SUSTAINABILITY REPORT2017

RESPONSIBLE CORPORATE
GOVERNANCE: Securing the future
with a proven mission

GRI 102-11; GRI 102-15

Management approach: GRI 201; GRI 205; GRI 206; GRI 412; GRI 415; GRI 419

For over 65 years, the Hamburg family-owned company Tchibo has modelled itself on the ideal of the ‘honourable merchant’. We think long term and see it as our entrepreneurial duty to take respon­si­bility for our actions. Building on this principle, we made sustain­ability an integral part of our business strategy in 2006. We consider the impact of our business opera­tions on people and the environ­ment in our key processes and products, and thus safeguard our commercial success far into the future. 

Enjoyment and quality are hallmarks of the Tchibo brand. To be able to continue deliv­ering on this claim in the future, we have integrated sustain­ability in our business strategy, the Tchibo DNA, and in our Code of Conduct since 2006. We combine our pursuit of revenues and profit with ecological, social and societal respon­si­bility, because an intact natural environment as the basis and source of high-quality products, respect for and compliance with human rights in the supply chain, reliable cooper­ation with respon­sible business partners, passionate employees, and the trust of our customers are crucial deter­mi­nants of the future viability of our business.

In August 2011, we went a step further and set the following strategic core objective: Tchibo is on the way to becoming a 100 % sustainable business. In line with this, we are progres­sively designing our business processes and products to be environ­men­tally and socially compatible, because our commercial success must not be at the expense of people and the environment. We place particular emphasis on the areas where we have the greatest influence and thus the greatest possible leverage. We want the Tchibo brand to be synonymous with sustain­ability and to be perceived as such by our stake­holders.

In the firm conviction that a sustainable business safeguards our company’s future, we will continue on our path with full strength. We follow inter­na­tional guide­lines such as those of the Organ­i­sation for Economic Cooper­ation and Devel­opment (OECD), the core labour standards of the Inter­na­tional Labour Organ­i­sation (ILO), the UN Guiding Principles on Business and Human Rights, and their imple­men­tation within the framework of the National Action Plan on Economic and Human Rights (NAP).

As a respon­sible company, we want to continue making signif­icant contri­bu­tions to sustainable devel­opment and to achieving the Sustainable Devel­opment Goals (SDGs).

Doing business sustainably: experi­ences and insights from recent years

More than 10 years ago, we embarked on the path to becoming a 100 % sustainable business. We have achieved a great deal since then: we have managed to set milestones and advance important issues. We identify challenges, tackle them, and work on innovative solutions together with our partners. In the past ten years, we have also experi­enced some mishaps or setbacks, especially when we came up against the limits of what we can do as a single trading company. But we draw valuable insights for the further devel­opment of our focus on sustain­ability from our successes as well as our setbacks. The experi­ences of the past ten years have strengthened our deter­mi­nation to continue pursuing the goal of becoming a 100 % sustainable business and thus safeguarding Tchibo’s future viability. To implement this goal, we have developed a management system and firmly anchored it in the company.

In dealing with the key sustain­ability issues, we also involve our stake­holders. Maintaining a dialogue with them is important in order to identify and evaluate key issues and expec­ta­tions, and prioritise measures. This is the only way we can set the right course for the diversity and global dimension of the challenges. Accord­ingly, we have developed a roadmap setting out the key measures, and also clearly delin­eating the areas in which we can achieve improve­ments as a single company – for example, through our WE (Worldwide Enhancement of Social Quality) quali­fi­cation programme for our consumer goods producers and our Tchibo Joint Forces!® quali­fi­cation programme for coffee farmers – and where we can only achieve changes in cooper­ation with other stake­holders.

Into the future with innovation and cooper­ation

This gave rise to two strate­gi­cally important instru­ments, which we will increas­ingly focus on in future: cooper­ation and innovation. Cooper­ation in order to increase leverage and jointly develop solutions for systemic and struc­tural challenges with other protag­o­nists and stake­holders. Innovation, because ground-breaking new ideas and measures are needed in response to the depletion of resources, loss of biodi­versity, climate change, demographic change and other global challenges.

Trans­parency is an essential prereq­uisite for imple­menting social and ecological standards in our value chains. Due to the small-scale supply chain, it is a great challenge to create trans­parency from cup to plantation and to promote better local condi­tions in the coffee value chain. Cooper­ation with reliable partners in the growing countries and in the supply chains is therefore indis­pensable for us. We maintain trustful and longstanding supplier relation­ships with exporters and dealers as well as cooper­a­tives and individual larger farms. In the consumer goods supply chain, too, we are currently working to achieve even better trans­parency in the upstream stages of the supply chain.

Another important prereq­uisite for bringing about change and promoting sustainable consumption is to get our customers excited about sustainable products. We can only achieve this by offering a wide range of sustainable assort­ments, and credible and easily under­standable product and process commu­ni­cations. We are working flat out on this.

