METRO is focused on identifying and addressing current and future challenges of its customers in a constantly changing environment at an early stage and providing them with the best possible support to overcome them. In doing so, we strive not only to meet our customers’ expectations, but also to position METRO as their preferred partner. During the reporting period, the Covid-19 pandemic clearly demonstrated to society, and thus also to companies like METRO, how important robust and sustainable supply chains are. It also revealed how strong the interest in more conscious consumption is among consumers, for example in terms of local sourcing, healthy products and more sustainable packaging options. It is also against this background that our customer relationships are evolving from transactional merchandise trading to sustainable and holistic partnerships.
Responsible procurement and a more sustainable product range
Our assortment – especially that of our own brands – is a strong lever to achieve a positive impact in terms of more sustainable consumption. In a continuous transformation process, we are expanding our assortment of sustainable, local and healthy products for our customers to meet their expectations. At the same time, we help them differentiate themselves from competitors, strengthen local economies and influence our supply chains by raising our ambition to meet environmental and social standards1For the METRO AG holding company, the aspects of responsible procurement and more sustainable product assortment, packaging and plastics as well as healthy and nutritious products are not material according to § 289c of the German Commercial Code (HGB) due to its business orientation, but rather only for its operating units.. We are committed to collective action that strengthens systemic approaches, for example to address excessive deforestation, forest degradation and conversion in key commodity supply chains, by working with external partners such as the Consumer Goods Forum’s Forest Positive Coalition (FPC) of Action. This collaboration also helps us manage risks, for example, by avoiding sourcing raw materials from areas considered high risk in terms of excessive deforestation. Once a region is classified as a ‘risk area’, we work on the ground with local parties and other stakeholders in the supply chain, for example, to end excessive deforestation. We are also reinforcing our existing compliance and control mechanisms to ensure that products are traceable and certified in line with our purchasing requirements.
We systematically establish group-wide requirements to provide the relevant internal and external parties with guidelines for sustainable supply chain and procurement management – from responsible sourcing strategies to building a more sustainable assortment. Therefore, METRO works in line with its sustainable procurement policy, which describes the overall approach, as well as with merchandise-specific policies, for example for fish, soya, palm oil, paper and wood. Each policy contains corresponding targets, such as ensuring that 90% of the 12 main fish and seafood species in own-brand products are sustainably sourced by 2025, which must be demonstrated in the form of a sustainability certificate or a development project. During the reporting period, new policies on meat and animal welfare were enforced across the group. The guidelines on disposable plastic and cage-free eggs, our health and nutrition guideline and METRO’s packaging targets were updated.
The guidelines are developed jointly and cross-functionally by experts from the CR team at METRO AG, departments (for example Quality Assurance and Procurement), as well as experts from the METRO national subsidiaries and external experts through stakeholder involvement. Our approach to responsible sourcing and a more sustainable product assortment, including all related policies and targets, is approved by the METRO Sustainability Committee and published on the METRO AG website. Quarterly progress updates are provided to the Sustainability Committee to guide implementation by METRO’s operational functions.
During the reporting period, 15 raw material-specific policy and reporting training sessions with 1,4712It was possible for individuals to participate multiple times. participants were conducted throughout the METRO organisation in order to once again consolidate the implementation specifications of all policies group-wide and to correspondingly introduce them to new colleagues. Through process optimisations, EFS also revised its Food Common Sourcing Brand Book and integrated sustainable sourcing requirements that include environmental, social and packaging aspects and will be the basis of the tendering process for suppliers of own-brand products. The revised version of the Brand Book took effect on 1 October 2021. While the packaging requirements are set out in a separate packaging requirements profile, a new sustainability requirements profile for the tender process was also developed for all other own-brand suppliers beyond EFS suppliers during the reporting period. The profile takes into account environmental sustainability aspects of our procurement policy3It includes fish and seafood, palm oil, soya, cage-free eggs, paper and wood, and disposable plastics, but excludes meat and animal welfare, health and nutrition, packaging, and social compliance.. In order to facilitate better data and target management, METRO further improved its IT system landscape during the reporting period: for example, MQuality, a tool used throughout the group for the development and monitoring of own-brand products with an initial focus on quality management aspects, was expanded to include sustainability requirements4It includes fish and seafood, palm oil, soya, cage-free eggs, paper and wood, and disposable plastics, but excludes meat and animal welfare and social compliance. There is a separate section within MQuality for packaging; a separate section for health and nutrition information is in preparation. such as the ability to record sustainability certificates.
