Q'n'A: Rewe talk sustainability post award win

Can you give us some background on REWE Group’s 2010 Guidelines for Sustainable Business Practices? What are the main aims of these guidelines?

“We believe that sustainability is the foundation of long-term commercial success.

REWE Group considers sustainability to be a part of its business strategy, an area that contributes to the company’s success in business and serves as a major driver of growth.

The release of the "Guidelines for sustainable Business Practices" intensified the activities of the REWE Group in the field of environmental sustainability. The 27-page publication released on January 24th, 2011, documents the values the company stands for and describes how the REWE Group business relationships should be characterised with respect to environment and society.

The objective is to work with the contract suppliers to expand the REWE Group corporate principle of "We are aware of our responsibility and act sustainably" to cover the entire length of the supply chain. The Guidelines are addressed to employees, customers, political institutions and the interested public as well as the contract partners of the REWE Group.

The Guidelines are divided into three main sections: "Responsible action", "Labour and Social Standards" and "Environmental and Animal Protection". Sixteen chapters concretise various topics such as the general prohibition of corruption, fairness in competition, prohibition of forced and child labour, prohibition of discrimination or health protection on the job, protection of climate, resources and animals, a commitment to protection of species and biodiversity and responsibility for consumer interests.”

Can you give examples for how the four pillars of sustainability: green products; employees; energy, climate and the environment; and social involvement are being implemented?

Green products: REWE Group intends to address these needs and excite growing numbers of people about more sustainable products and services. The focal points of the strategic objective of the pillar Green Products are:

1. Creating more sustainable product ranges

2. Improving social and environmental standards in the supply chain

3. Promoting the consumption of more sustainable products and services

These are the relevant approaches being taken to create sustainable product ranges:

A recent example is the involvement of REWE Group into research and development of the SELEGGT process for in-egg chick sexing which allows to identify the sex of a chick in the egg on the ninth day of incubation. The eggs containing male chicks can be sorted out and processed into high-quality protein feed. In this manner, the SELEGGT process eliminates the culling of day-old male chicks.

Employees: Satisfied, hard-working employees form the foundation of REWE Group’s long-term business success. Understanding this, the company offers attractive and fair working conditions to its employees. These conditions include fair pay, additional company benefits that extend beyond the level of negotiated wages, flexible working models that can be adjusted to meet individual employee needs and tailored offers to facilitate a work/life balance.

To help its employees achieve a good work/life balance, REWE Group has taken myriad steps and has been certified in this area for a number of years. The activities of REWE Group have been commended outside the company since 2011: With the audit berufundfamilie, the company has taken a verifiable and systematic approach to balancing these central aspects of life and to make family-friendly HR policies a permanent part of its corporate culture. These policies are developed by the combined employees, executives and managers in supermarkets and administrative locations to ensure the needs and requirements of local employees are taken into consideration.

Energy, Climate and Environment: Three areas of action have been identified in the pillar “Energy, Climate and the Environment”: “energy efficiency”, “climate-relevant emissions”, “conservation of resources”.

REWE Group continuously works to reduce its energy consumption per square metre of sales area. This is one of the key contributions that REWE Group makes to environmental protection and the conservation of resources.

The company lowered its specific energy consumption level in Germany and Austria by 4.8 per cent between 2012 and 2016.

Social Involvement: In its role as a reliable partner, REWE Group commits its resources to areas where it does business and to the world’s more destitute regions. In the process, the company works with strong partners who can deliver high-impact support as a result of their local experience. One major objective of REWE Group’s involvement is to create long-term, reliable partnerships for all players. When possible, REWE Group integrates its customers and employees into its projects. This approach strengthens the sense of community and expands the projects’ reach.

The reduction of energy usage per square metre of sales area plays a key role in efforts to reach REWE Group’s climate goal . The foundation of REWE Group’s systematic energy-efficiency activities is the group-wide energy management system that the company has been implementing since 2008 in conjunction with Energie-Handels-Gesellschaft (EHA) of Hamburg. The energy service provider – which became a wholly owned subsidiary of REWE Group in 2014 – installs measuring devices in the company’s stores and warehouses that facilitate central, up-to-the-minute monitoring of energy usage. In addition, a monitoring platform called FRIGODATA keeps close watch on temperature and energy data.

