Sustainability Report (dfi sustainability disclosure 2025)

This Sustainability Disclosure outlines the approach of the DFI Retail Group ('the Group' or 'DFI')

to managing sustainability-related risks and opportunities across our operations and value chain. The report covers the financial year ended 31 December 2025. The consolidated sustainability information applies to the same reporting entity as

our consolidated financial statements for subsidiaries, but excludes associates, joint ventures and franchisees unless otherwise stated. The disclosure aims to provide investors and stakeholders with decision-useful information on our governance, strategy,

risk management, and the metrics and targets associated with each of our sustainability pillars.

Our reporting approach is developed with reference to leading international frameworks and standards, including the Task Force on Climate-related Financial Disclosures (TCFD) recommendations

and the IFRS Sustainability Disclosure Standards

(IFRS S1 and IFRS S2) issued by the International

Sustainability Standards Board (ISSB). These frameworks guide the structure and content of our disclosures to ensure transparency, consistency and comparability with global best practices. Where relevant, we also reference the Global Reporting Initiative (GRI) Standards and the SASB Standards for the food and multiline retail sectors to provide industry-specific metrics.

This report builds on the foundation shared in our previous Sustainability Reports and reflects our continued progress in integrating sustainability into our business strategy and financial planning.

It includes updates on our double materiality assessment, climate scenario analysis, and transition planning, as well as enhanced disclosures on governance and risk management processes.

Cross-references to sections of the Annual Report are provided to enable stakeholders to relate our sustainability disclosures to our broader financial and business reporting.

32 Overview

34 Group Chief Legal, Sustainability and Corporate Affairs Officer's Review

36 Performance Highlights

37 External Engagement through Memberships

38 Major Awards and Recognition

40 Sustainability Governance

40 Our Approach to Sustainability Governance

42 Sustainability Strategy

42 Our Sustainability Framework

42 Double Materiality Assessment

44 Our Material Sustainability Issues

47 Our Strategic Response

49 Climate-related Risk and Opportunity Disclosures

52 Climate Transition Plan

53 Sustainability Risk and Opportunity Management

53 Integration of Sustainability into Overall Risk Management

53 Risk Management Process for Sustainability Risks and Opportunities

54 People

55 Customer Value Creation

57 Community Giveback

59 Team Member Success

1. Ethical Sourcing and Supply Chain Management

2. Metrics and Targets

68 Products

69 Sustainable Choices

72 Sustainable Packaging

1. Product Quality and Safety

2. Metrics and Targets

76 Planet

77 Carbon Footprint Reduction

80 Waste Recycling and Reduction

81 Biodiversity and Water Conservation

83 Metrics and Targets

84 Supporting Information

84 Basis of Preparation and Presentation

88 Independent Assurance Statement

91 Content Index - TCFD

32 DFI Retail Group Holdings Limited Annual Report 2025

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At DFI, our purpose is to sustainably serve Asia for generations with everyday moments. We are committed to transforming Asia's retail landscape through sustainable choices that benefit both people and the planet. Our sustainability strategy is anchored in three strategic pillars: People, Products, and Planet, with Governance as the cornerstone, ensuring robust leadership and oversight.

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33

Guided by our purpose to 'Sustainably Serve Asia for Generations with Everyday Moments', 2025 marked another year of steady progress in delivering on our sustainability ambitions. During

the year, we continued to strengthen governance, embed sustainability into our business strategy, and deliver measurable progress across our three pillars - People, Products, and Planet.

Governance, strategy and risk management

Our Board and Sustainability Committee maintain strong oversight of our progress and priorities.

We uphold our key principles of being 'focused, balanced and collaborative' in delivering our strategy, concentrating our efforts on our most material issues and working with our team members, suppliers, partners, and communities.

This year, we streamlined our sustainability disclosure, and enhanced our double materiality assessment, climate scenario analysis, and transition plan, further improving transparency and alignment

with IFRS S1 and S2.

People

We continue to create value for our customers through a wide range of health, wellness and nutritional products to help them live healthier lives. Across banners, our community giveback programmes supported over 1.25 million beneficiaries, empowering lives through health, wellness and community initiatives. Our new platform for learning and development (DFILEARN) and structured leadership development

programmes strengthened capability building for our team members. We maintained 100% approved ethical audits for Own Brand factories

in high-risk countries, reinforcing our commitment to human rights in our supply chain.

