2023 Natural Grocers Environmental, Social, and Governance Report

Water Many areas in which we operate are water-constrained, and therefore we are mindful of our usage. Our unique store format reduces our water consumption compared to conventional grocers that offer deli, meat, and seafood counters, as well as salad bars. We also utilize water-saving equipment and landscaping in our store designs. We believe that our rigorous product standards are more supportive of water systems. For example, land farmed regeneratively improves soil quality, including water retention. Land farmed organically does not use chemicals that pollute our water (and air). In contrast, conventional agriculture can generate water pollution from chemicals, pathogens, and antibiotics; they release high levels of phosphorous and nitrogen that lead to destructive algae blooms in waterways.

Greenhouse Gas Emissions Scope 1 emissions reflect direct emissions from owned or controlled sources, including natural gas and refrigerant emissions. To reduce climate impacts, we focus on the efficiency and maintenance of our facilities and equipment. Scope 2 emissions reflect indirect emissions from the generation of purchased electricity, which is used to power our buildings. We seek to reduce our energy costs and carbon footprint by using efficient lighting, refrigeration systems, heating, ventilation, air conditioning (HVAC), and well-insulated buildings. Our refrigeration systems include LED lighting and pull-down covers. By design, our store format does not include a deli counter, meat counter, seafood counter or salad bar. Our unique store format reduces our refrigerant usage and electricity demand, and thus reduces our Scope 1 and Scope 2 emissions. We are working toward publishing greenhouse gas emissions data in future ESG reports.

CO 2 Refrigerant Technology CO2 refrigerant technology is designed to save energy and provide enhanced environmental protection compared to conventional refrigeration technologies. The CO2 refrigerant has an Ozone Depletion Potential of 0 and a Global Warming Potential of 1, which is far less than those of the more common refrigerants CFCs and HCFCs. In FY23, we installed a CO2 refrigeration system in a second store. Though more expensive and complex to install than traditional systems, CO2 refrigerant technology is just one more way our company prioritizes the health of our communities and our planet.

Transportation The majority of inbound transportation is handled by third parties: approximately 68% of our total purchases in FY23 were from United Natural Foods Inc. and its subsidiaries (UNFI). Our trucking fleet comprises three vehicles that serve partial deliveries to 36 stores in the Denver region.

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FISCAL YEAR | 2023