Climate protection

Our commitment to climate protection is not only aimed at achieving our already established near-term SBT sub-targets but also extends beyond the defined timeframe. Therefore, we are already intensively working on defining a net-zero target by the year 2045 and the necessary steps to achieve it. With this, we aim to meet our own standards for credible and long-term climate protection and contribute to the federal government's climate goals.

The definition of net-zero emissions by the Science Based Target Initiative (SBTi) serves as a guiding framework for us. Here, the reduction of greenhouse gas emissions (GHG) takes precedence. All remaining emissions must be permanently neutralized. This means that companies must take measures to remove greenhouse gases from the atmosphere and store them permanently to offset the impacts of non-reduced emissions. Currently, companies are allowed to neutralize only up to ten percent of their GHG emissions. Furthermore, the SBTi encourages companies to go beyond their value chain and take additional measures for emission reductions to support societal and international efforts to drastically minimize GHG emissions until they reach net zero. We regularly inform our stakeholders about our progress in formulating a net-zero target, for example, in our annual report.

We aim to achieve our climate goals by consistently avoiding and reducing emissions. It is possible to reduce emissions. For instance, we have more than halved our CO₂ emissions in our own operations from 2006 to 2020, and by the end of 2023, we have further reduced them by an additional 30 percent compared to the base year of 2018 – completely without compensation.

In addition, we continue to systematically transition to green power at our own locations. The share of green electricity at Otto Group's own sites worldwide is 72 percent. We are also leveraging the potential of our locations by installing solar systems (Frankonia), combined heat and power plants (Hermes Fulfilment), and geothermal energy (Hermes Einrichtungs Service). However, we see the largest levers for reducing our greenhouse gas emissions in our upstream and downstream supply chains.

In the area of logistics, we see further potential for climate protection. By delivering goods to our customers with low or even zero emissions, we contribute to reducing particulate pollution in cities, thereby protecting the environment and public health.

• Last mile: A core measure at Hermes Germany is the transformation of the structure of the last mile towards locally emission-free delivery in 80 major German city centers by the end of 2025. Innovative solutions such as expanding the use of electric vehicles, environmentally friendly deliveries via cargo bikes, and utilizing parcel shops, along with the use of intelligent route planning software, contribute to reducing the CO₂ footprint. In 2024, Hermes delivery staff across Germany transported over 2.8 million shipments in a locally CO2-free manner using cargo bikes, meaning delivered them to the recipients' front doors and collected returns on the same route.
  
• Green city logistics: By the end of 2025, Hermes Germany aims to deliver locally emission-free in 80 major German cities. As of March 2025, the transition to electric doorstep deliveries has already been successfully completed in 70 city centers, with implementation underway in more than 10 other cities. Following the launch of "Green Delivery Berlin" in the summer of 2021, shipments are delivered electrically to the front door and to around 400 Hermes parcel shops throughout the inner S-Bahn ring – covering approximately 106 square kilometers across 67 postal code areas. This area is as large as the city of Paris. As a result, Hermes Germany has more than doubled its reach regarding the potential recipients since the start of the project, now serving around 680,000 households. Since the end of 2023, Hermes Germany has also been delivering to the entire metropolitan area of Hamburg electrically – from the city center to the outermost city limits.
• Intelligent route planning: The data-driven optimization of routes contributes to reducing pollutant emissions during the delivery of goods to consumers. Intelligent route planning involves the data-based and dynamic optimization of shipping order and routing, which leads to more precise and efficient deliveries through improved traffic flow (less stop-and-go) and results in a significant reduction in CO₂ emissions.
  
• Low-emissions over long distances: Emission-free solutions are not yet widely available for long-haul transport. Nevertheless, Hermes Germany is also seeking more climate-friendly solutions in this area to reduce its ecological footprint. Currently, the company is utilizing five electric trucks at various locations. In addition, a hydrogen truck has been operating since early 2024 as part of a 48-month test run between two selected locations.
• 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.
• Shipping Transport: Compared to air and rail freight, ships emit the least CO₂ per transported item. However, ship diesel also emits CO₂ and generates air pollutants such as sulfur and nitrogen oxides, soot, and fine dust. This presents great potential for CO₂ emission reduction solely due to the large volume of freight. For this reason, OTTO has partnered with GoodShipping, a pioneering company and market leader in the field of transport emission reduction. GoodShipping uses a biofuel mix from various waste streams (known as "Second Generation"), such as used cooking oil and fats from food production, for fueling container ships instead of heavy fuel oil. These biofuels offer several advantages: On one hand, they reduce CO₂ emissions by 80-90% compared to heavy fuel oil. On the other hand, unlike heavy fuel oil, their use results in almost no harmful air pollutants. Furthermore, the ships don’t even need to be retrofitted for this. By using less ship diesel and more biofuel, emissions from maritime transport are thus reduced. The biofuels from GoodShipping are certified according to strict criteria by internationally recognized sustainability certifiers such as ISCC (International Sustainability & Carbon Certification) and for biomass like RSB (Roundtable on Sustainable Biomaterials). This ensures that existing waste streams are utilized and that there is no competition with food production.