Products

Our Own Brand strategy continued to make sustainable choices accessible and affordable. We expanded our offerings with sustainability certifications, such as Rainforest Alliance-certified

coffee and responsibly sourced seafood. We launched Own Brand Low-Carbon Rice and 7-Eleven products that embraced circularity through our 'Grounds

to Green' programme. By the end of 2025, we successfully transitioned 83% of our Own Brand product plastic packaging components to be reusable, recyclable, or compostable.

Planet

We are proud of our decarbonisation achievements across our operations and supply chains. As of 2025, we achieved a 22% reduction in Scope 1 and 2 emissions compared to our 2021 baseline, marking clear progress towards our 50% reduction target

by 2030. This reflects the cumulative impact

of our initiatives, ranging from investments in refrigeration upgrades to energy-efficiency projects across our stores.

Our focus on four key commodities in our Scope 3

portfolio is also yielding results. We launched 380 tonnes of Low-Carbon Rice, surpassing our 200-tonne target and demonstrating that

sustainable options can be affordable and scalable by advancing collaboration across value chains.

We achieved 100% certified deforestation-free sourcing for coffee beans used by 7CAFÉ in Hong Kong, Macau and Singapore, as well as IKEA.

We initiated a systematic supplier engagement programme and launched a Sustainability Innovation Challenge to support decarbonisation for the beef and dairy industries.

Waste diversion improved to 66% from 61% across the Group, driven by enhanced recycling and reduction practices across our distribution centres and stores, and the expansion of food donation partnerships.

Recognition and collaboration

Our efforts have been recognised through multiple accolades and most importantly by our customers and shareholders. We continue to invest in industry

collaboration by participating in the Consumer Goods Forum (CGF)'s Climate Transition and Plastic Waste Coalitions, and the World Economic Forum First Movers Coalition for Food, reinforcing our belief that systemic transformation can only be delivered through collective action.

Looking ahead

As we look ahead to 2026 and beyond, we remain focused on delivering our plans across our priorities within the People, Products and Planet pillars.

These include continuing to embed sustainability into learning and governance frameworks across the Group, scaling our low-carbon rice programme, amplifying supplier engagement and innovation across key commodities, accelerating energy-efficiency and renewable energy procurement

in priority markets, and progressing on waste diversion programmes. These initiatives will continue to position the Group as 'Customer First, People Led, Shareholder Driven' to support our long-term success.

Erica Chan

Group Chief Legal, Sustainability and Corporate Affairs Officer

3 March 2026

Our Commitment 2025 Progress

Sustainability Month 2025, themed 'Sustainability - Today, Tomorrow, Together', engaged 3,000+ team members across 32 activities to bring ambitions to life

Our sustainability efforts are strengthened through active participation in global and local initiatives, coalitions and task forces, and through adherence to recognised standards.

• The Consumer Goods Forum (CGF) - Towards Net Zero Coalition, Plastic Waste Coalition

• World Economic Forum - First Movers Coalition for Food

• Business Environment Council in Hong Kong -Climate Change Business Forum Advisory Group, Circular Economy Advisory Group

• Hong Kong General Chamber of Commerce -Environment & Sustainability Committee

• Hong Kong Retail Management Association -Sustainability Task Force

• Food Wise Hong Kong Steering Committee -Member

• WWF-Hong Kong - Sustainable Seafood Business Membership Programme

• amfori BSCI (Business Social Compliance Initiative) - Member

Across our markets, we have received more than 60 awards reflecting our achievements in

the People, Products, and Planet pillars. A selection of our key awards is highlighted here.

People

1. Retail Asia Awards 2025: ESG Initiative of the Year Mannings Hong Kong's 'Safe Disposal of Unused Medicines' Programme

2. People's Association Community Spirit Awards 2025: Merit Award

   Cold Storage, Giant, Guardian, and 7-Eleven's

   community giveback programmes

3. Business Awards of Macau 2025:

   Corporate Social Responsibility Award Mannings' PharmaCare Programme provides health and wellbeing benefits for team members and their family members

4. Company of Good, National Volunteer & Philanthropy Centre (NVPC): 1 Heart

   DFI community contributions and commitment to meaningful, long-term social impact in Singapore

5. HR Asia Best Companies to Work For In Asia Award:

   (i) Diversity, Equity, and Inclusion Award, Best Companies to Work For in (ii) Hong Kong and (iii) Cambodia

