Materiality process

Impact materiality process

Each of Wesfarmers' seven divisions conducts its own annual materiality assessment. This considers the division's strategy, business model, sector, geographic footprint, operating environment and value chain, including its key stakeholder relationships. Divisions document relevant assumptions and judgements where full value chain visibility is not feasible, consistent with GRI's principles of transparency and verifiability.

Divisions identify a broad range of actual and potential impacts, both negative and positive, across their own operations and value chain, using internationally recognised frameworks such as the UN Guiding Principles on Business and Human Rights, along with relevant GRI Sector Standards, to help ensure common industry impacts are considered.

The divisions assessed positive impacts based on their likelihood, scale and scope. Negative impacts were assessed based on likelihood, scale, scope and irremediability. Following the assessment, impacts were grouped into sustainability topics. A weighted score was then calculated for each topic, considering both the significance and number of impacts identified, to support the prioritisation of material topics. Topics are then ranked and reviewed by divisional management, drawing on peer benchmarking, media analysis and stakeholder feedback.

Topics identified through divisional assessments are consolidated at a Group level through a structured, multi-stage process. This includes an assessment of factors such as operational and economic scale, geographic footprint and severity of impact, followed by a review incorporating peer benchmarking, external standards and regulatory alignment, and any significant human rights considerations. Input from subject matter experts is also considered before topics are finalised.

The FY26 assessment identified 10 material topics. The updated list reflects changes in the grouping, scope and naming of topics, as well as the identification of new material topics. Compared with FY25:

• Nature and Biodiversity (including water and wastewater), Customer health and safety (including product quality) and Waste were added as new material topics.

• Greenhouse gas emissions (including climate, decarbonisation and energy) was broadened and renamed Climate adaptation, resilience and transition.

• Governance and corporate ethics, Procurement practices and supply chain and Product labelling was not identified as a standalone material topic in FY26.

These changes reflect the outcome of the FY26 materiality assessment and do not necessarily indicate that topics removed as standalone material topics are no longer managed or reported elsewhere.

Stakeholder engagement

Stakeholder engagement directly informs the identification and assessment of the Group's impacts, supplemented by input from subject matter experts, and community and Indigenous perspectives, before topics are finalised at a Group level. For the full range of stakeholder groups engaged, engagement channels and governance, see the Stakeholder engagement section of the Wesfarmers website.

For the purpose of the materiality assessment, priority is given to stakeholders most severely affected or potentially affected by our activities, including those without a direct relationship to Wesfarmers, such as workers in our supply chain and communities distant from our operations. This severity-based lens is broader than, and complements, the impact, proximity and dependency criteria used to select stakeholder groups for day-to-day engagement.

Engagement methods vary by stakeholder group (see Stakeholder engagement section of the Wesfarmers website) and are supplemented by peer benchmarking and media analysis to help validate and contextualise the topics identified. Wesfarmers' materiality assessment methodology and topics have been subject to limited assurance by an independent third party.

FY26 material sustainability topics

• Climate adaptation, resilience, and transition (incl. GHG emissions and energy)
• Modern slavery and ethical sourcing
• Team member health and safety
• Data and cyber security
• Customer and product health and safety
• Environment, nature and circular economy (including water and wastewater)
• Investing in stronger communities
• Advancing reconciliation and rights of Indigenous Peoples
• People development, diversity and inclusion
• Waste and packaging

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