TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 1 SUSTAINABILITY REPORT 2019 ACCORDING TO THE STANDARDS OF THE GLOBAL REPORTING INITIATIVE (GRI) GENERAL DISCLOSURES G R I 1 0 2 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 2TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 GRI Standards reflect global best practice for public reporting on economic, environmental and social impacts. Sustainability reporting based on these standards provides information about an organisation's contributions, positive or negative, to sustainable development. C E O, T H O M A S L I N E M AY R TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 3G R I 1 0 2 : G E N E R A L D I S C L O S U R E STC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 4G R I 1 0 2 : G E N E R A L D I S C L O S U R E S A message from our most senior decision-maker We live in an age where economic success must go hand in hand with a commitment to environmental and social responsibility. Rising global temperatures, the ever-increasing consumption of natural resources, growing numbers of people living in existential poverty: The list of social injustices and environmental problems is long. Even today, there are many regions around the world where these problems are destabilising the economy and threatening social peace. Simply carrying on with 'business as usual' is inconceivable. As things stand today, we have less than 8 years to prevent the worst effects of climate change, and this alone must motivate us to fundamentally rethink the way we do things. Those businesses and politicians who choose not to see this and who consider responsibility to be an overrated luxury have failed to recognise the signs of the times. At Tchibo, we shoulder our share of the responsibility, face up to the challenges as a family business and strive to find solutions – including for problems that are difficult to solve. Our goal is to transform the company into a 100% responsible brand that is at the heart of society, protecting people and the environment wherever it does business. The path ahead holds many challenges; we venture along it with great respect for the immense task at hand, but also with confidence and motivation thanks to the successes we have achieved so far. On the one hand, we are proud of what we have already accomplished when it comes to sustainability: over 90% sustainable cotton in our textile range; 97% recyclable packaging; we have been using green energy for 11 years; we have supported 45,000 small-scale farmers in their transition to more sustainable farming; 405 producers have participated in the WE programme; 51 of our coffee varieties are responsibly sourced; and so much more. On the other hand, we have great respect for the challenges that we must now take on urgently. Working conditions in our supplier factories and environmental protection in the countries where our goods are produced represent the greatest challenge here. We have a responsibility to work with our partners to campaign for living wages and safe working conditions in our supply chains, to establish strict regulations on the use of chemicals, to implement water conservation programmes and to continue to promote sustainable coffee farming. ThomasLinemayr,2019 G R I 1 0 2 - 1 4 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 5G R I 1 0 2 : G E N E R A L D I S C L O S U R E S T H O M A S L I N E M AY R C E O TC H I B O G M B H Big challenges that we are well prepared for. Alongside our activities in recent years, we have provided employees with advanced training and launched important cooperative ventures with a view to implementing environmental and social programmes together. Nevertheless, we don't believe this is enough, and we are convinced that a reliable political framework is essential for sustainable practices to succeed. This has prompted us to become increasingly active at the political level since 2019: We are calling for a supply chain law to ensure that commercial operations are never conducted at the expense of people or the environment. At present, the global economy is clearly not capable of restoring a healthy equilibrium to this skewed system for the benefit of all concerned. Legal regulation and widespread cooperation are needed if we are to strike a balance between the economy, human society and the natural world and make substantial progress. In order to achieve this, we seek dialogue with trade unions, politicians and industry associations at national and international level. The challenge posed by the COVID crisis is a very timely reminder of how unpredictable change can be and how important it is for us as a company to establish sustainable and flexible management processes. The fact that we are able to do this is thanks to our committed employees and, of course, our customers, who follow us with a critical eye as their sustainability concerns grow. Keep challenging us! We need you to drive us to make radical improvements and to tangibly change the planet for the better, as far as possible. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 6G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 1 G R I 1 0 2 -2 G R I 1 0 2 -3 G R I 1 0 2 - 4 G R I 1 0 2 - 5 Activities, brands, products and services Tchibo supplies an extensive range of coffees, the Cafissimo single-cup system, Eduscho Gala and Qbo, as well as a range of consumer goods that changes each week. The company also sells services such as Tchibo Travel and Tchibo mobile. Sales are via a multi-channel distribution system that includes the company's own shops, retail concessions and online shops.  