Companies that want to reduce their carbon footprint need to work closely with their suppliers, because the majority of greenhouse gas emissions come from supply chains. At the end of last year, the REWE Group launched an initiative to address this issue. The results so far.
The year 2030 sounds like the distant future. At least two Bundestag elections and two new football World Cups will come around before then. But, when it comes to protecting the climate, time moves at a different pace, one in which 2030 is like the day after tomorrow. Companies like the REWE Group that want to achieve substantial reductions in greenhouse gas emissions from internal business processes as well as in the supply chains for REWE and PENNY own-brand goods by 2030 must start working toward these goals now. The REWE Group’s ambition is therefore to continually reduce greenhouse gas emissions from its business processes by implementing measures such as using sources of renewable green energy.
But the REWE Group’s efforts do not stop there. It will also work with its suppliers to significantly decrease greenhouse gas emissions in the supply chains for REWE and PENNY own-brand products. Most greenhouse gas emissions result from upstream value chains, i.e. from suppliers and their own upstream suppliers, primarily in the production of raw materials and maintaining livestock.
In 2020, the REWE Group pledged to achieve a 15% reduction in greenhouse gas emissions by 2030, compared to 2019. We are currently discussing a significant increase in this ambition. We have no time to lose and must now do everything to tackle climate change,
says Marcel Weber. As Managing Director of National and International Own-Brand Goods, he is responsible for own-brand purchasing as well as the sustainability of goods.
To achieve its aims, the REWE Group is focused on collaborative partnerships. REWE’s strategic suppliers account for 75 percent of product-related emissions. By the end of 2024, the group wants to reach agreements with these suppliers on targets and measures designed to cut greenhouse gases in upstream supply chains.
The suppliers’ climate targets must align with the Science Based Target initiative (SBTi). The SBTi is a partnership between the UN Global Compact, the World Resources Institute, and the WWF. It supports companies to develop science-based climate targets designed to limit global warming to less than 1.5 degrees Celsius by 2050.
This is why the REWE Group launched its “Together for more climate protection” initiative at the end of last year. As part of the initiative, suppliers can register on a platform and establish climate protection goals and measures for reducing greenhouse gas emissions, supported by the REWE Group and external service providers.
Gropper dairy and hygiene paper manufacturer WEPA are two long-standing suppliers who are registered on the platform. When it comes to protecting the climate, we are all in the same boat. We all want to know how to cut our CO2 emissions. The opportunity to discuss it on a platform such as this is therefore useful,
says Hans Guggenmoos, Head of Quality Assurance/PE/Environment at Gropper. According to Stefan Gräter, Head of Sustainability at WEPA, another advantage of the REWE initiative is the opportunity to gather information. Seeing how other companies approach climate protection can give us useful ideas.
The two companies recently presented their schemes at the REWE Group’s “Climate Roundtable”. Both WEPA and Gropper have set ambitious targets: the Sauerland-based paper manufacturer wants to decrease its Scope 1, 2, and 3 greenhouse gas emissions by 52.5 percent by 2030 (compared to the 2019 level). Its longer-term vision is to be climate-neutral by 2040. The Bavarian dairy company intends to reduce Scope 1 and 2 emissions by 42 percent by 2030 (compared to 2020) and also aims to decrease greenhouse gas emissions in its supply chain. To achieve these aims, Gropper is relying on a collaborative partnership. Our strategic suppliers account for at least 75 percent of Scope 3 emissions. By the end of 2025, we want to reach agreements with these suppliers on targets and measures designed to reduce emissions in the upstream supply chain,
explains Hans Guggenmoos.
The dairy also intends to play an active role in reducing CO2 emissions in the agricultural industry. To this end, it is collaborating with a project partner of Deutsche Landwirtschafts-Gesellschaft e.V. (DLG). As part of a research project, the DLG, a German non-profit organisation for agriculture, has developed a standardised method for calculating greenhouse gas emissions for dairy suppliers and is using it for the first time with Gropper’s milk suppliers. The method incorporates the various feed sources and excrement from the animals, the energy used by buildings and milking systems, and the storage of slurry.
