and Black, Asian and Minority Ethnic colleagues in senior roles, to becoming This year we announced our bold new signatories of the Social Mobility and Time 172,000 sustainability plan - to become Net Zero to Change pledges, we continue to strive colleagues across our own operations by 2040 and we to be a great place to work. This year we have committed to investing £1 billion over also updated our Human Rights policy, the next twenty years to achieve this. We we recognise our customers want to be 87+ will use the £1 billion investment to support confident that we source with integrity and countries we source our own-brand seven commitments that focus on reducing that the people in our supply chains who products from carbon emissions, food waste, plastic make, grow or sell our products are treated packaging, water usage and increasing fairly and their human rights respected. recycling, biodiversity and healthy & sustainable diets. We will report on our This past year also saw the celebration of 28 million+ our milestone 150th Birthday. We wanted customer transactions every week progress every six months using science- based targets,working with the Carbon to mark the anniversary by making a Trust and the CDP. positive difference in our communities, so we gave all our colleagues the opportunity Our values and sustainability activities to volunteer during work time for a local protect our brands so that customers, charity or community initiative. In total over suppliers and stakeholders continue to 35,000 colleagues pledged to volunteer, with trust us. As I look back at my time with over 2,400 community projects carried out, Sainsbury’s, we have made tremendous 19 per cent of these being environmentally- progress in sustainability and you’ll find based projects. To support our customers many examples of our achievements to live healthier lives, we have invested over and current activities across our five £187 million into Active Kids to date and values, detailed in this report. Having this year ran 70 Active Kids holiday clubs respect for our environment is one of which had 23,000 children attending during our core values and this year we cut the summer months. Along with our long- our absolute carbon emissions by 42 standing charity partnerships, this reflects how we sit at the heart of our communities and play a broader role in society overall. As we look to the future, we know that climate change is at the top of our colleagues’ and our customers’ minds, therefore it’s time to push ourselves further, with our new commitments, so that we can help everyone live well today and into the future.

Mike Coupe Chief Executive Officer 4 Our 2020 Sustainability Plan J Sainsbury plc Sustainability Update 2019/20

Our 2020 Sustainability Plan

Delivering on our 2020 Highlights commitments of our 2020 Our purpose is to help our customers live commitments well for less, now and in the future and to help them get the most out of life, no matter how much money or time they have. Our customers care about wide-ranging, complex issues that impact them and our wider world and they expect us to be a responsible, sustainable business, whether that’s by supporting the communities we serve and source from, managing our environmental impact or contributing to a Making a positive healthier and more inclusive society. Living healthier lives difference to our To this end, in January 2020 we announced our new commitment to invest £1 billion community over 20 years to become Net Zero across our Offering customers nutritious and healthy Generating positive impact in the own operations by no later than 2040. food and encouraging active lifestyles communities we serve and source from, When we launched our 2020 Sustainability We committed that our customers could locally and globally Plan in 2011, we set out five clear values and always choose nutritious and healthy food We committed to support our local gave ourselves 20 deliberately stretching when they shop with us and that we would communities in relevant and impactful commitments which gave us a clear focus to encourage kids to live a healthy, balanced ways and donate over £400 million to formalise our activities. lifestyle. charitable causes by 2020. Our five values were to help our customers, colleagues and suppliers to live healthier lives; make a positive difference to our communities; source with integrity; have respect for our environment; and create 22% £359 million¹ a great place to work for our colleagues. red traffic light labels on our own-brand cumulative charitable investment generated In 2015, approaching the halfway point products (2020 target: 21 per cent) across our programmes (2020 target: £400 of our 2020 timescale and following the million) launch of our 2014 business strategy, we took the opportunity to review our 2020 £187 million Sustainability Plan. total investment in our Active Kids scheme Through our customers and colleagues, we As a result, we updated our commitments, (2020 target: £200 million) have generated over £359 million to make a removing those which were no longer positive difference to the communities we relevant and adding challenging new ones serve. In addition, we supported over 35,000 to have the most positive impact. This gave We are continuing to reduce the percentage of our colleagues who pledged to work with us a refreshed focus as we moved forward charities and community groups across the to 2020. of red traffic labels on own-brand products and reformulate to reduce salt, sugar, UK through our 150 Days of Community Our 2020 Sustainability Plan has been our fat and saturated fat in order to help our programme to celebrate our Company’s guide for building a sustainable future, customers eat and live well. 150th birthday. ensuring we focused our efforts to make the greatest difference and we are proud We are also supporting customers with of what we have achieved over the past food allergies and intolerances by creating decade. We have learnt a lot in the process personalised allergen profiles online via food and taken lessons from where we have hit search platform FoodMaestro. our targets and where we have not. We continue to invest in our Active Kids This helped to inform how we can make a scheme and launched summer holiday greater impact moving forward and where clubs to offer activities to kids of all abilities we need to collaborate with industry and during the long summer break. partners to contribute to tackling some of the big challenges such as climate change.

¹ Includes funds raised for good causes from corporate donations, carrier bags, colleague and customer fundraising and charity partnerships. 5 Our 2020 Sustainability Plan J Sainsbury plc Sustainability Update 2019/20

Sourcing with Respect for our Great place integrity environment to work

Building resilient supply chains by sourcing Reducing emissions, water use and waste Being an inclusive employer where products ethically and sustainably. across our value chain colleagues love to work We committed to sourcing our key raw We committed to reduce our operational We committed to being an employer where materials sustainably to an independent food waste and to work with our customers colleagues love to work and to having standard and that our own-brand fish would to help them reduce theirs, putting both an inclusive workforce which offers good be independently certified as sustainable. to positive use. We also said we would employment opportunities to all members We committed to selling products that reduce our own-brand packaging and our of the community. We also committed to are fairly traded and to invest in the operational carbon emissions. Through investing in the training and development of sustainability of the suppliers, farmers, robust water stewardship, we committed our colleagues. growers and workers within our supply to address and manage all areas of water chains internationally, as well as investing vulnerability. in the future of British farming and be the leading retailer for British produce. We also 4 committed to sourcing our meat, poultry, £9.30 per hour eggs and dairy products from suppliers who colleague reward (2020 target: standard adhere to independently verified animal 92%³ colleague reward greater than National health and welfare outcomes. stores with Food Donation Partners for Living Wage) surplus food (2020 target: 100 per cent) 6.7% 99.1%² 42% per cent colleague reward is greater than National Living Wage (2020 target: standard palm oil used in our products is sourced absolute greenhouse gas emissions colleague reward greater than National to an independent sustainability standard reduction (2020 target: 30 per cent) Living Wage) (2020 target: 100 per cent) We continue to support the delivery of Courtauld 2025/Champions 12.3 by reducing We are recognised as a great place to work, 100% operational food waste and are making year demonstrated by maintaining our Gold farmed seafood independently certified as on year progress to increase the number accreditation from Investors in People for sustainable (2020 target: 100 per cent) of stores with food donation partners. We the 4th year running. We have continued are really proud of our achievements in to broaden our training and development reducing greenhouse gas emissions and offer to our colleagues and our ‘Leading@ We are proud of our track record on water use in our operations. This year we Sainsbury’s’ development programmes sustainably farmed fish and have made received a CDP A rating for our climate support individuals to develop the skills significant progress to ensure we limit the change disclosure for the sixth year and leadership capability to transition to a contribution to global deforestation from running, the only UK food retailer to achieve management role. our own-brand products. We will continue this score for this length of time. We will to actively collaborate with suppliers, our continue to introduce proven technologies partners and industry experts to ensure that to achieve further reductions in these areas we source from sustainable sources. in order to reach our goal of being Net Zero in our own operations by 2040.

² Based on 2019 calendar year. ³ We have sent zero operational waste to landfill since 2013. 4 Per hour base rate of pay in Sainsbury’s stores. National Living Wage rate (25+) effective dates: April 2018, April 2019 and April 2020. 6 Our priorities J Sainsbury plc Sustainability Update 2019/20