The full international coffee portfolio includes the following coffee brands: Tchibo, Eduscho Gala, Qbo, Jihlavanka (CZ), Eduscho (A), Davidoff Café, Cafissimo. Location of operations In 2019, Tchibo operated subsidiaries in: Austria, Bulgaria, Czech Republic, Germany, Hungary, Hong Kong, Poland, Romania, Russia, Slovakia, Switzerland and Turkey.  In the eight countries of Germany, Austria, Switzerland, Poland, the Czech Republic, Slovakia, Turkey and Hungary, we operate a total of around 900 shops (550 of which are in Germany) and approximately 19,000 concessions in German retail stores. We operate dedicated online shops in Germany, Austria, Poland, Switzerland, the Czech Republic, Slovakia, Turkey and Hungary (and also in Denmark and Sweden in 2019).  Our coffee-roasting facilities are located in Hamburg and Berlin in Germany and in Marki in Poland. Logistics centres: Our primary sites are located in Bremen, Neumarkt, and Gallin in Germany and also in Cheb in the Czech Republic. For distribution purposes, we have smaller logistics centres outside of Germany, in Senec in Slovakia for handling coffee orders in Austria and in Kampinos in Poland. Ownership structure and legal form Tchibo takes the legal form of a limited liability company (GmbH) and is a family-run business. The holding company maxingvest ag holds a 100% stake and is also family-owned (for more information, visit www.maxingvest.de). Name of organisation Tchibo GmbH, established in 1949 in Hamburg Location of headquarters Tchibo has its headquarters at Überseering 18, 22297 Hamburg, Germany. Organisation profile TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 7G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 6 Markets served China: In 2019, selected coffee and non-food ranges were sold via an online retail platform in China. Sales were handled by a team based at the headquarters in Hamburg. This sales channel was closed in 2020. Denmark: Starting in 2017, Danish customers were able to order products straight to their homes from their local Tchibo online shop. The Danish online shop was run by a team based at the headquarters in Hamburg. This sales channel was closed in 2020. Austria: Vienna-based Eduscho Austria is the market leader with its two brands Tchibo and Eduscho and impresses with its extensive selection of roasted coffees, its non-food products and its coffee bars. Products are distributed through the 150 or so Tchibo/Eduscho shops, grocery shops and specialist retailers, as well as on the online shop. Poland: Tchibo has been selling its products in Poland since 1992. After two successful years on the Polish market, Tchibo opened its own coffee-roasting plant in Marki in 1994. In 1999, Gala became the second Tchibo brand to be launched on the Polish market. To date, more than 30 Tchibo shops have opened in the bricks-andmortar retail sector. Tchibo Coffee Service has also been supplying hotels and offices with coffee and coffee products since 1994. Tchibo has been offering its customers the chance to order coffee and non-food products through its online shop since early 2008. Sweden: From 2019 onwards, Swedish customers were able to order products straight to their homes from their local Tchibo online shop. The Swedish online shop was run by a team based at the headquarters in Hamburg. This sales channel was closed in 2020. Romania: Tchibo has been operational in the capital city, Bucharest, since 2001. Products are distributed nationwide via the retail trade. Today, Tchibo is active in all market segments in the roasted and instant coffee sector in Romania, with coffee blends that are tailored to the country's unique taste profile. Russia: Tchibo opened its first Russian branch in St. Petersburg in 1994, with a second outlet in Moscow following a year later. In the space of just a few years, Tchibo made a name for itself in Russia, becoming one of the leading coffee suppliers in the country. As a result of this success, business activities in other CIS countries are continuously being expanded. Switzerland: In 2001, Tchibo entered the German-speaking market in Switzerland with direct selling. The Tchibo non-food range was initially available over the Internet and from the catalogue. In 2002, Tchibo opened its first shops in Lucerne, Winterthur and Basel. There are now around 40 shops selling all three Tchibo ranges. Slovakia: In 1991, Tchibo became the first international coffee supplier to enter the market in what was then Czechoslovakia. Tchibo was a market leader even before the country split into two independent states. Following the break-up of Czechoslovakia, Tchibo opened a branch in Bratislava in 1993. Since then coffee has been distributed through wholesalers and retailers. The Eduscho brand has also been available in Slovakia since 1998. Czech Republic: Tchibo entered the market in the former Czechoslovakia in 1991 and was able to rapidly build its reputation as the first international coffee supplier. Today, Tchibo is the market leader in the roasted coffee segment with its international Tchibo brand and the local Jihlavanka brand. Its food and non-food products are distributed through Tchibo shops and retail concessions. Tchibo Coffee Service also supplies coffee and coffee products to hotels, restaurants and offices. