Our Annual & Integrated Report 2023-24

Godrej Consumer Products Limited (GCPL) consistently reports its financial and non-financial performance in accordance with regulatory requirements such as the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015; the Companies Act, 2013; and Secretarial Standards. This marks our sixth Annual and Integrated Report, structured to comply with the International Integrated Reporting Framework (the framework) developed by the International Integrated Reporting Council (IIRC). Moreover, this report is in reference with the Global Reporting Initiative (GRI) standards as per the Sustainability Reporting Guidelines of GRI and fulfils the Business Responsibility and Sustainability Report (BRSR) requirements mandated by SEBI. Additionally, it meets the voluntary requirements of the Dow Jones Sustainability Index (DJSI).

Our R&D teams lead new product development
across the geographies we operate in

Content of the report

We aim to provide an overview of our financial and non-financial performance through Integrated Reporting, demonstrating the creation of short and long-term value for our stakeholders.

This report offers insights into:

Material issues and our operational context
Governance framework
Key strategies
Value creation approach across capitals
Performance identified against Key Performance Indicators (KPIs)
Interrelation among material issues, strategies, performance, and value creation
Financial and statutory reporting

Scope and boundary

This report covers GCPL, including its manufacturing facilities across India, Africa, Indonesia, Latin America, and the USA. Unless specified otherwise, all data and content herein are consolidated for our entire business operations.

Aligned with our commitment to transparent reporting and sustainable business operations, we have followed the taxonomy set by the Securities and Exchange Board of India's Business Responsibility and Sustainability Report (BRSR) and the Task Force on Climate- Related Financial Disclosures (TCFD) framework. Our adherence to these rigorous frameworks offers a thorough insight into our sustainability goals and the efficacy of our initiatives for our stakeholders.

Reporting period

All data, both financial and nonfinancial, covers the period spanning April 1, 2023, to March 31, 2024. To offer a thorough assessment of our sustainability performance, we have included comparative figures from the previous fiscal year (2022-23) as well as from the baseline year (2011-12, excluding statutory financials). This approach allows for a holistic evaluation of our progress over time. By examining our activities implemented between April 1, 2023, and March 31, 2024, alongside historical data from preceding years, we aim to highlight ongoing trends and provide a basis for comparative analysis, facilitating an assessment of our overall advancement. 5

Forward Looking Statements

The Integrated Annual Report includes forward-looking statements in the Management Discussion and Analysis, indicating the Company's objectives using terms such as 'may'. 'believe', 'outlook', 'plan', 'anticipate', 'continue', 'estimate', and 'expect'. These statements are grounded in reasonable assumptions but may be influenced by risks, uncertainties, and external factors, potentially resulting in deviations from expressed or implied outcomes.The forward-looking statements in this report are applicable only as of the statement date. GCPL is not obligated to publicly release revisions or updates to these statements after this report's date, except as required by law or regulatory authorities. Past performance is not indicative of future performance.

Double Materiality assessment

At GCPL, we put people and planet alongside profits. Our materiality approach is aligned with our strategic vision and value creation. We identified material issues by extensively engaging with our stakeholders and monitoring industry trends.

In the fiscal year 2023-24, we embraced a double materiality approach to align with our sustainability vision. We explored and evaluated Environmental, Social, and Governance (ESG) issues relevant to our business operations and our stakeholders. We also examined how material issues, business risks, objectives, and value creation are interconnected. The aim of this double materiality assessment is to prioritise the ESG topics most relevant to our operations and stakeholders, while considering the impact between our organisation and the broader sustainability landscape.

We integrated our materiality considerations into our Enterprise Risk Management (ERM) process where relevant, particularly focusing on areas such as Occupational Health and Safety (OHS), governance, and sustainable packaging that are overseen at a Board level. Our procedure involves identifying significant risks and opportunities with substantial financial implications and integrating them into the ERM framework.

Recently, we completed a new double materiality assessment in reference to the European Financial Reporting Advisory Group (EFRAG) guidance for materiality assessment released in February 2024, and the draft European Sustainability Reporting Standard (ESRS), ESRS 1 general requirement standard, released in November 2022, our Double Materiality Assessment is conducted in alignment with Corporate Sustainability Reporting

Disclosure (CSRD) guidelines. We have used the Double Materiality framework to assess a sustainability topic from both impact perspective and/or financial standpoint. We are now in the process of including additional topics like Diversity, Equity, and Inclusion in our ERM approach.

