Russia’s largest food retailer, X5, is forging ahead with sustainability programmes not just for itself, but the entire Russian food industry.
The new X5 “30×30” plan sees the food retail and e-business giant set a 2030 target to reduce emissions, and waste, and increase renewable energy by 30%.
With its 17,000 stores and 1.97 trillion rubles sales, X5 is in a good position to show others the way in terms of environment, social and governance (ESG) programs. Basing “30×30” on the United Nation’s 17 Sustainable Development Goals, the Russian retailer takes corporate responsibility seriously. Already, the company has successfully reduced its plastic waste in physical stores as well as online. In 2020, 28,000 buyers returned about 248,000 plastic bags. Approximately 310,000 packages have been collected and sent off to recycling plants.
Plus, aware of the lack of industrial composting and recycling infrastructure in Russia, X5 sees it as their duty to create viable, share-able processes. For example, a pilot programme has installed 20 reverse vending machines in-store that collect plastic packaging for recycling in return for coupons.
The supermarket chain also implemented a sustainable packaging initiative, not just for themselves but the entire food retail industry. After a collaborative process involving competitors, suppliers, environmental activists and other stakeholders, X5 saw that they would have a bigger impact by developing packaging regulations for all organisations. The resulting guidelines cover design, materials and labelling. They ensure best labour and environmental practice, albeit with the current technology and infrastructure available in Russia.
Another key area for X5 has been education. In order to reach sustainability goals, the company’s 340,000 employees receive a 45 minute interactive training session to create awareness and encourage engagement. In addition, dashboards allow for each business unit to track their sustainability targets and ensure transparency. In 2019, most X5 employees didn’t know what ESG meant. Now, everyone in the organisation, from top down, is invested.
X5’s achievements in collaborative ESG are particularly impressive set against the unique challenges of Russia’s geography. Operating in the largest and coldest country in the world, creates very specific hurdles to sustainable transformation. The size and freezing temperatures mean Russian companies cannot simply follow the strategies of their western counterparts. Another issue is the gap between intention and action when it comes to sustainable consumption. In line with the rest of the world, 44% of Russians say they feel guilty when they do something that harms the environment. However, whilst globally 34% of people claim they try to do their best for the whole planet, just 9% of Russians say the same.
However, consumer attitudes are progressing. Analysts predict significant change is on the way. “Russian retailers and brands should start to prioritise social responsibility, particularly around sustainability and diversity and inclusion,” says Nadejda Krec, senior analyst at Euromonitor International in a Vogue interview. “Publicity of ongoing CSR initiatives would encourage other companies to follow in this direction. Conscious consumption is a key Russia consumer trend to emerge since the pandemic.”
Find out about a UK supermarket Tesco going super-sustainable here.