   Recognitions for DFI Retail Group, and Hong Kong and Cambodia teams for people and culture performance

6. Hong Kong Management Association: Award for Excellence in Training and Development 2025 Pioneering Qualifications Framework Level 6 Programme for the Hong Kong retail industry

7. Equal Opportunities Commission Racial Diversity & Inclusion Employers Award Scheme: (i) Racial Equity in Hiring (Gold), (ii) Inclusive Workplace Culture (Gold) and (iii) Community Engagement (Silver)

   DFI Hong Kong team received three recognitions for fostering inclusion across our workplace

   Products

   
   
   

8. UNSDG Achievements Award Hong Kong 2025: Individual SDG Award for Goal 13: Climate Action DFI's low-emissions rice pilot delivered emissions reductions for a key commodity

9. FMCG Asia Awards 2025, Sustainability Initiative of the Year - Hong Kong

   DFI's low-emissions rice pilot achieved a successful launch in Hong Kong's retail market

10. ESGBusiness Awards 2025: Supply Chain

    Partnership Award

    DFI's supply chain collaboration helped deliver low emissions rice to consumers

11. ESGBusiness Awards 2025: (i) Circular Economy

    Award, (ii) Initiative Award

    7-Eleven Hong Kong & Macau's Grounds to Green

    Upcycling Programme

12. HK International Beer Awards 2025: Certificate of

    Bronze in Specialty Beer, Non-Aged

    7-Eleven collaborated with Maxim's to launch 'BOB x 7CAFÉ Coffee Beer,' brewed using upcycled coffee grounds from 7CAFÉ and surplus bread from Maxim's

13. Global Wine & Spirits Awards Asia: Silver Award 2025 in Beer, Specialty

    Global recognition of 'BOB x 7CAFÉ Coffee Beer'

    for its quality and sustainability attributes

14. Asia 100 Sustainable Agri-food Development Forum: Circular Economy Innovation Award Maxim's WeGen farming's closed-loop model

    Planet

    
    
    

15. 2024 Hong Kong Awards for Environmental Excellence: Shops and Retailers - Bronze Award DFI's outstanding environmental performance was recognised by the Environmental Campaign Committee in Hong Kong

16. CLP Smart Energy Award 2025: Sustainable Carbon Neutral Award, Excellence Award (Services) Maxim's strong performance in energy efficiency and the adoption of renewable energy sources across its operations

17. HKMA Sustainability Award 2025: Excellence in Environmental Sustainability Initiative (Large Organisation Category), Certificate of Excellence DFI's initiatives elevated sustainability performance and demonstrated excellence

    in environmental sustainability

18. Hong Kong Sustainable Development Innovation and Technology Awards 2025: Towards Net Zero Innovation and Technology, Excellent Award Maxim's SmartOps, a digital transformation initiative, enhanced production line efficiency and strengthened food traceability

19. TVB ESG Awards 2025: ESG Special Recognition

    Award - with Merit

    Both DFI and Maxim's received the award in recognition of our ESG performance and industry leadership

20. World Green Organisation Climate Action Award 2025: Climate Action Award

Recognition for Maxim's efforts in ESG integration and carbon management

11.

7.

12.

Gloria Shiu, Marketing Director, 7-Eleven Hong Kong (left), Una Lau, Head of Corporate Communications and Public Affairs, Maxim's Group (middle) represented 7-Eleven and Maxim's to receive Hong Kong International Beer Awards

9.

DFI's Own Brand team members, Tammy Wong (left), and Karita Yip (second from the left); Dorathy Au, Group

Technical team (middle), and Yvonne To; Group Sustainability team (second from the right) represented DFI in receiving the FMCG Asia Awards

Our Approach to Sustainability Governance

Sustainability governance is a cornerstone of our sustainability framework and underscores our commitment to robust oversight of sustainability-related risks and opportunities. Through well-defined governance processes, DFI ensures an integrated approach to sustainability strategy planning and implementation.

The Board is accountable for the governance processes, controls, and procedures that monitor, manage, and oversee sustainability-related risks and opportunities. Oversight is supported by the Management Committee, which translates strategic direction into operational execution and continuously monitors progress through established controls. Our overall governance

approach is detailed in the Corporate Governance section of the Annual Report.

