REWE GROUP SUSTAINABILITY REPORT 2017 GRI report of REWE Group DOWNLOAD VERSION You will find the complete REWE Group Sustainability Report 2017 at www.rewe-group-nachhaltigkeitsbericht.de/2017. REWE Group Sustainability Report 2017 Dear Ladies and Gentlemen, Partners and Friends of REWE Group, A long tradition is the strongest foundation for a secure future. As a traditional, cooperative company, we have made sustainability a fixed part of our culture for the past 90 years. At the same time, we have served as a pacesetter in biodiversity who has worked intensely for more than a decade to protect the animal kingdom. The successful monitoring work we performed in the Lake Constance area of Germany in 2017 clearly demonstrated the positive impact that close collaboration among environmentalists, farmers and retailers can have on the habitats of wild bees. With the help of nesting adds, flowering strips and tree planting in and around fruit farms, we succeeded in doubling the number of species. By contrast, a PENNY store demonstrated to us in May just what can happen if producers, environmentalists, retailers and consumers fail to work together. All products that no longer would exist without bees and other pollinating insects were removed from the store’s shelves. The result: 60 per cent of all products were missing. As you see, our only recourse is to intensify our commitment. In our current Sustainability Report under the motto “Tradition. Diversity. Future.” we provide you, our readers, with a detailed look at what we achieved last year in terms of sustainability and, above all, where we intend to go. In a reflection of this topic’s high priority at our company, we are now issuing our sustainability report annually. I hope you enjoy this interesting report. Lionel Souque CEO BACK TO THE HOMEPAGE REWE Group Sustainability Report 2017 Sustainability Strategy GRI 102-18: Governance structure GRI 102-19: Delegating authority GRI 102-20: Executive-level responsibility for economic, environmental, and social topics GRI 102-21: Consulting stakeholders on economic, environmental and social topics The Management Board has clearly defined the company’s position in its Guidelines for Sustainable Business Practices: “Sustainability is not a fleeting trend at REWE Group. Rather, it is a fundamental element of its business st rategy.” REWE Group considers this to mean one thing: It promotes a more sustainable assortment and deals fairly with partners and suppliers. It does business with the environment and climate in mind. It assumes responsibility for its employees and works to prepare society for the future. As a leading international trade and tourism company, REWE Group is keenly aware of the special role it plays as an interface among producers, suppliers and consumers. For this reason, the sustainability strategy encompasses all of the company’s business operations in order to integrate more sustainable consumption and tourism into the entire marketplace. REWE Group formulates challenging goals and is not afraid to tackle complex issues. In many cases, it has been a pacesetter introducing ideas that are now general standards. As it carries out its sustainability strategy, REWE Group conducts an intensive dialogue with stakeholders and enters binding, long-term partnerships. It does so because long-range improvements can be achieved only if all participants work together on the same goals. In applying this strategy, the company continuously expands its share of more sustainable products and services and introduces more sustainable consumption to larger and larger segments of the population. In 2008, REWE Group added the following principle to its mission statement: “We are aware of our responsibility and act sustainably.” At the same time, the company also introduced a system of strategic sustainability management. In 2010, it defined its Guidelines for Sustainable Business Practices and established a binding foundation for REWE Group’s comprehensive commitment to sustainability. The goal was clearly defined from the start: Sustainability should be brought “out of its niche” and introduced to mainstream society. While introducing its sustainability strategy, REWE Group created four pillars of sustainability in 2008: Green Products; Energy, Climate and the Environment; Employees; and Social Involvement. The company added areas of action within these pillars that outline the key issues of its commitment to sustainability. Reorganisation of the Company’s Structure since 2016 In 2016, REWE Group made several changes in its company structure that serve as the basis for further improvements in efficiency and long-term profitable growth. As part of the changes, it created a new central organisation in which the sales lines REWE and PENNY were merged. REWE Group refocused its sustainability strategy at the same time. In 2016, it carried out a comprehensive strategy process in which the organisation and the focal points of its sustainability strategy were evaluated and developed further. The core element of this strategic realignment is the provision of increased