Environmental matters¹

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 resources². We do this by focusing on behavioural change (Energy Awareness Programme) and investment aimed at increasing our energy and resource efficiency. We also operate a global energy management system that identifies potential savings in our stores and monitors our overall savings targets. In financial year 2022/23, electricity consumption in our METRO stores per square metre of selling and delivery space³ decreased by 3.5% in comparison to the previous year. Examples of measures in the overall area of environmental matters in the reporting period:

• As part of the Energy Saving Programme, we invested €17.3 million in energy-efficient lighting and building equipment. This will likely save us approximately €6.1 million in energy costs annually.
• We invest in energy-efficient cooling systems with natural refrigerants within the framework of the F-Gas Exit Programme. This reduces our emissions from loss of refrigerants as well as energy requirements and costs. In total, we invested €73.7 million to this end in the reporting period, for example in the Kyiv Teremki wholesale store.
• In the reporting period, 21 further photovoltaic plants were installed in Turkey, Spain and Romania with a total additional capacity of 24,374 kWp.
• Additional charging stations for electric vehicles of METRO customers were set up at wholesale stores in Turkey, Spain and Ukraine, among other locations. In Moldova, Poland, Portugal, Slovakia and Hungary, all METRO wholesale stores are now equipped with charging stations. We now have a total of 1,086 charging locations. In Germany, more than 400 employees already use electric vehicles as company cars, whose emissions are offset by certificates for hydroelectric power plants. In total, 861 company cars are powered by electricity or hydrogen, which is about 10% of our total vehicle fleet. We have integrated electric trucks into our own delivery fleet, for instance in France, Spain and Portugal, for the FSD delivery business.
• Water consumption in our markets decreased by 5.9% compared to the previous year. By 2030, specific water consumption in our own business operations is expected to be reduced by 10% per square metre of net operating area compared to the base year 2020/21.
• Other key topics in relation to resource-efficient business operations are the prevention of waste and the recovery and recycling of waste materials.
• Compared to the previous year, the volume of waste (excluding food waste) decreased by 9.3%.

METRO uses an internal CO₂ price of €50 per tonne of CO₂, mainly to approve energy-efficient projects with lower financial savings. METRO is a member of the Task Force on Carbon Pricing in Europe, which aims to put a price on all relevant carbon emissions and thus achieve market- and competition-based decarbonisation.

Reduction of food waste

Food waste⁴ is a large-scale squandering of resources and makes a major contribution to our CO₂ emissions. As a wholesaler with a clear focus on food, we bear a great responsibility in this context.

In line with the Consumer Goods Forum (CGF) resolution on food waste, we are committed to reducing food waste in our operations (per square metre of sales and delivery area) by 50% by 2025 compared to the baseline year 2017/18. In 2022/23, we achieved a reduction of 23% in relation to the square metres of selling and delivery space compared to the baseline year. ⁵

Our aspiration is to measure, monitor and report progress in line with the requirements of the Food Loss & Waste (FLW) Protocol. We are tackling food waste with a 5-pillar strategy from farm to table: (1) dedication to the upstream supply chain, (2) food waste reporting, (3) food waste solutions, (4) partner and customer engagement, and (5) stakeholder engagement.

Key initiatives are helping us achieve our goal:

• In 19 countries and service units, we work with food bank organisations to pass on unsold food to those in need.
• In 2 countries, we are working with Too Good To Go (TGTG) to accomplish this goal. In financial year 2022/23, the dedicated collaboration has ‘saved’ 82,469 meals, which corresponds to a reduction of 206 tonnes of CO₂. Moreover, we are promoting the TGTG platform in 2 countries as a solution to help our customers save food in their operations.
• METRO is a member of the World Resources Institute’s (WRI) ‘10x20x30’ initiative, which calls on the world’s 10 largest grocery store chains to commit at least 20 of their suppliers to cutting their food waste in half by 2030. METRO AG has integrated suppliers through its operating national subsidiary METRO Turkey.
• We work with various technical solutions to reduce food waste, depending on availability and demand. In Turkey, we use Fazla (formerly Whole Surplus) to analyse food waste hotspots and disposal routes.
• In addition, we were able to improve the quality of the data and the data collection process – both by means of a simplified user interface and by establishing automated control mechanisms in our IT system. We also carried out intensive training courses and individual measures, including revised training documents for the data collectors.