Healthy and nutritious products
As part of METRO’s overall strategy to offer more sustainable products, the goal is to enable customers to make a positive environmental impact and healthy food choices for their businesses and families by offering more reformulated, ultra-fresh, organic and alternative protein products. In doing so, we strive to meet the expectations of our customers and incorporate the insights gained from stakeholder communication and market research on consumer demands for healthy food. The focus is on our own-brand products. Clear and easily accessible information about nutrients and ingredients on the product, in the store or on the national subsidiary’s website is of paramount importance to educate our customers about healthy alternatives and thus promote healthy and more sustainable consumption. This development experienced strong momentum, especially during the Covid-19 pandemic.
As outlined in our Health and Nutrition Policy, our goal is to offer our customers a total of 1,500 healthier own-brand products worldwide (150 from central sourcing and 1,350 from national subsidiaries) by the end of 2023; some will contain less sugar, salt and fat, and some will be additive-free and certified organic or based on alternative proteins. Special health and nutrition ambassadors have been appointed in all national subsidiaries to support achievement of these goals. Since 2018 and until the end of financial year 2020/21, 603 METRO own-brand products have been reformulated in terms of their sugar, salt and fat content and to make sure they are free of additives. Furthermore, 430 organic own-brand products and 14 alternative protein-based products have been introduced since 2018.
Packaging and plastics
We support the recovery of resources through recycling to mitigate the risk of future depletion of natural resources and loss of biodiversity. Therefore, especially for our own-brand packaging, we strive to reduce the environmental impact throughout a product’s life cycle, including by seeking alternatives to traditional plastics. Given the complexity of the challenge of reducing the amount of plastic used and defining sustainable materials, we work with various stakeholders to develop innovative solutions that promote closing loops and using less environmentally harmful materials.
METRO has set goals to be completed by 30 September 2023:
- to keep all own-brand packaging 100% free of PVC (PVdC) and EPS at all packaging levels,
- to certify all primary and secondary packaging made of paper/cardboard/wood of our own brands as defined by FSC or PEFC or to ensure a recycling proportion of at least 70%, and
- to reduce plastic packaging (new and recycled) by a total of 2,000 tonnes, starting in 2018.
An expert team of packaging specialists from METRO AG and – since 2018 – a project team from 18 national subsidiaries and 3 trading offices are collaborating to achieve these goals. In the reporting period, METRO Pakistan joined the project team as an additional member.
Furthermore, METRO has committed to replacing conventional disposable plastic products with reusable, recyclable or compostable alternatives by the end of 2025. To this end, we joined the Ellen MacArthur Foundation’s New Plastics Economy in October 2018. The foundation is an international network of more than 290 organisations, companies, universities, academics and financial institutions working together towards the cross-sector challenge of creating a closed-loop economy for plastics.
In addition, METRO has launched the METRO Plastic Initiative together with the social enterprise Plastic Bank and numerous own-brand and brand suppliers. In order to reduce the consumption of valuable resources and to put the closed-loop economy principle into practice, the initiative aims to raise awareness of sustainable packaging, promote sustainable consumption as well as environmentally friendly recycling. The goal in the first 12 months of this multi-year partnership is to collect more than 65 million plastic bottles before they potentially end up in the world’s oceans. This is equivalent to more than 1 million kg of plastic waste. By the end of the reporting period, more than 20 million plastic bottles had already been collected by METRO and its suppliers.
1 For the METRO AG holding company, the aspects of responsible procurement and more sustainable product assortment, packaging and plastics as well as healthy and nutritious products are not material according to § 289c of the German Commercial Code (HGB) due to its business orientation, but rather only for its operating units.
2 It was possible for individuals to participate multiple times.
3 It includes fish and seafood, palm oil, soya, cage-free eggs, paper and wood, and disposable plastics, but excludes meat and animal welfare, health and nutrition, packaging, and social compliance.
4 It includes fish and seafood, palm oil, soya, cage-free eggs, paper and wood, and disposable plastics, but excludes meat and animal welfare and social compliance. There is a separate section within MQuality for packaging; a separate section for health and nutrition information is in preparation.