5. Responsibility

Accountability within the company’s management with regard to sustainability is disclosed.

The CR department is housed under the organisation of ALDI Buying in Germany. It reports to one of the managing directors of ALDI Buying. The department was established as a standalone unit in 2015. Previously, CR had been grouped with Quality Assurance and formed a part of Corporate Buying. In the other ALDI North countries, CR-related tasks are normally handled by the head of CR/Quality Assurance as well as other employees.  

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6. Rules and Processes

The company discloses how the sustainability strategy is implemented in the operational business by way of rules and processes.

See also criteria 5  

All CR officers maintain close contact across national boundaries and work on the five fields of action from our CR Policy. They also coordinate at their respective companies with colleagues from Purchasing and Quality Assurance, as well as with other departments, bodies of experts and divisions. Among others, this includes Human Resources (HR), Corporate Communications, Marketing, Sales and Logistics. Overall, more than 50 staff members deal with CR at ALDI North.  

Non-Food
The CR department coordinates the review of environmental and social standards and is in close contact with suppliers and buyers. ALDI CR-Support Asia Ltd. in Hong Kong, whose primary task is to monitor suppliers and production facilities, provides support for the CR department during its work in the production countries. That is how we additionally check the conditions and progress ourselves on site.  

Food
The ALDI Buying Corporate Responsibility (CR) department draws up the resource-specific purchasing policies in consultation with the buying department and the ALDI North Group countries. The CR department also coordinates the implementation of the provisions defined therein. The ALDI North Group countries may develop national versions of the purchasing policies to meet country-specific requirements. Before we adopt new sustainability requirements, we check that implementation is feasible with the selected suppliers. The requirements developed in this way become a fixed element in our purchasing processes and contracts.  

Climate Protection
The development towards more climate-friendly logistics is being driven forward within Germany by the Logistics department of ALDI Buying and the regional companies. Communication on this issue is taking place with the ALDI North Group companies in the relevant countries. In May 2018, we adopted our International Climate Protection Policy.  

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7. Control

The company states how and what performance indicators related to sustainability are used in its regular internal planning and control processes. It discloses how suitable processes ensure reliability, comparability and consistency of the data used for internal management and external communication.

In order to assess the success of our strategies and measures, we record economically, socially and ecologically relevant key figures. Product-related key figures in particular help us to monitor the progress of our product changes. The targets for the conversion of raw materials are defined in our purchasing policies and in our CR Programme.  

Our selection of key figures is based on meaningful reporting standards such as the guidelines of the Global Reporting Initiative (GRI).  

The legally independent companies form the ALDI North Group, which is the subject of the report. Deviations in individual performance indicators or content are indicated as necessary. We report, where possible, over three years. Selected content and performance indicators for the year 2017 were the subject of an assurance engagement by the independent audit firm Flottmeyer • Steghaus + Partner.  

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Key Performance Indicators to criteria 5 to 7

Key Performance Indicator GRI SRS-102-16: Values
The reporting organization shall report the following information:

a. A description of the organization’s values, principles, standards, and norms of behavior.

Please use the following link for further information:
GRI 102-16

8. Incentive Systems

The company discloses how target agreements and remuneration schemes for executives and employees are also geared towards the achievement of sustainability goals and how they are aligned with long-term value creation. It discloses the extent to which the achievement of these goals forms part of the evaluation of the top managerial level (board/managing directors) conducted by the monitoring body (supervisory board/advisory board).

We focus on performance and pay above and beyond the collective bargaining agreement. We give all employees equal opportunities.  

There is currently no link between sustainability targets and remuneration, nor are there any plans to do so.  

Proportion of employees covered by collective bargaining agreements: 99.3

Key Performance Indicators to criteria 8

Key Performance Indicator GRI SRS-102-35: Renumeration policies
The reporting organization shall report the following information:

a. Remuneration policies for the highest governance body and senior executives for the following types of remuneration:
i. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, and deferred or vested shares;
ii. Sign-on bonuses or recruitment incentive payments;
iii. Termination payments;
iv. Clawbacks;
v. Retirement benefits, including the difference between benefit schemes and contribution rates for the highest governance body, senior executives, and all other employees.

b. How performance criteria in the remuneration policies relate to the highest governance body’s and senior executives’ objectives for economic, environmental, and social topics.

We do not report in public about the GRI SRS-102-35 indicator because of competition and confidentiality reasons.

Key Performance Indicator GRI SRS-102-38: Annual total compensation ratio
The reporting organization shall report the following information:

a. Ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country.

As a “Core” reporting Company we do not use this indicator, because we do not consider the information as significant for the analysis of our compensation structure. Instead, we offer secure working conditions, attractive framework conditions and long-term development prospects. ALDI employees receive fair and performance-related compensation.

9. Stakeholder Engagement

The company discloses how the socially and economically relevant stakeholders are identified and integrated into the sustainability process. It states whether and how an ongoing dialogue takes place with them and how the results are integrated into the sustainability process.

