Compliance

Effect

The REWE Group is aware that its business activities have an effect on the Compliance issue. Conduct in compliance with the law is an essential component for the sustainable success of a trade and tourism company such as the REWE Group. This is because non-compliance with laws, guidelines or codes can result in personal liability (for example, claims for damages and criminal consequences) for individual employees or the members of the REWE Group's corporate bodies – and lead to damage to their reputation. Particular risks exist in price agreements, the exploitation of market power in dealings with suppliers, the corruptibility of employees and the acceptance of personal benefits. Therefore, compliance is a basic prerequisite for the REWE Group to achieve sustainable economic success and to assume social responsibility. The REWE Group contributes to the prevention of violations of laws and regulations with various measures.

Principles

Integrity and fairness in business transactions and in dealing with each other are established as important basic values in the REWE Group mission statement . With the REWE Group's Code of Conduct, the company has also defined standards of conduct which are mandatory for all employees working at the REWE Group – including executives and the management.

Responsibility and Resources

In February 2009, the REWE Group appointed a Chief Compliance Officer and since June 2010, the compliance activities of the REWE Group are directed and coordinated by the Central Compliance Division. Decentralised Compliance Officers in the respective business units and national companies are available as competent contact persons. As part of the REWE Group’s CMS, various guidelines on conduct for executives and the management have been implemented and an ombudsperson has been employed.

Implementation

The CMS is focused on approximately 120 companies of the REWE Group, which are chosen by certain criteria such as sales volume and number of employees (Compliance scope). Consequently, a higher coverage ratio can be achieved. Acquisitions are successively integrated into the CMS. In 2022, the Lekkerland SE was incorporated as a new member of the business segment Convenience to the compliance processes of the REWE Group.

As part of an efficient CMS, based on the auditing standard (PS 980) of the Institute of Public Auditors in Germany, the REWE Group has set up a compliance programme that comprises a large number of preventive measures – including risk assessments, training courses, the notification management system, business partner audits and consultations.

In addition, all compliance-relevant combine guidelines are accessible to all employees in an interactive IT tool. They are also informed about all changes and innovations to relevant combine guidelines via the intranet.

Involvement of Stakeholders

The topic Integrity and Compliance was rated as relevant by stakeholders in the Materiality Analysis. They are informed annually about the effectiveness of measures taken via the Sustainability Report and in various dialogue formats (see Stakeholder Dialogue). This exchange allows stakeholders to provide important input on the issue. Moreover, all significant activities are reported to the Executive Board and the Audit Committee in the annual compliance report.

The outline parameters, guidelines and processes for a uniform combine-wide risk management system with regard to the compliance risks of anti-trust violations and corruption are developed by the Central Governance & Compliance Division.

With the help of an IT-supported tool, corruption risks are systematically recorded and assessed for the entire REWE Group (nationally and internationally). It considers national as well as international operating locations. In this way, 100 per cent of operating locations in the compliance scope are reviewed. On the basis of the recorded and assessed risks, corresponding measures are derived. “Corruption in the course of business” was identified as a significant corruption risk.

The business operation and compliance risks are jointly collected, uniformly assessed and transferred to a Group-wide system solution (for more information on risk management, see also Management Report for the 2022 Financial Year, pages 30-36).

The mandatory e-learning "Compliance Basics" is available for all administrative staff in the business units with a learning management system. It provides training on the proper handling of donations (anti-corruption). This course is supplemented by another e-learning module on the topic of ethics, which essentially provides training on the contents of the REWE Group Code of Conduct and on dealing with compliance notices. In addition, e-learning is available on the topic of antitrust law. Since 2020, a repetition format has ensured that the knowledge imparted is refreshed. In smaller companies that have not yet been connected to a learning management system, the responsible compliance divisions are obliged to convey the content of the e-learning to the administrative employees in a classroom training session or to make it available in another suitable manner.

The trainings address executives and employees alike on the basis of a risk-oriented approach. In addition, numerous trainings and workshops were conducted in the reporting year, in which employees were instructed in compliant conduct in their particular area of expertise. In this way, coverage of knowledge transfer to virtually all relevant employees can be achieved over a period of two to three years.

The REWE Group provides information on its website on the topic of Compliance, especially on reporting management and provides the Code of Conduct for download. Furthermore, all employees of the REWE Group are provided with relevant compliance information via the intranet.

Total Headcount Trained in the Anti-Corruption Policies and Procedures of the Organisation¹

Critical requests, concerns, grievances, reports, suggestions and proposals are well received at the REWE Group. The company ensures this via different procedures and communication channels for all stakeholders – for employees, suppliers and consumers (see Other Reporting Possibilities). The REWE Group has developed special grievance mechanisms for the relevant supply chains, especially for focus raw materials and the production sites in analysed risk countries. For more information, please refer to the section Social Aspects in the Supply Chain.