Our priorities

To deliver our purpose and engaged and we measure this twice a and we raised £29 million this year for vision we will focus on seven year through our colleague engagement local and national causes. As part of our survey. We retained our Gold accreditation 150th birthday, we launched 150 Days of strategic priorities which are from Investors in People (IIP) for the fourth Community and over 35,000 colleagues designed to ensure we continue consecutive time over 10 years, despite the pledged their time to volunteer during to give our customers what level of change in the business. working hours for over 2,400 local community projects. For more information they want in a rapidly changing We have made good progress with our retail marketplace while on how our colleagues support the inclusivity agenda. We are a Disability communities we serve, see pages 10-11. also delivering value for our Confident Leader for our work on disability shareholders. and inclusivity and, looking ahead, we aim We are committed to complying with to increase our employment of Black, Asian laws and regulations and set high ethical and Minority Ethnic (BAME) representation standards for our colleagues and suppliers. These priorities are: to be at senior manager level. We also aim to We expect all colleagues to abide by our competitive on price; to increase the percentage of colleagues Ethical Conduct Policy, covering areas offer distinctive products who agree with the statement ‘I feel I am including anti-bribery and corruption, and categories; to provide able to be myself at work’ in our colleague conflicts of interest, suppliers, fraud and personalised and seamless engagement survey. whistleblowing. Training on these policies is provided to colleagues in the commercial physical and digital divisions as part of their inductions and then experiences; to be fast, friendly annually. This year we also updated policies and convenient; to drive and processes for our suppliers to gain a efficiency to reinvest; to be a better understanding of risk, and updated place where we all love to work our Human Rights policy which can also be and to be Net Zero in our own found on our corporate website. operations by 2040. Alongside our community investment, we make positive economic contributions through our supply chain, our market- leading pay for colleagues and our responsible approach to tax, contributing £2.1 billion in taxes borne and collected this We continue to work on our gender pay year. balance across the business and have further reduced our gender pay gap by 1.6 per cent to 10.5 per cent this year, while our median gender pay gap remains at 3.8 per Be a place cent. Female representation at Board level is 33 per cent and female representation at where we all senior levels has increased to 35 per cent by the year end. Across the entire business, female representation is 54.6 per cent. There love to work are 94,992 women and 78,983 men and the remaining colleagues did not identify as either women or men. We are committed Sainsbury’s is an inclusive to achieving our aspirational target of 40 employer where colleagues love per cent female representation in senior to work and are encouraged to positions by 2021. For more information, develop their skills and fulfil see our Gender Pay Report on our corporate their potential. website. In this complex retail environment, excellent Being a company that people love to work leadership of our store teams is crucial. for means being an inclusive employer We have an award winning leadership where colleagues are encouraged to programme for store colleagues and develop their skills and fulfil their potential. managers. We are also focused on ensuring It’s about playing an active role in our that more junior colleagues can develop communities and about having high ethical their skills and progress and measure standards that we and our suppliers adhere the number of colleagues enrolled on to. an apprenticeship programme and the It is important for the long-term success completion rate for those apprenticeships. of the business that our colleagues remain We play an active role in local communities 7 Our priorities J Sainsbury plc Sustainability Update 2019/20

billion litres since 2005. We have committed to minimise the use of water in our own operations, driving towards water neutral by 2040. We were the first Net Zero by retailer to achieve zero waste to 2040 landfill and we Living well means living plan to reduce food sustainably and we have committed to invest £1 billion waste by 50 per over 20 years to become Net In 2005 we were the first retailer to cent by 2030 Zero across all our operations by introduce multiple traffic light labelling on the front of our own-brand packaging and 2040. we have reduced the number of red traffic We will also increase the use of recycling in We have seven key areas of focus and we lights since 2015. Through reformulation, our own operations and make it easier for will report progress against each of them at 97 per cent of our own-brand products our customers and colleagues to recycle. All our interim results in November. meet Public Health England’s salt reduction targets and we have reduced the amount our plastic hangers are made from 100 per of sugar across soft drinks, ice cream, cent recycled materials and last year we cereals and more by over 20 per cent since recycled 300 tonnes of them. As we move We have committed 2015. As part of our Net Zero commitment forward we will expand recycling facilities at we will continue to develop healthy, tasty our stores to help customers recycle metal nutritious food for our customers and cans, glass, plastic, paper, clothing and to invest £1 billion other materials. over 20 years expand our popular meat alternative range. to become Net We have Zero across our committed to operations by 2040 reduce our use of

We are the only UK food retailer to receive plastic packaging an A rating in the Climate Disclosure Project for six consecutive years. We are proud to by 50% by 2025 have achieved a 42 per cent reduction in carbon emissions over fifteen years, despite a 46 per cent increase in our estate. We have We have committed to reduce our use committed to reduce carbon emissions of plastic packaging by 50 per cent by Finally, we will ensure that the impact of our within our own operations to Net Zero 2025 and then go further. We were the operations is net positive for biodiversity. We greenhouse gas emissions, increasing the first retailer to remove plastic bags from have planted nearly four million trees in use of renewable energy. our produce aisles and bakery counters; partnership with the Woodland Trust since customers now use their own bags or buy 2004 and we expect to plant more than 1.5 a reusable and recyclable bag made from million trees by 2025. 99.1 per cent of the a recycled plastic bottle. Among a large palm oil used in our products is sustainably number of initiatives, we removed plastic sourced as is all our farmed seafood. bags from online deliveries and reduced the weight of plastic used in milk and water packaging. We were the first retailer to achieve zero waste to landfill and we plan to reduce food waste by 50 per cent by 2030. Most of our stores redistribute good quality food safely to local charities and community groups through our food donation partnerships. We were also the first retailer to achieve The Carbon Trust Water Standard in 2017 as well as this past year achieving the Climate Disclosure Project A rating for water disclosure. We achieved our 2020 water reduction targets early, saving one 8 Our values make us different J Sainsbury plc Sustainability Update 2019/20

We take our responsibility to help our increasing vegetables in our customers’ customers eat healthily, seriously, whatever diets and guarantees at least one of the their budget. From making the everyday recommended five a day. In 2019, 13 new options a healthier choice or innovating Love Your Veg products launched, including to bring healthier products to market, butternut squash and lentil lasagne customers can always choose nutritious which contains three of your five a day. and healthy food when shopping with us. We aim to provide customers with the Living information, incentives and rewards to 43% encourage those healthier choices. healthier lives healthy products sold as a proportion of total sales volume, up from 38% Making everyday in 2018/191 (2020 target: 45 per cent) products healthier Related UN Sustainable Development Goals We also continue to support the Food We have an ongoing programme of Foundation’s Peas Please Initiative, which reformulation, reducing sugar, salt and makes a pledge for more veg. In 2019, 18.8 saturated fat from our own brand products, per cent of the total own-brand food volume without compromising on quality or sold at Sainsbury’s was vegetables and 100 taste for our customers. We have been per cent of our promotional space had at reducing sugar for a number of years and least one vegetable option. We help our customers to live continue to make strong progress within well and living well starts with key categories outlined by Public Health England’s Childhood Obesity Plan. We have Innovating for healthier healthy eating. achieved over 20 per cent sugar tonnage choices reduction since 2015, as well as not having characters on any of our children’s breakfast We continue to innovate in our product cereals. We have also removed sugar across ranges to provide customers with new key categories like ice creams, bakery and healthier choices. We outperform the market biscuits. in meat alternative, plant based food ranges, and this year we introduced Plant Pioneers We have a long history of providing clear to our own-brand offer, providing innovative nutritional information, and were the first and delicious options to customers following UK supermarket to introduce the pioneering flexitarian or plant based diets. We added multiple traffic light (MTL) system in 2005, 26 new products across the fresh, frozen going beyond government requirements and ambient categories, this includes our at that time, and continue to do so. Vegan Fishless Fish Fingers which contain We ensure that our products are algae oil and provide customers who do not consume oily fish, with a source of Omega 3.

accurately and simply labelled, providing nutritional claims on our products to help customers easily access the nutrient benefits of the product, including fibre and protein. We restrict We also have products to help customers nutrition and health claims on any get enough of key vitamins in their diet, own-brand product with a red MTL including our Super Mushrooms fortified (except where naturally occurring), and with B12 and Vitamin D or our Scottish we continue to reformulate to reduce Salmon with additional Omega-3. the number of red traffic lights across our ranges. This year we also extended our Little Ones range. The first 1000 days in a child’s life Our prepared foods range has a wide are vital to development and the products choice of fruit and vegetable portions, available across this range have been helping our customers increase specifically designed to ensure that children their consumption easily and in are well equipped to grow and live healthy different ways. Our Love Your Veg lives. All of our Little Ones savoury pouches range emphasises the benefits of contain one of your five a day, and we also

¹ The proportion of products in our customers’ baskets that are defined as healthy, based on category specific criteria. 9 Our values make us different J Sainsbury plc Sustainability Update 2019/20 created scratch cooking weaning recipes FMCG companies, several local public which are available on our website. health organisations, as well as academia 23,076 including The University of Oxford. Number of children who took part Through our involvement in the Livestock, in our Active Kids holiday clubs Environment and People (LEAP) project with The University of Oxford, we were In 2019 we ran 70 Active Kids holiday clubs the first UK supermarket to trial selling in locations across England and Wales, with meat-alternative products in meat aisles. attendance from over 23,000 children, and we offered 5000 free places to families who were in need. The clubs provided a healthy 96% lunch and snacks, and a wide range of increase in sales of volume of low activities from fencing and circus skills to alcohol wine (2020 target: 100 per cent) tennis and quick cricket.

Helping customers who We are committed to promoting healthier lifestyles to our customers and continue to wish to make healthier strive to ensure that all promotions, adverts, choices incentives and product placements, both in-store and online, are offered responsibly. We understand many of our customers Whilst great progress has been made, we’re want to make healthier choices and we aim aware there’s still much more that can be to support customers make their healthier done and we actively participate in industry lifestyles more achievable. working groups to drive forward the health agenda. Through our membership with the We have an ongoing commitment to provide Institute of Grocery Distribution, we work clear nutritional labelling for our customers, with other retailers and manufacturers in both on pack and when shopping online, Nutrition and Healthy Sustainable and previously launched an online tool with Diets working groups. We continue Food Maestro, enabling those with allergies to be members of Drink Aware or intolerances to identify the suitability of and are members of the British different products when shopping online. Nutrition Foundation.