Climate protection target 2040⁶

We plan to make our global business operations climate-neutral by 2040, largely through our own initiatives. With the 39.7% savings we have achieved so far compared to the baseline year 2011, we are on the right track. From October 2022 to September 2023, METRO generated 232.4 kg of CO₂-equivalents per square metre of selling and delivery space. This compares to 243.1 kg in the same period last year.

In 2019, METRO expanded the climate target to the supply chain and as the first German wholesale company set a recognised science-based target for itself. In it, METRO AG undertakes to reduce its Scope 1 and Scope 2 CO₂ emissions by 60% per square metre of selling and delivery space by 2030 compared to 2011. A reduction of 31.4% has been achieved in this area since 2011. Furthermore, METRO AG is committed to reducing absolute Scope 3 CO₂ emissions⁷ (supply chain) by 15% by 2030 compared to 2018. Our goals for Scope 1 and Scope 2 are thus in line with the reductions required to keep global warming well below 2°C by 2100 compared to pre-industrial levels. The SBTi targets are currently being revised.

Packaging and plastics

Plastic is one of the most used materials for packaging food and non-food products, and the improper disposal of plastic waste has a negative impact on the ecosystem and the earth. METRO is taking responsibility and attempting to limit plastic pollution and to improve the environmental footprint of its own-brand packaging. To this end, we support the recovery of resources through recycling and strive to reduce the environmental impact throughout a product’s life cycle, including by seeking alternatives to traditional plastics.

In doing so, we focus on the METRO/MAKRO countries as well as our central purchasing companies. This approach contributes to mitigating the risk of future depletion of natural resources and a loss of biodiversity. To reduce the amount of plastic used and to increase the use of alternative sustainable materials, we work with various stakeholders on the development of corresponding solutions.

A team of packaging specialists from METRO AG and a project team from various METRO national subsidiaries and from central purchasing companies are working:

1. On the 100% withdrawal from the use of polyvinyl chloride (PVC)/polyvinylidene chloride (PVDC) in own-brand packaging at all packaging levels (primary, secondary and tertiary)
2. On the 100% withdrawal from the use of expanded polystyrene (EPS) in own-brand packaging at all packaging levels (primary, secondary and tertiary)
3. To ensure that all packaging made of paper, cardboard and wood of our own-brand products is certified in accordance with the Forest Stewardship Council^® (FSC^®)/Programme for the Endorsement of Forest Certification Schemes (PEFC), or that at least 70% of packaging at the primary and secondary packaging levels is made from recycled materials
4. To reduce plastic packaging (new and recycled) for our own-brand products by a total of 2,000 tonnes compared to the baseline value from 1 October 2018

We are unable to guarantee plastic-free or recycled, compostable or reusable plastic packaging for the brands that do not belong to METRO. In future, we will place greater emphasis on reducing plastic packaging for our own brands, as this approach has the largest direct influence on the reduction of our ecological footprint with regard to packaging. In the reporting period, METRO successfully achieved this by means of the METRO Cash & Carry Own Brand Packaging Policy for its own brands in METRO/MAKRO countries, common sourcing and ITOs. In future, all packaging and plastics data will be collected regularly in accordance with the same scheme. The data collected will also be prepared and disclosed for external reporting purposes in the next reporting period. In addition, we are currently working on new packaging and plastics targets to update the above-mentioned targets. An exception to this is the target of replacing conventional disposable plastic products with reusable, recyclable or compostable alternatives by the end of 2025. We will carry out internal controls regularly to monitor progress, with the aim of supporting target achievement. Regular reports on the status of target achievement in the ESG Peer Group ensure the involvement of the Management Board in matters concerning plastics and packaging.