Prosus N : Environmental sustainability programme

ENVIRONMENTAL SUSTAINABILITY PROGRAMME

Improving everyday life for billions of people through technology

Prosus Environmental sustainability Programme - Proof 5 - 11 July 2024

Prosus Environmental sustainability Programme - Proof 5 - 11 July 2024

Prosus is

1. global technology group with businesses and investments in growth markets around the world.

Contents

1. Introduction
2. Chief executive's statement
3. 1 Managing our impact

1. 1.1 Responsible investing

1. 1.2 Materiality
2. 1.3 Scope of impact

7 2 Governance

1. 2.1 Sustainability governance
2. 2.2 Management responsibilities

1. 2.3 Portfolio engagement approach
2. 2.4 Building collaboration and learning across the group

1. 2.5 Environmental advocacy, awareness and training
2. 2.6 External partnerships and commitments

11 3 Strategy and climate transition plan

11 3.1 Our strategy

12 3.2 Targets and metrics

13 3.3 Climate transition engagement plan

1. 3.4 Fair and just transitions

1. 3.5 Value-chain engagement

15 4 Risk management and scenario analysis

15 4.1 Assessing climate-related risks

15 4.2 Climate-related physical risks

16 4.3 Climate-related transition risks

17 4.4 Scenario analysis

18 4.5 Risk impact quantification

18 4.6 Managing exposure to climate-related risks

20 4.7 Climate-related opportunities assessment and management

22 5 Resource use

22 5.1 Sustainable packaging

1. 5.2 Framework for sustainable packaging
2. 5.3 Packaging waste

23 5.4 Building a circular economy

24 6 Pollution

25 7 Water

1. 7.1 Water consumption in data centres

1. 7.2 Corporate water use

26 Glossary

Introduction

Our impact on our natural environment, whether positive

or negative, can affect our people, customers, reputation and operations, which can have

an effect on our financial performance. Measuring, managing and reporting our environmental impact is an important element

of our ability to create sustainable value as a business.

In this document we share our approach on how we define, measure and manage the environmental impacts of our group. We've created this document for all our stakeholders, to provide a comprehensive overview of our impact on the planet and

to outline how we address the resulting risks and opportunities.

The framing of our environmental impact is inspired by the United Nations Sustainable Development Goals (UN SDGs) and contributes in particular to principles 11, 12 and 13.

We apply environmental principles and environmental or climate key performance indicators (KPIs) to the core of what we do - making investment decisions and building companies into successful businesses - thereby contributing to the sustainable development of our world. Our investments help to increase the resilience of the communities they operate in, supporting the transition to greener economies.

Environmental, social and governance (ESG) and sustainability are dynamic areas that will continue to evolve, particularly in the markets in which we operate. Consequently, our environment programme, which is based on the concepts and principles outlined in our sustainability policy, is reviewed and updated on a regular basis in response to changes in legislation, stakeholder expectations and developments in our business. We will continue our efforts on transparency on our environmental impact reporting updates via our annual report and corporate website.

We welcome feedback from our stakeholders on this document, please reach us via [e-mail].

Latest version of report: June 2024

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Environmental sustainability programme

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Chief executive's statement

Sustainability targets are embedded in the annual business-planning process where we engage in the ESG performance of our portfolio companies and their strategies, targets and budgets for the year.

1 Managing our impact

1.1 Responsible investing

Making responsible investments is at the heart of the capital allocation decisions that we make. To create sustainable value, we follow a responsible investment approach, based on three pillars (see figure 1.1).

Figure 1.1: Three pillars of responsible investment

Three pillars of responsible investment

1	2	3 Increase
Embed	Enhance ESG	investments in
ESG in	performance	inclusive and
investment	of portfolio	sustainable
due diligence	companies	businesses
Mitigate value impairment	Drive value creation

Firstly, we mitigate risks to people and to our planet: ESG screening is built into our pre-investment due diligence process. We proactively limit our exposure to carbon-intense sectors.

Secondly, we manage for performance: our investees share our entrepreneurial instincts, and our companies are motivated

Through our investment activities, we are in an ideal position

to play an active role in the transition to a low-carbon economy. Our investments can contribute to positive systemic change, such as dematerialisation of educational services and developing

a circular economy.

1.2 Materiality

We have built an investment portfolio of businesses that

is focused on consumer internet services, across five areas: Classifieds, Food Delivery, Payments and Fintech, Education technology (Edtech) and Etail (figure 1.2).

Our digital platforms in our portfolio are software-driven and asset-light in their operations, thereby having a relatively low environmental footprint.

The diversity of our group companies, not only in terms

of business sector and geography, but also in their relative maturity, means that the nature of their material environmental impacts, and how to define them, will vary. We work closely with our subsidiaries on their accounting and reporting of their environmental impacts.

At Naspers and Prosus we use technology to build leading companies that enrich communities. I am convinced that we can harness this power of innovation and technology to contribute towards climate action.

Our aim is to be a sustainable business. We do this by investing in tech-drivenasset-light and low-carbon digital services in high-growth markets that support local job creation and prosperity. And a robust environmental sustainability programme is crucial to deliver long-term value for our investors.

We have a low emissions profile and we do not operate in high-emitting sectors - so why do we spend so much time and resources to drive climate action across our group? We do this because each one of us needs to contribute to solutions that will limit global warming to enable us to leave behind a planet that can meet the needs of our generation and generations to come.

Action on climate change, access to digital services, responsible supply chains, and delivering sustainable consumer products and services are fundamental to our sustainability agenda.

By integrating sustainability considerations into our decision- making - from capital allocation to value crystallisation - we have built a portfolio of low-carbon businesses that contribute

to social progress.