This section outlines DFI's sustainability governance structure in more detail, including the roles of the Board, Board Committees, the Sustainability Committee, and key working teams. Each committee or management team comprises individuals with the relevant skills and competencies to fulfil their roles. Responsibilities are delegated and integrated across relevant functions and formats within the Group.

To ensure the Board remains appropriately skilled, we monitor and disclose the competencies of our Board members in industry-specific and sustainability issues, as outlined in our Board Composition and Operational Management section.

In 2025, the Board convened two sessions - in March and November - to review progress, performance, and plans on sustainability matters. Additionally, our Sustainability Committee held 11 meetings during the year to assess the progress of our sustainability initiatives. Each meeting focused on different material sustainability topics outlined in the Sustainability Strategy section of this report.

We continue to review and adapt the governance cadence of our Sustainability Committee to align with the maturity of our journey.

Our remuneration and rewards programmes -covering short-term and long-term incentive plans - are designed to support our overall business strategy, including sustainability objectives and performance. Relevant sustainability objectives are formally integrated into the annual objective-setting process, and performance against those objectives is considered during reviews. This approach cascades top-down, from the Management Committee to all team members.

More information about our remuneration philosophy for senior leaders is in the Corporate Governance section of our Annual Report.

Board of Directors

• Oversees significant sustainability-related risks, opportunities, and impacts by ensuring that sustainability considerations are integrated into DFl's purpose, governance, strategy, decision-making, and risk management processes.

• Provides oversight of our risk management framework, including sustainability-related risks.

Bi-annual Progress Update

Audit Committee

Sustainability Committee

Risk Management Committee

• Oversees and assesses the effectiveness of the Group's risk management framework.

• Oversees the integrity, accuracy and reliability of sustainability data and disclosures.

• Oversees compliance with sustainability reporting regulations and standards.

• Reviews assurance of sustainability metrics provided by external independent practitioner.

• Comprises Group Chief Executive (Chair), Group Chief Financial Officer, Group Chief Legal, Sustainability and Corporate Affairs Officer, and Chief Executive Officer of Food.

• Leads the strategic direction and approves DFl's sustainability targets.

• Provides governance oversight to ensure alignment of sustainability initiatives with business priorities.

• Monitors and reviews progress in sustainability

• Oversees principal and material risks including sustainability-related risks, and integrates into the risk management framework.

• Assesses risk appetite, tolerance, and promotes a strong risk culture.

• Reviews and monitors controls in place to mitigate such risks.

  ESG Reporting Team

  Sustainability Team

  Sustainability Working Groups

  • Manages sustainability data collection for internal and external reporting.

  • Maintains data quality and integrity.

  • Reviews and maintains compliance with sustainability reporting regulations and standards.

• Develops and drives implementation of sustainability strategy and action plans.

• Coordinates execution

  of initiatives with internal and external stakeholders to achieve sustainability targets.

• Monitors external developments and responds to emerging risks and opportunities.

  • Leads execution of sustainability initiatives in specific focus areas to achieve sustainability targets and objectives.

  • Provides progress updates, challenges and solutions to the Sustainability Committee.

    ‌Sustainability Strategy

    Our Sustainability Framework

    DFI Retail Group's Sustainability Framework is anchored on three strategic pillars-People, Products, and Planet-with Governance as the foundational cornerstone across all our sustainability policies and practices.

    Double Materiality Assessment

    Our strategic focus areas are informed by a double materiality assessment, which evaluates sustainability issues from two perspectives: financial materiality and impact materiality. Our annual assessment process incorporates:

    Sustainably Serve Asia for Generations with Everyday Moments

    People

    We empower lives across Asia by promoting health, safety, and wellbeing for customers, team members, suppliers and communities.

    Products

    We enable sustainable choices by integrating sustainability into our own product design and packaging, increasing

    the range of products with sustainability certifications, and ensuring affordability without compromising quality.

    Planet

    We play our part in reducing our environmental impact through carbon reduction across our value chain and continuing to minimise waste.

    
    
    

    1. Identification: In 2025, we identified 22 relevant sustainability-related risks and opportunities that cover both potential dependencies and areas of impact at an industry and operational level. This process referenced leading reporting standards, including IFRS S1 and S2, GRI, and SASB.

