TCFD

Strategy

a) Describe climate-related risks and opportunities the organization has identified over the short, medium, and long term.

In 2023, we deepened our analysis of climate change-related risks and opportunities across all operations. The study aimed to identify the main physical and transition risks, as well as the main opportunities for the Company aligned with a low-carbon strategy. For physical risks, seven threats were considered: heat waves, river floods, vector proliferation, windstorms, landslides, sea level rise, and fires. For pharmacies, windstorm and heat wave threats presented the largest number of assets at critical risk. Regarding DCs and the RD Saúde Campus, the most critical threats were windstorms, heatwaves, and fires. As for transition risks, the highest were: pressure to adopt voluntary decarbonization targets; carbon pricing; and responsibility for actions taken by suppliers and/or service providers without climate and ESG targets. The main opportunities identified were: investments in the development of more sustainable products, services and processes (low emission rates); development of electric vehicle charging points in pharmacies; and migration to low-carbon electricity consumption.

b) Describe the impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.

Climate-related risks and opportunities have influenced the development of the Company’s long-term vision, particularly in the definition of sustainability commitments for 2030, which impact and guide the strategy of our operations. Short-, medium-, and long-term financial planning related to direct and indirect expenses has also been influenced by climate risks and opportunities. The purchase of electric trucks and the adoption of more energy-efficient measures, for example, require investments that are calculated and provided for in the organization’s annual budget. In addition, several areas, such as Expansion, Engineering, Insurance, and Pharmacy Operations, already have action plans in place to monitor, prevent, and address climate events.

c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

RD Saúde has developed a consistent mitigation and adaptation strategy (page 95), which brings resilience to the business in the face of climate change: we have a high percentage of electricity consumption from renewable sources and have implemented energy-efficient solutions (page 96); we invested in training our own drivers and in optimizing processes to increase the efficiency of our vehicles (page 96); we increased the volume of last-mile deliveries carried out using less polluting modes (page 96); we acquired electric trucks for our fleet (page 96); we have worked closely with our suppliers to engage them in the climate agenda (page 94); and adopted public targets for reducing emissions and engaging the value chain.