Focus Raw Materials – Non-Food and Services

Effect

The REWE Group is aware that its business activities as a leading international trade and tourism company can have a wide range of impacts on people, animals and environment. In the supply chain stages of raw material cultivation and processing the ecological challenges are particularly high – as is the risk of disregarding labour and social standards. The activities of the various business units therefore focus on the preventive handling of these challenges.

Principles

With its Guideline on Sustainable Business Practices the REWE Group formulates the principles of its business relationships. In the area of ecology, this includes the careful use of resources such as soil, air, water and natural raw materials, the protection and preservation of natural ecosystems and biodiversity, and the avoidance and reduction of environmental risks.

Moreover, the guideline is based notably on the United Nations Universal Declaration of Human Rights, the Conventions of the International Labour Organization (ILO) and the UN Global Compact. It includes, among other things, the prohibition of forced labour or exploitative child labour. In the event of deliberate gross disregard of the values set out in the guideline, the REWE Group reserves the right to impose sanctions. The company specifies requirements on ecological and social issues in its Guidelines as well as in the PRO PLANET process.

Moreover, in October 2022, the REWE Group updated its Supplier Code of Conduct for the compliance with its corporate due diligence in the supply chain. It applies as of 1 January 2023 and outlines the minimum standards that suppliers must observe and comply with when doing business with companies of the REWE Group. For example, suppliers must be able to trace the origin of the raw materials used all the way back to their source. The Supplier Code of Conduct also takes into account the requirements of the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG). Within the framework of the law, the REWE Group also prepared the required Declaration of Principles in the reporting period, which shows its strategy for respecting human rights and environmental concerns. The REWE Group specifically addresses the risks that arise in the supply chain with regard to the areas of action People and Environment through systematic supply chain management. This is characterised by close cooperation with suppliers and commitment at the production site and raw material production level, especially through its local procurement companies. Risks to human and environmental rights are already taken into account in the selection of suppliers, for example, with the REWE Group attaching particular importance to the purchase of certified products.

Responsibility and Resources

The respective sales lines are responsible for implementing strategies and measures for the individual focus raw materials non-food and services. Within the sales lines, the topics are worked on and driven forward by selected teams or specialists. For more information, please refer to Management Approach Green Products.

Implementation

As part of a Product-Related Risk Analysis for the supply chains of private label products sold at REWE and PENNY in Germany, the REWE Group identified the following critical raw materials in the non-food sector: cotton and textiles as well as natural stones (for more information on the supply chains for individual focus raw materials see Supply Chain). Therefore, the activities on these focus raw materials play a special role.

The REWE Group is continuously working on making its supply chains more socially and ecologically compatible. In doing so, the company relies on internationally recognised certification standards, collaborates with the industry in initiatives and sets up its own projects.

The approaches for the three critical focus raw materials and other important raw materials, including travelling and drugstore products, are presented below.

• Cotton and Textiles
• Wood and Paper
• Peat-Free Soils
• Natural Stones
• Nordmann Firs
• Travelling
• Drug store

Cotton is one of the most important raw materials in the textile industry and is mainly grown in India, China and the USA. Conventional cotton growing is often water-intensive and can involve high doses of pesticides and fertilisers. In order to increase the share of textile products made from more sustainable cotton, the REWE Group in Germany focuses on the Cotton made in Africa (CmiA) standard, the Global Organic Textile Standard (GOTS) and on textiles made from recycled fibres. The trade company also supports the German textile label Grüner Knopf (Green Button). In addition, the REWE Group procurement company is a member of the international Fur Free Retailer Program. The Guideline on More Sustainable Textiles summarises the management approach and activities for textiles such as clothing, home textiles and shoes of the REWE Group’s private labels, which are sold in Germany by REWE, PENNY and toom Baumarkt DIY store.

In 2022, the REWE Group achieved its goal of increasing the share of textiles made from more sustainable cotton in the private labels of REWE, PENNY and toom Baumarkt DIY store in Germany to 100 per cent by 2025 (2021: 98) ahead of schedule.