    2. Evaluation: We assessed the materiality of these topics on their dependencies, impacts, risks, and opportunities through internal and external stakeholder engagement. The evaluation considered both the likelihood of the event occurring and the magnitude of impact. For impact materiality, senior management and selected stakeholders, including our suppliers, investors, and NGO partners, participated in

       a survey to rate the materiality of risks and opportunities. For financial materiality, we refreshed last year's assessment through workshops and interviews with senior members of the finance and sustainability teams. Based on the assessment, 13 issues are considered to have higher financial and impact materiality.

    3. Validation: Key members of senior management reviewed and validated the results of the double materiality assessment. We also compared the results with previous assessments to ensure continued relevance.

    
    
    

    Scope of our assessment Value chain

    Our assessment takes a holistic view across our entire value chain, with the following key considerations.

    
    
    

    Value Chain

    Upstream Own Operations Downstream

    Key Considerations

• Operating in Asia, DFI procures products from numerous fragmented suppliers, who depend on raw materials and international and local supply chain networks.

• We are also dependent on our landlords, non-trade suppliers and service providers as part of our upstream ecosystem.

• Products are sent to our distribution centres,

  where they are organised for delivery to stores,

  e-commerce fulfilment centres, pick-up locations, and directly to customers' homes.

• Our local banners have a network of outlets delivering a quality

  shopping experience both in-store and online.

• Our 42,000+ team members are key to delivering smooth operations across our businesses.

• We are strongly committed to delivering high-quality products and exceptional service to our customers.

• We are expanding our business across media and data insights, presenting digital advertising opportunities for B2B partners, creating more personalised and relevant experiences for customers.

• We are an integral part of the local communities that we serve.

  Time horizon

  When considering our risks and opportunities, we assess their materiality in the short-, medium-, and long-term. These time horizons are determined by aligning with DFI's planning horizons and broader long-term commitments, as follows.

  Time Horizon

  Short-Term

  Medium-Term

  Long-Term

  Key Considerations

  Aligning with DFI's

  three-year planning cycle

  Aligning with DFI's sustainability target and addressing more complex challenges

  Aligning with DFI's

  Net Zero target and the Paris Agreement, and addressing long-term risks

  Years

  2026 - 2028

  Up to 2030

  Up to 2050

  
  
  

  ‌Our Material Sustainability Issues

  This materiality assessment process was designed to identify and prioritise sustainability-related risks and opportunities that could affect and influence our prospects. Based on this process, we focus on 13 issues with the highest financial and impact materiality. While other issues ranked relatively lower in the materiality assessment, they remain actively considered across our operations and value chain management practices where appropriate. These include addressing emerging issues such as managing biodiversity risks and water conservation.

  Material Issue	Impact Materiality: DFI's Impact on Society	Financial Materiality: Risk and Opportunity to DFI	Value Chain	Time Horizon
  Governance
  Data privacy and cybersecurity	Robust data protection and cybersecurity measures safeguard the data security	Risks

  • Operational and sales disruptions, potential revenue loss and legal costs associated with data breaches or other cybersecurity incidents.

  and privacy of our operations and consumers.

  • Reputational damage due to the loss of trust in cybersecurity integrity.

Ethics and anti-corruption

Strong policies and practices that prevent corruption and bribery, foster fair competition and protect intellectual property rights across our markets.

Risks

• Financial losses from fraud, bribery, or misappropriation of funds.

• Increased compliance and monitoring costs to address corruption risks.

• Reputational damage that reduces credibility in global markets.

  Upstream

  Own Operations

  Downstream

  Short-term

  Medium-term

  Long-term

  
  
  
  
  

  Sustainability Disclosure Sustainability Strategy

  Material Issue

  Impact Materiality:

  DFI's Impact on Society

  Financial Materiality:

  Risk and Opportunity to DFI

  Value Chain

  Time Horizon

  People

  Customer value creation

  Community giveback

  Team member success

  Health, safety and wellbeing

  Ethical sourcing and supply chain management

  Addressing societal demands for value-driven products and services that enhance personal wellbeing

  to meet evolving customers' needs.

  Providing support to local communities enhances social resilience and

  builds momentum in addressing societal issues.

  As a major retailer with a large workforce, DFI can provide competitive benefits, professional development and career advancement opportunities.

  Providing a safe and healthy working environment can safeguard the physical and mental wellbeing of team members, reducing the risk of workplace accidents, injuries and illnesses.

