REWE Group Sustainability Report 2018

Ecological
Impacts Within the Supply Chain

REWE Group purchases a broad range of products and product components from sources located inside and outside Germany. Within the supply chain, farming and production in particular have negative environmental impacts, involving the consumption of natural resources. In addition, global demand for raw materials is rising. Therefore, conserving resources is a major concern for REWE Group.

To permanently integrate sustainability into its company processes, REWE Group has developed an all-encompassing sustainability strategy that is made up of four main pillars: Green Products; Energy, Climate and the Environment; Employees; and Social Involvement. The Green Products Strategy 2030 was adopted in 2017 in a move to more strongly anchor sustainability within procurement processes. In the action areas of ethical business practices, animal welfare and conservation of resources, the trade and tourism company designs effective measures to reduce environmental and social impacts as part of the Green Products commitment. Activities connected with environmental impacts arising within the supply chain centre on conservation of resources, aimed at protecting natural resources and preserving biodiversity. The focus issues of circular economy, biodiversity and water have been defined, and specific work is being carried out on these. Within the complex of issues pertinent to the topic of circular economy, the focus is currently on Packaging.

GRI 308: Supplier environmental ratings

Management Approach

To reduce environmental impact stemming from the supply chains, REWE Group ensures that the suppliers and business partners it selects comply with environmental standards. The company cooperates with these parties to heighten transparency within supply chains and achieve more environmentally friendly production. In a policy document entitled Guideline for Sustainable Business Practises, REWE Group has formulated principles for conducting business relationships. In the area of the environment, these principles are as outlined below:

  • Prudent use of such resources as land, air, water and natural raw materials
  • Protection and preservation of natural ecosystems and biodiversity
  • Avoidance and reduction of environmental risks

These basic principles apply to the company’s own business processes and to those of REWE Group’s business partners and suppliers. REWE Group reserves the right to apply sanctions when the values set forth in the guidelines are deliberately and flagrantly breached.

REWE Group utilises a four-stage process to identify significant environmental impacts and allow appropriate steps to be taken to improve product supply chains – which can be both complex and global in scope.

Step 1: Thorough risk and hot spot analyses are conducted to identify impacts. REWE Group has substantially expanded and systematised its risk recognition efforts since 2016. For more information, see the section Product-related Risk Analysis.

Step 2: Focus raw materials and key issues are identified based on insights obtained in step 1. Textiles, plastics and metals as well as fruit and vegetables in the food area have been identified as product groups with particularly high environmental impact.

Step 3: The focus raw materials and key issues are addressed via measures suitable for reducing negative impact. These measures are implemented by means of a management approach that is applied on three levels:

  1. Internal management, through training of purchasers, for example
  2. Supply chain management, through requirements for suppliers or for purchasing certified raw materials, for example
  3. Stakeholder management, by further developing standard organisations, for example

Measures can be defined in different ways depending on which risks are identified. They include a demand for standards and certifications, cooperation with standards organisations, joining industry initiatives as well as conducting projects with local suppliers and producers.

Step 4: The activities implemented are monitored and evaluated. Findings from monitoring flow into the further development of measures.

In order to make progress measurable in the area of action of conservation of resources, the following targets and key performance indicators for store brands have been defined (for more information, see the overarching Management Approach Green Products):

KPI Target Status1
Percentage of relevant food and non-food producers integrated within an environmental programme 100% by the end of 2030 ↗︎
Percentage of more environmentally friendly store brand packaging 100% by the end of 2030 ↗︎
↗︎On Track Target attainedTarget not attained
1 Detailed information on the current status of target attainment should be available from 2019 upon the introduction of system tracking.

Local REWE Group purchasing cooperatives can discuss requirements and issues directly with suppliers or production sites and implement measures. In Asia, for example, the sourcing office REWE Far East (RFE) is responsible for the purchasing of some food and non-food products. As a result, it plays a key role in the improvement of environmental conditions in the supply chain. The Corporate Responsibility Department of RFE maintains direct contact with suppliers and assists with the Green Production Programme and Detox Programme on site.

REWE Group receives procurement support with fruit and vegetables from the wholly-owned corporate subsidiaries Eurogroup and Campina Verde and their national offices in individual countries. This support affords the trading company greater transparency in its value chains. The country representatives for Spain, Italy and Germany ensure close dialogue with Production and that REWE Group requirements are met in optimal fashion.

GRI 308-2:

Negative environmental impacts in the supply chain and actions taken

REWE Group takes three different approaches in implementing specific measures to reduce negative ecological impacts, as described below:

1. Internal management

REWE Group employees receive regular training about relevant environmental issues which are to be considered accordingly in selecting suppliers and in the purchasing process. Information on biodiversity, packaging, deforestation or other relevant topics is provided on a target group-specific basis. Special requirements are factored in already in the tender invitation process and integrated into supplier contracts.

