Sustainable value creation model
At METRO we aim to measure and understand the impact our business activities have on the value chain. The food on our plates, the ingredients we sell in our markets around the world - everything has its origins in the fields, farms and waters of this planet. Our consumption requires valuable resources. But can we also give something back through our consumption? To find answers to this question, we have compared our consumption of resources with the value we create along the entire value chain - socially, ecologically and economically; from farm to fork. In 2018, we conducted a sustainability accounting for the financial year 2016/2017. In order to obtain a complete overview of the impacts of our business activities and to be able to keep improving the value we bring to society. With our model of sustainable value creation, we can take a close look at the economic, ecological and social impacts of our business activities along the entire value chain and quantify them in monetary terms. This enables us to compare the significance of the impacts directly with each other and to demonstrate interrelationships. By conducting such a holistic analysis we go beyond looking at standard key financial indicators as METRO.
The results of the sustainability balance show us where negative impacts can be mitigated and positive impacts enhanced and illustrate the key importance of METRO’s supply chain and customer relations. This approach therefore supports our sustainability strategy, creates a nuanced basis for strategic decisions and helps secure our company’s long-term competitiveness.
The results of our first sustainability accounting in a nutshell
- METRO generates a positive net effect of € 26.7 billion per year along the entire value chain
- For every Euro of negative impact to the environment and society, we create 3 € value on social, ecological and economic level.
- Nearly 89% of the negative impacts can be located in upstream and downstream processes, i.e. in the production, processing and consumption of resources.
- Because we trade with resources, the impact of our actions on the environment is significantly greater than that on society.
Impact Assessment on Food Service Distribution
To ensure a successful and sustainable business, our company needs to generate financial but also social and environmental value. Every business impacts and depends on natural and social capital and will experience risks and opportunities associated with these relationships. Changes in our operations resulting from the significant growth of Food Service Distribution (FSD) business imply the creation of potential new impacts on the society and environment. Therefore, METRO Wholesale sought to answer the following question: “What is the difference in terms of impact (on natural and social capital) deriving from 1,000 € sales growth in FSD compared to 1,000 € additional sales in METRO stores?” By assessing our different business models (Cash & Carry and FSD depot) according to the “Natural Capital Protocol and Social Capital Protocol”, we are now able to monetize our environmental and social impacts. The pilot project demonstrates a benefit of 68 € per 1,000 € sales through the FSD depot model compared to the stationary Cash & Carry model.