2018 materiality analysis

In order to recognise and prioritise early on any material issues that might constitute opportunities or risks for our business, we performed a materiality analysis in financial year 2017/18, including an extensive survey of internal stakeholders.

The material issues for METRO were selected in a process that consisted of several steps. The first step was the generation of a list of non-financial issues that are relevant to our company or our stakeholder groups. Key sources for this included:

• The standards of the Global Reporting Initiative (GRI)
• Existing strategies, commitments and guidelines of METRO and its sales lines
• EU CSR directive requirements concerning non-financial and diversity-related information
• Sustainable Development Goals
• Requirements for various rating systems, including the Dow Jones Sustainability Index (DJSI)
• Competitors’ materiality analyses

The wide range of issues was summarised in a list of 27 issues, making sure that each aspect from the complete list appeared in the content of the condensed list. The issues on this shortlist formed the basis for the survey. Respondents assessed them in relation to 3 aspects:

• What influence the issue has on METRO’s business, financial result or economic situation
• What influence METRO’s business operations have on the issue in question
• How relevant the issue is for the stakeholders affected by it

Our survey was conducted online and via in-person and telephone interviews. More than 100 internal stakeholders took part and identified and evaluated the issues that were relevant to them. They included representatives of the Supervisory Board, the Management Board, the national boards, the operating partners, the group directors and national sustainability officers. In order to include the external perspective, participants were also asked to state which stakeholder group they thought was most affected by the issues in question and to give an impact level.

Lastly, the results of the assessments and surveys were compiled in a materiality matrix that classifies all the sustainability issues. This matrix combines and prioritises all 3 aspects. Issues count as material if they

• have a positive or negative effect on METRO’s business, financial result or situation – for example impacts on sales, investments, costs or the company’s reputation
• are impacted in a positive or negative way by METRO’s business activities – for example in the event of non-compliance with certain laws or environmental or social standards
• are very important to our stakeholders – for example in relation to purchase or investment decisions

The issues identified as having the highest priority were: fundamental principles and rights in the workplace, compliance with human rights in our own business and human rights and fair working conditions along the value chain, employability, human capital development, compliance, customer relationship and innovation management, diversity and equal opportunities, health and safety at work, data protection, supplier development, sustainable economic development, energy consumption in our own business and food waste in our own business. These issues can be allocated to METRO’s sustainability approach and the corresponding areas of responsibility as follows:

The materiality analysis did not yield any issues that were highly relevant to our Partnership area of responsibility. However, since we regard collaborative relationships and engaging with external experts to be essential for working on our core areas and implementing measures, we have decided to continue reporting on our stakeholder engagement.

This is also how we will proceed with other issues and aspects which have been identified as less material in the materiality analysis, but which we consider to be worth reporting on because of our sustainability approach, the updating of goals or interests. These include topics like a sustainable product range composition, packaging, water use and our social commitment. In addition, we asked the survey participants which product categories and product-related issues were most important for METRO in terms of sustainability. The results reveal that the important issues are local products, product safety and certified products, as well as the fish and seafood, meat and palm oil categories. We will examine these aspects in greater detail under the Secure Planet and Unfold Prosperity areas of responsibility.

Some aspects of the material issues are dealt with in the METRO Annual Report 2017/18, so they are not presented in depth here. They include issues in the areas of employees, customer relationship and innovation management, compliance and data protection.

METRO will continue to conduct stakeholder surveys as the basis of the materiality analysis. We will also continue the exchange with our stakeholder groups at the level of the sales lines and are available for dialogue via the options provided on our website and via our e-mail address CR@metro.de.