Environmental impact

• Cat. 1 Purchased Goods and Services: calculations involved DEFRA 2021 factors and an emissions expenditure estimation tool (Quantis). This category does not include products purchased as part of 1P retail operations due to lack of information available on emissions from products and goods. The value could be significant for the Scope 3 carbon footprint, although the 1P retail revenue accounted for 0.9% of Allegro.eu’s total GMV in FY 2021 and 0.7% of the total GMV in FY 2020.
• Cat. 2. Capital Goods – emissions estimated using Quantis based on capital expenditure.
• Cat. 3. Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope 2 – emissions from the production and distribution of electricity and transport fuel – based on real Scope 1 and 2 consumption data and DEFRA 2021 emission factors.
• Cat. 4. Upstream Transportation and Distribution – emissions were excluded from calculation.
• Cat. 5. Waste Generated in Operations – emissions from waste generated in office buildings and warehouses – based on real data on waste generated and DEFRA emission factors.
• Cat. 6. Business Travel – air and train travel emissions – based on real information on travel and DEFRA emission factors. ²⁶
• Cat. 7. Employee Commuting – emissions from employee commuting were estimated using Quantis and based on information on average employment in Group companies, including assumptions about remote work ²⁷
• Cat. 8. Upstream Leased Assets – emissions not applicable to the Allegro Group.
• Cat 9. Downstream Transportation and Distribution – transport emissions from shipments from the 1P warehouse and fulfillment and shipments under Allegro Standard – based on real information about the number of parcels shipped in 2021 and the average emissions per shipment and the average emissivity of one shipment according to DPD data.
• Cat. 10. Processing of Sold Products – emissions not applicable to the Allegro Group.
• Cat. 11. Use of Sold Products – emissions not applicable to the Allegro Group.
• Cat. 12. End-of-Life Treatment of Sold Products – emissions from used packaging waste (cardboard boxes, stretch film, filler, wood) – based on real data on materials purchased and DEFRA 2021 emission factors. This category does not include products purchased as part of 1P retail operations due to lack of information available on emissions from products and goods. The value could be significant for the Scope 3 carbon footprint, although the 1P retail revenue accounted for 0.9% of Allegro.eu’s total GMV in FY 2021 and 0.7% of the total GMV in FY 2020.
• Cat. 13. Downstream Leased Assets – emissions related to offices subleased to third-party companies at locations where the Allegro Group has offices.
• Cat. 14. Franchises – emissions not applicable to the Allegro Group.
• Cat. 15. Investments – emissions not applicable to the Allegro Group.

²⁶ Emissions from employees’ hotel stays on business trips were excluded.

²⁷ It was assumed that an average of 2,384 people worked remotely at Allegro, Allegro Pay and Allegro Finance in 2021; 70% of employees at eBilet, 100% at CENEO and 0% at Xpress Couriers.

As recommended by the Task Force on Climate-Related Financial Disclosures (TCFD), climate-related opportunities and risks are identified, assessed and managed at Allegro. The Company has mapped climate risks and opportunities for two climate scenarios and three time horizons.

In preparing climate scenarios and assessing risks, Allegro.eu used data from the IPCC, the Intergovernmental Panel on Climate Change.

Two RCP emission pathways were identified:

• RCP 2.6 – an emissions pathway that assumes a temperature rise of approx. 1.5°C by the end of the century:
• RCP 8.5 – an emissions pathway that assumes a temperature rise of approx. 4°C by the end of the century

The selected climate scenarios were calibrated for local conditions and potential impacts on the sector.

• According to the IPCC’s findings on the impacts of climate change in the short term, the differences in temperature increases through 2035 for the two RCP scenarios are negligible.
• These findings were confirmed in the context of Poland using the World Bank modelling tool based on scenarios used by the IPCC.
• For both scenarios, the following parameters were analysed: increase in average monthly temperatures, precipitation and number of hot days per year (>35°C)

Source: IPCC AR5 [link], World Bank [link]

[TCFD Risk A]

Risk identification and assessment was performed using the expert method. The process consisted of four steps:

• identification of risks in individual scenarios
• risk assessment in individual scenarios (TCFD)
• analysis and calibration of risk assessments in individual scenarios
• identification of key climate risks and opportunities

CLIMATE RISK ASSESSMENT

Risk assessment results in the short, medium and long term for two climate scenarios:

THE LIST AND ASSESSMENT OF CLIMATE OPPORTUNITIES IDENTIFIED

We identified risks as well as opportunities. The assessment in the short, medium and long term for two climate scenarios is presented in the table below:

List of identified climate risks and opportunities of Allegro:

Principal climate risks:

• The risk of increased requirements and increased accuracy of non-financial reporting on climate issues
• The risk of limiting the ability of internal combustion vehicles to make deliveries in urban centres
• The risk of the need for rapid changes in own and subcontractor fleets (demand greater than the supply of low/zero-emission fleet)
• The risk of decreased availability of RES for strategic objectives
• The risk of increased financial burden due to the purchase of electricity
• The risk of not delivering on climate promises, e.g. insufficient supply of RES energy

Principal climate opportunities:

• A potential decrease in energy costs through energy efficiency improvements
• Greater merchant engagement and loyalty to climate issues, and ensuring merchants can meet their obligations (including regulatory requirements) associated with climate change
• A potential increase in company value due to improvements in ESG.

Risk indicators are listed in the Environmental Impact section, some of which are currently in development.

[TCFD Oversight A]
[TCFD Oversight B]
[TCFD Risk B]

The role of the Board of Directors and management of climate risk is described in the Allegro.eu’s Sustainability Strategy for 2020–2023. The climate risk identification and assessment process is an integral part of the risk management system described in the Risk Management chapter of the report. Allegro also monitors the company’s GHG emissions and environmental impact.

In addition to physical risks, it is also worth mentioning the transformation risks associated with the growing expectations of investors and regulators associated with sustainable development. Due to the nature of our business, we are not able to directly manage and respond to physical risks, both unexpected (resulting from extreme weather events such as droughts, floods or fires) and chronic (resulting from long-term processes such as temperature changes or rising sea levels).