This continuous initiative ensures that pertinent material issues are efficiently handled and monitored within our risk management structure.

Process flow of double materiality

Stakeholder engagement

Stakeholder engagement is crucial to our materiality assessment to ensure a diverse representation of interests across the regions where GCPL operates. As a leading FMCG company, we understand that our responsibilities extend beyond consumer products. The success of GCPL heavily relies on effectively managing sustainability factors to drive business value and make a positive impact on communities and the environment. Through the double materiality assessment, we aim to identify and prioritise the most

significant sustainability factors affecting GCPL, while recognizing areas where GCPL can influence outcomes. To achieve this, we initiated interactions with key stakeholder groups to identify a comprehensive list of material issues. Key stakeholders were identified based on their influence, interest, and impact on the business. These included Leadership, Employees, Suppliers, Customers, Investors, NGO Partners, and Industry Associations. We tailored our questionnaire to stakeholders to gauge their perspectives and priorities.

We assessed each material issue for its relative importance across different stakeholder groups, and these insights were aggregated through stakeholder analysis.

Stakeholder prioritisation

We assessed the importance of stakeholders based on two critical parameters – their ability to influence GCPL’s performance and operations, and the extent of their influence due to GCPL’s performance and operations. We

then assigned relative weightages based on these parameters. This helped us to accurately prioritise materiality topics based on stakeholder conversation and inputs and reflect the significance of each stakeholder in our business context.

Stakeholder	Stakeholder group	Ability of a stakeholder to strongly influence GCPL’s performance and operations	Extent of influence on a stakeholder due to GCPL’s performance and operations
Internal Stakeholders	Leadership Team (L4)	High	High
	Employees (L3-L1)	Medium	High
External Stakeholders	Suppliers	Medium	Medium
	Customers	Medium	Medium
	Investors	Medium	High
	NGO Partners	Low	Medium
	Industry Associations	Low	Medium

Methodology & findings

For fiscal year 2023-24 double materiality assessment, we considered both GCPL’s domestic and international operations spanning India, Sri-Lanka, Bangladesh, Argentina, Chile, Africa, Indonesia, and the USA.

To kick off, we updated GCPL’s previous materiality assessment from 2020

and conducted secondary research on global frameworks and the FMCG sector landscape to draw out relevant sustainability topics. We identified a universe of 40 material topics to be considered for the assessment. Below is the preliminary list of sustainability topics:

Preliminary universe of 40 identified material topics

Sr

Environment
1

Climate Change
2

Biodiversity & Land use
3

Forestation
4

Ecological Impacts
5

Energy Management
6

Emissions
7

Toxic Emissions
8

Product Carbon Footprint
9

Water Management
10

Waste Management
11

Environmental Policy & Management Systems
12

Community Relations
13

Product Safety & Quality
14

Labor Practice Indicators

Sr

Social
15

Privacy & Data Security
16

Supply Chain Management
17

Chemical Safety
18

Health & safety
19

Human Capital Development
20

Materials Sourcing & Efficiency
21

Customer Relationship Management
22

Selling Practices & Product Labelling
23

Product Design & Lifecycle Management
24

Customer Privacy
25

Access & Affordability
26

Talent Attraction & Retention
27

Sustainable Agricultural Practices

Sr

Governance
28

Innovation Management
29

Business Ethics
30

Tax Transparency
31

Ownership & Control
32

Corporate Governance
33

Accounting
34

Competitive Behaviour
35

Management of the Legal & Regulatory Environment
36

Critical Incident Risk Management
37

Systemic Risk Management
38

Policy Influence
39

Transparency & Reporting
40

Macro Economy & Geopolitical Risk

We selected these 40 topics for our stakeholder engagement, involving interactions with employees, suppliers, investors, consumers, industry partners, and NGO partners. We organised 47 one-on-one interviews – online and in-person – across geographies. The discussion enabled us to identify sustainability areas important to our stakeholders. Based on this, our

preliminary list of 40 material topics was refined to a consolidated list of 20 material topics.

We then conducted an online survey and asked our stakeholders to rank the significance of each topic. This helped us

to gather stakeholder perspectives on current and potential sustainability risks and opportunities. We collected 184 responses across all our stakeholder groups. Based on these inputs and the weightage assigned to each stakeholder group, we computed and prioritised the top 20 topics based on stakeholder preferences.

