Transitional risks

Current regulations

Logista analyses the impact of carbon taxes on fossil fuels. Although Logista sub-contracts vehicles for its transport activity, incorporating them into its activity, any carbon tax that is applied to fossil fuels will affect our operational costs through its impact on the tariffs of transport providers subcontracted by Logista.

Nonetheless, this type of risk has been identified as not relevant, with a “moderate probability” and a “low impact”.

New regulations

Europe's strategy to be the leading carbon neutral economy by 2050, hence exceeding the initial commitment made in the Paris Agreement, will require new regulations affecting all business sub-sectors and companies. This strategy includes among others objectives decarbonising the road transport sector.

This will also be complemented by increasingly greater restrictions on vehicles' access to cities. It is envisaged that these restrictions, until now isolated and supported by local regulations, may become widespread in all cities, supported by a common regulatory framework.

Logista may be indirectly affected by this risk, since its transport operations are sub-contracted, and account for more than 90% of all Logista's emissions.

This type of risk has been identified as relevant, with a probable probability and a moderate impact.

Technology

New technology designed to reduce carbon emissions from transport is relevant to Logista, since existing and future regulations are pushing in this direction, and 90% of the Company's emissions are generated by its transport division's operations.

This type of risk has been identified as "relevant", with a moderate "probability" and a "moderate impact".

Legal

Legal risks have been identified as "not relevant" due to the nature of our business operations.

Moreover, Logista considers that there is "very little probability" of this risk materialising and the impact if it did would be "low".

Market

Logista distributes different types of products, and a change in consumer behaviour may affect the business in question.

This risk has been identified as not relevant to Logista.

Reputation

This risk has been identified as not relevant, as our business model helps to minimise the main climate-related impact.

Physical risks

Acute physical

Acute physical risks mean those that are caused by climate events, including the greatest severity of extreme weather events such as snowstorms, storms and floods. These types of events are possible, although their probability is "low".

Floods or snowstorms could cause an interruption to distribution operations at our warehouses.

However, the number and frequency of these events is very low. When these climate events have occurred, Logista's rapid and effective response in the materialisation of this risk has resulted in a low impact. However, the fact that a service interruption may occur means that the impact of this risk should be considered "significant".

Chronic physical

Temperature and rainfall patterns may change, affecting animal species such as Lasioderma serricorne, commonly known as the tobacco beetle. Logista stores and distributes the final tobacco product, so the probability and the impact of any plague is much lower than at the manufacturer's premises. This risk has therefore also been identified as not relevant.

Opportunities

Efficiency of resources

Although Logista outsources its transport operations, this process is fully integrated into its business operations and taken into account when calculating the Company's environmental impact. The group could reduce operating costs by using more efficient means of transport, which could also be key to allowing the group to meet its carbon emissions reduction targets.

In this regard, these savings could be achieved by using vehicles that are financed and/or partially subsidised, or by increasing Logista's market share in cities with restricted access as a consequence of the definition of low emission zones.

Logista is also already developing its transport decarbonisation strategy to include measures such as transport by rail or switching to vehicles with low carbon technology.

Energy resources

Cost reductions in the very long term, resulting from falling production costs of electrical energy from renewable sources. 100% of the electricity consumed at all of our warehouses in our main markets comes from renewable sources, as well as in the main warehouses in Poland.

Noise and light pollution

Noise during daytime and night-time hours is measured at each of our facilities as per the frequency stipulated by environmental regulations. If the measurements show values close to the legal limit, there are action plans in place to correct the noise level.

Light pollution is not significant, we have made no specific arrangements for this aspect.

Measures adopted to adapt to the consequences of climate change

The current risk management system provides for the analysis and definition of action plans to address the consequences that climate change may have for the Company in the short and medium term.

Measures adopted to reduce carbon emissions

We reduce emissions by continually optimising routes and renewing transport fleet agreements, including efficiency criteria, promoting a gradual increase in the fleet of vehicles that operate with less polluting fuels.

In particular, we set ourselves the target of increasing the number of low-emission vehicles managed by our transport division by 15% in 3 years (2021-2023).

This year, Logista Freight has also strengthened its combined rail/road intermodal operations, enabling it to reduce CO2 emissions for long-distance goods transport, in line with our environmental strategy.

