REWE Group Sustainability Report 2017

Sustainability Strategy

GRI 102-18: Governance structure

GRI 102-19: Delegating authority

GRI 102-20: Executive-level responsibility for economic, environmental, and social topics

GRI 102-21: Consulting stakeholders on economic, environmental and social topics

The Management Board has clearly defined the company’s position in its Guidelines for Sustainable Business Practices: “Sustainability is not a fleeting trend at REWE Group. Rather, it is a fundamental element of its business strategy.” REWE Group considers this to mean one thing: It promotes a more sustainable assortment and deals fairly with partners and suppliers. It does business with the environment and climate in mind. It assumes responsibility for its employees and works to prepare society for the future.

As a leading international trade and tourism company, REWE Group is keenly aware of the special role it plays as an interface among producers, suppliers and consumers. For this reason, the sustainability strategy encompasses all of the company’s business operations in order to integrate more sustainable consumption and tourism into the entire marketplace. REWE Group formulates challenging goals and is not afraid to tackle complex issues. In many cases, it has been a pacesetter introducing ideas that are now general standards. As it carries out its sustainability strategy, REWE Group conducts an intensive dialogue with stakeholders and enters binding, long-term partnerships. It does so because long-range improvements can be achieved only if all participants work together on the same goals. In applying this strategy, the company continuously expands its share of more sustainable products and services and introduces more sustainable consumption to larger and larger segments of the population.

In 2008, REWE Group added the following principle to its mission statement: “We are aware of our responsibility and act sustainably.” At the same time, the company also introduced a system of strategic sustainability management. In 2010, it defined its Guidelines for Sustainable Business Practices and established a binding foundation for REWE Group’s comprehensive commitment to sustainability. The goal was clearly defined from the start: Sustainability should be brought “out of its niche” and introduced to mainstream society.

While introducing its sustainability strategy, REWE Group created four pillars of sustainability in 2008: Green Products; Energy, Climate and the Environment; Employees; and Social Involvement. The company added areas of action within these pillars that outline the key issues of its commitment to sustainability.

Reorganisation of the Company’s Structure since 2016

In 2016, REWE Group made several changes in its company structure that serve as the basis for further improvements in efficiency and long-term profitable growth. As part of the changes, it created a new central organisation in which the sales lines REWE and PENNY were merged.

REWE Group refocused its sustainability strategy at the same time. In 2016, it carried out a comprehensive strategy process in which the organisation and the focal points of its sustainability strategy were evaluated and developed further. The core element of this strategic realignment is the provision of increased freedom to individual sales lines to carry out the sustainability strategy and, thus, to facilitate added customisation of the strategy to the specific needs of each sales line. In taking this decision, the company addressed the different business models of food retail, travel and tourism, and DIY stores, each of which has different stakeholder expectations and sustainability challenges. Each sales line can focus on those places where it has the biggest lever for improvements. At the same time, it can better tailor more sustainable products and services to the needs of various customer groups. The more sustainability becomes a success factor in the sales lines’ business, the faster and more effectively sustainability will become a fixture in the mass market.

REWE Group’s four pillars of sustainability continue to underpin its overarching strategy, and the Guidelines for Sustainable Business Practices continue to serve as the joint direction and canon of values for the company’s commitment to sustainability. In 2016, DER Touristik reworked its sustainability strategy under the motto “DER Welt verpflichtet” (Committed to the World). As part of this work, a materiality analysis was conducted under consideration of the sales line’s most important stakeholders. In the first step, the sales line conducted a baseline study and competitive analysis. Customers, employees and NGOs, among others, were surveyed online to identify and prioritise key issues. In addition, about 60 managers of DER Touristik took part in personal interviews in which they evaluated the issues in terms of opportunities and risks for the company as well as on the basis of the potential to exert influence. The identified issues were consolidated. They were then prioritised and approved by the International Board of DER Touristik. To implement the strategic focuses, effective measures will now be developed and measurable goals will be set.