What were the biggest challenges you faced when formulating these targets? Scope 3, the recording of our supply chain emissions, is problematic. We have more than 230 suppliers with over 5,000 materials for ingredients, packaging, and more than 1,000 farmers – all of which makes collecting data a bit of a headache,
explains Markus Haupt, Head of Innovation at Gropper. The family-run business and the REWE Group share a similar approach to this issue. Firstly, Gropper speaks to its strategic suppliers, which account for 75 percent of emissions, and together, they reach an agreement on the climate targets. With the support of Climate Partner, we would like to launch the process this year,
says Guggenmoos. He adds that the subsequent agreement of targets is also a challenge, particularly when it comes to the farmers, some of whom have been supplying Gropper for generations.
For Stefan Gräter at WEPA, the obstacles to climate protection also begin with data collection. Which figures need to be determined? Which performance indicators are suitable? And how ambitious should the targets be? Anyone who wants to cut their CO2 emissions has to make investments. Done the right way, this will boost their long-term competitiveness. What matters is the pace with which the company can tackle the necessary transformation without overreaching itself organisationally and commercially,
explains Gräter.
Although the issue is complex, we need to tackle it together. Climate protection can only be successful if everyone in the supply chain is on board,
adds Marcel Weber.
Scope 1 covers all the direct emissions resulting from a company’s business activities. This includes emissions from heat generation and refrigeration, and trips using company cars.
Scope 2 covers indirect emissions from purchased energy, heat, and steam. A crucial factor for the climate footprint is how the energy used is produced.
Scope 3 covers other indirect emissions from upstream and downstream activities in the supply chain. This includes all indirect emissions arising from a company’s operations but which are produced by independent external sources, both suppliers and customers.
What are the results of the REWE Group’s supplier survey on the current state of climate protection?
Marcel Weber: Unfortunately, the survey revealed that very few suppliers are engaging effectively with the issue of climate protection. Very few respondents are following a clearly defined strategy based on the SBTi requirements. These results have given us even greater impetus to press ahead with our plans. Doing so requires time and commitment, but there is no alternative.
Gropper dairy and hygiene paper manufacturer WEPA presented their schemes at the Climate roundtable event. These companies have already made considerable progress in terms of climate protection. Could they be a model for other suppliers?
Marcel Weber: We consciously chose to invite two suppliers that have already overcome a number of obstacles to report on their experiences. We wanted to alleviate other companies’ concerns that they wouldn’t be able to get to grips with such a complicated issue. Climate protection is learning by doing. So much can happen on the way to achieving your goal that it is always important to keep looking around to see what others are doing, having conversations – and crucially – calling in external expertise.
The coronavirus pandemic and the war in Ukraine are causing huge problems in many supply chains. Some companies might therefore be tempted to cut back their climate protection activities because other things always seem more important at the moment.
Marcel Weber: There is an enormous need for action to protect the climate. No one should be allowed to give less priority to this task, not even in challenging times. We at the REWE Group want to forge ahead with a clear commitment and decisive action.
Marcel Weber
is Managing Director of National and International Own-Brand Goods.
Gropper: Dairy products for the whole of Europe
Gropper dairy produces dairy products, fresh fruit juices, and smoothies for retail companies across Europe. The family-run business employs 1,471 people at sites in Bissingen, Stockach, and Moers and reported a turnover of 719 million euros in 2021. Each year, the company processes around 400 million litres of conventional milk and more than 120 million litres of organic milk. Gropper has a long-standing commitment to climate protection. We had sustainable business practices before the phrase even existed,
says Heinrich Gropper, who is the third generation of the family to run the business.
WEPA: Innovative hygiene solutions
The WEPA Group has been manufacturing hygiene paper since 1958 and is currently one of the top three companies in the sector in Europe. The family-run business is the market leader in the production of hygiene paper from recycled fibres. WEPA employs around 4,000 people at 13 sites (including eight international locations) and recently reported a turnover of 1.3 billion euros. Sustainability has been one of the paper specialist’s core values for many years.