We intended for our survey to focus on those stakeholders of greatest importance to ALDI North, which is why the stakeholders were divided into groups and rated based on their relevance to ALDI North. We took the following factors into account: As part of our materiality process, we regularly review which stakeholder groups are especially relevant to us. The most important stakeholders include customers, employees, non-governmental organisations (NGOs), initiatives and associations, suppliers and business partners, and members of works councils and unions. We are engaged in open and direct dialogue of growing depth with them, from which we learn a great deal. We also maintain contact with other groups, such as residents who live around our locations, in addition to members of the media and politicians. ALDI North engages in dialogue both nationally and internationally with various organisations, initiatives and alliances. Our efforts differ in each case depending on the issue and range from mere membership to playing an active management role. Online is a list of the initiatives that we are involved in and the related obligations  

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Key Performance Indicators to criteria 9

Key Performance Indicator GRI SRS-102-44: Key topics and concerns
The reporting organization shall report the following information:

a. Key topics and concerns that have been raised through stakeholder engagement, including:
i. how the organization has responded to those key topics and concerns, including through its reporting;
ii. the stakeholder groups that raised each of the key topics and concerns.

Please use the following link for further information:  
GRI 102-44

10. Innovation and Product Management

The company discloses how innovations in products and services are enhanced through suitable processes which improve sustainability with respect to the company’s utilisation of resources and with regard to users. Likewise, a further statement is made with regard to if and how the current and future impact of the key products and services in the value chain and in the product life cycle are assessed.

Non-Food
Our objective is to enable millions of customers in Europe to shop in our stores with a good conscience. To make this possible, we take responsibility for safe and fair working conditions and compliance with environmental standards wherever we can make a difference. Our non-food range includes, among other things, textiles, cosmetic and toiletry products, and weekly special-buy products – from electronics and household goods to furniture. The supply chains behind these products are diverse and complex. During production, non-food products often pass through several production sites in various different countries. Hence, the challenges are complex as well: Issues such as building safety, living wages or reducing the use of chemicals in textile production require cross-sector cooperation among companies, governments and non-governmental organisations (NGOs). That is why we have joined forces with other players to work on these challenges in global initiatives such as amfori BSCI (Business Social Compliance Initiative).    

Food
Our food product range is made up primarily of own-brand products that we select and design for our customers. We define purchasing policies for specific resources and internal purchasing guidelines while pursuing a risk-based approach. This means that we take action where environmental or social challenges exist – and where we can therefore achieve the greatest impact through our improvements. We work in close cooperation with our suppliers and are in constant contact regarding our sustainability requirements to enable them to implement our standards. We also participate in cross-sector and multistakeholder initiatives on a variety of topics, such as tropical and subtropical fruits. The traceability of products is gaining more and more importance for us to manage the conversion of resources all the way through to the producer. The ALDI Transparency Code (ATC) allows our customers to quickly find out where various products come from. In addition, we work with recognised sustainability labels, seals and certificates.  

Product rating
We analyse our product offering from sustainability and risk perspectives. Which resources are subject to risks on account of their manufacturing and cultivation methods and are therefore a topic of debate in the public domain? What is frequently used in our product range or is in great demand? The result is that we achieve environmental, social and economic improvement in production for a maximally large number of own-brand products and the resources they are made of.  

The Corporate Responsibility (CR) department of ALDI Buying draws up the raw material-specific purchasing policies in consultation with the Purchasing Department and the ALDI North Countries. There and in the sustainability report (food and non-food as well as in the highlights), the effects of the raw materials or products can be found.    


Packaging
In late 2017, we started discontinuing conventional disposable plastic shopping bags in Belgium, Germany and the Netherlands. Once the conversion process has been completed, these ALDI North Group countries will only carry reusable totes. For more information, please see the story entitled Disposing with disposables”.

Raising consumer awareness
We use various tools to inform our customers about social and environmental aspects of our products. Our customer magazine ALDI aktuell and our advertising campaigns often focus on our sustainably certified products. In our stores, we attract our customers’ attention to such products through appropriate labelling on shelves and through posters. Moreover, we create transparency through clear product labelling by using recognised sustainability seals and own brands. We raise awareness of special sustainability requirements through special campaigns and projects. In the Netherlands, for example, we are committed to raising awareness of the issue of plastic waste among schoolchildren. The employees of the ALDI North Group also receive comprehensive information about the sustainability aspects of our products, initiatives and projects.  

As a second cornerstone, we offer our customers an appropriate range of products for a healthy and sustainable lifestyle, such as a wide selection of fresh fruit and vegetables, healthier product alternatives with less sugar and products for special nutritional requirements, as well as products containing certified resources and from controlled production.  

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Key Performance Indicators to criteria 10

Key Performance Indicator G4-FS11
(report also in accordance with GRI SRS): Percentage of assets subject to positive and negative environmental or social screening. Link (Page 38)(Note: the indicator should also be reported when reporting to GRI SRS)

ALDI North does not include the proportion of financial investments that undergo a positive or negative selection test according to environmental or social factors and therefore cannot give a percentage.