Deforestation in the supply chain – a company perspective Russell Cooper

>1,000 Stores >24m Transactions >150,000 Colleagues >12,000 Products >770 Suppliers >17,000 Farms >2,000 Sites

CANADA USA MEXICO PANAMA DOMINICAN REPUBLIC ST LUCIA COLUMBIA BRAZIL PERU BOLIVIA ARGENTINA CHILE EUROPE UK EIRE SPAIN BENEGAL NORWAY SWEDEN FINLAND TURKEY EGYPT PORTUGAL GHANA MOROCCO KENYA SOUTH AFRICA MADAGASCAR MAURITUS NAMIBIA MALDIVES INDIA CHINA AUSTRALIA NEW ZEALAND MALAYSIA SOUTH KOREA VIETNAM THAILAND PAKISTAN We source £Billions of Own Brand products from 72 countries around the world A UK retailer but a global business

Our 20x20 commitment In November 2011 Sainsbury’s launched its 20x20 Sustainability Plan which sets out our environmental and social business targets. Key targets are: Sustainable Sourcing ‘We’ll source all of our key raw materials and commodities sustainably to an independent standard’ Global deforestation ‘Our own brand products won’t contribute to global deforestation’

Customers Securing supply Reputation, recognition & regulation 67 key delivery goals 35 key raw materials 14 commitments owned by Sainsbury's Brand team Our approach to 20x20

Deforestation risk in our supply chain Stakeholder engagement and risk assessment informed the development of our 20x20 Sustainability Plan. Enhanced our understanding of where the deforestation risks were in our supply chain. As a retailer we use: 1.Timber/paper – products, packaging, goods not for resale 2.Palm oil – food and non-food products 3.Soya – food products and animal feed 4.Beef – food products, small non-EU usage 5.Biofuels – Petrol stations and transport fleet Numerous external resources to help inform supply chain risk assessment

Example – information on deforestation risk

Strategy Clear public commitment on deforestation – 20x20 is a corporate target which provides strong guidance to supply chain Prioritisation of risk and focus on big wins Conversion plans and milestones Regular data collection and reporting to monitor progress Support for independent sustainability standards Improvement of visibility and traceability within supply chains – essential for legal compliance and where third party certification is insufficient.

Achievements to date 93% of the wood used in our own brand products is recycled, FSC or PEFC Vast majority of the palm oil (and palm derivatives) used in our own brand products will be certified sustainable (mass balance or segregated) by the end of Mapping the soya supply chains for many of our food products and much of our animal feed. Non-EU corned beef sourced only from approved traceable supply chain to guard against deforestation risk. Biofuels – compliant with EU RED requirements, certified sustainable and use of waste material dominates biodiesel production.

Challenges 1.Full traceability within complex supply chains 2.Availability of certified material (eg. some palm derivatives) 3.Incomplete sustainability standards (ie. RSPO standard)

Focus going forwards 1. Sourcing our raw materials according to holistic sustainability criteria. 2. Sourcing sustainable soya 3. Securing no-deforestation palm oil (building on RSPO) 4. Further improving traceability of raw materials