Pioneering milestone: Otto Group’s ambitious climate targets validated by the Science Based Targets Initiative

Hamburg, 19 March 2024 – The Otto Group is setting itself new, highly ambitious targets in its bid to fight climate change. By 2031, the global retail and services group aims to reduce its greenhouse gas emissions by 42% in absolute and real terms compared to 2021. In the process, it has already hit its first milestone: at the end of February, the new climate targets were officially validated by the Science Based Targets Initiative (SBTi). It confirmed that the targets are not only scientifically sound and in line with the 1.5 degree target of the Paris Climate Agreement, but also meet the highest standards.

For many years now, the Otto Group has been working continuously to scale down its ecological footprint. Thanks to the SBTi validation of its new ambitious climate targets, the Group has now reached an important milestone. What makes this unique in such a competitive environment, is the integration of its marketplace business into the objective. This goes beyond the minimum requirements demanded by the validation process and beyond the usual practice among competitors, and represents a unique selling point for the Otto Group. In addition to its SBT efforts, the Group is striving to achieve net zero emissions1 along the entire value chain. This long-term goal is set to be achieved by 2045 at the latest.

“I am really proud of our efforts to pursue and intensify our climate targets despite all the economic challenges in the online market. Having our ambitious climate targets validated is a significant milestone for the Otto Group and demonstrates our determination to play a leading role in the sustainable transformation of the industry,” explains Alexander Birken, CEO of the Otto Group. “We have to act, and want to, if our company is to remain fit for the future. Our commitment to climate protection goes beyond mere targets, though. It is a promise to future generations and a clear commitment to sustainable change in our economy and society,” Birken added. “However, we are aware that we in the Otto Group cannot achieve the goal of a 1.5 degree society alone. We need a collaborative approach in which business, politics and society – also on a global scale – work together on concrete measures.”

Its own success story shows that it is possible to cut back emissions. Between 2006 and 2020, the Otto Group more than halved it carbon output. On top of this, by 2023, CO₂e emissions were trimmed by more than 20 percent compared to 2018.

“We have achieved our climate targets to date by consistently avoiding and reducing emissions, not by offsetting. These measures in the fight against climate change were right, important and successful,” explains Prof Dr Tobias Wollermann, Group Vice President Corporate Responsibility at the Otto Group. “The new targets should therefore be seen as an on-going development of our long-standing, successful climate protection strategy and a necessary response to the worsening climate crisis.”

While previous climate protection measures have tended to focus on the Group's own direct sphere of influence – its own locations, procurement and distribution logistics, employee mobility and digital activities – the new, science-based climate target represents an expansion of its sphere of influence. It covers the entire value chain – from the cultivation of raw materials and production to a product’s useful life and eventually its disposal – and is therefore much more ambitious than any previous climate target. This massive expansion is tantamount to a significant intensification of climate protection measures.

The development of the Science-Based Target was challenging for the Otto Group and was achieved with a great deal of commitment and determination. “It was a tour de force,” summarizes Tobias Wollermann. “After an intensive development phase of over two years – getting many stakeholders from Group companies and Otto Group Holding involved – our collaborative Otto Group Science Based Target was officially validated by the SBTi at the end of February. This is undoubtedly a major milestone for the Otto Group’s climate protection activities. Of course, we want to be part of the climate solution and contribute towards limiting global warming, and the new SBT targets endorse this.”

The Otto Group is working on practical processes and measures, and is incorporating its business partners in a bid to become effective in achieving its objectives and to align its own activities with the 1.5 degree target. The particular focus here is on improving the energy efficiency of production processes in the upstream value chain and promoting the use of renewable energies. A pilot project launched in Bangladesh in 2023, for example, supports factories in developing energy efficiency measures, energy management and renewable energies. In future, measures to cut emissions during the product life span will also be highly relevant. Specific starting points include increasing the energy efficiency of electrical appliances and encouraging customers to switch to green electricity. In addition, the Otto Group is continuing to work on shifting the transportation of goods from air to ship or rail, and on electrifying home deliveries. At its own premises, it is pushing to increase energy efficiency and to switch completely to green electricity. The increased use of climate-friendly materials is also important for achieving the target.

The Science Based Targets Initiative is a collaboration between the CDP (formerly known as Carbon Disclosure Project), the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature (WWF). It supports companies in aligning their business strategies to comply with the 1.5 degree target of the Paris Agreement. In addition, the SBTi not only provides companies and organizations with technical support and expert resources to formulate science-based climate targets, but also brings together a team of experts to provide independent assessment and the validation of these targets. More than 7,700 companies worldwide are currently members of the SBTi and more than 4,000 of them have successfully had their climate targets validated.

1 Net zero emissions mean that a company cuts its greenhouse gas emissions overall by at least 90 percent and offsets the remaining 10 percent through measures that remove CO2 from the atmosphere. This is achieved through cutting carbon naturally, for instance through systems that absorb more carbon than they release, such as forests, soils and oceans, or special carbon sequestration technologies. The aim is to manage the carbon footprint in such a way that, on balance, no additional greenhouse gases are released into the atmosphere.

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About the Otto Group

Founded in Germany in 1949, today the Otto Group is a globally active retail and services group with around 41,000 employees in 30 major company groups primarily active in the economic regions of Germany, the rest of Europe, and the USA. Its business activities span the Platforms, Brand Concepts, Retailers, Services and Financial Services segments. In the 2022/23 financial year (to 28 February) the Otto Group generated revenues of 16.2 billion euros. With online revenues of approximately 12 billion euros (financial year 2022/23), the Otto Group is one of the world’s largest online retailers. The Group’s particular strength is the broad market presence of its differentiated product assortments and service offers to diverse customer target groups in the world’s relevant economic regions. Numerous strategic partnerships and joint ventures provide the Otto Group with excellent opportunities to transfer know-how and leverage areas of synergy potential. Group companies demonstrate a high degree of corporate responsibility and willingness to collaborate with one another; at the same time this guarantees flexibility, customer proximity and optimal target-group appeal in their respective national markets.

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