REWE Group Sustainability Report 2018

Product-related Risk Analyses

REWE Group strives to reduce the environmental and social impacts of its business operations wherever possible. To achieve this, the REWE Group carries out analyses to assess social and environmental risks on multiple levels, including the product group and commodity levels, to formulate strategies, and on the level of individual products, topics or countries to concretise individual measures to be taken. The REWE Group continuously reviews its risk containment efforts and progress within this framework. When different goals come into conflict with one another, the company calls on experts from its own ranks and from external stakeholder groups.

GRI 102-11: Precautionary principle or approach

Analysis of the Social and Environmental Risks in the Supply Chains

Risk analysis is carried out to determine and evaluate the impact of business activities on people and the environment. In 2016 and 2017 this approach was significantly expanded in order to obtain a comprehensive overview of the value chains. The aim was to identify any significant negative ecological and social effects store-brand products have, and where these occur. Hence, the analysis created a basis for the strategic alignment in the area of more sustainable product ranges and can be used to decide what measures are to be taken and with which priority – with the aim of minimising risks and taking advantage of opportunities. For example, the information was used to develop the Green Products 2030 strategy , in which topics, key performance indicators (KPIs), goals and measures are defined.

REWE Group Germany has carried out a formalised risk analysis for food and non-food products of the supply chains for its store-brand products distributed by REWE and PENNY in Germany. For this, the range of food and non-food products was organised into 37 clusters of goods. The analysis thus covers the entire range.

There are two parts to the procedure: a qualitative and a quantitative analysis. In the qualitative analysis, studies and reports were evaluated and buyers and NGOs were interviewed to determine significant sustainability topics throughout the value chains. In addition to the ecological effects, risk in the areas of working conditions and human rights were identified.

The quantitative analysis, based on an input-output analysis, is based on an economic model. For this analysis, ecological effects in the supply chain, such as greenhouse gas emissions, were determined and converted into monetary amounts. Social effects were assessed by identifying how many people are employed in the entire supply chain for each cluster of goods. These data were linked with the company’s purchasing volume and with information about production countries and countries of origin to specifically evaluate ecological and social risks from a monetary aspect. For example, the external costs of the company’s management were quantifiable for the individual clusters of goods. This allowed fact-based identification of ecological and social hot spots along the entire value chain, pointing out particularly high-risk product groups and focus commodities.

The analysis yielded the insight that the most impact is concentrated in the supply chain links of commodity cultivation and processing. Accordingly, REWE Group activities are focused on these.

Impact Along the Value Chain

Cultivation/farming
Processing
Logistics
rewe
REWE Group
Consumer
Waste disposal
Animal Welfare & health
Air emissions & energy
Space usage
Water
Human rights & working conditions
Transport
Transparency
Nutrition & health
Waste (includes food waste and packaging)

Impact

low high

The analysis additionally showed that the following are critical commodities: fruits and vegetables in general, bananas and pineapples in particular; meat and dairy products, including animal feed; coffee, cocoa, tea, palm oil, fish, cotton, textiles and natural stones (for more information see the section Raw Materials in Focus – Food and Raw Materials in Focus – Non-food).

Scorecards aggregate the results of the analysis for each individual cluster and provide an overview of the social and environmental costs of the respective products in the value chain. Allocating goods to the five levels of the value chain allows a more precise view of the key issues.

Example: Impact on Fruits and Vegetables

In the “fruit and vegetables” cluster, air emissions and energy, biodiversity, soil, water, working conditions and human rights were determined to be the most important sustainability issues along the supply chain:

Scorecard for Fruit and Vegetables – Overview of Ecological and Social Impact

Raw material production
Processing
Transport
Consumption
Packaging, end-of-life
Air emissions, energy Human rights & working conditions Environmental impact Packaging
Biodiversity Water CO2 emissions Food waste
Soil Transparency & business practices
Water
Working conditions, human rights

Results in the Fruits and Vegetables Product Cluster

Key issues
Air emissions & energy
  • Carbon dioxide emissions from using fertiliser and energy consumption during farming
  • Carbon dioxide emissions from logging to gain farming land
  • Transport emissions
Biodiversity
  • Risks to biodiversity from pesticides, use of chemicals, etc.
  • Risks to biodiversity from logging to gain farming land and the associated soil exhaustion and erosion
Soil
  • Exhaustion of agricultural soil
  • Soil erosionsion
Water
  • Water pollution from fertiliser
  • Waste of fresh water during cultivation and during production/processing
Working conditions
  • Workplace safety (handling chemicals, pesticides, pollutants, etc.)
  • Wages (e.g. of agricultural workers and also during processing)
  • Limited access of small farmers to information, technology and resources
Human rights
  • Risk of child labour

The scorecards indicate the key issues and their relevance and present the individual findings in detail. The results are also compared with the current sustainability activities of REWE Group Germany. This allows the necessary measures to be derived and taken.

For further information see the section Risk Management.

Further topics in this area:

Regional Products

GRI 204-1

Raw Materials in Focus – Food

GRI FP1

Raw Materials in Focus – Non-food

GRI FP1

Organic

GRI FP2

PRO PLANET

GRI FP2

Packaging

GRI 301

Biodiversity

GRI 304

Ecological Impacts
Within the Supply Chain

GRI 308

Social Issues
in the Supply Chain

GRI 412, 414

Customer Health
and Product Safety

GRI 416

Promoting Sustainable Consumption

GRI 417

Animal Welfare

FP10

Child Labour
and Forced Labour

GRI 408, 409

Livestock Farming Conditions

FP10

Nutrition

FP10