Environmental matters

A responsible consumption of energy and other natural resources is crucial for all of us. The use of resources has a direct effect on our operating costs and may entail undesirable environmental impact, such as the emission of climate-damaging greenhouse gases. Our approach is to significantly reduce the climate-relevant emissions caused by our business operations and resulting from our supply chain as well as to decrease our consumption of natural resources¹Due to the company size and alignment (management), the aspect of environmental concerns is not significant for the holding company, METRO AG.. We do this by focusing on behavioural change (Energy Awareness Programme) and investment aimed at increasing our energy efficiency (Energy Saving Programme). We also operate a global energy management system to identify potential savings in our stores and monitor our overall savings targets. At METRO Wholesale, we reduced electricity consumption in our stores by 3.4% in year-on-year comparison in the past financial year and thus clearly exceeded our target of 2.2%. Wherever possible, we are also converting our cooling systems to natural refrigerants (F-Gas Exit Programmes). This reduces our energy requirements as well as our costs. In financial year 2018/19, among other things, we invested €14.9 million in METRO Energy Saving Programme, which saves us approximately €5.3 million in energy costs each year. Examples of measures in the reporting year are:

• Commissioning of other transcritical ejector refrigeration plants, including in Germany, France, Italy, Bulgaria, Romania, Croatia and Russia
• Initiated roll-out of LED store lighting in Russia with an investment volume of €7.6 million, but also numerous diverse lighting optimisations in Germany, France, Romania, Poland, the Netherlands, Portugal, Ukraine and Moldova
• Installation of additional photovoltaic systems and expansion of the total capacity to more than 11,500 kWp in Germany, France, Pakistan and Japan.
• Heat recovery measures in connection with the installation of new refrigeration plants, including in Bulgaria, Croatia and Russia
• Improvement of building management system by installing a lighting control system in Spain
• Construction of charging stations for electric vehicles for METRO customers, especially in Germany, Poland and Austria At the Düsseldorf Campus, we commissioned a total of 80 electric chargers for customer, employee and company vehicles
• METRO uses an internal carbon price that was originally set at €25 and increased to €50 in 2019 due to general market expectations. We use the carbon price to approve energy-efficient projects with lower financial savings.

This is METRO’s response to risks identified in initial scenario analyses (as recommended by Task Force on Climate-related Financial Disclosures TCFD) in our business operations as well as in our supply chain:

• Physical risks resulting from extreme weather events and water damage (scarcity or flooding)
• Business disruptions due to extreme weather events and declining economic power pose a risk to our customers’ businesses and thus to our sales.
• Transition risks such as rising prices for CO₂ emissions (with short-term impact on costs and product prices)
• Shortage of resources (rising prices for agricultural products over the next 5 to 10 years)
• Investments in new technologies (carbon-neutral cooling units planned worldwide until 2030) and in the generation of renewable energies (extensive installation of solar systems planned until 2030)

We consider these risks in our medium-term risk management and assess risks for revenues and costs based on rising prices and decreasing availability of resources. No risks subject to mandatory disclosure pursuant to § 289c Section 3 Nos. 3 and 4 of the German Commercial Code (HGB) were identified. The climate-change-related risk listed under sustainability risk in the opportunity and risk report does not meet the requirement of double materiality. Furthermore, we assess potential approaches to perform a comprehensive climate change scenario analysis for METRO.

Further key focal issues in relation to sustainable business operations are the prevention of waste, the reuse of resources and their recovery by means of recycling. The reduction of food waste is an issue of particular importance to the operations of METRO. Every food product that is rejected or discarded instead of being eaten represents wasted economic, social and environmental resources. METRO has therefore committed itself to the Resolution on Food Waste by the Consumer Goods Forum (CGF) and thus to eliminate 50% of wasted food in our own operations by the year 2025 compared to 2016. Therefore for example, the ‘Food Loss and Waste Protocol’ was successfully implemented in Turkey in financial year 2017/18, and other countries are currently being discussed. In 22 countries we cooperate with food service organisations and social institutions in order to avoid food waste in the stores, including our restaurants and warehouses. In addition, 6 of these countries cooperate with Too Good To Go.

In connection with the METRO Water Initiative, the goal was set to save 5% of water by 2025 compared to the base year 2016/17. In 2019, we were able to reduce the consumption in our METRO wholesale stores by 6% calculated per square metre of net operating area compared to the previous year. Since the greatest impact for water is also in the supply chain, we use the CDP Supply Chain Programme to recognise potential opportunities and risks with our suppliers at an early stage.

Status of climate protection target

From October 2018 to September 2019, METRO generated 267 kg of CO₂-equivalents per square metre of selling and delivery space. This figure is down from 299 kg in the previous year’s period. In financial year 2018/19, we retroactively switched to a different emission factor set for energy. We also report figures excluding discontinued operations. Our goal is to reduce these emissions by 50% to 188 kg by 2030 compared with 2011, and with 29% we are on the right track in the reporting period. In particular, we focus on the aforementioned programmes. In financial year 2018/19, METRO expanded the climate target to the supply chain and as the first German retailer set a recognised science-based target for itself. METRO AG undertakes to reduce its Scope 1 and Scope 2 CO₂ emissions by 60% per square metre selling and delivery area by 2030 compared to 2011. Our goal is thus in line with the reductions required to keep global warming well below 2 °C. A reduction of 26% has been achieved in this area since 2011. Furthermore, METRO AG is committed to reducing absolute Scope-3-CO₂ emissions (supply chain) by 15% by 2030 compared to 2018.

Climate protection target status

Greenhouse gas emissions in kg CO₂ (CO₂ equivalent) per m² of selling and delivery space

¹ Due to the company size and alignment (management), the aspect of environmental concerns is not significant for the holding company, METRO AG.