  Ethical sourcing and supply chain transparency can enhance supply chain resiliency and allow customers to

  purchase responsibly sourced products.

  Risks

  
  
  

• Lower market share if customers switch to competitors with better offerings.

• Capital investment needed for infrastructure and service enhancements.

  Opportunities

• Attract value-focused customers and expand

  market share.

• Strengthen customer loyalty through exceptional service.

  
  
  

  Opportunities

• Strengthen customer and brand loyalty through stronger community engagement.

• Improve brand reputation as a community-friendly organisation.

  
  
  

  Risks

• Increased challenges to attract and retain team members.

• Impact on capability development from misaligned skills leading to inefficiencies and higher costs.

  Opportunities

• Increased productivity through investments in training and mentorship initiatives.

• Improved culture of creativity and continuous improvement through opportunities for professional growth.

  
  
  

  Risks

• Increased costs for medical treatment, rehabilitation, and compensation for workplace injuries or illnesses.

• Operational disruption caused by workplace incidents leading to downtime and decreased productivity.

• Increased costs for fines and penalties from

  non-compliance with health and safety regulations.

• Reputational damage from work-related safety incidents.

  
  
  

  Risks

• Increased costs from supply chain interruptions stemming from suppliers' violations of social issues.

• Reduced market share associated with consumer boycotts due to violations of social standards.

  Material Issue	Impact Materiality: DFI's Impact on Society	Financial Materiality: Risk and Opportunity to DFI	Value Chain	Time Horizon
  Products
  Sustainable choices	Providing a growing range of affordable sustainable products	Risks

  • Consumer backlash and brand damage from greenwashing allegations.

  Sustainable packaging

  Product quality and safety

  accelerates the adoption of sustainable consumption practices by consumers.

  Developing and offering products with high nutritional quality and health benefits to improve public health and address growing consumer demand for healthier lifestyles.

  Adopting sustainable packaging for Own Brand products reduces plastic waste, improves recyclability, and promotes the use

  of recycled materials to support a circular economy.

  Rigorous product quality and safety standards enable us to deliver reliable goods that protect our customers.

• Inability to offer relevant products to eco-conscious customers.

  Opportunities

• Increased revenue opportunity from shifting consumer preferences towards low-carbon and sustainable choices.

• Improved market differentiation through strong positioning on sustainable products.

  
  
  

  Risks

• Potential compliance challenges with packaging regulations may result in increased costs and pose risks to product quality and customer preferences.

  Opportunities

• Increased market share from eco-conscious consumers attracted to innovative packaging solutions that are both sustainable and functional.

• Cost savings associated with materials and transportation due to lighter and more compact sustainable packaging.

  
  
  

  Risks

• Increased costs and reputational damage associated with regulatory breaches and product recalls.

  Opportunities

• Improved market differentiation through strong positioning on high-quality products.

  Upstream

  Own Operations

  Downstream

  Short-term

  Medium-term

  Long-term

  
  
  
  
  

  Sustainability Disclosure Sustainability Strategy

  Material Issue	Impact Materiality: DFI's Impact on Society	Financial Materiality: Risk and Opportunity to DFI	Value Chain	Time Horizon
  Planet
  Climate change: carbon reduction	Food retail and distribution centres use energy for refrigeration, heating, ventilation	Transition risks

  • Increased costs associated with compliance with new climate-related regulations and carbon mechanisms.

  Climate change: climate resilience

  Waste recycling and reduction

  and air conditioning (HVAC), contributing to energy and greenhouse gas (GHG) emissions, while consumer goods are also a source of GHG emissions.

  As a major food retailer in several Asian markets, our ability to continue operations during extreme weather events is critical to ensuring a stable food supply to our customers.

  Food and general retail can generate food and product waste due to unfit or damaged products and unsold goods, or waste from transporting and storing our products.

  Opportunities

• Increased revenue opportunity from shifting consumer preferences towards low-carbon choices.

• Cost savings from successful investments in low-carbon technologies that enhance energy efficiency.

  
  
  

  Physical risks

• Increased costs from physical damage to goods and properties caused by extreme weather events.

• Decreased revenue from business disruptions caused by store closures during severe weather events.

• Increased cooling energy operating costs to maintain comfortable shopping and working temperatures.

• Increased disruptions and costs from supply chain disruptions due to crop failures.