The management team is responsible for creating a culture aimed at long-term value creation and ensuring that ethical business standards are integrated into the group's strategies and operations. Our most senior executives have sustainability KPIs as part of their remuneration scorecard and progress is published

Climate action continues to be a key priority and we apply

a considered approach. We are committed to a climate journey aligned with the Paris Agreement to limit global warming

to 1.5°C. We will continue with our plan to reduce the greenhouse gas emissions of our corporate operations and our investment portfolio, having defined our science-based targets and working towards establishing a net-zero pathway.

We are helping our investment companies, many of which operate in higher-growth economies, to define their individual climate action strategies: the specific action they are taking depends on their operating environments.

Our activities contribute to building an economy characterised by circularity financial inclusion, improved access to livelihoods, and education for all. We are committed to increasing our exposure to sustainably-driven business models, both

by improving the ESG performance of our established businesses and by investing in breakthrough technologies with the potential to address global challenges.

We will continue to find opportunities where technology is driving a systemic transition towards low-carbon growth and sustainable business models. And we will double down on our efforts

to uncover opportunities where technology can lead

to meaningful change for the benefit of the planet and its people.

Fabricio Bloisi

by a commitment to delivery and profitability. We strive to enhance the ESG performance of all companies in our investment portfolio, both those that are majority-owned by us and those in which we have a minority interest (though our influence is naturally greatest over the former).

All portfolio companies are encouraged to conduct regular materiality analyses and participate in an ESG performance assessment, using the S&P global corporate sustainability assessment framework.

Thirdly, we are committed to increasing exposure

to sustainability-driven business models across our portfolio. We will identify and invest in:

• Innovations that drive the systemic transition towards a low-carbon economy
• Software opportunities where digital services are transforming the environmental footprint and social impact of traditional business sectors
• Asset-lightdigital services that deliver on our group purpose to improve everyday life for half the planet's people.

Figure 1.2: Our investment areas

Most of the companies in our investment portfolio operate in high-growth markets and regions that typically are more vulnerable to the effects of climate change, biodiversity loss and other changes to our natural world. All subsidiaries are encouraged to conduct a materiality analysis based on their business model, operations and geography to help identify their environment-related risks and opportunities. This analysis is an important pillar in our understanding of their potential to create sustainable value.

annually in our remuneration report.

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Chief executive

Food Delivery	Etail	Classifieds	Edtech	Payments and
Fintech

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Environmental sustainability programme

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Prosus Environmental sustainability Programme - Proof 5 - 11 July 2024

1 Managing our impact continued

Figure 1.3: Material environmental impact themes

Material environmental impact themes

		Resource use and
Theme	Climate	circular economy	Pollution	Water
		Extended life	Packaging	Air pollution
	Climate mitigation	of consumer	used	from delivery	Water consumption
Topic	and adaption	products	in deliveries	vehicles	in data centres
	Food Delivery, Payments				Food Delivery, Payments
	and Fintech, Etail, Edtech	Classifieds	Food Delivery	Food Delivery	and Fintech, Etail, Edtech
Applicable sector	and Classifieds	and Etail	and Etail	and Etail	and Classifieds
Corporate
Operations
Supply chain	✔				✔
Portfolio companies

1 Managing our impact continued

Extended operations (including supply chain)

Our suppliers represent the majority of our extended environmental impact, and we take the opportunity to make a positive impact by embedding sustainability considerations in our procurement practices.

The vast majority of our supplier base consists of services such as consultant and audit fees, insurances and other professional services which, by the nature of their operations, have a relatively low environmental footprint. Our analysis shows that we have

no dependency on specific suppliers or reliance on suppliers that are critical to our business and operations. Please see section

3.5 on supplier engagement for more information on how we manage our extended value chain and engage with our suppliers on topics like climate action.

Investment portfolio

Our investment portfolio, including subsidiaries, associates and investees, has environmental impacts from the development and operation of their digital platforms and online service-delivery models while they also have opportunities to support the transition to a low-impact society, such as enabling reuse

of consumer products by our Classifieds businesses. Their extended value chain impacts are linked to the products and services of their business partners and suppliers, and to the footprint of their customers.

Supporting portfolio companies in impact management

We apply a three-step approach to support our investment portfolio in managing environmental impact: map, identify, and invest (figure 1.5).

Operations	✔		✔	✔
Supply chain	✔	✔	✔	✔	✔

Figure 1.5: Process of environmental impact management

To determine the materiality of environmental impact categories, we have performed a double-materiality assessment, following the impact and financial materiality definitions and requirements according to the July 2023 guidance of the European Sustainability Reporting Standards (ESRS). External and internal experts supported us in identifying the environmental impacts, risks, and opportunities for our group. The material themes, along with the specific topics, are shown for the relevant sectors

in figure 1.3.

For our portfolio companies, we set annual targets and KPIs to increase their understanding of environmental impacts and performance in managing them. For instance, we encourage our portfolio companies to develop science-based climate targets.

In the absence of global standards on packaging and circular economy, we have developed our own framework to steer and measure progress (see chapter 5).

1.3 Scope of impact

We identify three scopes of environmental impact within our broader group:

• Our own operations
• Our extended operations (including our supply chain)
• Our investment portfolio (both operations and supply chain).

Our direct and indirect operational impact lies within the boundaries of our corporate headquarters, and our extended operational activities cover suppliers that provide services and goods to our headquarters. Our most substantial impact is from the businesses that make up our investment portfolio (figure 1.4).