2. Supply chain management

Supply chain management at REWE Group includes the activities of supplier evaluation and education, obligating suppliers contractually, conducting compliance audits and taking steps on the basis thereof. REWE Group applies established standards in order to make the supply chain progressively more sustainable.

REWE Group regularly raises awareness of environmental issues at supplier events and in individual discussions with suppliers.

In addition, the requirements for these topics are incorporated into both contracts with suppliers and the Guideline for Sustainable Business Practices, meaning that compliance is confirmed by the suppliers within each tender or contract. For focus raw materials like cocoa and palm oil, REWE Group has defined guidelines with detailed requirements and objectives which are imposed in turn upon suppliers.

Compliance with Environmental Standards

In implementing improvements, REWE Group applies internationally recognised standards such as the seal for the Global Organic Textile Standard (GOTS) and Cotton made in Africa for sustainable textiles, and the FSC® and PEFC™ certifications for sustainable forest management. Standards such as Rainforest Alliance, Naturland, the German Association for Non-Genetically Modified Foods (VLOG) and the EU Organic seal are also important ways for REWE Group to bring about improved ecological conditions in the supply chain. In the production link of the supply chain, REWE Group utilises instruments of the Business Environmental Performance Initiative (BEPI) and the Detox Programme. REWE Group also plays an active role in platforms like the Forum for Sustainable Palm Oil and the German Initiative on Sustainable Cocoa as a way of refining standards and initiating industry-wide improvements in environmental conditions (see also the section Raw Materials in Focus – Food and Raw Materials in Focus – Non-food).

Black List of Prohibited Pesticides for Conventional Fruits and Vegetables

REWE Group has set the goal of continuously reducing the amount of pesticides used in the conventional cultivation of fruit and vegetables. In this effort, the company works with farmers, NGOs and scientific experts to develop solutions that have the lowest-possible impact on the environment and assure production and yield certainty for farmers. REWE Group has drawn up a black list of substances which farmers are prohibited from using. This list is regularly updated, for example to include specific pesticides that are endocrine disruptors. All fruit and vegetable products are regularly analysed for pesticide residues as part of quality management. REWE Group monitors the progress being made in its pesticide reduction programme. As part of this work, REWE Group has commissioned the environmental group GLOBAL 2000 to prepare an annual pesticide impact report since 2009. This report includes three impact indices based on a defined methodology. The results show that a reduction in the indices has occurred since the base year of 2009. Specific analysis reports are also prepared, on endocrine disruptors for example in 2017, and on bee-toxic substances in 2018. Among other things, these analysis reports are used to optimise REWE Group specifications.

Studying Environmental Effects and Achieving Improvements Through the Green Production Programme

An environmental programme for suppliers was implemented in the financial year to help us meet our KPI targets. This Green Production Programme is based on a process for identifying environmental impact at production sites in order to bring about improvements. A pilot project with selected suppliers of metal and plastic products took place in 2018, as the environmental impact in these product groups is comparatively high. The production sites participating in this pilot project underwent a review or received advice on environmental risks. Additional production sites are now to be gradually integrated into the programme. The production sites of the first 60 suppliers have already been integrated. In addition to the Green Production Programme which, among other things, is based on instruments from the amfori Business Environmental Performance Initiative (BEPI), there are already established programmes for other product lines, such as the Detox Programme.

Detox Programme for Negative Impact from Textile Production

To improve the environmental impact of the textile supply chain, REWE Group joined Greenpeace’s detox campaign in 2014. In addition, it has set up a related programme for products with REWE Group as the distribution company in the product groups clothing, shoes and household textiles. The goal is to create safe textile production that eliminates hazardous chemicals by 2020. To achieve this objective, REWE Group is working with its suppliers to systematically remove hazardous chemicals from textile production.

Chemicals are primarily used in textile production during so-called wet processes that involve dyeing, bleaching and washing. The health of factory workers can be endangered when hazardous substances are used in these production steps. In addition, bodies of water and other ecosystems can be negatively impacted if chemicals contained in wastewater enter the environment.

As part of the implementation of the detox programme, a roadmap pointing the way to 2020 was approved in 2014. The current status of the roadmap is documented in annual progress reports (the reports can be downloaded here: Progress Report 2015, Progress Report 2016, Progress Report 2017, Progress Report 2018).

