2023 Natural Grocers Environmental, Social, and Governance Report

Regenerative Agriculture and its Impacts “The nation that destroys its soil destroys itself.” - Franklin D. Roosevelt.

The regenerative farming philosophy marries pre-industrial farming best practices with years of scientific and applied research. Regenerative farming systems improve how the ecosystem functions, which provides overall environmental benefits, increased yields, and resistance to climate instability. It also provides greater economic value and quality of life advantages for farming and ranching communities by making the land productive and sustainable. By returning the land to its original natural state, the soil and above-ground biomass are able to operate as designed and may address possible climate change impacts by sequestering carbon within the soil itself.

Regenerative Farming Techniques Include: • Cover crops fix soil nutrients, such as nitrogen, improving soil structure, and protecting it from erosion and nutrient loss, which helps with fertilization and fosters a robust pollinator habitat. • Crop rotation reduces pests and minimizes disease cycles that may limit harvest output. The resulting reduction in harmful insects can lead to the reduced use of, or elimination of, pesticides, which increases the health of wildlife and the purity of water runoff. • Reduction or removal of chemical pesticides reduces or eliminates their impact on soil, animal, plant, and end consumer health. • Livestock land management practices such as rotational pasture grazing and co-grazing are vital to providing a more natural habitat for the animals, insect presence, and biodiversity, improved plant growth, and better soil. • Integration of trees and shrubs contributes to land health by increasing habitats for insects, pollinators, and wildlife, breaking down waste and processing it for the nutrient cycle. • Low or no till practices maintain soil stability, which reduces erosion, increases water and nutrient retention, and increases the microbiological quality of the soil.

Carbon Capture Potential We believe that regenerative agriculture is an important practice with the potential to mitigate climate change. In agricultural systems, the amount and length of time carbon is stored is determined predominately by how the soil resource is managed. 1 The results are observable and measurable. The Rodale Institute’s 2020 white paper Regenerative Agriculture and the Soil Carbon Solution concluded that global adoption of regenerative agricultural practices provides a mechanism to sequester more than the current annual atmospheric carbon dioxide (CO2) emissions generated by human activity. 2 Additionally, the white paper identified examples where, depending on the soil conditions and regenerative practice used, the soil carbon sequestration rate was rapid in the early years after implementation, which enables it to be a tool for near-term improvements. • 100% certified organic produce • More than 50% organic across all products • 100% pasture-raised dairy • 100% free-range eggs • 100% humanely raised and sustainably sourced meats Our product standards that support regenerative farming:

1 Ecological Society of America https://www.esa.org/esa/wp-content/uploads/2012/12/carbonsequestrationinsoils.pdf 2 Moyer. J, Smith. A(PhD), Rui. R(PhD), and Hayden. J(PhD). (2020). Regenerative Agriculture and the Soil Carbon Solution. Rodale Institute.

14

NATURAL GROCERS ® | ESG REPORT