  
  
  

  Risk

• Increased operating costs to comply with environmental regulations and standards on waste management.

  Opportunities

• Cost savings related to the collection, processing, recycling, and disposal of waste from effective resource management practices.

  ‌Our Strategic Response

  Three guiding principles shape our strategic response to material sustainability issues:

  • Focused: We concentrate on areas where we can create the most significant impact, such as our Own Brand products

    and key product categories, while strategically addressing value chain challenges unique to our operational context.

  • Balanced: We carefully navigate the price-sensitive nature of our markets while pursuing sustainability goals. Our approach prioritises practical, equitable solutions that deliver value for all stakeholders - customers, shareholders, and the environment - without compromising either affordability or long-term progress.

  • Collaborative: We actively partner with industry coalitions to tackle systemic challenges, leveraging shared resources and expertise to amplify impact, drive efficiencies, and foster a sustainable future.

Building on these principles, the subsequent sections - People, Products, and Planet - illustrate how these commitments translate into actions and measurable progress in the reporting period. Additionally, responses to our principal risks and key Governance matters, including the Code of Conduct, anti-corruption, data privacy, and cybersecurity, are covered in the Corporate Governance section.

Material issue Our commitment and strategic response

Governance

Data privacy and cybersecurity

We are committed to being a responsible custodian of the data entrusted to us by customers, team members, business partners, and other stakeholders, keeping it secure and processing it in accordance with legal requirements and stakeholder expectations.

Ethics and anti-corruption We are dedicated to conducting our business with a strong commitment to ethical responsibility and adherence to laws and regulations in all the regions where we operate.

People

Customer value creation Our customer-centric approach creates value by offering products and services that enhance personal wellbeing while addressing emerging needs.

Community giveback We support community growth through programmes and investments that promote health and development.

Team member success We invest in our team members' development, promote diversity, equity and inclusion, and prioritise their health and safety.

Health, safety and well-being

Ethical sourcing and supply chain management

We are committed to ethical sourcing practices to safeguard human rights in our supply chains.

Products

Sustainable choices We offer our customers a growing range of sustainable products while deepening sustainable consumption practices and education within our industry.

Sustainable packaging Starting with our Own Brand products, we are committed to enhancing packaging

recyclability and introducing more sustainable packaging materials.

Product quality and safety

With the extensive range of products we offer and the markets we serve, we are deeply committed to rigorous product quality and safety standards to protect our customers.

Planet

Climate change: carbon reduction

We prioritise the decarbonisation of our operations and value chains by adopting more eco-friendly refrigerants, reducing energy consumption, and developing low-carbon choices for our key product categories.

Climate change: climate resilience

We are actively assessing and managing climate-related risks to prevent adverse impacts on society and the environment, ensuring long-term resilience and sustainability.

Waste recycling and reduction

We continue to progress and strengthen our comprehensive initiatives for a cleaner planet.

‌Sustainability Disclosure Sustainability Strategy

Climate-Related Risk and Opportunity Disclosures

This section provides a deeper dive into our climate-related risks and opportunities, with reference to the Task Force on

Climate-Related Financial Disclosures (TCFD) and IFRS S2.

Climate-Related Risks and Opportunities and Resilience Analysis

Climate change creates physical and transition risks for our business. We have identified and assessed these risks, along with potential opportunities, and conducted climate scenario analysis to assess their potential impacts and our resilience.

DFI Retail Group initiated climate scenario analysis in 2022 to understand how climate-related risks and opportunities could impact our business model, strategy, and financial planning across the short-, medium-, and long-term horizons, using both qualitative and quantitative approaches. The scenario analysis is reviewed annually to incorporate updates from external climate projections, changes in our business model and value chain, and methodological changes.

In our 2025 review, we incorporated quantitative assessments of the changing impacts of potential extreme weather events, drawing on climate projections by the World Bank Climate Change Knowledge Portal, the Aqueduct and AgriAdapt platforms from the World Resources Institute (WRI), and the CGIAR Climate Resilience Platform. We also updated projections on relevant transition risk indicators, such as electricity price projections in our different markets, by the Network for Greening the Financial Systems (NGFS). Qualitative assessments were used to supplement data gaps through market research and expert judgment. Assessments were conducted at the relevant geographical level for each risk and aggregated to form a Group-wide perspective, recognising limitations in data availability and the inherent uncertainty in the information used to estimate potential financial effects.