Share of More Sustainable Textiles Made from Cotton

For further information, specifically regarding challenges and commitment of the REWE Group to the raw material cotton, see raw material supply chain Cotton.

The REWE Group implements various measures and projects in the area of textiles and cotton:

The REWE Group promotes the protection of forests and the animal and plant species that live there. It therefore supports environmentally friendly and socially responsible forest management by increasingly procuring wood and paper for its products and packaging from sustainably managed sources. In doing so, the REWE Group relies on the Forest Stewardship Council (FSC®) label and the Programme for the Endorsement of Forest Certification Schemes (PEFC™) as well as the Blue Angel ecolabel. A large number of the REWE Group products have already been awarded these labels.

For the REWE and PENNY sales lines in Germany, the REWE Group has set itself the target of having 100 per cent of wood and paper products (with a wood and paper content of at least 95 per cent) in the non-food sector certified according to the Blue Angel, FSC Recycled, PEFC Recycled, FSC 100%, PEFC™ or FSC Mix standards by the end of 2025. In the near-food sector (including sanitary paper products), this objective was already achieved in 2020 and has been a requirement since then.

Share of More Sustainable Wood and Paper

The sales lines REWE, PENNY and toom Baumarkt DIY store in Germany have been offering only FSC^® or PEFC™ certified charcoal since 2021.

toom Baumarkt DIY store also offers a steadily growing range of certified items from numerous product categories and has been a member of FSC® and PEFC™ since 2018. In this way, the sales line supports the high standards of transparency and control in terms of sustainable forest management set by these two systems.

When wet, peatlands store a quarter of all terrestrial carbon, even though they occupy only three per cent of the global land area. In terms of biodiversity, they also provide unique habitats for many animal and plant species that have become rare. The REWE Group is therefore committed to preserving and rewetting peatlands (see also Biodiversity and Climate Protection in the Supply Chain). toom Baumarkt DIY store has therefore set itself the objective of no longer offering peat-containing soils by 2025. This applies both to the private labels and brand products. In the course of the conversion, the peat content will be continuously reduced and replaced by renewable raw materials. In addition, the range of peat-free soil products is increasing every year. In 2022, the range of private label peat-free soils consisted of a total of 18 products (2021: 19), seven of which were Naturtalent by toom® potting soils (2021: 7) and 11 products from the toom quality brand (2021: 11). As part of the strategy, all of toom's private label soils are now at least peat-reduced. Naturtalent by toom® potting soils have also been awarded the PRO PLANET label and are certified with the Bio-Grünstempel®.

Number of Products and Shares of products with Peat-Containing Soil

toom Baumarkt DIY store aims to ensure that social standards and environmental specifications are adhered to in the quarrying and production of natural stone products. In countries like China and India, the world's leading producers of in natural stone, work in quarries and processing plants can lead to considerable dust pollution, polluted waste water and accidents at work and the risk of child labour. To this end, the sales line has been working for several years with the independent experts of the NGO XertifiX to seamlessly trace the supply chain of natural stones all the way back to the quarry and to independently monitor compliance with social and ecological criteria. The DIY store chain also actively participated as a representative of the trade in the revision of this standard, which is valid until 2023. Certified natural stone products bearing the XertifiX PLUS and PRO PLANET labels have been available in toom DIY store since 2016. Their share of natural stone sales is 82 per cent. Furthermore, all natural stone products from China available in toom DIY store bear the XertifiX PLUS label. In its Guideline on Natural Stone Products, the REWE Group shows how it actively contributes to solving the social and ecological problems in the production and processing of natural stone products for its toom Baumarkt DIY store sale line.

For further information, specifically regarding challenges and commitment of the REWE Group to the raw material natural stone, see raw material supply chain Natural Stone.