freedom to individual sales lines to carry out the sustainability strategy and, thus, to facilitate added customisation of the strategy to the specific needs of each sales line. In taking this decision, the company addressed the different business models of food retail, travel and tourism, and DIY stores, each of which has different stakeholder expectations and sustainability challenges. Each sales line can focus on those places where it has the biggest lever for improvements. At the same time, it can better tailor more sustainable products and services to the needs of various customer groups. The more sustainability becomes a success factor in the sales lines’ business, the faster and more effectively sustainability will become a fixture in the mass market. REWE Group’s four pillars of sustainability continue to underpin its overarching strategy, and the Guidelines for Sustainable Business Practices continue to serve as the joint direction and canon of values for the company’s commitment to sustainability. In 2016, DER Touristik reworked its sustainability strategy under the motto “DER Welt verpflichtet” (Committed to the World). As part of this work, a materiality analysis was conducted under consideration of the sales line’s most important stakeholders. In the first step, the sales line conducted a baseline study and competitive analysis. Customers, employees and NGOs, among others, were surveyed online to identify and prioritise key issues. In addition, about 60 managers of DER Touristik took part in personal interviews in which they evaluated the issues in terms of opportunities and risks for the company as well as on the basis of the potential to exert influence. The identified issues were consolidated. They were then prioritised and approved by the International Board of DER Touristik. To implement the strategic focuses, effective measures will now be developed and measurable goals will be set. REWE and PENNY also conducted a far-reaching materiality analysis on continued strategy development in 2016. This work drew on findings from customer and market research and stakeholder surveys. Benchmark studies were conducted in the food retail sector, among other areas, and the political landscape was analysed. In addition, the sustainability strategy was reviewed in terms of its contribution to the Sustainable Development Goals (see below ). The objective of this analysis was to identify potential opportunities and risks associated with the revision of the sustainability strategy. In the second stage of the work, the areas of action and the focal points of the company’s commitment were reviewed on the basis of the results of the analysis and adjusted when necessary. Up to six workshops were conducted for each pillar in the sustainability strategy. These workshops were attended by experts in the particular field as well as by representatives of the sales lines, the Corporate Responsibility department and the Strategy department. The workshops facilitated a discussion about and an evaluation of the relevance of the identified issues and challenges in terms of the company’s strategy and its operational business activities. As a result of this work, adjustments were made in the areas of action for the sales lines involved in food retail in Germany. Since then, the sustainability strategy has been subject to an annual review in which all the available information, such as customer surveys, analyses of the competition, stakeholders topics and the political environment are considered. The other sales lines were included in the process of the materiality analysis during interviews and workshops. They are now in the process of reviewing the new areas of action in food retail in Germany and introducing them either in whole or in part. At the end of 2017, the areas of action from the pillars Energy, Climate and the Environment, Employees and Social Involvement will be adopted by the other sales lines. The Green Products pillar is still in the coordination phase. Within the areas of action, each sales line focuses on the topics that are important for it. For more information about the areas of action and the key performance indicators, see the higher-level management approaches for “Green Products”, “Energy, Climate and the Environment”, “Employees” and “Social Involvement”. Pillars of sustainability and areas of action for food retail in Germany starting in mid-2016 Green Products Areas of action: 1. Fairness 2. Conservation of resources 3. Animal welfare 4. Diet Energy, Climate and the Environment Areas of action: 1. Energy efficiency 2. Climate-relevant emissions 3. Conservation of resources Employees Areas of action: 1. Values and culture 2. Training and professional growth 3. Health and safety 4. Job and phases of life 5. Diversity and equal opportunity Social Involvement Areas of action: 1. Promotion of healthy diets and exercise 2. Opportunities for children and adolescents 3. Vigilant approach to food 4. Biodiversity and environmental protection Sustainability Organisation At REWE Group, the company’s management has made sustainability its highest priority.