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Figure 1.4: Scoping our environmental impact

Own	Supply	Investment
operations	chain	portfolio
	Scope of our impact

Own operations

Our corporate operations are limited to small offices in various locations around the world. The materiality threshold for our corporate office to measure and report data against key environmental indicators is set at a minimum of 10 employees. Our use of resources and emissions is linked to the provision of a workplace for our employees. We apply a considered approach to the environmental footprint of our office space, for example our office in Amsterdam is BREEAM-certified and

we procure 100% of our electricity from renewable sources.

Map environmental	Identify reduction
impact	opportunities

Process of

environmental

impact management

Invest in scalable

solutions, technology

and partnership

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2 Governance

1 Map environmental impact

All subsidiaries are required to conduct an assessment of their material environmental impacts and define their boundaries for the purpose of environmental impact reporting. We support them on their greenhouse gas (GHG) emissions inventory and ESG data on a centrally managed ESG data management tool, creating a repository of their upstream and downstream environmental data.

2 Identify reduction opportunities (and set targets)

We have identified four key areas (see figure 1.6 below) to assess and manage the environmental impact of the companies in our investment portfolio. For each of these areas we have articulated indicators that help us measure a company's progress, underpinned by materiality of risk and opportunity. In our annual environmental impact report we will report on progress on these indicators.

The common objective across all of our portfolio companies is the implementation of science-based climate targets and pathways,

2.1 Sustainability governance

Good governance plays a crucial role in achieving sustainability objectives in both the short and long term. Robust governance practices help to ensure that decisions are made transparently, with the participation of stakeholders, and that the benefits and costs of actions are distributed fairly. In addition, good governance provides the necessary framework for monitoring and enforcing environmental regulations and sustainability targets, ensuring that progress is being made towards our group-level targets.

Figure 2.1: Sustainability governance structure

This enables our diverse businesses to apply a data-driven approach to defining the baseline underpinning their longer-term environmental strategy. All newly acquired companies, where we have a majority share, will be required to measure and disclose data for scope 1 and scope 2 GHG emissions, in line with the GHG Protocol, within 24 months of their onboarding. They will also start mapping and disclosing the most material scope 3 categories.

Our carbon accounting process applies internationally acknowledged and globally orientated emission conversion factors. The GHG emission data measurement relies

on geolocation data of assets and operations which is used for both the climate-related as well as biodiversity risk and opportunity assessment.

Our annual environmental impact report discloses the detailed GHG emissions of all subsidiaries and estimates the emissions from associates and investees in our wider investment portfolio. Our Classifieds businesses measure their net environmental impact by enabling the circular economy.

captured in our commitment to ensure 50% of our invested capital will have done so by FY30, and our entire portfolio by FY40.

3 Invest in solutions, technology and partnerships

Achieving targets may require a transition to use new solutions, technologies or partnerships. Solutions can range from measures

to reduce business travel emissions to scale sustainable packaging for restaurants. Our businesses invest in conventional technologies like solar panels and other renewable-energy capacity, or in installations that drive energy efficiency in offices and other buildings.

Partnerships range from individual ventures with suppliers of electric vehicles, to industry-wide collaborations like joining a Plastics Pact.

Environmental KPIs

To measure and steer the performance of our portfolio companies on material ESG topics, we have identified the below KPIs, based on the double-materiality assessment. We keep track of the development of these indicators and expect portfolio companies to develop strategies and action plans to improve on them year on year.

Board

Chief executive

Chief financial officer

Non-executive directors

Sustainability committee

Chief executive

Chief financial officer

Non-executive directors

Governance committee

Chief financial officer

Head of legal

Senior segment and

functional leaders

Risk committee

Chief executive

Chief financial officer Non-executive directors

Executive management team

Chief executive General counsel C-suite managers

»	Ultimately responsible for
	sustainability agenda and plans
» Approves financial and business
	plans, including sustainability
	targets and budget
»	Help board discharge its
	responsibility on sustainability
»	Monitor progress on
	sustainability agenda and
	monitor sustainability-linked
	risks and opportunities
»	Define and implement
	sustainability strategy, KPIs
	and plans
»	Engage with stakeholders on
	sustainability-linked topics

Figure 1.6: Environmental performance indicators for portfolio companies

Environmental performance indicators for portfolio companies

		Resource use and
Theme	Climate	circular economy	Pollution	Water
Topic		Extended life
		cycles	Packaging	Air pollution
	Climate mitigation	of consumer	used	from delivery	Water consumption
	and adaption	products	in deliveries	vehicles	in data centers
Sector	Food Delivery, Payments				Food Delivery, Payments
	and Fintech, Etail, Edtech	Classifieds	Food Delivery	Food Delivery	and Fintech, Etail, Edtech
	and Classifieds	and Etail	and Etail	and Etail	and Classifieds
Key performance			Share		Engagement of DC
indicators	Scope of GHG emissions	Avoided GHG	of recycled	Share of EVs*	suppliers on water
	reporting	emissions	materials	for deliveries	management
		Avoided use
	Carbon intensity (based	of materials	Packaging
	on revenues)	and resources	intensity
	Share of renewables
	in electricity use
	Developed and set
	science-based targets

* Electric vehicles specifically, but also including other 'zero emissions vehicles', such as regular bicycles.

