Making sustainability measurable
6 minDecember 2020
METRO Bulgaria is committed to environmentally friendly value creation with regionally sourced organic and sustainable products. In pursuit of this goal, the company has taken a further important step: it is evaluating the actual impact its actions, products and their production have on society and the environment – and making this quantifiable in concrete figures.
Authentic regional vegetables are Daniel Petrov’s passion. A farmer in northern Bulgaria, he is a member of All Brands OOD, an organisation of agricultural producers: ‘We mainly grow lettuce, onions and carrots. We attach great importance to the high quality of all the raw materials, and we are aware that our products and the way they are grown have a great impact on our environment.’ Petrov is proud to be a part of METRO Bulgaria’s ‘Nurtured with Care in Bulgaria’ initiative, which he joined at its inception in 2017.
‘Nurtured with Care in Bulgaria’ was born of the will to promote the sustainable and socially responsible production and consumption of regional food products. The initiative supports local farmers like Daniel Petrov. ‘Our employees have travelled all over the country to find, select, inspire and train farmers to supply us with local and sustainable products,’ says Ivan Raynov, Category Manager Fruit & Vegetables at METRO Bulgaria.
The Nurtured with Care in Bulgaria project had positive effects for small farmers worth 11,073 Bulgarian leva per 1,000 square metres. That is the equivalent of about 5,500 euros. By way of comparison, the average per capita income in Bulgaria is around 1,300 leva or 600 euros per month.
Picture: © capital.bg
Picture: © capital.bg
The project now encompasses over 430 regional products from over 300 participating farmers. In addition to fresh fruit and vegetables, these include meat from the East Balkan pig, free-range chicken, lamb and beef. What’s so special about the initiative? Farmers supply 11 METRO markets in Bulgaria with fresh products straight from their farms every day – with no detours through intermediaries or the METRO central warehouse. ‘Our aim is to become a link between local producers of Bulgarian food and our HoReCa customers,’ Ivan Raynov says. ‘In 2018, we sold around 4,800 tonnes of Bulgarian agricultural products from small farmers. We are very proud that we can support the local economy with our project while also bringing authentic Bulgarian cuisine to our HoReCa customers.’ Now these products are no longer tracked separately – because they’ve become a natural part of the overall range.
How sustainable is ‘Nurtured with Care in Bulgaria’?
Sustainable value creation delivers not only added value for customers and business partners but also positive effects for the environment and society. METRO partnered with Denkstatt, a leading sustainability consultancy in Central and Eastern Europe, to evaluate the ‘Nurtured with Care in Bulgaria’ project in terms of its economic, ecological and social impact in concrete figures.
‘Our evaluation takes a holistic approach to sustainability, so it considers all three pillars of sustainability,’ says Ivan Paspaldzhiev, Senior Consultant at Denkstatt, describing the impact assessment. ‘Our evaluation looks at the changes the project has brought about, which may be both positive and negative. The problem is that different impacts are measured in very different ways. How do you compare 10 newly created jobs, for example, with 10 cubic metres of water saved or 10 kilograms of CO² emissions avoided?’
What is a sustainable product?
A sustainable product should rest on all 3 pillars of sustainability: ecological, social and economic.
This means that agriculturally responsible and economically sensible processes play a key role. Specifically, they should avoid the use of chemicals, give the soil sufficient time to regenerate, use water and raw materials sparingly and treat animals humanely. Environmentally friendly packaging as well as energy-saving and low-emission processes are also important. What is more, sustainable production also means maintaining working conditions that are fair and safe, and thus socially responsible.The Denkstatt impact analysis is helping METRO Bulgaria see the big picture. ‘As wholesalers and retailers, we are the gateway between the ‘farm’ and the ‘fork’, and we have a significant influence on what people eat and how it is produced,’ Ivan Raynov says. That’s why METRO is committed to a holistic approach to product sustainability – so that we can all benefit from it in the end.
A different kind of ‘currency converter’
To achieve that, Denkstatt converts all the environmental and social impacts of the project into a common currency: monetary values. In other words, it translates the impacts into an economic variable – the familiar ‘profits and losses’ – and thus makes it possible to integrate them into companies’ annual reports. ‘With the help of the analysis, METRO Bulgaria can compare the different impacts from the ‘Nurtured with Care in Bulgaria’ project and identify the activities that offer the greatest potential for positive change. This is incredibly important to help the company improve its own actions and establish truly sustainable processes,’ Ivan Paspaldzhiev says. The result: both local producers and the environment benefit from the project. ‘The business model is an economic win-win,’ he adds. ‘METRO can ensure excellent product quality and local producers earn more money for their work.’ The smallest producers in particular now earn more due to the increased purchase prices. They also reap the biggest benefits from supplying METRO stores directly. At the same time, the project has a positive impact on social sustainability, as METRO employee Ivan Raynov reports: ‘By providing free education and training to the farmers, we can help them to expand their business and preserve traditional regional products, which are a part of our Bulgarian identity and culture.’
The project also helps to reduce pollution, Raynov says, ‘Thanks to strict guidelines governing the use of fertilisers and pesticides and the implementation of responsible agricultural practices – such as the more resource-efficient use of water – we impact the environment in a positive way.’
The small producers were able to almost triple their production and at the same time reduce harmful environmental influences. For every 1,000 square metres, small producers can save water, fertilisers and pesticides worth 312 leva, or 155 euros.
Picture: © capital.bg
Picture: © capital.bg
The small producers were able to almost triple their production and at the same time reduce harmful environmental influences. For every 1,000 square metres, small producers can save water, fertilisers and pesticides worth 312 leva, or 155 euros.
Picture: © capital.bg
A pioneering project for the Bulgarian wholesale and retail trade
The range offered as part of ‘Nurtured with Care in Bulgaria’ depends on the different growing and harvesting timelines, so the products vary according to the season. When cultivating different varieties and seeds, METRO Bulgaria also draws on the knowledge of experts from national research institutes to ensure the highest product quality. In addition, METRO Bulgaria monitors compliance with all the specifications throughout the entire value-added process.
METRO Bulgaria and the farmers have built relationships of great openness, trust and loyalty, as farmer Daniel Petrov describes: ‘Small to medium-sized agricultural operations have an especially difficult time establishing a sustainable business in Bulgaria. That’s why we’re glad to have METRO as a reliable partner who gives us the support we need.’
Sustainability at METRO
We target our actions on 8 focus areas that affect us and our customers the most and where we create the greatest leverage. Read more about our sustainability strategy and the 8 strategic focus areas in our Corporate Responsibility Report 2019/20.
The Sustainable Value Creation model
In 2018, Denkstatt prepared a sustainability balance sheet for METRO AG for the 2016/17 financial year. With the help of the Sustainable Value Creation model, METRO measured its global influence as well as all of its business activities in terms of their economic, ecological and social impact, and quantified them in monetary terms. The goal: to compare the effects with one another and to manage them better. This earned METRO recognition as a ‘leading practice example’ on the Dow Jones Sustainability Index (DJSI) in 2018, and the Sustainable Value Creation model was included in the DJSI 2020 Sustainability Yearbook.