REWE and PENNY also conducted a far-reaching materiality analysis on continued strategy development in 2016. This work drew on findings from customer and market research and stakeholder surveys. Benchmark studies were conducted in the food retail sector, among other areas, and the political landscape was analysed. In addition, the sustainability strategy was reviewed in terms of its contribution to the Sustainable Development Goals (see below). The objective of this analysis was to identify potential opportunities and risks associated with the revision of the sustainability strategy. In the second stage of the work, the areas of action and the focal points of the company’s commitment were reviewed on the basis of the results of the analysis and adjusted when necessary. Up to six workshops were conducted for each pillar in the sustainability strategy. These workshops were attended by experts in the particular field as well as by representatives of the sales lines, the Corporate Responsibility department and the Strategy department. The workshops facilitated a discussion about and an evaluation of the relevance of the identified issues and challenges in terms of the company’s strategy and its operational business activities. As a result of this work, adjustments were made in the areas of action for the sales lines involved in food retail in Germany. Since then, the sustainability strategy has been subject to an annual review in which all the available information, such as customer surveys, analyses of the competition, stakeholders topics and the political environment are considered.

The other sales lines were included in the process of the materiality analysis during interviews and workshops. They are now in the process of reviewing the new areas of action in food retail in Germany and introducing them either in whole or in part. At the end of 2017, the areas of action from the pillars Energy, Climate and the Environment, Employees and Social Involvement will be adopted by the other sales lines. The Green Products pillar is still in the coordination phase. Within the areas of action, each sales line focuses on the topics that are important for it.

For more information about the areas of action and the key performance indicators, see the higher-level management approaches for “Green Products”, “Energy, Climate and the Environment”, “Employees” and “Social Involvement”.

Pillars of sustainability and areas of action for food retail in Germany starting in mid-2016

Green Products

Areas of action:

  1. Fairness
  2. Conservation of resources
  3. Animal welfare
  4. Diet

Energy, Climate and the Environment

Areas of action:

  1. Energy efficiency
  2. Climate-relevant emissions
  3. Conservation of resources

Employees

Areas of action:

  1. Values and culture
  2. Training and professional growth
  3. Health and safety
  4. Job and phases of life
  5. Diversity and equal opportunity

Social Involvement

Areas of action:

  1. Promotion of healthy diets and exercise
  2. Opportunities for children and adolescents
  3. Vigilant approach to food
  4. Biodiversity and environmental protection

Sustainability Organisation

At REWE Group, the company’s management has made sustainability its highest priority. Since the sustainability strategy was introduced in 2008, it had been directed by CEO Alain Caparros. This responsibility was passed to his successor, Lionel Souque, with the change of leadership at the company on 1 July 2017. Like his predecessor, the new CEO believes that sustainable business practises are a precondition for the company’s long-term success (see the statement by Lionel Souque).

Until mid-2016, a high-ranking sustainability strategy group had been responsible for managing REWE Group’s sustainability strategy. The committee served as a decision-making body and idea generator for the strategy’s implementation in all sales lines. It formulated the company’s annual sustainability goals and oversaw the progress of projects and key performance indicators (KPIs). The sustainability strategy group was drawn from the entire REWE Group: It was composed of members of the Management Board, all fully authorised representatives of REWE Group, managers from all sales lines and holding areas, the chairman of the Central Works Council and a representative of the independent retailers.

As part of the recalibration of the strategy in 2016, REWE Group bolstered the sustainability organisation within the individual sales lines and further integrated sustainability into business processes. The responsibilities of the strategy group were also transferred to the sales lines; the sustainability department and the pillars of sustainability were strengthened; and sustainability was integrated into regular decision-making processes. In taking these steps, REWE Group is determined to develop sustainability measures in closer proximity to its business operations and customers and to introduce them more rapidly. From 2017, a group-wide sustainability information event will be held at least once per year so that sustainability issues and best practices can be discussed among the management and divisional management levels of the individual sales lines (REWE, PENNY, Travel and Tourism, toom Baumarkt DIY stores and REWE International AG).

For the pillar Green Products, the new department Sustainable Products was created at REWE and PENNY. This new unit was placed directly within purchasing and supports the development of sustainable assortments there. In other areas, project groups are continuing to work across sales lines, including for the pillars Energy, Climate and the Environment and Social Involvement. This work will create agile structures in which project teams will be able to work together in a results-driven manner. Independent retailers are also included in these processes. This enables their ideas and experiences to flow into decisions regarding the development of sustainability at REWE Group.