Sustainability	Risk
team	team
Global head	Global head
sustainability	Risk

Sustainability	Sustainability
teams	champions

Executive management at subsidiary level

Subsidiary

chief financial officers

Topical experts

»	Drive sustainability strategy for
	corporate or for subsidiary
»	Report on risk and
	opportunities to executive team
	and committees (sustainability
	and risk teams only)
»	Implement sustainability
	strategy at subsidiary level
»	Report to chief executive and
	work closely with corporate
	sustainability team

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Environmental sustainability programme

PROSUS 7

Environmental sustainability programme

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2 Governance continued

Board and executive level oversight

Climate and sustainability issues are considered at the highest organisational level via the social, ethics and sustainability committee and the risk committee that are subcommittees of the Naspers board. The board is informed about environmental sustainability-related risks and opportunities, in particular climate-related, at all scheduled social, ethics and sustainability committee meetings and risk committee meetings. Our social, ethics and sustainability committee meets at least twice per year to discuss environmental impact performance and progress against targets. The risk committee meets at least three times per year and discusses environmental impact performance. These committees report back to the board meeting.

Our board retains overall responsibility for the oversight of our environmental impact management. The most senior executives have environmental sustainability KPIs as part of their remuneration scorecard which means that part of our chief executive and chief financial officer's variable compensation is tied to achieving specific environmental KPIs. Details and progress are published annually in the remuneration report. The group chief executive and chief financial officer's KPIs are cascaded to all their direct reports, including the chief executive officers of the subsidiaries, putting environmental management firmly on the agenda of these companies.

Sustainability targets are embedded in the annual business- planning process where our subsidiaries finalise their strategies, targets and budgets for the year. In addition to climate KPIs, that are universal, we use materiality to determine other workstreams and objectives. For example, our Etail companies have targets on carbon accounting and GHG reduction, and also work on KPIs on sustainable packaging. The sustainability KPIs are reviewed and signed off at board level.

In addition, our Ventures team also, among other things, looks for investments in sustainable start-ups that show growth opportunities. Potential opportunities are being explored

in sustainability-native sectors and activities like agriculture technology, alternative proteins, and low-carbon transportation.

Further information regarding our overall corporate governance structure, policies and reporting can be found in the governance section of our website.

2.2 Management responsibilities

Responsibility for the day-to-day management of environmental impact and sustainability topics resides with the executive management team. Our dedicated global head of sustainability leads sustainability activities across the group and reports to the general counsel for the group, who in turn reports to the group's chief executive.

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Environmental sustainability programme

We have defined our principles and approach to environmental impact management at the corporate level. These are cascaded to the group's portfolio companies to adapt and refine their specific business models and operational contexts.

Sustainability professionals at each portfolio business are responsible for the implementation of the environment programmes of those businesses. This group of sustainability accelerators

is supported by the group's core sustainability team on topics ranging from the basics of measuring and reporting extended carbon footprints to developing environmental strategies and learning from each other. One unifying group objective is the implementation of our science-based targets and pathways, which each of our subsidiaries is required to define by FY30.

2.3 Portfolio engagement approach

We engage in the ESG performance of companies across our investment portfolio. If we acquire a controlling interest, then this leads to a higher level of accountability and influence. Our influence over subsidiaries, associates and investees varies with each investment, but the principles that guide us are consistent (figure 2.2).

Figure 2.2: Ownership and control

Naspers
and Prosus	Controlled	Non-controlled
corporate	investees	investees
Ownership and control	High	Low

Where we have majority of the shares in a company, we work closely to ensure its management embeds our principles and takes action on all material environmental issues, adapted to local factors such as business model, geography, available resources, and the complexity of its activities. For instance, on climate action, we are deeply involved with portfolio companies to support their progress on carbon accounting, measurement and management.

Where we have a minority interest, we build a relationship with the company and, where appropriate, seek to share our sustainability agenda and ESG principles (figure 2.3). We apply a nuanced approach to our engagement strategy with companies where we have a minority interest. Our engagement considers the position and role of the private sector in the larger operating context of the company, including the requirements of the local regulatory regimes and jurisdictions. This makes it important

to have a bespoke approach to engagement.

2 Governance continued

Figure 2.3: Ownership and engagement

Controlled company

Majority interest

Close collaboration

Annual targets

2.4 Building collaboration and learning across the group

We aim to enhance environmental awareness and build expertise across our group. We deploy a multi-pronged model

of engagement with our investment companies:

• Bilateral engagement - with each subsidiary, and on request with our associates and investees, we organise regular bilateral engagement to discuss progress on sustainability by, for instance, providing in-depth support on GHG emissions data calculation and audit or setting up governance structures for ESG topics. Our ESG data tool plays a critical role in steering this engagement.
• Sustainability Accelerator Network (SAN) - a quarterly forum for sustainability leaders and experts across our group to share insights and best practices on all relevant ESG and sustainability topics, from employee engagement
  to electrification of delivery fleets.
• Expert working groups - we run specific working groups on social impact, packaging and waste and electrification of delivery fleets.
  The packaging and waste meetings bring together sustainability and packaging experts from our Etail and Food Delivery segments. These collaborations have led to the publication of several reports.
  The working group on electrification of delivery fleets is set up to share best practices and solutions across the Food Delivery and Etail companies in our portfolio, helping to scale the transition to zero-emission vehicles.
• Sustainability workshops - tailored, often on-site, events with and for companies from our investment portfolio. These workshops aim to engage management and employees on the company's sustainability journey.

Non-controlled company

Minority interest

Active dialogue

Sharing of principles

2.5 Environmental advocacy, awareness and training

Regular training of our people to develop their skills and knowledge and help them stay up to date with fast-paced ESG developments is critical. The knowledge of our board members of ESG in general and specific topics like climate change-related risks and opportunities is increased through tailored training sessions and companywide educational tools. We have developed an e-learning module on ESG that is offered

to employees at all group companies, from corporate headquarters to investees.

The sustainability team at corporate headquarters conducts training for our subsidiaries on an ongoing basis, and on request for associates and investees, with the objective of empowering these companies to take control of their own environmental impact management, in particular climate action, using our central GHG accounting tool.

