The global food system is responsible for 26–34 percent of global greenhouse gas emissions. Furthermore, it has substantial negative impacts on biodiversity, soil erosion, water consumption and water pollution. Food retailing plays a central role in the food system, as it can significantly influence both food production and consumption. The aim of this project was to assess the extent to which Germany's eight major food retailers, defined as those with the highest turnover, use their scope to instigate action targeted at making the food system more environmentally friendly. To this end, the project team evaluated these companies according to an evaluation grid with 22 areas of activity, 43 indicators and 112 sub-indicators. The assessment referred to the year 2020.
The results show that all eight food retailers make insufficient use of their scope for action in the areas of supply chain, own locations, and consumption. Although it is true that individual companies demonstrate notable performance in various areas of activity, these are not sufficient to make an overall significant contribution to the necessary transformation of the food system. Therefore, the project team recommends that the companies implement their sustainability management in a considerably more systematic, and consequently, more effective way. This includes setting consistently verifiable targets for environmental sustainability, investing in better data capabilities, and linking sustainability management more closely with business, purchasing, and category management.
Given the overall mediocre performance of the companies, the project team concludes that the current policy framework needs to be changed to enable food retailers to improve their environmental performance without suffering significant competitive disadvantages. This requires an effective policy mix of regulatory measures combined with financial incentives. In addition to general recommendations, such as the internalization of externalities, we recommend addressing the key drivers for companies; both on the supply and demand side. These include the introduction of minimum standards in raw material purchasing and restrictions on the sale of particularly environmentally harmful products, such as food transported by air-freight. In addition, a framework should be established to enable transparent and comparable sustainability reporting by the companies.
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