Actively managing sustainability

The sustainability management serves the purpose of systematically and organisationally anchoring the notion of sustainability in our core business operations and to consider the interdependencies between economic, environmental and social aspects in an efficient, solution-oriented manner. Via the formalised reporting and evaluation of sustainability-related opportunities and risks, which have been evaluated in the materiality analysis, it is closely linked to our overall opportunity and risk management. This enables the Management Board to systematically identify, evaluate and control deviations from the sustainability goals and the ensuing opportunities and risks. No risks subject to mandatory disclosure pursuant to § 289c Section 3 Nos. 3 and 4 of the German Commercial Code (HGB) were identified. The sustainability risk that was reported in the opportunity and risk report does not fulfil the criterion of double materiality. However, a carbon price or increased energy prices in general could negatively affect the financial situation of METRO in the short and long term. The existing, company-own climate target will further help in managing this risk. Since 2019 this target has additionally included the supply chain as the highest environmental impact accumulates here.

The Sustainability Committee sets the strategic framework, facilitates the exchange of information on sustainability issues at the highest level (also with external input) and defines group-wide objectives. To adequately respond to the specific market and customer requirements, the METRO companies manage the operational implementation of sustainability within this framework. They are responsible for working on the relevant sustainability issues, for defining specific targets and measures and for monitoring their success. They report on current developments and achieved progress to the Sustainability Committee.

The committee is chaired by 2 representatives from the top management, who are frequently regularly rotated. Other members of the committee are:

• People in charge of corporate responsibility at METRO AG
• Representatives of the core functions purchasing, own brands, communication as well as investments and technical solutions
• Representatives of the METRO Wholesale national subsidiaries

Ad hoc expert groups prepare specific issues on the operational level and then present them to the Sustainability Committee for decision. Depending on the issue, participants include experts from the METRO Wholesale national subsidiaries and the head office.

Additional interfaces between the strategic and operational levels of sustainability are periodic telephone calls of the sustainability experts and 1-to-1 responsibilities of the sustainability colleagues of METRO AG for all METRO Wholesale national subsidiaries through individual country support. Much like the ad hoc expert groups, the activities promote exchange and support to implement decisions made by the Sustainability Committee.

In addition, we integrate sustainability aspects into relevant business processes and decision making processes, among other things via guidelines such as the new policy on the procurement of sustainable soy. We also involve our employees via our quarterly employee survey, various sustainability activities such as our Sustainability Day as well as via our social network platform. We strive to enable our employees to understand the significance of sustainability with respect to both themselves and their professional environment, and to conduct themselves accordingly. For example, to support this goal we have our principles, self-commitments and positions that provide directional guidance and include compliance with laws as well as meeting additional requirements. Employee development programmes that integrate sustainability issues are an important aspect. For example our ambassador programme METRO Sustainable Leadership Programme, which enriches management development with a focus on sustainability. While METRO may be able to drive the issue in a top-down approach, each one of the more than 100,000 employees is our ambassador and can effectively contribute to our impact on sustainability.

Our stakeholders evaluate the sustainability measures implemented by us, for example, through ratings. These evaluations by independent third parties are an important motivator to us and serve as a management tool, because they demonstrate the progress and potential to improve our activities. An example of this is the linking of the remuneration of the Management Board and the global senior management to the valuation of METRO’s sustainability performance in the rating of the Dow Jones Sustainability Index (DJSI).

Oekom Research (now called ISS-oekom) awarded the prime status C+ (on a scale from D- to A+) to METRO in August 2018. Having been ranked as the best in the industry for 4 consecutive years by the internationally significant Dow Jones Sustainability World index, we attained second place in financial year 2018/2019 in the Food & Staples Retailing Group. In the Dow Jones Sustainability Index Europe however, we were ranked best in the industry for the fifth consecutive year. METRO is also listed in the FTSE4Good index. METRO has been issuing public statements on climate protection and water for many years through CDP. For the 2 topics, METRO achieved a rating of A- and B- respectively (scale F to A) in 2018 and is thus well above the industry average. METRO participated in CDP Forest for the first time. The results for 2019 were not yet available on the publication date.