Responding effec­tively to current and future devel­op­ments

In 2017, Tchibo once again further developed its focus on sustain­ability – also with a view to current challenges in politics and society. Further infor­mation 

Exchange with stake­holders

In the process of bringing our business in line with economic, ecological, social and societal criteria, it is important for us to purpose­fully involve our internal and external stake­holders. We learn about different expec­ta­tions, receive impulses and specific sugges­tions at an early stage and build up a trusting relationship with our stake­holders. That is why we are a member of the most important alliances and initia­tives and are often involved in innovation processes - both at company and societal level. In various events and forums, we have entered into an exchange with our stake­holders.

We entered into an exchange with our stake­holders at various events and forums. At the beginning of 2018, for instance, we hosted a panel discussion on our new Tchibo Share business model with around 25 journalists and bloggers. Former German Foreign Minister Joschka Fischer, Tchibo’s Corporate Respon­si­bility Director Nanda Bergstein, Green­peace Germany boss Sweelin Heuss, and Hendrik Scheuschner, Managing Director of Tchibo Share’s partner company kilenda, talked with our CEO Thomas Linemayr about the extent to which baby and children's fashion rentals are accepted in a mainstream market.  

The panel­lists and press repre­sen­ta­tives agreed that Tchibo Share is an important pilot venture and at the same time a major social exper­iment. Because companies aren’t the only ones who have to learn about and get used to sharing business models – consumers also have to change their behaviour when they rent clothes instead of buying them.

Voluntary commit­ments 

As long there is no legal framework at European level for imple­menting ecological and social duty of care in the global supplier struc­tures, we at Tchibo rely on voluntary commit­ments. We either fulfil them alone or in cooper­ation with other stake­holders or initia­tives – depending on their level of complexity.

UN Global Compact 

In 2009, we joined the United Nations Global Compact (UN), which links business, politics, labour [organ­i­sa­tions], and civil society. As part of our membership, we are expressly committed to the ten principles of the UN Global Compact in the areas of human rights, labour standards, environ­mental protection, and the fight against corruption, and undertake to take them into account in our business processes.

Global Coffee Platform

In 2016, Tchibo was involved in the founding of the Global Coffee Platform (GCP), a merger of the Sustainable Coffee Programme (SCP) and the 4C Associ­ation. The goal of GCP is to unite all the key players and initia­tives in the coffee sector – private as well as public – in a global alliance to jointly address sector-wide issues. As part of the GCP, Tchibo plays an active role in shaping a sustainable coffee sector. At the beginning of 2017, a Memorandum of Under­standing was signed with the German Federal Ministry for Economic Cooper­ation and Devel­opment (BMZ) regarding possi­bil­ities for cooper­ation. 

Partnership for Sustainable Textiles

In 2015, we joined the Partnership for Sustainable Textiles initiated by Germany’s Federal Minister for Economic Cooper­ation and Devel­opment. The aim of this alliance of companies, non-govern­mental and standards organ­i­sa­tions, trade unions, business, and politics is to improve social and environ­mental standards across the entire textile value chain. Tchibo is active in all of the Alliance’s working groups. In August 2017, as part of the Alliance, we published our ‘roadmap’ for 2017. It contains 15 measures that serve to further improve the environ­mental and working condi­tions in our textile supply chains. Further infor­mation

Detox Commitment

In October 2014, we signed and published the Detox Commitment initiated by the environ­mental protection organ­i­sation Green­peace. In doing so, we pledged to eliminate the use of undesirable chemicals in production processes, especially those of our textile suppliers, by 2020, and to create closed-loop material cycles. We are now imple­menting this ambitious goal step by step. Our extensive ‘closed-loop’ concept pursues the goal of closing material cycles, thereby conserving valuable resources while at the same time making consumption more sustainable. For us, this means that even at the product design stage, we develop our products in such a way that they can be produced with recycled or renewable resources as far as possible, that they are durable, and at the end of their useful life can be repur­posed for high-end recycling. 

Since the commitment was signed, we have reported annually on further devel­op­ments in a DETOX progress report. Further infor­mation

Accord on Fire and Building Safety in Bangladesh

In 2012, Tchibo was the second company in the world to sign the „Accord on Fire and Building Safety in Bangladesh“ and contributed to its coming into force, its improvement, and its ongoing imple­men­tation. Further infor­mation

Framework agreement with Indus­triALL Global Union und ACT

In September 2016, Tchibo became the first German trading company to sign an inter­na­tional framework agreement with the Indus­triALL Global union. This idea is to make it easier for workers and trade unions in the factories to negotiate wages and benefits with factory owners and management. We also work with the Indus­triALL Global Union and other inter­na­tional trading companies in the ACT (Action, Collab­o­ration, Trans­for­mation) initiative to secure living wages and industry-wide collective bargaining between social partners in the global clothing industry. Further infor­mation