We enhance the quality of sustainability management across our group through the four engagement tools of bilateral support, groupwide sustainability network calls, expert working groups, and bespoke workshops, as outlined above.

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Environmental sustainability programme

Prosus Environmental sustainability Programme - Proof 5 - 11 July 2024

2 Governance continued

Prosus Environmental sustainability Programme - Proof 5 - 11 July 2024

3 Strategy and climate transition plan

2.6 External partnerships and commitments

Feedback from our stakeholders, as well as collaboration with experts, partnerships with industry bodies, and regular exchanges with peers strengthen our group's approach, knowledge, and ability to be more effective in managing our environmental impact. We receive feedback from a diverse group of stakeholders through multiple channels such

as bilateral engagements with investors, larger forums such as our annual general meetings (AGMs), industry peers and sustainability experts through roundtables and other stakeholder engagement sessions.

Identifying scalable technologies, partnerships and strategies to reduce our environmental impact and improve performance is fundamental to ensuring our own low-carbon and low-impact growth. Below is an overview of the partnerships we have

at group level to unlock opportunities connected with the net-zero transition. The work that we do with our partners may indirectly help to inform policy and policy-makers.

» United Nations (UN) Global Compact - we are

members of the world's largest corporate sustainability

initiative, which helps us to align our operations and

strategies with its Ten Principlesin the areas of human

rights, labour, environment, and anti-corruption.

»PCAF(Partnership for Carbon Accounting Financials)

- we are part of a highly active network collaboration

between financial institutions worldwide to enable

harmonised assessments and disclosures of GHG

emissions financed by loans and investments.

3.1 Our strategy

For our group, taking climate action means two things. Firstly,

to shape our science-based reduction pathway for our corporate operations and investment portfolio (explained in this chapter). Secondly, to gain insights on climate-related risks and opportunities which we use in our decisions, whether for day-today operations and or new investments (section 4 sets out this risk and opportunity assessment and management).

We believe that a commercial strategy anchored in the global climate agenda will contribute to reducing systemic risk, enhancing human capital, and securing our societal licence to operate. Taking action on climate is a critical agenda for all companies in our portfolio, in particular our subsidiaries who are required to develop a science-based target by FY30. Below

we have laid out our climate transition plan, which ranges from establishing the boundaries for carbon accounting to setting multi-yearscience-based reduction targets.

Figure 3.1: Typical timeline for developing science-based targets

Process to setting science-based targets

Applying the three-step process for environmental impact management (see above figure 1.5), we work with our portfolio companies to help them to move from the first steps of carbon accounting to a science-based emission reduction target. The typical timeline for developing science-based targets is illustrated below and is dependent on the complexity and maturity of the business (figure 3.1).

»	The Climate Pledge- we have committed to reaching
	net-zero carbon emissions by 2040, 10 years ahead of
	the goal set out in the United Nations' Paris Agreement.
»	Board Now- we are part of a coalition of companies
	committed to sustainable air travel by addressing the
	significant and growing environmental impact of

Start GHG	Add material	Full GHG	Set science-
emissions	scope 3
footprint	based target
accounting	emissions

2 years

1-2 years

2-3 years

1 year

aviation fuels.

»Plastic Pacts- we have joined as supporters of the

IndianandSouth African Plastic Pacts, which are

influential national initiatives where users of packaging

collaborate to keep packaging in the economy and out

of the environment.

Onboarding into portfolio

1. We begin by mapping the environmental impact of a company's operations and extended value chain. Each portfolio company is required to calculate scope 1, scope 2, and scope 3 GHG emissions via our group carbon data reporting tool.
2. We help companies in our portfolio employ best practice and science-based frameworks to develop net-zero pathways spanning multi-year targets.
3. In collaboration with our Ventures team and our businesses, we are working to identify scalable technologies and partnerships that support individual decarbonisation pathways. Our Ventures arm identifies investment opportunities for building our future core segments and has built a portfolio of sustainable business models underlining the group's commitment to scaling sustainable innovations (see also below section 4.7 on climate-related opportunities).

	PROSUS	PROSUS
10	11
Environmental sustainability programme	Environmental sustainability programme

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3 Strategy and climate transition plan continued

3 Strategy and climate transition plan continued

3.2 Targets and metrics

With climate action a requirement for all controlled portfolio companies, climate-related KPIs are always included in the annual process to define budgets and targets. The costs to deliver on these targets are borne by the portfolio companies themselves. We ask each portfolio company to design its annual budget to include the necessary investments in carbon accounting, energy-reduction measures, and technology

to decarbonise business growth from GHG emissions. These annual budgets are planned, budgeted, and signed off by our board and translated into KPIs for the companies' leadership, whose performance towards meeting them is tracked throughout the year.

Decarbonising our corporate operations

Decarbonising our headquarters operations, with the aim of eliminating all scope 1 and 2 emissions by 2028, will be realised by:

• Removing all company cars or switching them to electric vehicles. This was achieved during FY23 and we are committed to ensure scope 1 emissions remain at zero
• Where possible, installing or procuring renewable energy for our offices. The electricity used for Prosus' headquarters in Amsterdam and our office in London is already 100% renewable.

When renewable energy is not available, we invest in renewable- energy credits (RECs), where possible distributed RECs or D-RECs,

Figure 3.2: Our science-based climate targets

Corporate emissions
					Scope 1 + scope 2
	-100%
		emissions by FY28
	-30%		Air business travel
					emissions by FY30

Portfolio emissions

Majority

Majority* of our portfolio companies set a science- based reduction target by FY30

Science-based reduction targets

After establishing the full GHG footprint of a company, the next phase consists of defining a baseline and articulating company-specific reduction roadmaps, supported by multi-year reduction targets.