On the Topic of Compliance

Internally decentralised Compliance Officers (DCO) are available to all employees in each business segment for compliance issues, together with the Compliance Delegates. This applies likewise to the Central Governance & Compliance Area. All the REWE Group’s employees are offered the possibility of approaching these contact persons with questions regarding compliance-related topics at any time. This can be done in writing, by e-mail or via the hotlines set up for this purpose.

Violations of statutory provisions or internal regulations especially with regard to corruption can be reported via a combine-wide whistleblower system. It serves to ensure a uniform and transparent approach to compliance indications company-wide. Formal grievances can also be addressed directly to the affected areas of the REWE Group, such as the management, quality management, purchasing or the stores.

All employees of the REWE Group and third parties, such as suppliers or business partners, can report information to the respective compliance area via the online whistleblower system REWE Group Hintbox. In addition, an external ombudsperson is available to receive the compliance information. Compliance information exists in the event of a suspected criminal offence, misdemeanour or other (including internal) regulation violations. This includes in particular cases of corruption or anti-trust infringement.

Contacts and telephone numbers are available at https://www.rewe-group.com/en/company/corporate-culture/compliance/.

Submission of compliance-related information can be made by using the REWE Group Hintbox – including anonymously, if requested. The responsible Compliance division still has the option of communicating with whistleblowers via a mailbox function. The introduction of the REWE Group Hintbox also serves to fully implement the requirements of Directive (EU) 2019/1937 of 23 October 2019 (the Whistleblowing Directive) and the German Whistleblower Protection Act, which was adopted by the Bundestag on 16 December 2022. The implementation of the Whistleblowing Directive into national law has not yet been completed in all EU member states in which the REWE Group operates.

Once compliance information has been received in the REWE Group Hintbox or via the external ombudsperson, the facts are clarified if there is initial suspicion, for example by Auditing, the Market Audit, external lawyers or the internal compliance organisation. They examine the facts and inform the Governance & Compliance division of the results or the measures to be taken. Their implementation, for example in terms of labour law or criminal law, is the responsibility of the operational units. After clarification, whistleblowers receive confirmation of the conclusion. In the event information has not been confirmed, all personal data will be deleted in accordance with the locally applicable data protection regulations.

In 2022, the compliance division received two pieces of information regarding corruption (2021: 6). Sanction measures are generally taken in the event of confirmed violations. For example, in the case of corruption violations by business partners, the termination of the contractual relationship is initiated. As part of its whistleblowing management system, the REWE Group has undertaken to protect the identity of whistleblowers and those affected. For example, comprehensive information on the persons concerned and on measures under labour law is not permitted for data protection reasons because it could lead to conclusions regarding personal data.

Together with the decentralised compliance officers, the Central Governance & Compliance Division conducts workshops at regular intervals in order to jointly develop the compliance programme and implement preventive measures to minimise compliance risks.

The REWE Group does not report on procedures or their results since this information is subject to special obligations of confidentiality.

Non-Compliance With Environmental Laws and Regulations

The REWE Group does not provide information on the monetary value of significant fines and the total number of non-monetary penalties for non-compliance with environmental laws and regulations, as this information is not available throughout the Group in the required quality. There are no plans to collect this information in the medium term, as the effort involved in obtaining the data is not in proportion to the benefit of this information.

Non-Compliance With Laws and Regulations in the Social and Economic Sector

The REWE Group does not provide information on the monetary value of significant fines and the total number of non-monetary penalties for non-compliance with environmental laws and regulations, as this information is not available throughout the Combine in the required quality. There are no plans to collect this information in the medium term, as the effort involved in obtaining the data is not in proportion to the benefit of this information.

The compliance risks are reported in the Management Report for the 2022 Financial Year from page 34. Other provisions for court, litigation and legal fees are disclosed in Note 34 of the Combined Management Report for the 2022 Financial Year on page 145.

Other Reporting Possibilities

External stakeholders such as consumers, for example, can submit grievances or provide suggestions via the usual customer hotline with regard to private label products of REWE and PENNY in Germany. These inquiries are forwarded to the specialised departments. The answers are coordinated internally, feedback is given via customer service. Suppliers may also contact the REWE Supplier Portal via an email address.

All other units of the REWE Group, such as DER Touristik, toom Baumarkt DIY stores and Lekkerland, also respond to enquiries, comments and grievances from customers and other external stakeholders – such as suppliers – via the appropriate contact points.

Employees of the REWE Group can contact their managers or ombudspersons and the Human Resources department for information on topics such as dealing with each other in a trusting and respectful manner, equal treatment or diversity and equal opportunities, as well as to the Compliance division, the works council, the disabled persons' representatives and the internal LGBTIQ network "di.to". In the event of discrimination, there are also special contact persons in all sales lines. Information on these issues is consistently pursued and confidentiality is guaranteed. Personal discussions are held with those affected, and the works council is always involved.