Climate protection
The Otto Group has pursued the goal of reconciling its business activities with climate protection for decades. In the long term, we want to reduce emissions along the entire value chain to net zero. As a first step, we are developing a medium-term Science Based Target (SBT), which is oriented towards the long-term objective.
Climate neutrality by 2030 and net zero emissions in the long term
In the long term, the Otto Group wants to stop emitting greenhouse gases along the entire value chain and thus achieve net zero emissions. This also includes business areas over which the Otto Group can only exert an indirect influence, such as the production of merchandise. The focus here is on systematically avoiding and reducing emissions.
To this end, we are currently developing a Science Based Target (SBT) to fully align our climate strategy with the 1.5° target of the Paris Climate Agreement. Our goals to reduce greenhouse gas emissions by 40 percent by 2025 compared to 2018 and to achieve climate neutrality by 2030 will be taken into account in the SBT development process.
Avoid and reduce
We want to achieve our climate goals by consistently avoiding and reducing emissions. Classic compensation measures, such as CO2-neutral shipping, are regarded in the Otto Group as voluntary additional measures and a sensible supplement to climate protection; however, they do not pay towards our climate targets.
Consistently reducing emissions is possible. For example, we have more than halved CO₂ emissions in our own business operations from 2006 to 2020, and have done so completely without offsetting. We see the biggest levers for reducing our greenhouse gas emissions in transportation, where we give preference to shipping and rail over air travel, the further increase in energy efficiency, and the complete switch to green power. The Otto Group's share of green electricity at its sites worldwide is 29 percent, and 49 percent in Germany. By 2025, we want to switch to 100 percent green electricity at all German and - if available - also international locations. We have been harnessing the potential of our own locations for a long time already, equipping them with solar systems (Frankonia) or combined heat and power plants (Hermes Fulfilment) and by using geothermal energy (Hermes Einrichtungs Service). The goal is to achieve a 40 percent reduction by 2025 compared to 2018.
At present, offsetting is mainly used for the carbon neutral shipment of parcels from Unito, Bonprix and OTTO, which are delivered by Hermes Germany and Hermes Einrichtungs Service to end customers in Germany. Offsetting is also used for Unito deliveries in Switzerland and Austria. We place our trust in high-quality certificates from Atmosfair in this context.
In addition, we are developing our own certificates according to the MoorFutures® standard for Germany and the Baltic States as part of the “toMOORow” initiative. They are intended for use as voluntary offsetting certificates in the medium term. More information on this in the following.
Peatland protection project "toMOORow"
Peatlands store more carbon than any other ecosystem in the world – if they are intact. Together with OTTO, Bonprix, Hermes Germany, the Witt Group and Systain, the Otto Group supports the peatland protection project “toMOORow” in its efforts to replenish German and European peatland with water and thereby demonstrate specific solutions for protecting the climate and nature. As part of this initiative we are developing our own certificates according to the MoorFutures® standard for Germany and the Baltic States. They are intended for use as voluntary offsetting certificates in the medium term.
The Environmental Foundation Michael Otto is in charge of implementing the initiative in collaboration with the Michael Succow Foundation, a partner in the Greifswald Moor Centrum. The aim is to engage in systematic rewetting to create functional peatlands that are capable of permanent carbon sequestration. In addition, the peatlands are to be sustainably managed as wetlands (paludiculture) in order to generate biomass for future value chains. Joining with Hermes Germany, the Otto Group and its Group companies OTTO, Bonprix, the Witt Group and Systain are providing long-term support for the restoration to further the cause of climate and nature protection and to help identify more sustainable solutions. In doing so, we are making a significant contribution to climate and species protection, because intact peatlands sequester more carbon than any other ecosystem in the world.
The project is currently being implemented in the Sernitzmoor in Brandenburg and in Lithuania as just two examples. In order to create suitable economic and political framework conditions in the medium term and to scale the rewetting of peatlands, “toMOORow” is working in dialog with environmental protection organizations, the business and farming sectors, the scientific community and politicians to strengthen the protection of peatlands in federal, state and EU climate and agricultural policy, as well as to establish functioning economic incentive systems and clear political frameworks.
The following video is only available in German.
Emissions in the supply chains
We have already achieved a great deal in our own business processes, but a significant portion of the greenhouse gas emissions in our supply chains occur during the production of goods – so-called Scope 3 emissions. Here we take a holistic and collaborative approach to support facilities in the upstream supply chains in improving their environmental performance, for example through training and workshops. Even though these are only indirectly caused by our business activities and are difficult to influence, we focus on reducing these emissions. In order to also positively influence the development of emissions through the selection of our materials, we want to continuously and increasingly use sustainable alternatives and are focusing in particular on the most commonly used materials which are textile fibers as well as wood for furniture, catalog paper and packaging.
In addition, the Otto Group is a member of the Sustainable Apparel Coalition (SAC), which provides the SAC Higg Facility Environmental Module, a tool for standardized recording of ecological key figures along the supply chains. The tool enabled us to collect information about the ecological performance of more than 200 facilities in 2021.
Sustainable logistics
Hermes is pursuing the goal of zero-emission delivery in the inner city areas of Germany's 80 largest cities by 2025. Innovative solutions such as the expansion of e-vehicles, environmentally friendly delivery by cargo bike and via ParcelShops, combined delivery in cooperation with other parcel and courier services, and the use of intelligent tour software all contribute to reducing the CO₂ footprint.
- Green city logistics: Since the summer of 2021, Hermes Germany has been using cargo bikes and e-transporters to deliver more than 2.5 million items per year in large parts of Berlin's city center without producing any emissions. Over 300,000 Berlin residents receive their packages and parcels in a CO₂e neutral manner – whether at their front door or at the parcel shop. The “Green Delivery” sustainability concept in Berlin's city center serves as a blueprint and has already been implemented in other German city centers, such as Leipzig, Dresden, Magdeburg, and Hamburg.
- Intelligent route planning: The data-based optimization of routes contributes to the reduction of emissions during the delivery of goods to consumers. Intelligent route planning involves the data-based and dynamic optimization of shipment sequence and routing, which means both more precise and more efficient delivery through improved trip flow (less stop-and-go) and a significant CO₂ savings effect. For example, Hermes is currently able to reduce around 7 percent of daily kilometers driven with the digital route planning tool. This is estimated to correspond to around 12-16 tons of CO₂ (depending on the basis: fuel type and average consumption of a vehicle).
- Low-emission on the long haul: On the long haul, emission-free solutions are not yet available across the board. Nevertheless, Hermes Germany is looking for more climate-friendly solutions here to reduce its environmental footprint. In a pilot test, shipments are transported by rail - across borders from Magdeburg in Germany to Lodz in Poland. Rail is one of the most environmentally friendly modes of transport and can make the most of this advantage, particularly over long distances.
- Parcel shop and requested delivery: By expanding the parcel shop network, the number of trips and thus the emissions in the delivery process can be reduced. In addition, CO₂ emissions can be reduced by avoiding multiple trips to customers who cannot be reached. Solutions such as neighborhood delivery or requested delivery at agreed times contribute to this.
As part of our commitment to climate protection, we also want to continuously reduce greenhouse gas emissions from water carriage. To this end, OTTO has entered into a cooperation with GoodShipping, a pioneering company and market leader in reducing transportation emissions. With less fossil marine diesel and more biofuel, emissions from sea transports are being reduced. Read more here.