2023 Natural Grocers Environmental, Social, and Governance Report

Our Palm Oil Policy The production of this extensively used ingredient has such major social and environmental impacts that we are seeking to influence the supply chain at the farm and production levels through our transparent sourcing policies. We accept all certified organic single-ingredient palm oil For products that are not certified organic and/or Roundtable on Sustainable Palm Oil (RSPO) Certified: – We accept RSPO Segregated palm oil, which is kept separate from conventional palm oil throughout the supply chain and is certified sustainable – We do not accept RSPO Mass Balanced or Book & Claim palm oil because up to 90% of the batch can come from conventional sources. As we want to incentivize the change to responsible palm oils, we are aiming at RSPO levels that are above this minimum standard and avoid co-mingling. We also accept Palm Done Right certified palm oil as it comprehensively monitors through third-party certifications the social, wildlife, and environmental impacts, and ensures responsible sourcing throughout the supply chain Quality Assurance We employ multiple benchmarks to ensure the quality of the products we sell. We strive to work with reputable suppliers that have shown proof of compliance with established regulatory and industry guidelines. Our Purchasing Department requires a complete supplier and product profile as part of the approval process, and we expect our vendors to comply with industry best practices for food safety. Our dietary supplements suppliers must follow the Food and Drug Administration’s current Good Manufacturing Practices (GMP), supported by quality-assurance testing for the base ingredients and the finished product. We believe these requirements build trust for customers seeking the highest quality supplements available. Many of our suppliers are inspected and certified under the USDA National Organic Program, and through voluntary industry standards and other third-party auditing programs concerning additional ingredients, manufacturing, and handling standards. Farm Visits Natural Grocers ® performs in-person farm and ranch visits where the Natural Grocers team inspects on-farm operations including how animals are raised, fed, cared for, transported, processed, and packaged. Our level of due diligence is extraordinary in the industry and allows the Natural Grocers team to audit supplier operations and educate the Purchasing Department on industry best practices and challenges. These visits also inform our Animal Product Standards, so they are focused on realistic metrics to measure positive on-farm practices and foster cooperative supplier relationships that encourage continual improvement.

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FISCAL YEAR | 2023