The Supervisory Board meets at least four times per year and discusses climaterelated issues through the Audit and Sustainable Development and Innovation Committees.

The Executive Board is in charge of properly managing progress against the Company’s strategy and the sustainable development strategy as well as associated risks, including all climate-related risks and opportunities.

By reviewing the detailed reports submitted by relevant committees, the Supervisory Board keeps track of all key projects and activities, including progress measured against the sustainable development strategy, the implementation of climaterelated mitigation measures, and project outcomes.

The Group has set up a Sustainable Development Committee at the Executive Board level. The Committee is responsible for implementing decarbonisation measures and developing action plans to mitigate climate-related risks, which are then submitted to the Sustainable Development and Innovation Committee, as well as the Supervisory Board, for approval.

Representatives of business units implement the proposed measures and changes within the Group’s sustainability agenda.

The Group’s climate risk assessment is aligned with three time horizons: 2023, the short-term horizon; 2023–2030, the medium-term horizon; and 2030–2050, the long-term horizon.

The Group analyses its transition and physical risks for each business unit separately in order to glean a comprehensive understanding of risk exposure across different business activities and geographies. A full list of identified climaterelated risks is published in our 2021 Sustainability Report.

In 2022, we have qualitatively reassessed the impact of our identified climate-related risks, results may be found in "Climate-related risks".

By analysing how climate-related risks affect us, we unlock a more comprehensive understanding of how the Group’s strategy should be built, as well as how we should mitigate the consequences of potential issues in the future.

The risk assessment used the following climate scenarios from the IPCC’s Sixth Assessment Report (AR6): the 1.5 °С scenario (scenario SSP1-2.6), the 2.0 °С scenario (scenario SSP2-4.5) and the 4.0 °С scenario (scenario SSP5-8.5).

X5 Group pays particular attention to materiality scores in the SSP2-4.5 scenario. We consider SSP2-4.5 the primary scenario for our industry, and we believe it will have a long-term effect on the Group’s strategic resilience and estimated financial impacts.

Climate-related risks, including physical and transition risks, are incorporated in the general risk register and are reviewed annually.

The Group’s climate risk assessment process is aligned with its general risk assessment.

The results are plotted on a scale, representing risk impact from the lowest possible impact (green) to the most significant possible impact (red).

Our decarbonisation initiatives feed into measures to mitigate climate risk to ensure our sustainable development strategy remains adequate and effective in scope.

The sustainable development strategy is based on cost-effective decarbonisation measures that are set to benefit X5’s long-term value.

Our climate risk assessment process aligns with the Group’s general risk assessment and is closely reviewed on a regular basis during the Supervisory Board’s strategy sessions.

In 2022, the Group regularly reviewed qualitative results relating to climaterelated risks and opportunities.

When charting its pathway to net zero, X5 established a feasible internal carbon price to aid in strategic decision-making.

X5 Group has set climate-related KPIs for management to help motivate them to implement our 2023 and 30×30 agenda. The KPIs include the LTI programme, which aims for a 10% carbon footprint cut by 2023 vs a 2019 baseline. The KPIs also include other sustainability metrics, such as boosting the share of packaging that is recycled, as well as waste management initiatives, which are vital for decreasing Scope 3 emissions. Overall, climate-related KPIs hold a 5% weighting for total management team KPIs.

Since 2019, the Group has been measuring GHG emissions (Scope 1, Scope 2 and Scope 3) in accordance with the GHG Protocol. In 2021, this assessment included GHG emission sources at key business units that make up at least 95% of all GHG emission sources. The 2022 GHG emissions calculation results and a full description of the calculation methodology will be published in our 2022 Sustainability Report.

The 2022 GHG emissions calculation results and a full description of the calculation methodology will be published in our 2022 Sustainability Report.

The long-term goal of the strategy is for the X5 Group to achieve carbon neutrality by 2050, in line with the Paris Agreement and Russian decarbonisation goals. As one of the steps to attain this objective, X5 has introduced the 30×30 agenda, which encompasses the following medium-term targets for 2030:

• A 30% reduction in GHG emissions intensity (Scope 1 and Scope 2) per square metre of selling space against a 2019 baseline
• A 30% share of renewable energy in X5 operations against a 2019 baseline
• A 30% reduction in the ratio of waste generated to retail sales against a 2019 baseline

ESG and climate considerations are also being incorporated into its short-term corporate strategy to 2025, which is currently under development.

X5’s GHG reduction targets are based on the methodology and requirements of the Science Based Targets initiative (SBTi) and look to achieve net zero by 2050.

More detailed information on GHG emissions will be published in our 2022 Sustainability Report.