Sustainability management

A company can generate profitable growth only if it acts responsibly towards society and the environment. We deeply believe in this principle of sustainability. For this reason, we acted during the reporting year to create a sustainability vision that will serve as a Group-wide foundation for the long-range transformation of METRO GROUP and as a guideline for our sustainability management. Above all, this vision defines our understanding of sustainability.

METRO GROUP. We offer quality of life.

FOR OUR CUSTOMERS – by providing them with safe quality products and services where they live, around the world, constantly improving our processes. And with products that are made, processed and recycled in a socially responsible, environmentally sound, resource-conserving manner. This lets us secure our future.

FOR OUR EMPLOYEES – by at all times respecting, protecting and helping them grow professionally, and by building trusted relationships with them. This lets us create an attractive working environment.

FOR ALL WHO WORK for US – by doing business fairly and responsibly and providing good living and working conditions. This lets us demonstrate responsibility in the supply chain.

FOR SOCIETY – by protecting the environment, conserving natural resources and minimising our effect on the climate. This lets us help ensure a sound footing for the retailing of tomorrow.

Organisational structure

The central institution of our sustainability management is our Sustainability Board. It integrates all relevant Group functions and areas. To optimise coordination processes, we made a series of changes within the board at the beginning of 2012.

The Sustainability Board includes 2 members of the Management Board of METRO AG and 1 member each from the management boards of the sales lines and of METRO PROPERTIES. Representatives of the Group units Corporate Communications and Sustainability of METRO AG are also members of the board. The Sustainability Board draws on the sustainability vision to develop guidelines, standards and strategies, formulates goals and defines key performance indicators to measure success. It is supported by 4 working groups. These groups develop programmes designed to reach the Group’s goals, form project groups, monitor implementation and report progress to the board. A preparatory committee acts as an interface, ensuring that tasks are passed on to the working groups and the results are collectively reported.

The sales lines and companies of METRO GROUP are charged with the responsibility of introducing the programmes on an operational level. They are assisted in this work by sustainability officers whom they have appointed. Furthermore, they are gradually developing their own systems of sustainability management as a way of further optimising this work.

Focal points of sustainability management

Our sustainability management comprises 4 focal points that apply to the entire METRO GROUP:

  • Supply chain and products
  • Energy and resource management
  • Employees and social affairs
  • Social policies and stakeholder dialogue

These fields of action cover the entire supply chain and our points of interaction with society. They identify the areas where our impact on sustainability-relevant processes is the greatest.

To review and elucidate the strategic implementation of our vision, we report in this section of the management report about the Sustainable Development Key Performance Indicators (SD KPIs).

Supply chain and products

Our core business is supplying private and professional customers with safe, high-quality goods. By taking a wide range of steps, we help to shape production and work conditions. The focal points of this work include the responsible use of raw materials, the careful selection of producers and sup­pliers, and the provision of our assortments with products that are made, processed, sold and used in a resource-conserving, socially responsible manner. We are committed to ensuring that the use of resources and the procurement of products can be traced throughout the entire supply chain. Through our guidelines on sustainable procurement, the expansion of our effort to promote fair working conditions and the monitoring of social and quality standards, we are strengthening our purchasing channels and improving the quality and sustainability of our products.

Social audits of own imports through MGB Hong Kong

Energy – electricity and heat usage in kWh per sqm of selling space (graphic)

Fair, socially just working conditions among suppliers

Compliance with social standards throughout the entire supply chain is vital. Knowing this, we have integrated the key work standards of the International Labour Organization (ILO) into our guidelines. Furthermore, we comply with the guidelines issued by the Organisation for Economic Co-operation and Development (OECD) for multinational corporations. Our suppliers are contractually required to protect human rights and to guarantee fair working conditions. Areas of our support include helping them to implement the requirements of the Business Social Compliance Initiative (BSCI), which we co-founded more than 10 years ago, or equivalent standards. The BSCI works to ensure that fundamental human rights are assured in the production and supply chain. To ensure that these standards are being met, we require our suppliers to undergo audits. All nonfood suppliers who deliver products into the EU through our subsidiary MGB Hong Kong have undergone such audits. 62 percent of them received a score of satisfactory in 2012. If requested, we will work with suppliers who fail to achieve this score until they can fulfil the requirements. By 2015, we intend to integrate nonfood suppliers who deliver products through local importers into the BSCI or an equivalent system of social standards.