The members of Division Management Boards or managing directors are responsible for each pillar, thus underscoring the importance of the pillars of sustainability and the work on them. Measures based on the pillars of sustainability are developed to reflect the goals and the positioning of the sales lines. These steps are then approved during regular annual and strategy-planning sessions of REWE and PENNY. As a result, the responsibility is integrated into established decision-making processes all the way to the operational level.

Each sales line has a sustainability unit to develop the sustainability strategy of the sales line. Corporate Responsibility, based in Cologne, develops the sustainability strategy of REWE and PENNY in Germany in agreement with the respective strategy units. It also supports and coordinates implementation of the sustainability strategy of the entire REWE Group and acts as a central interface between the sales lines and dealings with external stakeholders. As part of sustainability reporting, Corporate Responsibility documents and analyses the progress being made by sustainability projects and in the KPIs. It also takes on an advisory role for project groups and sales lines.

The sustainability organisation of REWE International AG is led by the Holding Management Board which is supported by the Sustainability executive department. Responsibility in the individual trade companies under the holding’s umbrella is assigned to the respective board members, management teams and top executives. Working and project groups for each of the four pillars of sustainability are responsible for putting the measures into effect. Sustainability plays an integrative role in business activities thanks to the inclusion of sustainability management in the strategies of the trade companies under the umbrella of REWE International AG.

During the reporting period, CEO Detlef Riesche had the main responsibility for sustainability at toom Baumarkt DIY stores. As in the entire REWE Group, the sales line’s sustainability management is based on the four pillars of sustainability. toom has created a department in purchasing that comprehensively coordinates the issue of sustainability, even beyond the continued expansion of assortments that include more sustainable products. Decisions about the sales line’s strategic focus and projects are taken during the regular meetings of its sustainability committee. This committee is composed of representatives of the management team, managers for the pillars and other nominated employees from relevant departments.

As Chief Executive Officer of DER Touristik Group, REWE Group Board Member Sören Hartmann was mainly responsible for its sustainability. The central sustainability department helps the international Executive Board of DER Touristik Group develop the strategy and coordinates and controls the implementation measures. In 2018, a Sustainability Advisory Board will be established to advise management with regard to strategic priorities and initiatives, make decisions about operational implementation of the strategy and implement the sustainability goals in the individual business units.

Sustainable Development Goals

In 2015, the United Nations adopted Sustainable Development Goals (SDGs). These 17 objectives address the key challenges of sustainable development on a global level. The SDGs are to be reached by 2050 and are broken down into 169 targets. REWE Group is determined to support the effort to reach these goals by carrying out its sustainability strategy. To do so, it has compared its sustainability goals and business processes with the 17 UN development goals and the related 169 SDG targets. Following this analysis, sustainability managers at REWE Group prioritised the SDGs and targets. Their ranking of the most relevant SDGs was taken up during a podium discussion held as part of the REWE Group Dialogue Forum with stakeholders in 2016. The feedback provided by stakeholders was used in an overall ranking in which the following SDGs were given a high priority for REWE Group:

  • Responsible Consumption and Production
  • Life on Land
  • Life Below Water
  • Decent Work and Economic Growth
  • Zero Hunger
  • Affordable and Clean Energy

The analysis shows that REWE Group’s sustainability activities will help to achieve the SDGs ranked as relevant and identifies additional potential for future activities.

You will find more information about work of the pillars of sustainability in this report:

More topics:

GRI 102-1 – 102-7, 102-10

REWE Group Portrait

GRI 102-8, 102-41

Employee Structure

GRI 102-9

Supply chain

GRI 102-12, 102-13

Initiatives and Memberships

GRI 102-16, 102-17

Ethics and Integrity

GRI 102-45 – 102-47, 102-49

Materiality

GRI 102-40, 102-42 – 102-44

Stakeholder Dialogue

GRI 102-48, 102-50 – 102-56

Report Profile

GRI 201

Economic Performance

GRI 205, 206, 307, 419

Compliance

GRI 415

Public Policy

GRI 418

Customer Privacy