We have developed a real-world climate transition plan that is both relevant and practical in the context of our diversified holdings and group structure. For our target setting, we have applied the Science Based Targets initiative (SBTi) guidance for financial institutions and investors, which best matches our diverse and dynamic portfolio of investments (see figure 3.2) and enables alignment with the Paris Agreement to keep global warming

to 1.5 degrees above preindustrial levels:

• Operational emissions: We commit to an absolute reduction in our scope 1 and 2 GHG emissions of 100% by FY28 from the FY20 base year. Upon realising this reduction, we commit to maintaining it for the future
• Supply chain emissions: We commit to reducing absolute scope 3 GHG emissions from air business travel by 30% by FY30 from the FY20 base year
• Portfolio companies' emissions: We commit to 50% of our eligible investments by invested capital setting SBTi-validated targets by FY30. Our portfolio target covers 90% of our total investment and lending activities by invested capital as of FY20.

The targets we have developed shape the absolute reduction pathway of our corporate emissions (scope 1, 2 and material scope 3) as well as multi-year engagement of our investment portfolio to put their businesses on a net-zero pathway. We will ensure that our targets remain aligned with the latest scientific insights to address global warming.

to reduce emissions from our electricity use. We have established the framework for D-RECs in FY23, which we see as a meaningful way to contribute to the growth of renewable-energy capacity, while providing rural and remote communities with significant additional benefits, such as access to more reliable clean energy.

Our target is to reduce air business travel, a significant source of GHG emissions, by 30% by FY30 from our FY20 base year. We will report on our progress towards this target. In addition, we have engaged in a multi-year offtake agreement to purchase sustainable aviation fuel (SAF) credits from SkyNRG. Starting

in 2027, we are committed to purchasing 95Mt of SAF credits for five consecutive years. While contributing to an absolute reduction of our business travel emissions, the investments in these credits present the only feasible short-term solution to structurally decarbonise the aviation industry.

Portfolio coverage target

Our portfolio coverage target is aimed at realising the majority of our portfolio, measured by invested capital, to have set science-based targets by FY30.

We will deliver on our FY30 portfolio coverage target

by engaging our subsidiaries, where we have the greatest level of influence and strong established collaborative relationship. Our strategy is to guide and support at least one subsidiary per year to complete the target-setting journey and submit it to SBTi for verification, with the objective to ensure that 100% of majority- owned companies set a target by FY30. The anticipated impact of our multi-year commitment is substantial: by 2030 we expect to help a group of companies with several billion turnover

in aggregate advance along their decarbonisation pathways.

The implementation of our climate transition plan, and its results, are monitored by the sustainability committee (a committee of the board) whose meetings are attended by the group's chief executive and chief financial officer.

3.3 Climate transition engagement plan

We ensure that our portfolio companies remove GHG emissions from their operations and supply chains by requiring them

to apply rigorous carbon accounting and develop their science- based reduction pathways. For each company and segment, decarbonisation brings different challenges, magnified by the specific local contexts of the countries in which the portfolio company operates. For example, the Payments and Fintech company PayU, with its headquarters in India and most of its emissions coming from business travel and purchased goods and services, has different challenges from Brazilian Food Delivery company iFood, which relies on thousands of restaurants and drivers to deliver food to its customers. We support the entire journey for each portfolio company from footprint assurance and reporting to developing the multi-year pathway to reduce emissions and ultimately achieve net zero.

aaaaFor this to work, we can continue to build on a large number of reduction initiatives already taken by our portfolio companies, fuelled by the high ambition level of their employees. For instance, our Etail companies are installing large numbers of solar panels at their distribution centres, our Food Delivery companies are piloting strategies for the electrification of their delivery fleets quickly, and our Payments and Fintech companies are purchasing renewable-energy certificates.

To increase the number of portfolio companies with science- based climate targets, our tools for engagement are:

• A cross-segment working group for all portfolio companies that have started on their journeys to set science-based targets
• Bespoke bilateral projects to guide and support individual portfolio companies in their target-setting process
• Centrally managed carbon and ESG data management tool.

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4 Risk management and scenario analysis

3.4 Fair and just transitions

Most of our businesses are located in the global South, often operating in communities that are most vulnerable to the effects of climate change. This means the need to ensure the climate transition is just and fair is high on our agenda. While countries of the industrialised North are overwhelmingly responsible for climate change, its impacts are felt most strongly in parts of the world with limited resources to adapt to its effects. For example, a company seeking to decarbonise its fleet of delivery vehicles in Germany benefits from lower costs of capital and more enabling policies, incentives and infrastructure than a comparable business in Brazil, India or South Africa.

This reality is core to any concept of climate justice - and

is recognised in article 2.2 of the Paris Agreement by an explicit

Supplier code of conduct

Our board has set out our guiding business values and ethical stance in our code of business ethics and conduct. This code sets out what we expect from all our employees, stakeholders, and the companies we invest in. Building on this code, our supplier code of conduct defines the ethical principles and professional behaviours we expect our suppliers to abide by if they wish

to remain our business partners. Our supplier code of conduct expects our suppliers to live up to our standards when it comes to social and environmental matters by, for example, ensuring alignment on upholding human rights and requiring action

on important environmental themes like climate. The supplier code governs our commercial engagements with suppliers and is made part of our contractual relationship with them. We monitor and track whether the code is included in all our new contracts.