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 8G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 -7 Scale of the organization Tchibo employs a total of roughly 11,450 people worldwide, about 7,000 of whom are employed in Germany. The total number of sites consists of the headquarters in Hamburg, three roasting facilities, about 900 shops worldwide, 19,000 concessions in Germany and four primary logistics centres. Tchibo generated €3,118 million in revenue in 2019. Every year, we put more than 2,000 new products in our retail concessions, in our shops and in our online shop. In 820 of our shops, customers will also find a coffee bar offering a range of food and beverages. Services are also sold via Tchibo Mobile and Tchibo Travel, insurance products and affiliate deals are sold in the online shop, and second-hand items are sold via Tchibo Share. We disclose no information about total capital. G R I 1 0 2 - 8 Information on salaried employees and other workers There has been a slight change in the personnel structure at Tchibo in recent years. The number of salaried employees is falling slightly. At the same time, the number of people under the age of 30 is increasing steadily.  Temporary staff account for a variable proportion of the workforce at our distribution centres in Gallin and Neumarkt. This proportion can fluctuate greatly depending on the season and the staffing requirements in logistics — during the Christmas season, for example. Workplace health and safety measures apply both to Tchibo employees and to temporary workers.  All workers are documented systemically. This enables automatic reporting of the absolute numbers of workers based on demographic factors such as gender and employment status. The personnel data in the GRI Report and in the tables are based on a data query for the Sustainability Report and are as at 31 December 2019. Specific details regarding salaried employees and other staff can be found in our Key Figures table. There is no significant amount of work done by people not employed by us. Turkey: In 2006, Tchibo entered the Turkish market with its first Turkish shop in Europe's largest shopping centre, Istanbul Cehavir. Following its successful market launch, distribution was expanded to more than 30 Turkish branches. Further branch outlets offering the usual Tchibo product range are in the planning stage. Hungary: Tchibo’s first Hungarian branch was established in Budapest in 1991. Since then, the coffee has been distributed nationwide via the retail trade. The Eduscho brand propelled Tchibo to its position as market leader in Hungary. There are now eight shops in Hungary, with the development of further locations being continuously evaluated.  Our Tchibo coffee is enjoyed by customers all over the world. Carefully selected importers and distributors supply customers with product ranges that are perfectly tailored to each market – from food and beverage retailers to the hospitality sector. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 9G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 9 Supply Chain Because our non-food range changes on a weekly basis and our coffee products are constantly being refined, our supply chains are subject to annual changes. The supply chain structure underpinning all this is outlined below in a condensed form. For more information, see the chapters on Non Food and Coffee. In order for supply chains to be sustainable, transparency is key. Yet supply chains are complex, as demonstrated by the examples of coffee and cotton textile supply chains below. Understanding these different stages in the value chain is a challenge we face in partnership with our suppliers, because enforcing labour, social and environmental standards impacts every product along its entire supply chain, not just at the final manufacturing stage. Our approach of building long-term supplier relationships and working closely on sustainability makes this task easier. Coffee: After the coffee harvest, the coffee cherries go through the first processing stage locally. This can be done either by the farmer before they leave the farm, or at a processing facility, where the beans are delivered as quickly as possible. It is important that the pulp is removed from the beans within six hours to preserve the quality of the beans. There are different processing methods depending on the country of origin and the supply chain, such as dry (or natural) processing, washed processing and honey processing. In the next stage, the green coffee is sorted according to quality, based on factors such as size, density, defects and colour. Certified coffees are always separated from conventional coffees at this point. The beans are then ready to be sold: If the processor does not have an export licence, they will sell the beans to an exporter or importer, sometimes through a broker. Some countries have legislation that requires a large proportion of local produce to be sold by auction. The beans are then sold to the roaster – Tchibo, for example – and this can involve several steps too. Once the coffee beans have arrived in Germany, they are checked to make sure they are free of any residues, and then they are stored, cleaned again, roasted, packaged and finally delivered to the consumer via the retail trade.  