Circular Economy

Circular economy is a key topic in the environmental area within the “Green Products” pillar. Packaging is a subtopic of circular economy and is outlined in more detail in the Packaging chapter.

Effect

In a linear economy, raw materials used for production are not returned to the cycle after the product’s end of use. Instead, they are disposed of (usually by incineration) and cannot be reused. This leads to increased resource consumption, with associated impacts on climate and the environment. Waste generation, e.g., from packaging, and food waste, is another unsolved problem in raw materials handling. The REWE Group is aware that processes along its products’ supply chain contribute to climate and environmental impacts. Product production, including transport, is associated with depletion and consumption of natural resources. Extracting and processing these resources has negative consequences, such as greenhouse gas emissions, biodiversity loss, or water stress. A growing volume of waste is generated at the end of a product’s useful life, with insufficient amounts of raw materials being returned to the cycle. The REWE Group's approach, and its implementation, aims to address these challenges in its own value chains, as circular economy also offers opportunities for the company, e.g., by reducing procurement risks associated with scarce raw materials, strengthening partnerships along supply chains, and ensuring compliance with regulatory requirements.

Principles

In its Guideline on Sustainable Business Practices, The REWE Group makes a commitment to efficient use of natural resources, e.g., soil, air, and water, as well as raw materials and fuels. The REWE Group optimises relevant use of resources in its business processes and implements product or raw material-related measures in the upstream and downstream stages of the value chain.

In 2021, the REWE Group adopted a circular economy strategy in its supply chains for private labels sold by REWE and PENNY in Germany, as well as toom Baumarkt DIY stores. The strategy was documented in the Guideline on Circular Economy and will form the basis for gradually integrating circular economy into products’ value chain. It complements the strategic circular economy principles for the packaging sector with a holistic approach for products and their value chains. These principles were set out in the Guideline on More Eco-Friendly Packaging, which was updated in early 2023. It provides a structured framework for summarising and communicating existing activities and further potential circular economy projects.

In pursuing its objectives, the REWE Group has identified key challenges, such as availability of recyclable materials for packaging and products. In this context, establishing closed material cycles from the company’s own recyclable materials was identified as a suitable solution within the framework of the circular economy strategy. Furthermore, in 2022, the REWE Group and partners started developing approaches and various cooperation models for closed cycles along the supply chain. These are intended to help secure suitable raw materials in the coming years.

Responsibility and Resources

Implementation of circular economy strategies and measures is the responsibility of dedicated teams and departments in the respective sales division. For more information, please refer to Management Approach Green Products.

Implementation

The REWE Group relies on three principles to implement its circular economy strategy: “Reduce, Reuse, Recycle”. Application of these principles in the life cycle of private label products sold by REWE and PENNY in Germany, as well as toom Baumarkt DIY stores, aims to help avoid wasting materials. It also aims to use resources as often and for as long as possible – from raw material extraction to consumption.

• Reduce: the REWE Group endeavours to reduce resource use when producing consumer goods and to minimise production waste wherever possible. To this end, it is further developing processes and creating product innovations. Together with its suppliers, the REWE Group aims to avoid generating waste in the food value chain, in both cultivation and production (see Food Waste).
• Reuse: the REWE Group is further developing quality and longevity of consumer goods to extend products’ useful life. It is also assessing more sustainable, reusable alternatives to consumables, such as disposable household items. The group is continuing to investigate ways of offering customers products in rental or sharing models.
• Recycle: secondary resources, such as recycled plastics or paper, are used to manufacture products wherever possible. The group continuously examines recycling potentials in its own material flows to identify and close new material cycles. Residual materials are separated and sent for high-quality recycling.

The REWE Group continuously examines potential for further developing the circular economy within the group, placing particular emphasis on resource use and waste generation in key supply chains, with the aim of developing further strategic measures and corresponding goals.

Regarding the company's own material flows, it also develops approaches for returning recyclable materials along the value chain to material cycles and reducing the need for primary resources.

In the range of private label products, more emphasis should be placed on products that make a positive contribution to the circular economy, based on the principles of “Reduce, Reuse, Recycle”.

These principles should eventually be integrated into purchasing processes and play an even greater role in existing environmental programmes.

Involvement of Stakeholders

In the materiality analysis, the REWE Group’s stakeholders classified the topic of circular economy as relevant for the company. They are informed annually about the effectiveness of measures taken via the Sustainability Report and in various dialogue formats (see Stakeholder Dialogue). This exchange allows stakeholders to give important input on the topic.

Customers, suppliers, and partners, as well as other stakeholders, can submit their complaints or comments. For this purpose, the REWE Group has established reporting and grievance mechanisms. For more information, please refer to the Compliance section.

The REWE Group is currently implementing pilot projects for the 2023 reporting period. Measures and projects focussing on packaging that have already been implemented can be found under Packaging.