Inspiring kids to live healthier lives

As part of our commitment to encourage kids to live a healthy, balanced lifestyle, we continue to provide our Active Kids scheme. Active Kids was first introduced in 2005, donating equipment and experiences We have also utilised Nectar to offer points to clubs and schools across the UK, with to reward fruit and vegetable purchases investment reaching over £187 million this and worked with Disney to run a campaign year. which incentivised customers to buy healthier products including mini fruits, by offering additional promotional cards in return. Sales of promotional fruits increased £187m by more than 250 per cent over the three Total investment in our Active Kids week period. scheme (2020 target: £200 million) We have also supported campaigns such as Veg Power’s ‘Eat Them to Defeat Them’ to In 2018, the scheme was reappraised and inspire healthier choices. Active Kids holiday clubs were introduced, following research from the ukactive Net Zero by Research Institute revealing that there Collaborating for our are significant reductions in children’s cardiorespiratory fitness over the summer 2040 customers holidays, with the decrease being more pronounced amongst children in the most As part of our Net Zero by 2040 We collaborate with a variety of deprived areas. This alarming statistic, commitment, we will develop and deliver stakeholders to transform the shopping coupled with the guidelines announced in healthy and sustainable diets for all. experience for customers across the the government’s Obesity Plan for Action UK. In 2019, we became a partner of the Our priorities are designed to ensure we which called for half an hour of a child’s Collaboration for Healthier Lives (CHL) UK, continue to give our customers what daily recommended activity to be delivered an initiative with the Consumer Goods they want in a rapidly changing retail beyond the school gates, were motivation Forum. This programme is designed to marketplace, while also driving value for enough to focus our attention on the encourage healthier living across the two our shareholders. summer months. London boroughs taking part in the initial trial period, Lambeth and Southwark, and is supported by some of the UK’s largest 10 Our values make us different J Sainsbury plc Sustainability Update 2019/20

whilst our colleagues in Marske-by-the-Sea Communities we threw a celebration for the older residents of their area to help combat loneliness, serve with dancers from Strictly Come Dancing Our colleagues are key to supporting providing entertainment. the communities we serve. Through our In Bath, one of our stores became the UK’s fundraising and volunteering programmes, first sign language store; our colleagues Making a our colleagues have the opportunity to were taught basic UK sign language by a fundraise and volunteer their time to local local signing school, Oscar-winning actress positive good causes. This year we ran our 150 Days Rachel Shenton, and store colleague of Community volunteering programme to Sam Book. The store sign was changed difference to our celebrate our 150th birthday. to ‘Signsbury’s’ with helpful visual guides placed throughout the store. community 150 Days of Community To celebrate our 150th birthday, colleagues “ from across the business were given the Related UN Sustainable Development Goals “The whole experience of working opportunity to dedicate some of their work with the Sainsbury’s Bybrook team time to volunteer in their communities. has been truly amazing, and the Over 35,000 colleagues pledged their time benefits to our young people have to support a local project, either individually been immense. Our partnership has or in teams, in the 150 day span from May – done absolute wonders for raising our October 2019. profile within the local community. In total we had 2,456 projects approved, The support from everyone, from the Our long-term business success which included over 1,200 Sainsbury’s stores store manager John and everyone relies on resilient, thriving and almost 500 Argos stores committed from the staff that have helped out at communities in the UK and to a local project. The volunteering different times, has been incredible internationally. projects covered a wide array of areas, and on behalf of everyone at the with 19 per cent being environmentally Caldecott Foundation I want to say a Sainsbury’s is a place-based business. based projects, 14 per cent focussing on massive thanks.” We have presence in thousands of schools and young people, and 14 per cent communities across the country through supporting with community care projects. our supermarkets, convenience stores, Jeremy Evans store support centres and depots, as well as Lead Teacher, The Caldecott School sourcing from over 87 countries across the 90% globe. Whether it’s the communities we serve or the communities we source from, stores taking part in 150 Days of we aim to have a positive impact on these Community volunteering programme Collaborating for communities, with the help of our partners greater impact and colleagues, in order to make a positive A few standout projects were given extra difference. financial support in order help to create Last year, we celebrated 25 years of a lasting impact on the community. The partnership with The Royal British Legion Bybrook Store supported The Caldecott Poppy Appeal. During that time we have Foundation to build a sensory garden for children with autism, 11 Our values make us different J Sainsbury plc Sustainability Update 2019/20 raised an estimated £40 million through across 92 per cent of our Sainsbury’s and workers in developing countries to Poppy Appeal collections in store and the stores. These partnerships include The give them a better chance of building sales of products. Felix Project and The Trussell Trust. a sustainable future for themselves, their families and their communities. To commemorate our longstanding partnership with The Royal British Legion, tea parties were held at Sainsbury’s 92% Chichester and Preston in-store cafes ahead stores with Food Donation £29m of Remembrance Sunday, bringing together Partners, up from 87 per cent in generated for charities and communities veterans and members of the Armed Forces 2018/19 (2020 target: 100 per cent) this year, bringing the total investment to community. £359 million1 (2020 target: £400 million) Limited edition bouquets were developed We have proudly been working with The and sold in-store and online, raising £44,000 Felix Project since 2016. These partners We recognise that we have a vital role to for the Poppy Appeal. One of our oldest collect surplus food from 24 of our stores play in supporting our farmers, growers colleagues, Des Burnand, 91, was presented and our online distribution centre, whilst and suppliers across the world, and we with a bouquet at the Chichester tea a number of our colleagues have also aim to increase transparency between party, dedicated to his father who served volunteered at their London facilities. We the communities we source and the in the First World War as an infantryman. also work closely with The Trussell Trust, communities we serve. hosting 256 permanent collection points in our stores for their network, supporting In 2010, we set up the APECAFEQ sun dried £3.4m customers to donate an average of 1.6 community coffee project in the town of million meals a year. Quinchia in Riserlda, Colombia. The project raised for the Royal British Legion this year aims to enhance the positive impact of our To support our Christmas food and toy trade and better meet the needs of this donation campaign, Help Brighten a Million farming community. We committed to We have a long history of working with food Christmases, in addition to the ongoing pay 2 cents/lb over the Fairtrade price for banks and community donation schemes store collection points that colleagues coffee purchased from this co-operative, to support our local communities. We are and customers can donate at, Sainsbury’s with a total investment of $30,000 into a founding member of FareShare which opened the first Giving Store. The pop- the community over the nine years of this began in 1994, and continue to work with up store in London was a store with a project, supporting the community to invest them to redistribute surplus food, indirectly difference, giving customers the opportunity in the construction of a greenhouse and supporting 11,000 charities and community to shop for others. The store provided a drying tunnels. projects across the UK. family-friendly ‘Dickensian’ experience, To find out more about how we work with This year we trialled a tech solution with and was stocked with priority items for foodbanks and charities at Christmas. All our farmers, growers and suppliers, see our FareShare, an app called FareShare Go, in Sourcing with Integrity section. 10 stores across the country. The trial saw items were donated to the North Paddington a total donation of 5,463kg of surplus food, Foodbank. the equivalent of over 13,000 meals, and we are continuing to explore how a technical solution to support our redistribution Communities we programme can work on a larger scale. source from Through our Food Donation Programme, we work with over 1,300 organisations As well as the communities we serve, we which have over 2,250 partnerships aim to make a positive impact on the communities we source from. One way we support these communities is through our long-standing partnership with Comic Relief. Since 1999, we have raised over £130 million, which goes towards supporting people both in the UK and internationally. Be a place where we all love to work

Playing an active role in our communities is huge part of our strategic priority of being a place we all love to work. Our priorities are designed to ensure we Our key activities to support fundraising continue to give our customers what include selling red noses and merchandise, they want in a rapidly changing retail colleague fundraising and partnerships with marketplace, while also driving value for multiple brands. Through our partnership, our shareholders. we also support farmers and workers in challenged value chains through the Fair Development Fund, set up in 2007. It has helped us engage with growers, farmers

