Second-Party Opinion Download

Selection of Key Performance Indicators

The Sustainability-Linked Bond Framework includes three KPIs for REWE and PENNY Germany: i) absolute scope 1 and 2 GHG emissions; ii) absolute scope 3 non-FLAG GHG emissions; and iii) absolute scope 3 FLAG GHG emissions (see Table 1). Sustainalytics considers the KPIs chosen to be very strong, given that: i) they are a direct measure of REWE Group’s performance on a relevant and material ESG issue; ii) they have a high scope of applicability; iii) they follow a clear and consistent methodology that is externally defined; and iv) they lend themselves to being benchmarked against science-based global decarbonization pathways.

Calibration of Sustainability Performance Targets

Sustainalytics considers the SPTs to be aligned with REWE Group’s sustainability strategy. Sustainalytics further considers SPT 1.3, 2.2, 2.3, 3.2 and 3.3 to be highly ambitious, SPT 1.2, 2.1 and 3.1 to be ambitious, and SPT 1.1 to be moderately ambitious based on the comparison with past performance, peer performance and alignment with science.

Bond Characteristics

REWE Group has linked the bonds’ financial characteristics to the achievement of all three SPTs. Failure to achieve these SPTs would constitute a trigger event and would lead to a step-up in the coupon or a redemption price adjustment. Sustainalytics notes that the financial characteristics of the bonds are aligned with the SLBP 2023.

Reporting

REWE Group commits to report on an annual basis on its progress towards the KPIs, relevant information regarding recalculations, updates on the emission reduction strategy and governance affecting the KPIs’ and SPTs’ trajectories, and qualitative or quantitative data explaining the main factors behind the evolution of its progress towards the KPIs. This reporting will be made publicly available in a Sustainability-Linked Bond Progress Report, which will be published on the Group’s website. These commitments are aligned with the SLBP 2023.

Verification

REWE Group commits to have external limited assurance conducted against each SPT for each KPI at least once a year, which is aligned with the SLBP 2023.