Insights from scenario analysis are integrated into DFI's broader strategic and financial planning processes. These insights help shape our sustainability roadmap, prioritise capital allocation, and guide product innovation.

We have selected a set of climate-related scenarios to represent diverse pathways relevant to both physical and transition risks, reflecting the latest international developments on climate-related scenario sources and assumptions. The key scopes, parameters and assumptions are outlined below.

There remain inherent uncertainties in our scenario analysis due to the wide variability and uncertainty in climate projections, challenges in isolating the effects of multiple contributing factors, and evolving non-climate-related risks and trends. The results indicate that, although we are exposed to multiple physical and transition risks that are expected to intensify over time, we have begun implementing mitigation measures to address them. Beyond the risks and opportunities disclosed, we also evaluated other risk factors, such as operational exposure to drought and water stress, which were assessed to be at lower risk levels and therefore not discussed in further detail.

Baseline Risk: Financial effects

Less than US$2m per year

Between US$2m and US$20m per year

Greater than US$20m per year

Increase in impact compared to current period

<5% 5-20% >20%

Short-term

Medium-term

Long-term

Risks and opportunities

(risk type) Potential business and financial effects

Primary financial effect

Value Chain

Baseline materiality

Sustainability Disclosure Sustainability Strategy

Current Financial Effects from Climate Risks and Opportunities

For FY25, the financial effects experienced by DFI from climate-related risks and opportunities include the following:

• Capital investment of US$7.7 million into refrigeration upgrades and energy efficiency projects to reduce our emissions

  and improve operational energy efficiency.

• Increased revenue from the launch of low-emissions rice, offered at price levels comparable to conventional rice. This led to higher product sales year-on-year, demonstrating strong consumer interest in sustainable products without compromising affordability.

• Business interruptions faced during extreme weather events in Hong Kong, Macau and Guangdong. Three typhoons at Signal 8 or above (wind speed over 118 km/h) led to reduced footfall in our retail outlets, offset by increased

e-commerce and food grocery revenue, as consumers shifted their purchasing and consumption behaviour during the events. The overall impact is financially immaterial.

Change in risk over time under

Most

~1.5oC scenario

> 3oC

scenario

affected

markets Assessment approach

Our responses to minimising risks and maximising opportunities

climate projections in markets (WBCCKP).

HKG, CHN

markets

• Developed business continuity plans, standard operating procedures and evacuation plans to prioritise the safety

  of team members and asset protection during flood events.

• Implementing security of supply initiatives and resilient sourcing practices to minimise disruptions to the availability of products and raw materials.

• Adopt energy-saving equipment to mitigate cooling

  cost increase.

  HKG, TWN
  
  

  All

  markets

  Semi-quantitative, based on climate projections of key crops.

• Improve understanding and assessment of at-risk commodities and regions to inform sourcing strategy.

• Diversify supply source to regions with more sustainable farming practices.

  All
  
  

  markets

  All
  
  

  markets

  All
  
  

  markets

  Quantitative, based on climate projections in markets (NGFS).

  Semi-quantitative, based on price projections of selected crops (NGFS).

  Qualitative, based on internal subject matter expertise.

• Allocate US$14-28 million for 2026 - 2030 on Scope 1 and 2 projects to reduce emissions.

• Integrate internal carbon pricing into decision making process

  on investment projects on emissions reduction.

• Engage suppliers to improve on energy, water and resource management to increase supplier efficiency.

• Diversify supply source to regions with more sustainable farming practices.

• Integrate climate risks into enterprise risk management.

• Maintain and improve data quality standards on emission data disclosed.

• Ongoing monitoring, updating of policies and procedures to ensure adherence to evolving regulations.

  All

  markets

  All

  markets

  Quantitative, based on internal cost simulation of key technologies.

  Semi-quantitative, based on consumer survey and internal subject matter expertise.

• Develop a structured transition plan for Scope 3, concentrating on four priority categories (rice, dairy, beef, and coffee).

• Promote innovation through our Sustainable Innovation Programme.

• Launch or procure new products with improved packaging, emissions or other sustainability credentials.

• Allocate US$14-28 million for 2026 - 2030 on Scope 1 and 2 projects to reduce emissions.

• Deploy low-carbon energy efficiency and carbon reduction technologies in line with internal carbon pricing threshold.

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