Food quality and safety

Our sales lines assume direct responsibility for our own brands. The Company’s guidelines guarantee comprehensive quality management. This effort includes supplier evaluations conducted in accordance with the international standards of the Global Food Safety Initiative (GFSI). In this manner, certification of compliance with a food-safety standard recognised by the GFSI becomes a mandatory component of all contractual relationships for our own-brand suppliers. Furthermore, regular analytical and sensory inspections of products are conducted. These inspections are carried out and coordinated by the Company’s own quality assurance staff or by external testing labs. As part of complaint management, information from customers is used to refine products and improve processes. These processes are backed up by preventive crisis management. In this area, media reports about critical situations are carefully evaluated. The appropriate steps are then taken and incorporated into the processes to ensure consumer protection. The objective is to identify potential problems at the earliest possible stage and, thus, to provide the highest levels of quality and product safety. But even a quality assurance system that employs the very latest technology cannot provide 100 percent protection against human error or criminal activity. Should problems with products occur in spite of the careful inspections, the quality management team will take immediate action to ensure that the affected products are removed from store shelves and that consumers are transparently informed about the situtation. These comprehensive procedural regulations fully apply to own-brand products and to fresh foods, including meat, fish, fruit and vegetables.

Expansion of supplier qualifications

Local suppliers and producers are important partners for us because we obtain a major share of the foods for our stores from them. With proprietary training courses and established qualification programmes, we help suppliers in developing and emerging countries to meet the high quality standards. As part of strategic partnerships with such international development organisations as the United Nations Industrial Development Organization (UNIDO), the International Finance Corporation (IFC) and the German Society for International Cooperation (GIZ, Deutsche Gesellschaft für Internationale Zusammenarbeit), we provide training to local producers and suppliers of fresh foods. In the reporting year, we provided training to more than 60 suppliers in Russia, Ukraine and India. The main topics covered in this training included food safety and hygiene, warehousing, transport and processing. The training helped the suppliers to meet the requirements of the Global Food Safety Initiative (GFSI) and to qualify for an internationally recognised certificate. The programmes can help to reduce suppliers’ post-harvest losses by up to 40 percent, raise the volume of their marketable products and improve their income.

Environmentally and socially certified products

With our assortments, we meet the expectations of our customers in terms of environmentally conscious and socially acceptable products. These products include those from fair trade or foods that bear the European organic seal. In the reporting year, our sales lines in Germany generated sales of products certified by the EU organic directive that totalled nearly €50 million.

In addition, our sales lines provide customers in many product groups with a broad range of environmentally conscious and socially responsible products. These products include

  • efficient electric appliances bearing energy labels from A+ to A+++,
  • stationery produced in compliance with the standards of the Forest Stewardship Council (FSC) or Blauer Engel (Blue Angel),
  • natural cosmetics and
  • textiles made from organic cotton or cotton produced in accordance with the “Cotton made in Africa” standard.

METRO GROUP is currently developing a system to track the sales of these products.

Products from responsible fishing and aquaculture

METRO GROUP is committed to the principles of sustainable and environmentally conscious fishing. In 2002, we became the first retail and wholesale company in Germany to offer own-brand products bearing the seal of the Marine Stewardship Council (MSC) for wild fish. It attests that a product came from a responsibly managed fishing operation. Today, our sales lines offer an array of MSC-certified brand and own-brand products. In 2012, our sustainable range of fish sold in Germany comprised 78 MSC-certified own-brand products and 658 brand products. These products generated sales of approximately €54 million. We are also continuing to support the development of the ASC seal (Aquaculture Stewardship Council) for farmed fish. Similar to the MSC seal, this label is designed to help consumers buy sustainable foods. The first ASC products are now being sold in our stores.

Energy and resource management

Energy and natural resources are the foundation of our core business. Their use, however, impacts the Earth’s environment and climate. For this very reason, we assume responsibility for environmental and climate protection in the areas of the supply chain we can directly influence. These efforts include the storage and cooling of products, their transport, and the operation of our stores and administrative offices around the world. In taking this approach, we also address the rising costs of energy and resources.

With our energy and resource management, we intend to reduce the climate-relevant emissions of our business oper­ations. We are striving by 2020 to cut our greenhouse gas emissions per square metre of selling space by 20 percent compared with the level in 2011. To achieve this goal, we are systematically working to efficiently use energy. In addition, we intend to minimise our consumption of resources. In this work, we are focusing in particular on reducing our paper consumption and the emissions generated by the use of refrigerants.

Increased energy efficiency

To be able to systematically plan, carry out and monitor energy and efficiency measures, our sales lines use smart metering systems. Thanks to these systems, a location’s consumption of electricity, natural gas and heating oil can be measured in a continuous and, thus, usage-based manner. Today, 95 percent of all METRO GROUP stores and outlets are equipped with these systems.