Respon­sible consumption

We have also joined a voluntary commitment by business associ­a­tions in Germany and Austria to stop providing free plastic bags. We have success­fully imple­mented this since January 2016 in Germany. As a result, we were able to cut the number of single-use bags given out at our Tchibo shops in Germany by nearly 90 % that same year, and by 80 % in Austria. As second voluntary commitment, we have decided to system­at­i­cally use reusable cups for ‘coffee to go’. We intro­duced our own reusable cups solution for our coffee bars in the Tchibo shops, and are also partic­i­pating in the trial phase of the Kehrwieder-Becher initiative to test the intro­duction of a deposit system for reusable cups in Hamburg city centre. 

In 2018, we became the first major retailer to offer rentals of sustainably produced baby and children's clothing made of organic cotton, under the name ‘Tchibo Share’. With Tchibo Share, we resolutely continue our holistic approach to achieving the longest possible product life and subse­quent recycling: baby and children's wear made from organic cotton is reused as second-hand after rental, thus maximising its useful life.

For further infor­mation, see sections on Customers and products and on Environ­mental protection.

Tackling political and societal challenges

Tchibo addresses current political and societal challenges inten­sively, and derives specific measures for sustain­ability management based on this.

Sustainable Devel­opment Goals

Sustain­ability has been integrated into Tchibo Gmbh’s corporate strategy since 2006. From the beginning, this has included our working towards the United Nations’ eight Millennium Devel­opment Goals. In 2015, the United Nations formu­lated 17 Sustainable Devel­opment Goals (SDGs) based on the Millennium Devel­opment Goals. We regard the SDGs as a global framework for our sustain­ability agenda, and seek to contribute to their fulfilment. Further infor­mation 

National action plan for business and human rights

We see the Guiding Principles on Business and Human Rights adopted by the United Nations in 2011 as another formative devel­opment. Based on existing human rights commit­ments such as the Inter­na­tional Human Rights Charter and the funda­mental conven­tions of the Inter­na­tional Labour Organ­i­sation (ILO), they for the first time provide a univer­sally accredited frame of reference that imposes some of the respon­si­bility for respecting human rights in global supply and value chains, and for preventing human rights viola­tions, on companies. We are aware of this business respon­si­bility and integrated respect for human rights into our business practices many years ago. Further infor­mation

EU reporting obligation

The regula­tions imple­menting the EU Non-Financial Reporting Directive entered into force in 2017. Although the associated obligation of expanded non-financial reporting does not apply to us as a family-owned company, we will continue to provide trans­parent and compre­hensive infor­mation on the results of our sustain­ability management. We follow the principle of trans­parent and compa­rable annual reporting that has been estab­lished at Tchibo since 2008. The present Sustain­ability Report 2017, which has been prepared in accor­dance with the standards of the Global Reporting Initiative, we also take into account the require­ments of the Non-Financial Reporting Directive and thus contribute to the trans­parency of a sustain­ability-driven way of doing business.

Germany’s New Packaging Act

The new German Packaging Act, which was adopted by the Bundestag and comes into effect in 2019, stipu­lates further recycling and reusability require­ments for business. Together with the Handelsverband Deutschland (HDE), the German Indus­trial Plastic Packaging Associ­ation (IK), the Feder­ation of German Food and Drink Indus­tries (BVE), and our super­market concession (Depot) partners and other companies, we proposed practical and sustain­ability-promoting regula­tions for packaging design, collection, licensing and disposal which are reflected in the legis­lation.

National Programme for Sustainable Consumption

The German Government’s National Programme for Sustainable Consumption is meant to promote sustainable consumption in the areas of home living, mobility, nutrition, office and work, clothing, as well as tourism and leisure. The programme specifies goals and measures that are linked with existing strategies, funding programmes and regula­tions. The German Government also wants the programme to serve as a platform for social discourse on the evolution of consumer behaviour. Tchibo has for many years promoted respon­sible consumption by offering sustainable product ranges, and expressly welcomes the programme. Further infor­mation

Corporate Citizenship

As a family-owned company and an active corporate citizen, we feel it is a matter of course to get involved and take respon­si­bility beyond the limits of our own business activ­ities.

In 2017, societal discourse continued to be dominated by the issue of refugee aid and the integration of displaced persons. This is a challenge of great relevance to global society that we tackled and responded to within the scope of our possi­bil­ities as a business. For example, we are involved in a three-stage action plan for displaced persons in the distri­bution countries Germany, Austria and Turkey: we provide intern­ships and appren­tice­ships, enable our employees to volunteer their time for support activ­ities at a refugee reception centre and a school, and supply relief organ­i­sa­tions with donations in kind as needed. Further infor­mation