1 Includes funds raised for good causes from corporate donations, carrier bags, colleague and customer fundraising and charity partnerships. 12 Our values make us different J Sainsbury plc Sustainability Update 2019/20

corporate website. Responsible fishing Prevention, identification and remediation of modern slavery is an issue that requires We continue to lead the way in sourcing fish collaboration across stakeholders and responsibly from both wild capture fisheries government involvement is essential. and farms. 100 per cent of our farmed Sainsbury’s met with newly-appointed fish sources are independently certified independent Anti-Slavery Commissioner to a recognised best aquaculture practice Sourcing with Dame Sara Thornton to share our individual standard and 82.3 per cent of our wild and collaborative work to date. caught fish and seafood are certified to the integrity Marine Stewardship Council (MSC) standard. Where fisheries are not yet certified, we are engaged with our suppliers in order to “ achieve certification in the shortest possible timescale through structured fishery Related UN Sustainable Development Goals “I met with major retailers in the wake of Operation Fort, the UK’s improvement programmes. largest modern slavery case, to assess We continue to support Project UK, which is how they are responding to human working towards meeting the MSC standard rights risks in their supply chains. I for a number of species, including scallops, was particularly encouraged by the monkfish and langoustines, to deliver a approach of some businesses who sustainable future for these UK fisheries, as were innovating and experimenting well as a number of international fisheries With over 48,000 Sainsbury’s with new tools and technologies improvement projects. We also support a branded products sourced from and I have highlighted this as good number of organisations driving responsible practice. Sainsbury’s Modern Slavery practice through pre-competitive over 87 countries, we have a Risk Assessment tool, which uses collaboration and innovation such as the vital role to play in supporting data analytics to provide a dynamic Global Dialogue on Seafood Traceability, our farmers, growers and assessment of multiple tiers of its Fisheries Innovation Scotland, Aquaculture suppliers across the world. supply chains, is a good example of Stewardship Council and Global Seafood this.” Assurances. Our approach is to work collaboratively to tackle climate change, reduce the Dame Sara Thornton environmental impact of our raw materials, Independent Anti-Slavery Commissioner Sustainable general advance respect for human rights across our supply chain and improve the livelihoods of merchandise and our farmers, growers and suppliers. Whether clothing it’s our people, animals or the environment, we aim to have equivalent standards As one of the largest general merchandise wherever we source from in the world. and clothing retailers in the UK, we can make a real difference. We have focused on driving transparency through updating Protecting Human our Tu website with key sustainability facts Rights about our business and plans for the future.

Our vision is to be the most trusted retailer where people love to work and shop, which 76% includes treating people fairly wherever of our cotton is sourced more they are in our business and supply sustainably through the Better chain. This year, to build on our Cotton Initiative, up from 68% in sustainable sourcing programme, 2018/19 (2020 target: 100 per cent) we have supported suppliers to gain a better understanding of risk areas. We have embedded We are utilising more recycled a robust labour provider materials in our ranges, with 20 certification scheme, called per cent of our women’s denim Clearview¹, for all agencies range now using REPREVE® providing labour into our high quality, 100 per cent depots, and we also worked recycled polyester made from with Stronger Together² to post-consumer plastic bottles, provide classroom training pre-consumer industrial waste for our property team and or a hybrid blend of both. Our key suppliers. Sleep More Sustainable bedding range uses REKOOP® DNA tagged We updated our Human recycled polyester, which is produced Rights Policy, making a public from post-consumer plastic bottles. commitment to the United Nations Women’s Empowerment Principles and UN Guiding Principles on Business and Human Rights, and revised our sustainable sourcing policy to include the key global issue of responsible recruitment and environmental protection. For our Human Rights Policy and 3 The Sainsbury’s Foundation is the name Sainsbury’s Modern Slavery Statement, please visit our gives to its not-for-profit initiatives including its Sainsbury’s Fairly Traded programme. The Sainsbury’s Foundation is a trading name only. All Sainsbury’s ¹ https://www.clearviewassurance.com/ Foundation funds are ring-fenced by Sainsbury’s and ² https://www.stronger2gether.org/ applied for social and/or charitable purposes. 13 Our values make us different J Sainsbury plc Sustainability Update 2019/20

Trading for a fairer more of our palm oil is certified sustainable each year. One of the major problems with future deforestation is where other buyers do not Improving animal source certified sustainable palm oil. To health and welfare We support farmers and workers directly address this we have been working with through our Sainsbury’s Fairly Traded other retailers on the Palm Oil Transparency We know that animal health and welfare programmes. Sainsbury’s Fairly Traded Coalition (POTC) to engage suppliers and matters to our customers and we regularly Programme was launched in 2017 with the traders on the issue in order to minimise review the practices of our farmers and ambition to support the sustainability, the impact concerning deforestation suppliers. We have recently moved to resilience and efficiency of suppliers, and land change, and promote receiving outcomes data direct from farmers and producers within our East sustainable sourcing across the industry, suppliers across chicken, beef, lamb, pork, African tea supply chains. We source our turkey, eggs and dairy. Utilising data Sainsbury’s Fairly Traded tea from producer dashboards we can gain key insights and groups in Rwanda, Kenya and Malawi, and 99.1% engage suppliers to drive improvements. as one of the most popular beverages in palm oil sourced to an independent the world it provides a huge opportunity to 1 make a real difference by working directly sustainability standard with our tea farmers. (2020 target: 100 per cent)

In 2019, one of our Technical Managers Through the Retailer Cocoa Collaboration, visited Malawi to explore the projects that we have committed to support the Cocoa have been co-funded by the Sainsbury’s & Forests Initiative (CFI) and the eight core Fairly Traded Social Premium, which famers commitments. This year we have been can use to invest in their businesses and progressing our CFI actions through the communities. trader assessment process and by engaging with our cocoa supply chain partners to ensure progress is being made against their individual CFI Action Plans. We are We’re encouraged by the progress our also working as part of the Consumer “ farmers have made and continue to support Goods Forum (CGF) Forest Positive Coalition “I felt immensely proud of what they them by working with experts in animal of Action to accelerate efforts to remove had achieved with the funding, and to health & welfare, sharing best practice commodity-driven deforestation from our be a part of Sainsbury’s in providing and supporting research in this field. We’re supply chains. such a strong foundation for their committed to ensuring the highest possible future. Every penny has been well standards of animal welfare, it’s what our spent after careful consideration of customers expect from us and it’s why what would have the greatest impact we are the UK’s biggest retailer of RSPCA on improving lives and businesses. Assured products and of MSC certified It was great seeing how we could seafood products.2 improve so many lives, hand-in-hand with creating great products for our customers. Considering that there is Working closely with more funding on the way, I am excited to see the next phase.” our Farmer Development Groups

John Owles Our Agriculture team works closely with Sainsbury’s In-Country Category Technical our Farmer Development Groups in order to Manager build resilient and sustainable value chains. We continue to support the protection This year we launched our Integrated of woodland and biodiversity in the Beef Programme, with farmers from our The Sainsbury’s Foundation Advisory UK, and since our partnership began in Dairy and Beef Development Groups. The Board3, comprised of external experts 2004, we have raised £9.8 million for the programme will change how we source and Sainsbury’s colleagues, oversees the Woodland Trust and planted 3.9 million our beef over the coming years, and will activities in our Fairly Traded programme, native trees. This year to celebrate our create a more stable and financially secure which are decided on democratically 150th Birthday, a tree was planted for supply chain for our farmers by providing a within producer communities. For more every Sainsbury’s colleague, including the confirmed outlet and price for their animals, information please see our Fairly Traded creation of 150 woods with landowners allowing for forward planning and the Progress Report on our corporate website. and farmers. We also provided colleagues confidence to invest in their businesses. with tree seeds to plant themselves. This year we also trialled our Kinermony range, produced from an integrated supply Protecting forests 493,750 chain. The range is a uniquely sourced, fully traceable and renowned breed of Aberdeen With many of the world’s tropical forests at number of trees planted in partnership Angus beef with historic ties to the risk, we have a long history of collaborating with the Woodland Trust this Sainsbury’s family. We also continue to be a with others to progress greater sustainable past year, 3.9 million since 2004. key partner in the North Highland Initiative sourcing of palm oil, cocoa, soy and timber (NHI) project to support rural communities globally. in the far north of Scotland, working with over 100 small family farmers and crofters We use palm oil in a variety of our own- supplying cattle into our North Highland brand products and are proud that 99.1 range. per cent of our palm oil is sustainably sourced to an independent standard. We We are working closely with our lamb are continuing to seek new ways to ensure farmers via our Taste the Difference (TtD)