A recent example of implementation:

Interior lighting in stores affects customers’ moods and product presentations. As a result, pleasing lighting becomes an essential part of the shopping experience. At the same time, lighting is responsible for about 25 per cent of electricity consumption in food stores and around 60 per cent in toom Baumarkt DIY stores. To reduce this total, energy management is devising efficient lighting concepts that address the lighting needs of the sales lines. LEDs play a major part in this effort by saving between 30 per cent and 45 per cent of the electricity required by lighting systems. In 2013 and 2014, the sales lines of REWE Group began to systematically switch to LED lighting in its stores. In this effort, a group-wide project was initiated during the reporting period to use LEDs (including retrofit solutions) for new and replacement systems. This project also involved developing special trade lighting concepts that occasionally required new technical solutions. Tremendous advances in the light colour and life span of LED lighting systems have been achieved in recent years. As a result, nothing stands in the way of their widespread use any longer. In future, REWE Group will use new LED lighting concepts in all new and remodelled stores.

How does the implementation of sustainability led initiatives effect the day to day running of the business?

In June 2016, REWE stores showed plastic shopping bags the door. All our German and Austrian markets stopped selling plastic bags in 2016/2017 and introduced more environmentally-friendly substitute products such as paper and cotton bags. REWE Group thoroughly prepared its effort to drop selling plastic shopping bags from its assortment. A three-month test phase during which more than 130 stores stopped selling the bags produced some promising results: A large number of consumers seemed ready to make the switch to alternative bags. Nonetheless, a certain amount of uncertainty remained when the decision was made. And it was easy to see why: No retailer likes to restrict the decision-making freedom of his or her customers. This step was accompanied by a massive PR campaign urging customers to use reusable bags and explaining the consequences of plastic waste. A large number of the store’s customers were happy to switch to alternative sources, he says: Other customers are now bringing a reusable bag from home. Customers who are in a hurry or buy something spontaneously will purchase a paper shopping bag or a reusable shopping bag.

Result: By eliminating the plastic bags at REWE and PENNY 202 million bags can be saved per year.

What are German Consumers’ expectations of sustainability in a large business like REWE?

Consumers are increasingly demanding that companies make a credible contribution to sustainability. One of the main goals of our sustainability strategy is to meet these expectations with convincing, more sustainable product ranges. This requires us to know supply chains and sustainability requirements just as well as we know the needs of our customers.

Health and wellness is a major trend in convenience and food retail- how important is it to REWE in the German market?

The concept of sustainability has entered the mainstream of society. It is reflected in both dietary and consumption behaviour as well as in the selection of holiday destinations. Recent surveys have found that about two-thirds of Germans buy organic products on occasion at the very least (source: German Ministry of Food and Agriculture: Environmental Barometer 2017; the German Environmental and Protection Agency: Attitudes About the Environment in Germany 2016).

What part do businesses play in helping to protect the world and its resources and why is this important?

The challenges the global community is facing are significant. The international community has set some ambitious targets with the Sustainable Development Goals that should be reached by 2030. Within the context of sustainability, many people have correctly pointed out that we are using excessive amounts of the world’s precious resources. But often individuals as well as companies also feel we are too small or too weak to tackle this huge problem by ourselves. As a company that employs sustainable business practises, we also run up against the limits of what is feasible in a globalised world and realise we cannot change everything all by ourselves. Nonetheless, we have understood the message: Everyone does what he or she can. Togetherness produces success. You need courage and perseverance to steadily and resolutely pursue goals even when the progress is slow and the challenges are great.

What is the general outlook on the future of sustainability in the German market?

More and more people are interested in knowing how their actions impact society and the environment. In particular, they want to know that products and services are made or offered under good working conditions and that the environment is not damaged in the process. Nonetheless, one principle still applies: Sustainability is never the sole criteria used to take a decision. Quality and the price are just as important. At the same time, consumers interpret the term “sustainability” in different ways. Some define it as protecting nature and the environment. Others view it from the perspective of social conditions and animal welfare.

REWE Group intends to address these needs and excite growing numbers of people about more sustainable products and services. REWE Group considers sustainability to be a part of its business strategy, an area that contributes to the company’s success in business and serves as a major driver of growth.

How important is collaboration with suppliers to fulfil these strategies?

As a trade and tourism company, REWE Group gets its products and services from a large number of suppliers and the most diverse range of supply chains.

REWE Group works closely with its suppliers in the process and continuously refines the environmental and social requirements for its product ranges. Step by step, sustainability is joining freshness, quality and price as an important factor in the shopping process.

What does it mean to the company to be recognised for their sustainability efforts on a global level by winning the 2017 NACS Insight European Convenience Retail Sustainability Award?

“We are very proud and happy that our sustainability efforts are being recognised on an international level in winning the 2017 NACS Insight European Convenience Retail Sustainability Award. That is a big incentive not to let up our sustainability efforts.”

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