Sustainability in Retail: An Interview with Anna Krall from HORNBACH

The retail industry is facing many new trends and developments: From energy saving and sustainable products to future-oriented construction. Topics such as resource-saving and energy-efficient construction methods and living concepts are an integral part of our society. But how does the retail industry actually react to these trends? We spoke with Anna Krall, Head of CSR at HORNBACH Holding AG & Co. KGaA to answer this question. In the following, we would like to give you an insight into how HORNBACH has accepted and mastered the latest opportunities and challenges in the retail industry when it comes to sustainability.

Where do you see the biggest opportunities and challenges in retail in terms of sustainability?

For a retail company like us, I see the biggest challenge in the area of assortment. In the best case, we make a social difference with the goods we sell. For example, since the mid-90s we have only sold FSC-certified tropical wood. We stopped selling products such as hand-hewn natural stones and fireworks and also have an organic certification in some countries.  

Our goal is to ensure that our customers can shop with a clear conscience. This means, among other things, that we respect human rights, comply with the ILO core labour standards and, of course, the laws in the producing country. That is always the minimum.

The second major building block is our colleagues. We are 25,000 Hornbachers spread over nine countries. Our basic idea is that satisfied employees also lead to satisfied customers. If our colleagues enjoy working for us and are passionate about the company and the business model behind it, then it is precisely this passion that reaches our customers.

In addition to these two core aspects, there are two further fields of action: one is spare parts and disposal, i.e. what happens to our products after we have sold them. The other aspect is, of course, our own business operations. Here we can observe some major challenges within logistics or in the construction and operation of buildings that also have a significant impact on our CO2 emissions.

HORNBACH is determined to understand its impact and footprint in detail and to integrate sustainability into its growth strategy and business operations. Can you tell us how this process began? How has the topic developed so far and how much time and resources are behind your sustainability management?

For us, sustainability means first and foremost doing business in such a way that you can still look each other in the eye, and if you have promised something, then what you have promised counts, as does the handshake that seals the whole thing. This is the decency with which I was socialised at HORNBACH. The "honourable businessman" is not just a theory for us, but the basis of our (sustainable) actions. 

Common sense has become a proper business field over the past 20 years. While CSR was initially in the hands of our merchandising department, especially in quality management, we now have our own team. This is not only due to the many topics we are working on. The fact that our two chairmen, Albrecht Hornbach for the holding company and Erich Harsch for Baumarkt AG, are responsible for CSR at board level underlines the importance we attach to sustainability issues. 

The new structure is best represented in circles: The CSR core team currently consists of 12 colleagues. Some of them are responsible for everything to do with social commitment, be it our HORNBACH Foundation or the small to very large donations. There are also project managers who work very intensively with our Group divisions to drive forward operational issues.

However, there is also a larger group of colleagues who deal with CSR issues but are not part of the department in either disciplinary or technical terms. These are representatives from all relevant divisions. They are available to us as permanent contact persons in logistics or technology to place, discuss and pass on topics.

What made HORNBACH choose a software-based approach for CO2 scoping?

The effort required to measure and calculate emissions is incredibly complex - especially when you look at Scope 3 emissions in retail, which we want to tackle gradually. 

We had a small list of companies that we had discussions with to see if they were a good fit for us and our requirements. After that, we sat down in the project team and thought: "What is actually important to us?". The crucial point why we chose Planetly is the agility we attribute to you. Not only are you a very young team, but you are incredibly ambitious, fast and willing to learn with us. That's important in a subject that is evolving at a rapid pace.

Now that the first phase of the emissions calculation has been successfully completed, what are the next steps for HORNBACH in terms of further emissions calculations and possible emissions reductions? What are the expectations and what are you most looking forward to at HORNBACH?

The fact that we have now completed the first phase of the emissions calculation now leads to a certain pressure. Because step two is clear, reduction targets must follow and at the end of the road there will be carbon neutrality. The question now is, in which year do we want to and can we achieve this? What intermediate targets make sense? And above all: how do we want to achieve our goals? Because simply switching to green electricity or offsetting emissions is not our ambition. We want to reduce our footprint in real terms. We may be taking the harder path, but it is the path that makes sense to us. When we tackle something, we want to make a difference. The impact must be clear.

Yesterday we had the preliminary discussion for the reduction workshops with you. Here we clearly defined which measures we have already implemented and with which attitude we want to implement further measures and what these will impact. We simply have to discuss this openly and I am looking forward to that. 

Scope 3 will certainly be challenging. This is mainly due to the availability of data. Therefore, we will first look at what data is available and only then decide what to measure and when. Because systems will certainly have to be adapted and prepared so that we can actually capture Scope 3.

Can you give a few examples of what HORNBACH is already doing and still planning in the area of reduction?

If I look at it from a structural and operational point of view, there has been something like building management technology for a very long time, for example on-demand lighting, or also overhead lighting in the sense of real light through light domes. In 2020, we also replaced the entire lighting, starting with the normal market lighting and then also the shelf lighting and car park lighting. We're not quite done yet, but soon everything will be converted to LED.

Various things are planned, such as in the area of our vehicle fleet or photovoltaic projects. With the latter, there are still a few hurdles to overcome - think of the condition of the roofs and the renovation cycles, for example. Of course, there are also technical and regulatory issues here. But admittedly: If photovoltaics could be scaled up so that many markets could implement it, then that would be a great lever for us. 

You have talked about some opportunities but also challenges on the sustainability journey. What advice would you give to other companies who also want to start this journey?

It is important to deal with the topic of CO2 because, in my view, it is one of the most valid KPIs for dealing with climate change and the environment. As a company, you need support here because this expertise and experience is often lacking internally. It is not (yet) the case that all processes in the company that cause CO2 are recorded centrally, unlike for example turnover or cost. It is a huge effort to identify all energy consumption and to establish processes to measure it. But it is worth investing time here to create a reliable and audit-proof database on which to build in the years to come. Because one thing is clear: no company can avoid the topic of CO2 any more.

However, I also confess that the hype about CO2 in sustainability circles is a little strange to me. On the one hand because the comparability of CO2 data is often not possible. Although most companies follow the GHG Protocol, they only calculate part of their total footprint. And when it comes to reduction targets, there are in any case very different views on what is relevant and can be influenced. On the other hand, companies should be careful not to be too driven by the issues that others consider important and lose sight of what is really relevant for their own company and business model.