¹ Based on 2019 calendar year 2 Based on the number of MSC labelled products 14 Our values make us different J Sainsbury plc Sustainability Update 2019/20 initiative. Within this scheme we aim with NIAB and AC Goathams focused on keynote speaker, with attendees including to build open and resilient relationships understanding and measuring soil health. our farmers, growers, suppliers, academics with our farmers and share best practice and industry stakeholders. to improve quality and consistency. The initiative was created to ensure a Backing British Farming sustainable and futureproof supply of the Collaborating on global TtD range and allows us to support over 800 goals Welsh hill farmers. We also continue to work closely with our With a growing population and our planet’s Dairy Development Group, paying our dairy resources being pushed to their limits, we farmers a fair price through our cost of are focusing our efforts where we can make production model. This provides a ring- the greatest difference. We believe that fenced supply which has continued to see industry collaboration is the only way to benefits such as higher health and welfare address domestic and global issues at the outcomes, and improved efficiency and speed and scale required. We have a strong business sustainability. track record of partnering to help address global challenges and drive change in our value chains. We are currently involved in Sustainable crops many industry collaborations, including: As a UK retailer, we are proud to support • Better Cotton Initiative We have been working closely with our British farmers and growers. This year growers through Crop Action Groups (CAG) we returned as a principal sponsor for • Ethical Trading Initiative since 2006, and we’re proud to say that the Linking Environment and Farming (LEAF)’s • Roundtable on Sustainable Palm Oil UK number, size and reach of these groups has Open Farm Sunday, for the fourth year. grown considerably over this time. We are The event saw 365 British farms opening • Roundtable for Sustainable Soya currently running CAGs across over 30 crop their gates to over 250,000 visitors, and areas, this covers the UK as well as other we funded sustainable farming posters • Retailer Palm Oil Group and Retail Soy countries and regions, including Spain, for farmers to display on the day. We Group South Africa and South America. also continue to support LEAF’s Farmer • World Cocoa Foundation Time initiative (formerly known We also work with our as FaceTime a Farmer). The growers via Grower programme continues to gain Interaction Groups momentum and has seen (GIGs), which are around 9,000 pupils chatting forums to get growers virtually to farmers from their of different crops classrooms. together to identify new thinking and advance We held our annual Farming best practice. Working Conference this year, and with our orchard crop were delighted to welcome suppliers, we recently Emma Howard Boyd, Chair of The held a GIG in partnership Environment Agency as our

Net Zero Be a place by 2040 where we all love to work As part of our Net Zero by 2040 commitments, we will ensure that the impact of our operations is net positive for biodiversity. Whilst having high ethical standards that we and our suppliers adhere to is a huge part of our strategic priority of being a place where we all love to work. Our priorities are designed to ensure we continue to give our customers what they want in a rapidly changing retail marketplace, while also driving value for our shareholders. 15 Our values make us different J Sainsbury plc Sustainability Update 2019/20

We will be setting science-based targets for emissions reductions and will be a Net “ Zero business across our own operations by “Sainsbury’s endorsement of Aerofoils 2040. We are really proud of the progress has established this unique product we have made so far, achieving a 42 per as the industry gold standard in cent absolute reduction in the last 15 years energy saving technology. As one despite our estate increasing by 46 per cent of the fastest-growing “green tech” over the same timeframe. Respect for our companies in the UK, it’s great that Aerofoil Energy has been part of environment Sainsbury’s drive towards a more Improving Air Quality sustainable retail future.” We recognise the impact of the vehicle Paul McAndrew emissions on air quality and human Founder and CEO of Aerofoil Energy Related UN Sustainable Development Goals health and continue to trial and roll out new technologies to minimise emissions across our fleet. We have been working with Imperial College London on our electric van trials, which have given us vital Climate change and resource data on the operational considerations scarcity are complex, global of running refrigerated, electric vans. We’re now looking to extend the trial and challenges, which affect every have one of our click and collect hubs part of our business. running entirely on electric vans by the To grow our business sustainably, we are end of the 2020/21 financial year. We also cutting carbon, maximising energy and have a strategy in place for when electric water efficiency, reducing packaging and vans become more widely available that keeping food waste at a minimum. will enable us to transition at speed.

Net Zero by 2040 42% absolute reduction in carbon emissions As part of our Net Zero by 2040 plan, we against our 2005 baseline, achieved a year have committed to investing £1 billion over early (2020 target: 30 per cent reduction) twenty years towards becoming a Net Zero Over the past 12 months we’ve been business across our own operations by developing our own smart building solution, 2040, aligned to the highest ambitions of and to date, we have over 220 stores with the Paris Climate Change Agreement. The fully connected lighting controls, through investment will enable Sainsbury’s to fulfil this platform. This has enabled us to help Scope one and Scope two emissions, putting save 991,000 kWh. We have also continued the business on course to reach Net Zero our programme of LED replacement lighting a decade ahead of the UK government’s this year, which with our work on aerofoils deadlines, and we are working with and water saving taps has seen an suppliers to set their own ambitious Net investment of over £6.5 million. For our Zero commitments, in line with the Paris greenhouse gas emission disclosure Agreement goals. We will provide clear, please see our Annual Report. frequent disclosures on our progress, and as signatories of Task Force on Climate-related Financial Disclosures (TCFD), we will use CDP A rating scenario modelling to further assess the for our climate change impact of current and emerging climate disclosure, the only UK food change on our business model and strategy. retailer to achieve an A rating for six consecutive years Cutting carbon emissions Setting science This year we continued to rollout Aerofoil based targets technology across Sainsbury’s stores, celebrating our 400,000th fitting in March. Science-based targets seek to deliver This milestone fitting meant that all on the commitment made by convenience stores and supermarkets are international leaders to meet the now fitted with this innovative energy goals of the Paris agreement - to saving technology. Aerofoil Formula 1 limit global warming to well-below technology prevents cold air from leaving 2°C, above pre-industrial levels the cabinet and directing it back into the and pursue efforts to limit warming fridge, this reduces energy consumption by to 1.5°C. We have signed up to setting a 15%, keeping aisles warmer and reducing science-based target with the Science Based food waste by maintaining products at their Targets initiative (SBTi) and have worked optimal temperature. As a result, Aerofoil with the Carbon Trust to map and assess equipped fridges are delivering carbon Scope 1, 2 and 3 emissions. savings of almost 9,000 tCO2e per year 16 Our values make us different J Sainsbury plc Sustainability Update 2019/20

Reducing, reusing and purchase a reusable and recyclable bag Collaborating on global recycling made from recycled plastic bottles. challenges

Through our facilities we help our This year we held an Environmental Science customers reduce their waste and put it Conference in partnership with the Natural to positive use, helping customers recycle Environment Research Council (NERC) in unwanted clothing, metal cans, glass, order to have collaborative discussions plastic, paper and other materials at our on key themes; air quality, biodiversity, managed recycling facilities in 274 stores plastics, soil health and water quality, nationwide. This year we trialled Deposit with 175 attendees across our suppliers, Return Schemes with our reverse vending academics, research councils, government machines. Customers could recycle plastic, officials and industry stakeholders. We have metal cans and glass drink containers in also responded pro-actively to government exchange for a 5p per item coupon towards consultations, including the Environment their shopping. Customer uptake proved As members of WRAP’s UK Plastic Pact, we Bill, welcoming impending legislation which positive and we’re now looking at how these are collaborating to eliminate unnecessary are bringing focus on the global challenges trials can be scaled up. single-use packaging by 2025 and working of today. We support the UN Sustainable towards all plastic packaging being 100 per Development Goal 12.3 to halve food cent reusable, recyclable or compostable by waste by 2030 and are a signatory to the 2023, as well as containing at least 30 per Courtauld Commitment to cut food waste cent recycled content by 2022. by 20 per cent by 2025. We are committed to supporting the delivery of these targets by working to reduce operational Saving water food waste and put it to positive use. We have sent no food to landfill since 2013 and 92 per cent of our stores have Food Donation Partners for surplus food. 92% stores with Food Donation Partners up from 87 per cent in 2018/19 (2020 target: 100%)

Pledging to cut plastic

Packaging helps us deliver fresh, undamaged produce, but we know that it can have a negative impact on our planet. Net Zero by Respecting our environment is one of our core values and therefore reducing plastic Having reached our water reduction target 2040 across all our stores and supply chain is one years ahead of schedule, we went beyond of our absolute priorities. This is why we our 2020 target this year, achieving a 33 As part of our Net Zero plan we have were the UK’s first major retailer to make a per cent absolute water reduction. We are made the following commitments; significant commitment to reduce plastic, continuing to drive efficiency across the pledging to cut plastic by 50% by 2025. • Reduce greenhouse gas emissions business, and are proud to have received from our own operations to Net Zero a CDP A rating for our water disclosure this year. Our engineering teams are • Minimise the use of water in our own currently in the process of rolling out low operations, driving towards water flow taps in our washrooms and reviewing neutral solutions for our food preparation areas. • Increase the use of recycling in our own operations and make it easier for customers and our colleagues to 33% recycle absolute water reduction against our • Reduce our use of plastic packaging 2005 baseline1 (2020 target: 30 per cent) by 50% by 2025 and then go further

As part of this commitment, Sainsbury’s • Reduce food waste by 50% by 2030 achieved a 4 per cent reduction of primary Our priorities are designed to ensure we plastic packaging in 2019. We removed, CDP A rating continue to give our customers what reduced and replaced plastic packaging they want in a rapidly changing retail for our water disclosure across various categories and improved marketplace, while also driving value for recyclability by replacing 1,200 tonnes of our shareholders. own-brand packaging with recyclable alternatives. In September we removed all plastic produce bags from our bakery and produce aisles, becoming the first retailer to do so, customers now have the option to

