Plan for Better

Undertaking a materiality assessment helps us to identify and gain insight into the issues that matter the most to our key stakeholder groups. It enables us to assess which issues will have the greatest impact on our business and also supports us to identify areas of emerging importance.

Our materiality assessments

Prior to this year’s assessment, we undertook a materiality assessment in 2019 to inform the development of our sustainability strategy and the pillars and targets under the plan. The output of this materiality assessment was shared using a materiality matrix at our ESG investor event in June 2021, with a commitment to continue to review our material issues with our key stakeholders. In February 2022, we conducted a refreshed materiality assessment.

Informing our Plan for Better

The insights from our latest materiality assessment are being used to evolve our strategy and ensure that our Plan for Better is focussed on the most material issues focussing on the important issues to our stakeholders and areas that will have the greatest impact on our business. We are committed to continually reviewing this to ensure our strategy is continuously aligned with expectations of our stakeholders. In the year ahead we will report on refreshed commitments across our Plan for Better, to include; human rights, community and partnerships, plastic packaging, recycling and animal health and welfare.

Our approach to materiality

We have outlined the steps taken to conduct our latest materiality assessment below. In order to ensure a rigorous process, we are consistently refining our approach:

Identify issues: With the support of internal experts across the business, we developed a list of 16 key issues to form the basis of the assessment The issues were identified through horizon and trend scanning, competitor and benchmark review taking into consideration our Plan for Better objectives and the broader Environmental, Social and Corporate Governance (ESG) agenda.

Stakeholder engagement: We engaged key stakeholder groups to understand how important the 16 key issues were for Sainsbury’s Group to address. Working with an independent third-party organisation to conduct anonymous surveys, we surveyed customers, non-governmental organisations and members of parliament. We also engaged directly with colleagues, suppliers and investors ensuring we gained insight from all perspectives that impact our business. Overall we sought feedback from:

• Over 1,500 colleagues, representative of all areas of the business including our senior leaders
• Over 2,000 customers, a nationally representative sample including customers of all Sainsbury’s Group brands
• Over 100 non-governmental organisations
• Over 300 suppliers, representative across all business areas and brands
• 97 members of parliament, representative across all parties and regions
• 26 investor representatives

Issue prioritisation and mapping: Following consultation, we undertook an analysis of the findings, drawing on expertise from our Sustainability, Insights and Finance teams. The results of the analysis have been plotted onto a materiality matrix to visualise the importance of topics and the impact to our business over a 3 – 5 year horizon.

Governance: The materiality review and the outputs were validated via our Plan for Better governance forums to ensure input at all levels and consultation with subject matter experts. We are committed to continually engaging with our stakeholders to ensure that we understand the most material issues that impact our business and our stakeholders.

Results: the results of the assessment can be seen plotted onto the materiality matrix.

Corporate Responsibility and Sustainability governance structure:

_{¹ Remit of Committee in relation to the sustainability strategy. For full details on the Committees please read the Remuneration Committee Report and the Audit Committee Report in our Annual Report and Financial Statements 2022.}

_{² Replaced the Net Zero Steering Committee as of June 2021. Steering Committee meets five times per year. Membership consists of Directors from across the business, with additional Director representation from Audit, Finance and Strategy attending the Committee twice a year to review Corporate Risk Updates including TCFD recommendations.}

_{³ Current working group structure replaced individual pillar working group structure in September 2021. Working groups meet five times per year. Our Diversity & inclusion and Skills & opportunities pillars are managed via the Human Resources Leadership Team and the Community & Partnerships pillar is managed via the Marketing and Loyalty Division.}