100% of the electricity consumed at all of our warehouses in our main markets (Spain, Italy, France and Portugal) and our main warehouses in Poland, comes from renewable sources.

In addition, measures taken to improve energy eficiency and increase the use of renewable forms of energy, also foster the reduction of greenhouse gas emissions.

Awards

Logista was once again recognised in 2022 as one of the global leaders in combating climate change, having been included in CDP's prestigious "A list" on the basis of the Company's 2021 climate report.

We are the only European distributor, and one of the only two global distributors, to be included in the "A List" for the sixth year running. Only three Spanish companies, and 15 worldwide, have managed to maintain this distinction for six consecutive years.

Logista has also been recognised as a Supplier Engagement Leader again by CDP in recognition of its commitment to our suppliers and efforts to reduce emissions across the supply chain.

Every year, Logista sends CDP information about the Company's management of climate change, both at corporate level and at individual business level. This information can be viewed on CDP's website.

Emission reduction targets

We have developed our own sustainability index to identify opportunities for reducing emissions, based on the Science-Based Target (SBT) initiative.

After analysing the existing methodologies, we have taken the view that the GEVA method (Greenhouse gas emissions per value-added unit) is the most suitable method for our operations.

We have therefore reviewed this methodology and adapted it to include our transport operations within its reduction targets, since it is the most pertinent in terms of emissions. The proposed unit of reference therefore includes the distances covered.

This indicator shows the overall performance of Logista's emissions because it includes scope 1 (that includes transport activities with operational control), scope 2 and scope 3 (that include all emissions related to transport activities without operational control: upstream and downstream emissions) emissions, as well as emissions from franchise transport.

We have considered CDP recommendations concerning year-on-year reduction and have set an annual emissions reduction target of 2.1%. We include the majority of scope 3 emissions in this target, exceeding the percentage recommended by SBTi, as 95% of Logista's scope 3 emissions are included in this target. The result is an overall target that accounts for and includes 95.5% of all Logista's emissions (considering scopes 1+2+3).

Renewable energy consumption target

Logista is firmly committed to renewable energy.

100% of the electricity consumed at all of our warehouses in our main markets (Spain, Italy, France and Portugal) and our main warehouses in Poland, comes from renewable sources.

In the 2021 financial year, we consumed 51,438 MWh, of which 51,067 MWh corresponded to the purchase of renewable energy. In the 2022 financial year, our electricity consumption fell to 48,740 MWh, with the purchase of renewable energy accounting for 48,611 MWh. This renewable energy consumption entails an estimated saving of 13,698 metric tonnes of CO2e compared with conventional energy consumption, taking into account the different emissions factors in each country.

A solar self-consumption renewable energy facility was also installed in Leganés in 2022, enhancing the Company's energy efficiency and reducing its consumption and operating costs. We are currently working on rolling out this initiative to more facilities.

Sustainable use of resources

We are fully aware of how important the eficient use of resources is. As such, we compile and analyse information about water consumption, waste and about the materials that are most relevant for the group.

The main sources of energy consumption in the Company are electricity, natural gas, diesel and fuel oil.

Logista is part of the national mobility committee set up by Spain's General Traffic Directorate (DGT) and works on the "Autonomous Ready" project driven by the DGT and Barcelona city hall.

This project aims to lay the foundations for the testing and approval of autonomous vehicles and to define a regulatory framework that guarantees safe and sustainable urban mobility.

Meanwhile, other measures introduced by Logista (flexitime, compressed hours, remote working) are in line with the needs of cities in relation to the staggering of employee travel around times of peak traffic and congestion.

Wastewater discharge is not considered a material aspect at Logista due to the fact that the group's operations produce sanitary wastewater and is discharged into municipal water systems.

The best practices introduced to reduce water consumption include the installation of water-saving devices, monitoring consumption, signage and campaigns to raise awareness and certification of all the group's new facilities under the LEED/BREEAM efficiency standards.

In the 2022 financial year, water accounted for 0.006% of Logista's environmental impact, because it is only used for sanitary purposes (0.007% in 2021).

During 2022, 98,331 * m3 of the supply network was consumed, in accordance with local limits. In 2021, water consumption from the supply network stood at 114,501 m3 and was in line with the established local limits.

* For the months in which no current data is available, a calculation has been made based on estimated forecasts and/or data from the previous year.