¹ Excludes Argos to be consistent with prior year disclosure. Absolute water reduction including Argos for 2019/20 is 30%. 17 Our values make us different J Sainsbury plc Sustainability Update 2019/20

highlighting a great atmosphere during birthday week. A colleague survey A place where completed at the end of 150 Days of colleagues love to work Community saw 91 per cent of volunteer respondents say they strongly agree or We invest in our colleagues to make sure agree with the statement ‘I felt positive and they feel rewarded and motivated to do inspired as a result of volunteering’ and 19 the best possible job for our customers per cent colleagues significantly more likely Great place every day. This year to celebrate our 150th to recommend Sainsbury’s as an employer. Birthday we ran a year-long programme to work of communication to engage and excite colleagues. During our birthday week, all colleagues had the opportunity to celebrate with parties taking place at Related UN Sustainable Development Goals each location. Colleagues received a commemorative bag made from recycled bottles, which contained a badge and tea and biscuits in heritage packaging. 75% colleagues who are engaged We want to be the most based on results from our This year we came third in the LinkedIn inclusive retailer, where every colleague engagement survey annual poll of top companies to work for in single one of our colleagues can the UK, and are delighted to have retained our Gold accreditation from Investors in fulfil their potential and where The milestone birthday was also celebrated People, making us the largest organisation all our customers feel welcome with an immersive experience shop in to have achieved Gold. The Investors in London, which took visitors through the when shopping with us. People report praised the way that change Sainsbury’s journey from 1869 to 2019. has been implemented across our business The event was attended by Her Majesty and our work to develop and improve our Our colleagues are the foundation of the Queen and over 1,000 visitors, which people management processes. The report our business, and they strive to provide included 46 colleagues recognised for their also praised the ‘level of diversity and the excellent service for our customers across long service and contribution in their local genuine culture of inclusivity’ that we have our Sainsbury’s, Argos, Habitat stores, communities. Sainsbury’s Bank, Travel Money outlets in our business. and customer management We also launched our 150 days of centres. Creating an inclusive Community programme, our first environment where over work time volunteering initiative. Gold 172,000 of our colleagues Colleagues were asked to can be the best they can suggest local projects accreditation that mattered to them be, helps us to attract from Investors in People, maintained for and were given the and retain talent, and the fourth consecutive year increase productivity. opportunity to volunteer during work time, you can read more about this on page 10. We conducted an all colleague survey to understand how colleagues felt about our A place where 150th birthday celebrations. Colleagues reported the colleagues learn and celebrations made them grow feel proud to be a part of Sainsbury’s, Apprenticeships give colleagues on- the-job skills and training, and help us to secure our talent pipeline. We have offered apprenticeships since 1974 and continue to expand our offer, this year we had 1,316 apprentices on our programme. 1,316 number of apprentices trained in 19/201

This year we launched the ‘Leading@ Sainsbury’s’ programmes in order to support individuals to develop the skills and leadership capability to transition to a management role. Consisting

¹The 2019/20 figure represents the amount of apprentices live on an apprenticeship programme 18 Our values make us different J Sainsbury plc Sustainability Update 2019/20 of four programmes, they are tailored to Celebrating and develop colleagues of different grades, providing a mix of face-to-face interventions empowering diverse Time to Change and practical applications, underpinned colleagues by a digital learning platform. To date, 230 this year we pledged to end mental health programmes have been completed, with a stigma Our colleagues continue to demonstrate total of 2,242 colleagues enrolled. their support for diversity and inclusion through our Embrace the Difference campaign. We continue to actively drive our culture of inclusivity; our colleagues attended over 40 pride events this year, created a Standing Together film and we ran st a campaign during Black History Month to 71 celebrate black culture, both with colleague ranking in Stonewall Workplace Equality activities and with messaging to our Top 100 employer list making us the customers. top retail employer for LGPT+ people We are also proud that some of our colleagues have been recognised externally this year; in recognition of services to We are proud to have become a signatory disability awareness, our Company of the Social Mobility Pledge, the largest Secretary, Tim Fallowfield, was awarded an business campaign of its kind encouraging OBE, he was also recognised by the Business business to put social mobility at the heart Disability Forum, winning the Disability- of its purpose. The commitment covers Smart Senior Champion Award 2019. Our outreach, access and recruitment in order to Chief Technical Officer, John Elliott, was progress talent from all backgrounds and to shortlisted for a prestigious British LGBT+ help to improve the UK’s social mobility. Award 2020, whilst Alice Boaten, Regional Manager, was awarded Woman of the Year 2019 by the Everywoman in Retail Awards. Inclusive recruitment and development Disability Inclusion is at the heart of our approach to recruitment and talent development. We Confident Leader have trialled several initiatives in recent highest tier of accreditation in the years to reduce recruitment bias, this Government’s Disability Confident includes anonymised CV’s, strengths-based Programme assessments and video interviewing. We continue to integrate best practices into our recruitment and development processes, and have created a guide to inclusive recruitment which details a new We continue to work hard to improve mandatory approach and trialled Black, gender pay balance across the business and Asian and Minority Ethnic (BAME) and welcome the opportunity to report on our female development programmes. gender pay gap. For details on gender diversity and pay balance, please see page 6 and our corporate website for our Gender Pay Report. Be a place where we all love to work We aim to be a company that people love to work, this means being an inclusive employer where colleagues are encouraged to develop their skills and fulfil their potential. Our priorities are designed to ensure we continue to give our customers what they want in a rapidly changing retail marketplace, while also driving value for our shareholders. A Message from our Director of Sainsbury’s Brand

19 A Message from our Director of Sainsbury’s Brand J Sainsbury plc Sustainability Update 2019/20

Local to Global Impact

Judith Batchelar reflects our suppliers to support them to set their Research Council (NERC) to ensure we are on challenges facing our own challenging emissions targets. As we collaborating with our supply base and look forward, it is worth reflecting on what wider industry to innovate in areas such as customers, business and the we have achieved and learnt over the past plastics and biodiversity. We continue to wider world and how, working decade as we come to the conclusion of our utilise the latest technology where possible together, we can do even more 2020 Sustainability Plan. across our value chains, including our to grow and develop sustainably partnership with OceanMind to broaden Whilst we have some significant responsible fishing practices. into the future. achievements to call out, such as our 42 per cent absolute reduction in carbon emissions We fully support the UN Sustainable Our customers care about wide-ranging, over the past 15 years, which has laid strong Development Goals, which are a call for all complex issues. From social challenges foundations as we progress forward to our countries and organisations to take action with the soaring use of food banks in our Net Zero ambition. There are also areas to grow prosperity while protecting our communities and world hunger on the rise, where things have moved on considerably planet. This includes promoting health and to environmental challenges with plastic in the past decade, and although not wellbeing, reducing inequalities, cutting polluting our planet’s oceans and climate reflected in our numbers, we are proud of resource consumption and tackling climate change affecting every part of our business. the progress we have made. change. Throughout this report, we indicate These challenges may seem overwhelming, where our activities and partnerships We know that animal health and welfare but they are all areas where we can make an contribute towards these global goals. matters to our customers, and we have important contribution, as one of the UK’s identified ways to take our commitment As we look forward to the next 20 years, largest retailers, working with our suppliers to higher welfare a step further. We we have a hugely ambitious goal and we and partners. recognise that standards and certifications now need to push ourselves to make the We are at a pivotal moment in time and are aren’t always a guarantee of an outcome, biggest impact we possibly can, as quickly entering into a decade of huge change as therefore since our 2011 commitment we as we possibly can. We plan to be even we work with Government’s, wider industry have moved from a standards approach to more transparent, with clear and frequent and on an individual level to ensure we keep a data-led outcomes approach. We work disclosures on our progress. As signatories of our planet’s warming within 1.5 degrees. We closely with our farmers and suppliers the Task Force for Climate-Related Financial announced our own plans on how we are to collect data in order to give us the Disclosures (TCFD), we will utilise scenario working towards this, committing to being best insights, and are confident in our modelling to further assess the impact Net Zero in our own operations by 2040, a approach of measuring and managing of current and emerging climate change decade ahead of the Governments Net Zero to continuously improve the health and on our business model and strategy, and plans, and that we are also working with welfare of our animals. will report biannually against our new Net Zero by 2040 commitments. We know that There are a number of areas where we achieving this won’t be easy but we have acknowledge collaboration is fundamental a once-in-a-lifetime opportunity to make to change. Our work on ensuring our the changes needed to help the planet exist own-brand products do not contribute to sustainably. global deforestation over the past decade has led us to 99.1 per cent and 90 per cent sustainably sourced palm oil and timber respectively. Even though we have improved the sustainable sourcing of our raw materials, global deforestation is at an all-time high, indicating we cannot make a significant change on our own. Therefore we are working collaboratively, on initiatives such as the Palm Oil Transparency Coalition to minimise the impact concerning deforestation and promote sustainable sourcing across the industry. We continue to be actively involved in research and development, and this year are involved in projects worth over £3 million related to British Farming. We also held an Environmental Science Conference in partnership with the Judith Batchelar, OBE Natural Environment Director of Sainsbury’s Brand 20 Local to Global Impact J Sainsbury plc Sustainability Update 2019/20

Transforming our world Here are a few examples of how we’re contributing to the UN Sustainable Development Goals. More can be found throughout this report.