The REWE Group strategy comprises the following elements:

Chemicals Management (1) comprises the ongoing further development of requirements for suppliers and products. REWE Group has developed the following instruments for this purpose:

  • The Manufacturing Restricted Substances List (MRSL) 4.0, released in December 2018, listing chemicals which REWE Group classifies as hazardous and are prohibited in production.
  • Six pilot projects for eliminating specific chemicals
  • Ban on groups of dangerous chemicals
  • Wastewater tests

Cooperation along the supply chain, and thus Supplier Development and Management (2), are key for the success of the Detox Programme. All suppliers in the supply chain have committed themselves to the Detox Programme. The following are some of the measures REWE Group has implemented:

  • Publication of an informational brochure in five languages
  • Meetings, events, workshops and a supplier event
  • A capacity-building programme for wet processing factories in which 20 producers in China and Bangladesh received training in 2018. Improvements were achieved in the areas of chemicals management, management systems, process optimisation, wastewater and waste management as well as water consumption. The participating producers attained an average improvement of 27 per cent.
  • Creation of a pool of wet processing factories for intensive cooperation in order to attain the detox targets
  • Adoption of the detox requirements as binding obligations in supplier contracts

A common approach is essential in executing the Detox Programme. Cooperation and Dialogue with stakeholders (3) is thus a key element. REWE Group plays an active role in dialogue with stakeholders on a number of different levels:

  • Sharing best practices with other retailers and textile firms
  • Membership in the Alliance for Sustainable Textiles and activities as part of the Alliance Initiative for Environmental and Chemical Management
  • Annual publication of a Detox Progress Report to provide stakeholders with transparent information including waste water testing findings
  •  

    As part of its detox commitment, REWE Group is developing measures to promote a Closed Loop (4) of materials in the area of textiles. The following steps have been taken in recent years:

    • Conducting of a scientific study on the Closed Loop model
    • Introduction of a collection system for textiles: By the end of 2018, 629 containers for the collection of used clothing had been placed
    • Offering recycled-fibre products
    • Customer communications on the topics of environmentally friendly textile washing and upcycling
    • A workshop on circular economy at a supplier event in China

    3. Stakeholder management

    In order to improve general conditions, REWE Group joins forces with other companies and stakeholders in industry initiatives and partnerships, thereby increasing its influence. In addition, REWE Group actively participates in the further development of these partnerships and represents its interests there. The Group met with some 200 suppliers in Shanghai In September 2018 in a Supplier Summit involving a range of workshops on various sustainability topics under the slogan “Together for a Sustainable Future”.

    REWE Group was represented in three amfori working groups in financial year 2018: two working groups on ecological issues in the supply chain at the amfori Business Environmental Performance Initiative (BEPI), and one working group on social issues in the supply chain as part of the amfori Business Social Compliance Initiative (BSCI). The company also joined the GRASP Technical Committee that same year. As an active member of the Rainforest Alliance Standard Committee, the trading company cooperates on development of the new standard. REWE Group is also involved in the following national and international initiatives concerned with environmental impact in supply chains:

    • Member of amfori BEPI: The amfori Business Environmental Performance Initiative (BEPI) helps companies improve their environmental performance in global supply chains. In addition to being a member of amfori BEPI, REWE Group is also represented on the amfori Member Advisory Council to provide expert strategic advice from a business perspective.
    • Charter member of the Forum for Sustainable Palm Oil (FONAP): The aim of this multi-stakeholder initiative is to significantly increase the share of sustainably produced palm oil while improving existing certifications and standards. REWE Group is represented on the FONAP Management Board.
    • Charter member of the German Initiative on Sustainable Cocoa: This multi-stakeholder initiative has been committed to improving the living conditions of cocoa farmers, protecting natural resources and biodiversity, as well as growing and marketing sustainable cocoa.
    • Member of the Fruit Juice CSR Platform: The platform is driving social and environmental improvements in the supply chains of the fruit juice industry. It was created to help European fruit juice producers incorporate CSR measures into their company strategies, and thus achieve a long-term, sustainable contribution along the global value chain of fruit juices for all stakeholders.
    • Member of the World Banana Forum: The forum brings together various stakeholders from the global banana supply chain to achieve sustainable cultivation, respect for human rights and improved working conditions.
    • Member of the Alliance for Sustainable Textiles: The alliance is a partnership of various stakeholders aimed at driving improvements along the global value chain in the textile industry. For 2018 REWE Group again developed a roadmap for reaching the Alliance targets, and will outline the progress made in 2018 as part of the Textile Alliance’s reporting.
    • Member of the Board at Cotton made in Africa: This initiative was born with the aim of improving the living conditions of people in Africa’s cotton-growing regions.
    • Member of the Rainforest Alliance Standards Committee: The Rainforest Alliance is a sustainability standard for the production of agricultural commodities and products. The Standards Committee makes decisions about content-related development based on public consultations on standards.
    • Regular dialogue and cooperation with the Marine Stewardship Council (MSC): The MSC is an independent non-profit organisation that awards a seal for sustainable fish and shellfish catching. The certified fisheries ensure sustainable fish stocks, intact marine habitats and the protection of endangered species.
    • Participation in the “Wirtschaft macht Klimaschutz” (Business Drives Climate Protection’) initiative: This dialogue forum brings together players in the German economy for the purpose of climate protection. The aim is to initiate the development of concrete climate protection measures in companies in order to contribute to climate protection goals.

Further topics in this area:

Product-related Risk Analyses

GRI 102-11

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

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