Our business is driven by our culture in which people are empowered to promptly respond to business opportunities while keeping risks within defined acceptable levels. Management and the board are accountable for the choices and decisions

we make, how we execute these, and for delivering value in its broadest definition - within the parameters of the risk profile the board deems acceptable. We proactively manage broader sustainability risks from both an investor and an operator perspective. We expect our businesses to apply a methodical approach to analyse risk and opportunities, while ensuring sustainability aspects are included.

Climate-related risks, like natural disasters, and extreme weather events result from society's failure to mitigate climate change. These risks are among the world's top 10 risks, according to the Global Risks Report from the World Economic Forum.

• Our focus on 'pure software' opportunities where digital services are transforming the environmental footprint
  of traditional business sectors rooted in the physical economy
• We invest in companies that develop digital technology, are asset light, and have low-carbon business models. Our investment strategy restricts us from investing in carbon-intense assets and activities, meaning that we are limited exposed to climate-related scrutiny, regulation, and stakeholder engagement.

However, our exposure to climate-related hazards, which potentially can create physical risks to our business, is high due to the geographical location of our portfolio companies.

Our ability to create sustainable value is underpinned

by a comprehensive and robust risk management framework. We apply scenario analysis to determine our risk exposures. See section 4.4 below for the applied scenario analysis.

commitment to 'the principle of common but differentiated responsibilities and respective capabilities'. Deploying technologies to curb emissions is often more difficult, disruptive and expensive in those economies that are least responsible for global warming.

Climate goals are global, but operating environments and the costs of transition are local, influenced by the available energy mix, economic structures, and government commitments, policies and regulations. Each company's operating context is critical to its decarbonisation pathway. For example, Brazil has set a goal

of achieving net zero by 2050, while India has set a date

of 2070 to achieve the same target. The available incentives for companies, and therefore the cost of funding their transition, vary accordingly: our subsidiary iFood has access to benefits from Brazil's enabling ecosystem that are unavailable to its peer Swiggy, which is operating in India.

Our commitment to a just and fair transition underpins our

Supplier screening

Before we engage with a supplier organisation, we screen it for historical conduct on elements including financial conduct, incidents related to human rights, and environmental management. Only when the results of this screening are satisfactory, and any red flags sufficiently addressed, can

we onboard or continue to work with the supplier. We pride ourselves on setting up the necessary checks and balances to ensure that all our vendors are screened.

Supplier engagement

Given the need for decarbonisation across all sectors and value chains, and the importance we attach to climate action for our group, we also expect our suppliers to measure, report and reduce their GHG emissions. In particular, we expect them to:

›	Measure and disclose their GHG emissions associated with the
›	services and products provided to us
Set GHG reduction targets, preferably aligned with science-

4.1 Assessing climate-related risks

Several of our group companies operate in high-growth markets that are more vulnerable to climate-related risks due to lower levels of economic resilience than more mature markets. Despite being an asset-light,low-carbon-intense group of businesses, we do however have emissions resulting from our operation, and our business can be impacted by climate change. The ultimate objective of our approach to climate-related risks is to empower our colleagues and our businesses to enhance the resilience of our investment portfolio companies and consequently, the group.

For the two climate-related risk categories: physical and transition risks, our core business model of investing in and operating digital platforms structurally lends to a low climate-related risk profile:

Figure 4.1: Classification of climate-related physical risks

4.2 Climate-related physical risks

Exposure to physical risks that arise from changes in climate, such as extreme precipitation or wildfires is geolocation-based. Vulnerability to climate change is a function of the sensitivity

of the business at risk, the potential impact a climate hazard can have, as well as the companies' inherent adaptive capacity

Using climate scenarios against 2030 and 2050 timelines, we have assessed the exposure, vulnerability and potential financial impacts of our subsidiaries to six hazards such

as flooding and high temperatures. Figure 4.1 shows the result of our assessment. The businesses of Edtech, Payments and Fintech, and Classifieds are digital and use very limited physical assets, which results in insignificant impact from climate change. More vulnerable to climate change are the businesses that rely on more elaborate operations, for the delivery of food, groceries and other goods by our Food Delivery and Etail companies.

approach to creating sustainable value. We believe that

a commercial strategy anchored in the climate agenda will contribute to reducing systemic risk, enhancing human capital, and securing our societal licence to operate. Our governance and management framework is in place and ready to support all our businesses, operations and investee companies to meet global climate targets aligned with the Paris Agreement goal of net-zero emissions by 2050.

3.5 Value-chain engagement

Governance and performance management related to the purchase of external goods and services is an important addition to our environmental impact management. By setting environmental impact and disclosure requirements for our suppliers and business partners, we use our procurement influence to drive further climate action in our value chain.

based frameworks.

The results of our supplier engagement are disclosed in our annual environmental impact report. We encourage all our portfolio companies, in particular those with a large supply chain, to develop and implement supply chain engagement programmes. We look to build a robust method to include primary data from suppliers in the calculations of GHG emissions of our value chain.

Our supplier base consists of predominantly professional service providers (consultants and auditors) and fees for insurances and subscriptions. The small number of products we procure are

IT hardware, office rental and office supplies. As an investor, we do not have any business-critical or significant suppliers, but we work with a range of trusted business partners. The absence of critical suppliers gives us the flexibility to work with our suppliers

on environmental disclosures and action, and over time include more stringent ESG criteria in our supplier selection process.