Good health and wellbeing Reduced inequalities Sustainable cities Responsible consumption We’re committed to helping our We want to be the most and communities and production customers and communities to inclusive retailer where people Our long-term business success We provide facilities to help live healthier lives. love to work and shop. We also relies on resilient, thriving our customers recycle, as well work with partners to support communities in the UK and as supporting global efforts to inclusive growth. internationally. reduce food waste and working to minimise our own packaging.

40% 6,368 our aspirational target for volume of clothing donated female representation in senior through our facilities positions by 2021 43% 92% Healthy products sold as a 10% of our stores have food donation 1 proportion of total sales volume our aspirational target for £359m partners BAME representation in senior investment generated for 23,000+ positions by 2021 charities and communities2 children took part in our new Active Kids holiday clubs

Climate action Life below water Life on land Partnerships for the goals Doing our part to help tackle We’re leading the way in We have a long history of We have a strong track record climate change. sourcing fish responsibly. collaborating to protect the of partnering to help address world’s forests. global and local challenges. 42% 99.1% 15+ years reduction in relative carbon of palm oil and 90 per cent of partnership with the Woodland emissions since 2005 timber in our products certified Trust to international sustainability CDP A standards3 25 year rating for our climate change partnership with The Royal disclosure for the sixth year 3.9m British Legion running trees planted Largest through our retailer of Marine Stewardship partnership Certified products.4 with the Woodland Trust since 2004

¹ The proportion of products in our customers’ baskets that are defined as healthy, based on category specific criteria. ³ Based on 2019 calendar year. ² Includes funds raised for good causes from corporate donations, carrier bags, colleague and customer fundraising 4 based on the number of MSC and charity partnerships. labelled products Governance

21 Governance J Sainsbury plc Sustainability Update 2019/20

Corporate Responsibility and Sustainability Committee Report

Dear Shareholder a positive difference to our communities, The Committee was instrumental in the source with integrity, have respect for our development of our Net Zero by 2040 environment, and create a great place to plan. I was delighted that we launched it Our purpose is to help our work for our colleagues. Highlights include in January 2020 and that it is one of our customers live well for less, now reducing our absolute carbon emissions strategic priorities. Our Net Zero by 2040 and in the future. In delivering by 42 per cent against our 2005 baseline, plan includes key areas of focus across that purpose, we take our reaching our 30 per cent target a year carbon, water, sustainable diets, plastics, responsibility as a sustainable early, and retaining our Gold standard food waste, recycling and biodiversity, accreditation from Investors in People for which will guide our activity over the next retailer seriously. the 4th year running. We also celebrated our 20 years to ensure we become Net Zero in The Committee oversees the governance 150th birthday by delivering our 150 Days our own operations by 2040. We have also of being a sustainable business. Now in my of Community programme which saw over committed to investing £1 billion over 20 second year as Chair, I am pleased to see 35,000 of our colleagues pledge their time years to help us achieve this. to good causes in their communities. We the accomplishments against our agenda: In order to oversee the implementation the significant progress that has been made were unable to reach every target we set out to achieve in 2011 but we have learned of our new Net Zero by 2040 plan and to against our 2020 Sustainability Plan since have more time to understand and hear its inception in 2011; the development of our a lot in the process. We are confident we are taking the right approach in areas such from our stakeholders, we have increased new ‘Net Zero by 2040’ sustainability plan; the number of Committee meetings. From and the increased focus on our stakeholders. as improving animal health and welfare by focussing on data-led health outcomes, 2020/21 we will be holding at least three This year sees the conclusion of our 2020 whilst on deforestation we understand meetings a year, with additional updates Sustainability Plan and I am proud of the that despite our high levels of certification to the Board and I am pleased to welcome progress and achievements we have made and sustainable sourcing of raw materials, Martin Scicluna and Simon Roberts to the against our commitments. Our activities such as palm oil and timber, we have been Committee as members, effective from have spanned our five values, governed unable to impact the rise of deforestation 1st June 2020. We have also refreshed our by our Value Management Groups, to on our own. sustainability governance structure in the help customers live healthier lives, make business with the creation of a Net Zero This year has also seen the Committee Steering Group, as well as specific working increase its focus on stakeholder groups. This will allow us to be more agile engagement including our customers, amid changing dynamics and emerging colleagues, suppliers and the community. issues, and support the delivery of our We have listened to and engaged with our commitments. stakeholders and more information about our work can be found in our Annual Report.

Jo Harlow Chair, Corporate Responsibility and Sustainability Committee

Attendance at scheduled Committee meetings. Meetings were also attended by Martin Scicluna.

Jo Harlow 2(2) Mike Coupe 2(2) Jean Tomlin 2(2)

The maximum number of meetings held during the year is shown in brackets. 22 Governance J Sainsbury plc Sustainability Update 2019/20

Principal roles and The Committee was engaged in our 150 on our suppliers can be found on page Days of Community programme which ran 12-14. The Committee also reviewed the responsibilities from May to October 2019, to celebrate the steps we are taking to prevent modern Company’s 150th birthday. The programme slavery and human trafficking in our The Committee’s principal role is to review offered the opportunity for each colleague business operations and supply chain and the sustainability strategy, ensuring it to volunteer during working hours. In recommended that the Board approve our is aligned with the Company’s purpose, total, we supported 2,456 projects which Modern Slavery Statement, which can be strategy, culture, vision and values. The saw colleagues volunteer on a wide found on our corporate website. Committee also plays a part in monitoring range of initiatives to support their local the business’s engagement with communities. As we focused on our new sustainability stakeholders including customers, suppliers, plan, we listened intently to our the community, colleagues, shareholders Culture and ‘creating a place where we customers, noticing a shift in their views and government on sustainability and all love to work’ was a key part of the on sustainability. While climate change corporate responsibility matters. Committee’s agenda. The Committee were and being ‘green’ are really important provided with the feedback from colleague to them, they are not fully aware of the engagement surveys and discussed ways to extensive work that Sainsbury’s does in Principal activities in build colleague trust with the management this area, an insight that has helped inform team. the communications plan for our new the year strategy. The Committee was engaged in This year the Committee received a upcoming regulatory developments on The Committee met twice during the year. comprehensive update on supplier childhood obesity, resources and waste, Prior to each meeting, members received engagement, including the results of the clean air, employment reform and the cost insights on how we engaged with our Advantage Suppliers Survey and Groceries of these to the business, which fed into the stakeholders - colleagues, customers, Code Adjudicator report. Committee development of the new Net Zero by 2040 the community and suppliers - as well as members were keen to understand the plan. Learnings from the 2020 Sustainability progress updates on the 2020 Sustainability actions being taken to build relationships Plan and other stakeholders were also Plan. During the meetings, discussions and with our suppliers, how our supply chains considered. After a broad discussion, at a reviews of stakeholder engagement and source products ethically and sustainably number of Committee and Board meetings development of our Net Zero by 2040 plan and the work undertaken by the Fair between September 2019 and January 2020, took place. Development Fund and Sainsbury’s Fairly the Net Zero by 2040 plan was approved as Traded programme. More information our seventh strategic priority.

Oversight of the sustainability strategy J Sainsbury plc Board Chair: Martin Scicluna

Reviews the sustainability strategy; our Net Zero by 2040 plan. It also monitors the business’s engagement with colleagues, customers, suppliers, the community, shareholders and government on sustainability and corporate responsibility Corporate Responsibility & matters. Sustainability Committee Chair: Jo Harlow

Defines business-wide strategy, adapting to new regulatory requirements and trends. Reviews cross-value progress and signs off major investments. Operating Board Chair: Mike Coupe, Chief Executive Office

Value Management Groups¹ Net Zero Steering Group (since Feb 2020)

Led operational execution of sustainability activities for our 2020 Leads operational execution of Net Zero by 2040 commitments Sustainability Plan commitments by value, ensuring delivery of by overseeing working group activity, ensuring delivery of performance. performance. 1. Living Healthier Lives - Chair: Judith Batchelar, Director of Chair: Simon Roberts, Director of Retail & Operations and Paul Mills- Sainsbury’s Brand Hicks, Commercial Director 2. Making a Positive Difference to our Community – Chair: Simon Working groups: Roberts, Director of Retail & Operations 1. Carbon & Water 3. Sourcing with Integrity – Chair: James Brown, Director of Non- 2. Sustainable Diets Food Commercial 3. Plastics 4. Respect for our Environment – Chair: John Rogers, CEO of Argos (until Oct 2019) / Patrick Dunne, Director of Property, 4. Food Waste Procurement and Cost Transformation (since March 2020)² 5. Recycling 5. Great Place to Work – Chair: Angie Risley, Director of Group HR 6. Biodiversity

¹ These groups are currently being reviewed on conclusion of our 2020 Sustainability Plan. ² An interim Chair was in place between John Rogers and Patrick Dunne’s appointments. 23 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Performance scorecard Below are our key commitments, KPIs and performance across our five values.