Material issues

Top material issues	Link to our strategic pillars
Sustainable packaging	Accelerating innovation and building purposeful brands: Integrating sustainability into our brand purpose through sustainable packaging Enhancing go-to-market: Differentiating our products and exploring new market segments Building a more inclusive and greener world: Driving responsible consumption by reducing post-consumer footprint of packaging material
Research and development (R&D)	Accelerating innovation and building purposeful brands: Developing products with natural ingredients to differentiate our products from those already avaliable in the market and improve market position Making our supply chain best-in-class: Integrating sustainable materials into our supply chain for rapid innovation and product development Building a more inclusive and greener world: Reducing the overall footprint of our product penetration
Responsible marketing and communication	Accelerating innovation and building purposeful brands: Developing products with natural ingredients to differentiate our products from those already available in the market and improve market position Making our supply chain best-in-class: Integrating sustainable materials into our supply chain for rapid innovation and product development Building a more inclusive and greener world: Reducing the overall footprint of our product penetration
Building inclusive and prosperous communities	Making our supply chain best-in-class: Improving the environmental footprint of our entire supply chain Building a more inclusive and greener world: Improving social relationships through CSR interventions in local communities
Governance and accountability	Making our supply chain best-in-class: Improving the performance of our entire value chain through governance, codes, policies, and audits Fostering an inclusive, agile, and high-performance culture: Harnessing our company purpose to build greater engagement with team members and drive agility and innovation
Occupational health and safety	Making our supply chain best-in-class: Ensuring best practices are followed to improve overall performance across the value chain Fostering an inclusive, agile, and high-performance culture: Building greater engagement with team members by focusing on their safety and well-being
Skill development and training	Extending leadership in core categories and geographies Leveraging digital: Achieving improved growth and market penetration by developing the skills (including digital skills) of team members Fostering an inclusive, agile, and high-performance culture: Enhancing the skills of team members to build capabilities and improve engagement

GCPL Materiality Matrix

The following figure maps out the entire universe of material issues and stakeholder input and its significance in our business.

GCPL Materiality Matrix

A note on COVID-19

We engage with all our stakeholders on a regular basis to foster and nurture strong relationships, which in turn help us improve our strategy

and decision-making and grow our business. In a crisis like the COVID-19 pandemic, our partnerships with our stakeholders became even more important.

The table below provides an overview of our stakeholder engagement process and the steps we take to understand the needs and priorities of each stakeholder group.

Stakeholders and their significance	Frequency and manner of stakeholder engagement	Sustainability and other concerns	Our engagement approach
Consumers	Making our supply chain best-in-class: Improving the environmental footprint of our entire supply chain Building a more inclusive and greener world: Improving social relationships through CSR interventions in local communities	Product safety and quality Waste management and circular economy	Providing high-quality, safe products that delight consumers Understanding short and long-term needs Ensuring responsible consumer engagement
Investors and shareholders	Investor meets Investor calls Roadshows and grievance forums for shareholders and investors	Profitability and growth Focus on carbon emission, renewable and clean energy, and air pollution Technology, product, and process innovation Embed sustainability in supply chain	Communicating progress transparently
Employees	Weekly/monthly reviews HR forums Town halls Small group discussions Employee engagement surveys 360-degree feedback	Health, safety, and mental well-being Skill development and learning Circular economy principles Water recycling and reuse Sustainable packaging	Ensuring a safe and productive place to work where employees can be their whole selves Prioritising learning and development Highlighting employee feedback mechanisms through a variety of channels Enabling medical facilities for employees and their families
Suppliers	Sustainable procurement initiative Supplier meets Audits Annual suppliers conference	Product safety and quality Responsible supply chain Reducing environmental footprint Waste management and circular economy Sustainable packaging	Supporting and enhancing their capabilities through skill development, growth opportunities, and safe operations
Customers	Customer meets Customer surveys Feedback calls Direct visits	Greater market penetration Responsible marketing and communication	Using technology to assess and respond in an agile manner Providing high-quality, safe products that delight consumers Ensuring responsible consumer engagement
NGO partners and community	Project planning and review meetings Need assessment surveys Field visits Feedback surveys	Building inclusive and prosperous communities	Responding to the COVID-19 crisis by supporting communities with immediate relief kits and medical supplies and longer term livelihood revival Creating and scaling up programmes that meet the needs of communities in terms of livelihoods, public health, waste management, and water conservation
Government and regulatory bodies	One-on-one meetings Meetings in industry forums	Carbon emission, energy efficiency, and waste management Building inclusive and prosperous communities	Committing to meet and exceed compliance and regulatory mandates Collaborating on national agendas to build inclusive and prosperous communities