Climate-related physical risks

				For six climate hazards
			(floods, precipitation, temperature, fire, heat and drought):
Sector	Subsidiaries	Key geography	Exposure*	Vulnerability	Estimated financial impact**
Classifieds	OLX	Eastern Europe	High - very high	Low	Nil
Food Delivery	iFood	Brazil	High - very high	Medium	Less than 1% of revenues
Etail	eMAG	Eastern Europe	High - very high	Medium	Less than 1% of revenues
Payments and Fintech	PayU	India	High - very high	Low	Nil
Edtech	GoodHabitz	Western Europe	High - very high	Low	Nil
Etail	Takealot	South Africa	High - very high	Medium	Less than 1% of revenues
Etail	Media24 Logistics***	South Africa	High - very high	Medium	Less than 1% of revenues

• Exposure is a function of the location of assets and operations, as predicted by the climate models deployed.
• Financial impact is calculated as aggregated estimated revenue loss for three hazards floods, heat and fire. Please note it is highly unlikely these hazards all occur at the same time across all locations of operations.
• The scope of the climate-related risk assessment for Media24 was limited to ecommerce business unit Media24 Logistics.

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In the businesses where vulnerability to climate change

is medium, our analysis concludes that the potential impact

on business operations remains low. This is due to the following mitigations:

1. Diversified portfolio of businesses
2. Broad and diverse supplier and customers base
3. Agility to be able to adjust and adapt operations.

understand climate-related risks, with a focus on equipping our portfolio companies to be able to take specific operational actions when warranted by assessments of risks and potential impacts. Our FY24 assessment will form the basis of an ongoing engagement with our subsidiaries to further understand potential risks and impacts and how to grow resilience as well as adaptive capacity can be built into the fabric of the operations

Figure 4.3: Carbon intensity of selected industry sectors

2 000

1 500

For example, Food Delivery company iFood in Brazil: With thousands of restaurants and clients across the country, there is no concentration of operations or business. This creates

a natural mitigant to local impacts of climate hazards. Equally, the resilience is high; in the past iFood has been able to adjust routes for delivery, to circumvent flooded areas.

Emerging category

We recognise that climate-related risks, in particular physical risks, are an emerging risk category. The fast pace of changes to our climate, and to the efforts to tackle climate change, warrant continued investment in our internal capacity to gauge and

4.3 Climate-related transition risks

Transition risks are related to the transition to a lower-carbon economy, which, according to the Task Force on Climate-related Financial Disclosures (TCFD), may entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements related to climate change. Depending on the nature, speed, and focus of these changes, transition risks may pose varying levels of financial and reputational risk

to organisations. Our analysis has surfaced that transition risks are low for our portfolio companies, as shown in figure 4.2.

1 000

500

0

Figure 4.2: Climate-related transition risk assessment

Climate-related transition risks

				Risks related to changes in:
Sector	Subsidiaries	Key geography	Policy	Legal	Technology	Market
Classifieds	OLX	Eastern Europe	Low	Low	Low	Low
Food Delivery	iFood	Brazil	Low	Low	Low	Low
Etail	eMAG	Eastern Europe	Low-medium	Low	Low	Low
Payments and Fintech	PayU	India	Low	Low	Low	Low
Edtech	GoodHabitz	Western Europe	Low	Low	Low	Low
Etail	Takealot	South Africa	Low-medium	Low	Low	Low

4.4 Scenario analysis

Scenario analysis is a useful tool to map value at risk consequent to climate change. We partnered with a leading third-party expert to perform a detailed climate risk for our subsidiaries and corporate activities, assessing the exposure and vulnerability of individual subsidiaries and calculating potential financial impacts. We disclose the results in our annual reports, TCFD reports and our submission of the CDP climate questionnaire.

Figure 4.4: Key elements of climate-related risk assessment

Element		Description
Scenarios physical risks		IPCC RCP 2.6 (best-case scenario) and IPCC RCP 8.5 (worst-case scenario)

Etail

Media24 Logistics*

South Africa

Low-medium Low

Low

Low

• The scope of the climate related risk assessment for Media24 was limited to Ecommerce business unit Media24 Logistics.

Description of scenarios

RCP 2.6 scenario overview: Pathway to limit warming to below 2 degrees Celsius above preindustrial levels by the end of the 21st century.

Most of our digital and software-driven subsidiaries have a low direct carbon footprint, which results in low risks of financial impact from regulations that levy costs for carbon emissions (see also figure 4.3). Equally, the strong focus we have

on decarbonisation (see our climate transition plan above) means that regulatory transitions risks, like carbon pricing, are further reduced. Our businesses do not consume primary raw materials nor are they exposed in other ways to carbon-intense sectors, which are exposed to transition risks like taxes and technology shifts. Some of the products procured and sold by our Etail companies, such as electronics, could be impacted by carbon taxes, but these influences are likely to be passed on.

There is a potential for reputational risks to emerge on the back of a larger environmental impact of the Food Delivery and Etail segments, as they use vehicles for transportation and packaging, but this risk is mitigated with a set of actions and targets,

as outlined in section 4.6.

• Physical risks: Physical risk implications are relatively low compared to other scenarios and there is a greater chance of avoiding some of the most severe climate change impacts.
• Transition risks: Transition risk implications are high due to ambitious mitigation efforts. Some sectors may face challenges in adapting to new regulations and market shifts.

RCP 8.5 scenario overview: High emissions scenario leading to global warming ranging from 3.2 to 5.4 degrees Celsius above preindustrial levels by the end of the century.

RCP 8.5 is used by the IPCC as a 'very high baseline emission scenario' representing the 90th percentile of a no-policy baseline scenario. RCP 8.5 does not represent a most likely 'business as usual' outcome.

• Physical risks: Physical risks are most severe compared to other scenarios. It assumes a continuation of current emission trends without significant mitigation efforts, leading to global warming of more than 4 degrees Celsius.
• Transition risks: Transition risk implications are lower compared to other scenarios. This scenario assumes late adoption of mitigation efforts.

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