Living Healthier Lives

Commitment Our customers can trust that they can always choose nutritious and healthy food when they shop with us

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll continue to reformulate our Percentage of red traffic light 23% 22% 22% 21% own-brand products to reduce labels on our own-brand products salt, sugar, fat and saturated fat

We’ll build the nutrient profile of Percentage of products that have an 14% 17% 18% our own-brand food appropriate nutrition claim on pack1

We’ll improve the healthy balance Healthy products sold as a 39% 38% 43% 45% of our customers’ food baskets proportion of total sales volume2

We’ll continue to grow our lighter Percentage increase in sales 73% 75% 96% 100% alcohol wine category (under of volume of low alcohol wine 10.5% ABV) (against a 2010/11 baseline)

Commitment We will encourage kids to live a healthy, balanced lifestyle

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll continue to develop our Active Total investment in our Active Kids scheme £186m >£186m >£187m £200m Kids scheme, investing £200 million in activities for kids of all abilities

1Examples of nutrition claims include ‘one of your five-a-day’, ‘low in fat’ or ‘high in protein’. These are also products which do not have a red traffic light label for sugar, salt, fat or saturated fat.

2The proportion of products in our customers’ baskets that are defined as healthy, based on category specific criteria. 24 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Making a positive difference to our community

Commitment We’ll support our local communities in relevant and impactful ways and generate over £400 million to charitable causes by 2020

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll give back to communities Total annual charitable investment £35m £30m £29m through volunteering, awareness- generated across all programmes1 raising and charitable investment Cumulative charitable investment £300m £330m £359m £400m generated across all programmes

We’ll continue to develop our Local Percentage of stores supporting 91% 94% 90% 100% Charity of the Year programme their Local Charity of the Year partner through awareness-raising, fundraising and volunteeringx2

We’ll develop our national Increase in scale and innovation of our £9m £14.8m £7.2m partnerships with Comic Relief support for national charity partners3 and The Royal British Legion

1 Includes funds raised for good causes from corporate donations, carrier bags, colleague and customer fundraising and charity partnerships.

2 For 2019/20 this figure represents the percentage of stores that took part in the 150 Days of Community volunteering programme.

3 Annual contribution to our national charity partners - The Royal British Legion and Comic Relief. 25 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Sourcing with integrity

Commitment We will source our key raw materials sustainably to an independent standard1

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) Each of our key raw materials Number of Sainsbury’s 35 35 35 Independent is sourced sustainably to an Sustainability Standards developed sustainability independent standard standards for all key raw materials

Number of Sainsbury’s 4 4 4 Sustainability Sustainability Standards in pilot standards in operation in all the value chains of our key raw materials

Number of suppliers, farmers and 5 suppliers Over 100 42 farms growers engaged via Sainsbury’s Over 100 farmers and including Sustainability Standards2 farmers and growers cooperatives growers2

Our own-brand products will not Percentage of commodities which contribute to global deforestation can cause deforestation sourced to an and we will source all commodities independent sustainability standard which can cause deforestation 1 from sustainable sources Timber 95% 97% 90% 100% Palm oil2 98% 98.7% 99.1% 100%

Woodland Trust trees planted 323,471 273,471 493,750

Commitment Our own-brand fish will be independently certified as sustainable

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) All the wild caught fish we sell Proportion of wild caught seafood 86% 82.5% 82.3% 100% will be independently certified sales which is independently as sustainable3 certified as sustainable3

All farmed fish will be Proportion of farmed seafood 100% 100% 100% 100% independently certified sales which is independently as sustainable certified as sustainable

We’ll diversify our offer beyond Percentage sales volume 17% 18% 20% the big five (cod, haddock, of other species salmon, tuna and prawns)

1 Based on 2019 calendar year.

2 Based on 2019 calendar year.

3 Where fisheries are not yet certified, we are engaged with our suppliers in order to achieve certification in the shortest possible timescale through structured fishery improvement projects. 26 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Sourcing with integrity continued

Commitment We are committed to selling products that are fairly traded, investing in the sustainability of our suppliers, farmers, growers and workers within our supply chains internationally

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll continue to grow the sales Value of fairly traded sales >£280m >£300m >£300m of fairly traded products in line with the business1

Commitment We will invest in the future of British farming and be the leading retailer for British produce

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll continue to focus on research, Number of R&D projects (participation 11 12 6 development and innovation to either as a project lead or partner) improve agricultural productivity, resilience and quality Value of investment for projects >£3m £2.8m >£3m involving Sainsbury’s in British farming

Commitment Our meat, poultry, eggs and dairy products will be sourced from suppliers who adhere to independently verified higher animal health and welfare outcomes

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) Our meat, poultry, eggs and dairy products Proportion of sales from an will be sourced from suppliers who adhere independently verified higher to independently verified higher animal animal health and welfare health and welfare outcomes2 outcome source

Poultry 14% 14% 13% 100%

Egg 100% 100% 100% 100%

Veal3 100% 100% n/a 100%

1 This includes Fairtrade branded and Sainsbury’s Own-Brand Fairly Traded products.

2 We have identified ways to take our commitment to high welfare a step further, and have moved from a standards approach to a data-led outcomes approach; we believe in our cycle of measuring, managing and continuously improving the health and welfare of our animals.

3 We no longer sell veal 27 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Respect for our environment

Commitment We will work to reduce our operational food waste and put it to positive use

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll support the delivery of the Percentage of stores with food 73% 87% 92% 100% Courtauld 2025 target by working donation partners for surplus food to reduce operational food waste and put it to positive use1

Commitment We’ll work with our customers to help them reduce their waste and put it to positive use

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) Through our facilities we will help Number of Sainsbury’s-managed 269 269 274 345 our customers reduce their waste recycling facilities in all available sites and put it to positive use Volume of clothing donations (tonnes) 5,594 5,289 6,368

Commitment We will reduce our operational carbon emissions by 30% absolute and 65% relative (to 2005)

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll continue to introduce Absolute greenhouse gas 24% 35% 42% 30% proven and next generation emissions reduction technologies in our new and existing stores to reduce our Relative greenhouse gas 50% 55% 60% 65% operational carbon emissions emissions reduction Percentage of our core fleet to 2% 3% 3.3% use an alternative fuel rather than pure diesel

We’ll help colleagues to do the Percentage reduction in 3% 3% 3% right thing for the environment electricity as a result of colleague at home, and at work, by sharing engagement programme information and ideas

1 We have sent zero operational waste to landfill since 2013. 28 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Respect for our environment continued

Commitment Through robust water stewardship we will ensure that our business addresses and manages all areas of water vulnerability

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll improve the efficiency of Absolute water reduction 31% 30% 33% 30% water use in our operations (against a 2005 baseline)1

Relative water reduction 55% 57% 56.5% 55% (against a 2005 baseline)2

Commitment We will reduce and optimise our own-brand packaging

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) Reduce own-brand packaging by Reduction in own-brand 35% 36% 37% 50% 50 per cent compared to 2005 packaging since 2005/06

We’ll seek to use recycled materials Percentage recycled 38% 38% 44% and make sure that the material is content by weight recyclable wherever possible Percentage of recyclable packaging by weight (OPR)

Widely recycled 83% 85% 87%

Check local recycling 2% 1% 3%

Not currently recycled 15% 14% 10%

1 Excludes Argos to be consistent with prior year disclosure. Absolute water reduction including Argos for 2019/20 is 30%.

2 Excludes Argos to be consistent with prior year disclosure. Relative water reduction including Argos for 2019/20 is 54%. 29 Performance scorecard J Sainsbury plc Sustainability Update 2019/20

Great place to work

Commitment We’ll be an employer where colleagues love to work

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll understand our colleagues The percentage of our colleagues who 72% 69% 75% better than anyone else and are engaged based on results from engage colleagues in the long- our colleague engagement survey1 term success of our business

We’re committed to exceed the Colleague Reward 2 £8.00/hour £9.20/hour £9.30/hour National Living Wage (NLW) (percentage above NLW) 2.2% 12.1% 6.7%

We’ll continue to be recognised Continue to be awarded a Maintained Maintained Maintained as being a great place to work by Gold accreditation in Investors maintaining our Gold Investors in in People People accreditation

Commitment We’ll continue to invest in the training and development of our colleagues

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll offer colleagues externally Number of apprentices trained3 713 887 1,316 2,500 accredited training to support our business strategy

Commitment We’ll have an inclusive workforce that offers employment opportunities to all members of the community

What we’ll do KPI Performance 2020 target (where 2017/18 2018/19 2019/20 relevant) We’ll be an inclusive workforce that Increase diversity of our workforce reflects the communities we serve across race and gender:

Percentage of women on our 11% 22% 22% Operating Board

Percentage of women in our 55% 56% 55% workforce

1 2018/19 and 2019/20 data is for the Group and prior data is for Sainsbury’s.

2 Per hour base rate of pay in Sainsbury’s stores. National Living Wage rate (25+) effective dates: April 2018, April 2019 and April 2020.

3 The 2019/20 figure represents the amount of apprentices live on an apprenticeship programme