Energy – electricity and heat usage
in kWh per m2 of selling space

Climate target – greenhouse gas emissions in kg CO2 (CO2 equivalent) per sqm of selling space (graphic)

Lighting as well as heating and cooling systems are respon­sible for the largest share of energy usage. To cut usage levels even further, METRO Cash & Carry and Galeria Kaufhof have replaced fluorescent lamps with LED lights. Another effective step is installing sliding doors on deep freezers and frozen-food shelves. As part of this effort, METRO Cash & Carry has also installed energy-saving fans in all refrigeration units used throughout Germany. By taking this step, our sales line lowered the use of electricity by its German wholesale stores by more than 3,000 MWh in 2012 compared with the previous year’s level.

In the reporting year, energy usage for electricity and heat totalled 433 kWh per square metre of selling space. Compared with 2011, we lowered use by 3.4 percent.


Energy Awareness Programme

Through environmentally conscious behaviour, our employees can make a major contribution to our drive to save energy. For this reason, METRO Cash & Carry developed the Energy Awareness Programme (EAP) during the reporting year. It is designed to encourage employees to use energy more efficiently. In addition, every location has been assigned a specific reduction goal. The programme is scheduled to start in March 2013. METRO Cash & Carry’s overall goal is to achieve a 5 percent reduction in energy usage by August 2013 compared with 2011 and an 18 percent decrease by 2015.

New climate protection target and carbon footprint

In 2012, the Sustainability Board of METRO GROUP set a new climate protection target: by 2020, we will reduce our specific greenhouse gas emissions by 20 percent compared with the level in 2011. This means that we will lower emissions per square metre of selling space by 323 kilogrammes of CO2 equivalents per year to 258 kilogrammes of CO2 equivalents. The climate protection target is part of our Group-wide carbon footprint that we have been disclosing since 2008. To increase the transparency of the data collection and improve comparability, we expanded the scope of our reporting in 2011. The change also made it necessary to recalibrate the climate target we set in 2008.

In the reporting year, METRO GROUP generated 315 kilogrammes of CO2 equivalents per square metre of selling space. As a result, our Group-wide emissions fell by 8 kilogrammes per square metre of selling space compared with 2011, or 2.5 percent. This reduction was primarily achieved by energy-saving programmes.

Climate target – greenhouse gas emissions in kg CO2 (CO2 equivalent)
per m2 of selling space

Carbon footprint – all measured emission sources (graphic)

1 In 2011, we changed the range of emission sources that we monitor. But some primary data for the years before 2011 are not available. For this reason, the reporting year 2010 does not include company car’s and partially pre-chain emissions, network losses for direct and indirect energy sources and the loss of refrigerants.

We also see room for improvement in the area of emissions created by the loss of refrigerants. In years to come, we intend to measurably lower the refill rate of these agents. In addition, a technical programme to reduce leak rates and natural refrigerants are to be increasingly used in buildings and remodelling projects.

Our climate reporting is based on the Greenhouse Gas (GHG) Protocol standard and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The emissions of the sales lines and cross-divisional service companies are considered. In this review, we examine 19 different resources of emissions.

With the help of the Group-wide Carbon Intelligence System that we introduced in 2011, we track the energy consumption and other critical environmental impacts in virtually all outlets and department stores, administrative offices and warehouses. The quality of collected data is high. More than 95 percent of emissions for Scope 1 and Scope 2 draw from the collected data, and less than 5 percent from projections and estimates. We report the total impact of all relevant greenhouse gas emissions as CO2 equivalents.

Since 2011, the auditing firm KPMG AG has audited our carbon footprint and certified its correctness.

Carbon footprint – all measured emission sources

(graphic)

Employees and social affairs

A company that intends to create added value for its customers needs motivated and qualified employees who can turn this pledge into an everyday reality. For this reason, the dedication of our workforce is a focal point of our sustainability management. By employing foresighted human resources concepts, we ensure that the Company has the employees it needs, particularly specialists and managers, to conduct business over the long term. We offer professional development opportunities and an attractive workplace that is characterised by diversity and respect. By taking such steps, we increase our appeal as an employer and invest in the future of our Company.

The human resources policies of METRO GROUP and key performance indicators are contained in chapter "Employees" of the Group management report.

Social policies and stakeholder dialogue

As a leading international retail and wholesale company, METRO GROUP adds its voice to discussions about business and sociopolitical issues. In doing so, we conduct a transparent dialogue with our stakeholders. We also want to live up to our responsibility as a good corporate citizen. Our commitment to society includes compliance with a code of conduct and prin­ciples of good management, a regular dialogue, reporting about sociopolitical issues and charitable activities in the form of fund-raising and sponsoring activities.

You will find in-depth information and other key performance indicators regarding the topic of sustainability in the METRO GROUP Sustainability Report 2012 that is included with the annual report as well as on our website in the Sustainability section. This year, the sustainability report was prepared for the first time in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines. Based on the self-assessment stipulated by GRI, it corresponds to the requirements of GRI Level B.