80 per cent of the seeds of all Nordmann firs grown in Germany come from the economically underdeveloped Rakha region of Georgia. Here, toom Baumarkt DIY store is committed together with the Danish foundation Fair Trees to promoting fair working conditions and more safety in cone harvesting. This ensures that the cone pickers, who harvest the seeds from fully-grown Nordmann firs at a height of 30 metres, complete a five-day climbing training course prior to each harvesting season in compliance with German climbing standards. They also receive professional climbing equipment with double securing. In addition, fair wages are paid and accident insurance is guaranteed during the harvest season. Furthermore, for every tree sold, a tree from a fair harvest is replanted. The Fair Trees Foundation also supports social projects in the harvesting region with every fir sold. In addition to the Fair Trees logo, the trees bear the PRO PLANET label. Since 2018, toom Baumarkt DIY store has been selling exclusively Fair Trees Nordmann firs. For the first time, the PENNY sales line in Germany offered only domestically planted Nordmann firs for Christmas in the reporting period. 80 per cent of the trees carried the natural tree seal of the Association of Natural Christmas Trees (Verband natürlicher Weihnachtsbaum e. V.), Moisburg. The seal includes - in addition to the German origin - the mandatory creation of flowering areas and measures to preserve biodiversity, such as the creation of nesting opportunities. For every Nordmann fir, a new one is planted, social standards are met and the trees can be traced back to the seed. The remaining trees at PENNY came from the Prignitz region in Brandenburg, as well as from smaller, regional suppliers. The REWE sales line in Germany has also been offering Fair Trees Nordmann firs in its range since 2021.

As early as 2015, DER Touristik joined Futouris e. V., the sustainability initiative of the German travel industry with the aim of promoting tourist destinations in the long term and by supporting projects in the areas of ecology, biodiversity and responsibility towards society and culture. In this context, for example, a project on the prevention of food waste in hotels was carried out and a guideline for the analysis of human rights impacts of business activities in large tourism enterprises was prepared. The completed Green Travel Transformation project resulted in an industry-recognised uniform label for sustainable travel offers: Since winter 2019, sustainably certified hotels are marked with a green leaf (see also Promotion of Sustainable Consumption).

In the reporting period, the DER Touristik was also able to achieve certification by Travelife for 35 per cent of the hotels in its own main brands in the core portfolio. For the international seal of the British Tourism Federation, hotels have to fulfil up to 163 criteria in the three sustainability pillars of economy, social and environment, depending on their size, which are checked by one or several external experts. The Travelife Gold certificate is only awarded if all mandatory criteria are actually met. DER Touristik's own Destination Management Companies (DMC) - which serve the Group's guests in 29 countries as the first point of contact for reservations, transfers or the organisation of excursions - are also currently in the process of certification.

In 2021, DER Touristik has already worked with Futouris e. V. on a feasibility study to draw up an industry-wide CO₂ balance sheet for travel. This was transferred to the industry project "Climate-conscious travel" in the reporting period. The digital provision of data on the climate impact of various travel offers is intended to make them transparent and comparable across the industry and thus promote climate-friendly travel alternatives in a targeted manner. For more information, please refer to Climate in the Supply Chain, further sustainable projects of the DER Touristik are also available at Promotion of Sustainable Consumption and Packaging.

In 2014, BIPA introduced the environmentally friendly private label "bi good". All "bi good" products are produced in a resource-saving way on the basis of renewable raw materials and are biodegradable within a short time. When it comes to packaging materials, attention is paid to the highest possible recycling rate. For example, the "bi good" detergent bottles - like egg cartons - are made of moulded fibre material, which is 100 per cent recycled from waste paper. The "bi good" products are certified by independent quality seals such as the NATRUE seal, the EU Ecolabel, the Blue Angel, the Vegan seal or the Austrian Eco-label and are packaged in a more environmentally friendly way. In order to meet the requirements for a more sustainable private label, the "bi good" Codex was also developed. The Codex includes guidelines for the entire production chain.