ESG priority topics

Within our ESG Strategy, we have prioritized key ESG topics based on an in-depth materiality analysis conducted through conversations with key stakeholders including our team, investor community, consumers, regulators and our portfolio companies.

The four priority topics identified through the analysis are:

• 1. Climate Change & Energy
• 2. Equality of Opportunity, Diversity & Inclusion
• 3. Business Ethics
• 4. ESG Management & Accountability

We approach these topics through tailored programs both within our own organization and with our portfolio companies. While our portfolio companies operate independently, we actively engage with each to embed JAB’s ESG priorities into their strategy and operations, as well as pursue their own tailored ESG agendas before the four key topics identified above are considered. ESG is overseen at the Board level of all our investments, with each business reporting to the Board at least once per year on ESG priority topics, including climate.

In addition, we enable our portfolio companies to share best practices through our ESG Collaboration Forum, which takes place every quarter. We started this initiative in 2019 because of our conviction that ESG is universally important, and that collaboration can only build positive impact and momentum across the portfolio companies. The Collaboration Forum, which includes sustainability experts and C-suite members from across the portfolio, provides our portfolio companies with the opportunity to jointly discuss progress and challenges experienced in the execution of their ESG agendas. It also enables leadership teams from both private and public companies to work together. This dynamic is unique to JAB thanks to our long-term ownership model and continued engagement with our companies once they become public.

Our due diligence process also includes ESG considerations, and we encourage new portfolio companies to embed ESG into their strategy early on, if it is not already present.

We evaluate the performance of these ESG topics at JAB and across the portfolio based on Key Performance Indicators (KPIs), which as of 2021 are periodically measured, monitored and reported on. These KPIs have been defined for each of the four priority ESG topics, both at the Holding level and the Investment Platform level.

UN Sustainable Development Goals

JAB is committed to the UN Sustainable Development Goals (SDGs), which are the internationally recognized framework adopted by all UN Member States in 2015 as part of the 2030 Agenda for Sustainable Development. We believe that all businesses have a critical role to play in building a healthier world, and the UN SDGs provide a strong framework from which to ensure that JAB and our Investment Platforms are effectively bringing long-term benefits to consumers and communities around the world.

JAB Governance

JAB Holding Company has four statutory Managers, including the CEO, and has implemented a governance framework for strategy, finance, risk and compliance, remuneration and ESG. This framework is overseen by the JAB Board. The Chairman and Vice Chairman are each members of the JAB Board and the Investment Committee.

The organization is led by the CEO, who is also a member of the Investment Committee, together with the Chairman and Vice Chairman of the JAB Board. The members of the Investment Committee are referred to as Managing Partners. The Investment Committee obtains independent advice from two globally recognized Senior Advisors with extensive expertise on governance and strategy matters.

The JAB Board exercises typical shareholder rights (e.g. approval of distributions and valuations, and admission of shareholders) and is responsible for defining and monitoring JAB Holding Company’s governance model, including the mandate of the Investment Committee and key elements of management’s remuneration framework. The JAB Board meets periodically in Luxembourg together with the Managing Partners of the firm.

The Investment Committee is responsible for JAB Holding Company’s investment and exit strategy, including ESG. Investment and divestment decisions require the unanimous approval of the Managing Partners. The Investment Committee is also responsible for the remuneration of the broader management team, including nine (Senior) Partners and our Chief Financial Officer.

On a number of specified domains there is an individual partner responsible for the execution of our strategy. For example, there is one JAB Partner with overall execution responsibility for ESG matters across JAB and its investment portfolio. For each of our portfolio companies, ESG issues are also monitored by the respective Board of Directors, with each business reporting to the Board at least once per year on ESG priority matters.

Our portfolio companies are managed by their respective CEOs and leadership teams which have also invested their personal wealth into their businesses, resulting in strong alignment of interests with those of JAB. Each of our portfolio companies, private and public, has a Board of Directors, an Audit Committee and Remuneration Committee, with Independent Directors and JAB representatives.