Personnel structure in 2019 TOTAL WOMEN MEN NUMBER OF STAFF IN GERMANY 6,962 5,478 1,484 FULL TIME (%) 38.4 51.4 48.6 PART TIME (%) 61.6 95.7 4.3 PERMANENT (%) 87.4 77.9 22.1 TEMPORARY (%) 12.6 83.8 16.2 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 10G R I 1 0 2 : G E N E R A L D I S C L O S U R E S Illustration showing the process steps in the coffee supply chain COFFEE FARMING DRY, WASHED OR HONEY PROCESSING HULLING & SORTING SHIPPING/ EXPORT ROASTING & PACKAGING DISTRIBUTION CONSUMPTION RETAIL Countries of origin Sales countries Non Food: From cotton growing, to harvesting and transporting the raw material, right through to the finished garment, there are many steps (preliminary stages) involved, such as spinning, weaving, knitting, dyeing, washing, making up and packaging, which are often carried out by different suppliers in different countries. Suppliers of parts such as buttons, zips and appliqué elements are also involved. Illustration showing the process steps in the textile supply chain PRODUCTION OF RAW MATERIALS, E.G. COTTON Farming Deseeding Bleaching Dyeing Printing Smoothing/softening SPINNING WEAVING/KNITTING FINISHING PICKING & PACKING SHIPPING/ EXPORT DISTRIBUTION RETAIL CONSUMPTION DISPOSAL & RECYCLING Countries of origin Sales countries TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 11G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 1 0 G R I 1 0 2 - 1 1 Significant changes in the organisation and its supply chain There were no significant changes in the Tchibo organisation and supply chain in the 2019 reporting year. Precautionary approach or precautionary principle Doing business responsibly We consider it our corporate duty to assume responsibility for our actions – along our entire global value chain. Because we benefit from the advantages of a globalised world that is based on division of labour, we have an obligation to take responsibility for the impact of our business activities on people and the environment. A detailed explanation of our precautionary approach can be found in the consolidated management approach GRI 201, 203, 205 and 206. G R I 1 0 2 - 1 2 & - 1 3 External initiatives & membership of associations and interest groups Tchibo is a member of various associations and interest groups, as well as external initiatives for economic, environmental and social improvements. A detailed overview is provided here here. G R I 1 0 2 - 1 8 Governance structure The management structure at Tchibo is described in the consolidated management approach GRI 201, 203, 205 and 206. Our company's sustainability management is integrated into all departments and embedded at all levels. Higherlevel coordination and governance is entrusted to the Corporate Responsibility Directorate. This Directorate reports to the Chairman of the Board of Directors and, with the help of its team, supports the various departments with implementing and further developing their sustainability goals. The Directorate also coordinates stakeholder management at both an overall level and at the level of the individual departments. With the overarching strategic objective clearly in mind, the departments develop key objectives and measures to achieve the necessary ecological and social transformation processes. Responsibility for sustainability issues is thus gradually being accumulated within the various departments. G R I 1 0 2 - 1 6 Ethics and integrity — values, principles, standards and codes of conduct Values, principles, standards and codes of conduct are described in detail in the consolidated management approach GRI 201, 203, 205 and 206. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 12G R I 1 0 2 : G E N E R A L D I S C L O S U R E S Areas of responsibility for sustainability in the company Goal setting and agreement of goals/ intermediate goals Measures and projects for implementing goals/ intermediate goals Review, including reporting Communication External promotion on the topic of sustainability Data protection Issues Management/ Risk Management CEO (Information) EXECUTIVE BOARD (Information) SUPERVISORY BOARD (Information) (Information) (Information) MAXINGVEST AG (Information) (Information) (Information) WORKS COUNCIL (Information) SPECIALIST DEPARTMENTS: PRODUCTS SPECIALIST DEPARTMENTS: PROCESSES/SALES LOGISTICS LEGAL DEPARTMENT HR DEPARTMENT CORPORATE COMMUNICATIONS/OTHER STAFF (Support) (Information/Recording) WORKING GROUP BEREICH UNTERNEHMENS- VERANTWORTUNG TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 13G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 4 0 List of stakeholder groups Description of stakeholder groups EMPLOYEES CUSTOMERS SUPPLY CHAINS AND BUSINESS PARTNERS GOVERNMENTAL ORGANISATIONS CONSUMER PROTECTION ORGANISATIONS BANKS AND INSURANCE COMPANIES SCIENTIFIC COMMUNITY TRADE UNIONS NON-GOVERNMENTAL ORGANISATIONS (NGOS) G R I 1 0 2 - 4 1 Collective bargaining agreements Collective agreements apply to all our employees in Germany, with the exception of the managing directors of Tchibo GmbH. G R I 1 0 2 - 4 2 Identification and selection of stakeholders As far back as autumn 2012, we began to identify more than 1,200 stakeholders and to group them: customers, employees, suppliers and business partners, non-governmental organisations, governmental organisations, trade unions, consumer protection organisations, academia, banks and insurance companies, and the media. In order to do this, we invited 430 of the 1,200 stakeholders to take part in an anonymous online survey at the end of 2012. Selection was made by considering the relevance of each stakeholder, based on their institution, on Tchibo and on their potential influence on our brand. We also felt it was important to select stakeholders with extensive expertise in the field of sustainability, people we could learn from and work with to make a difference. The following table provides an up-to-date overview of the stakeholder groups, their fundamental concerns and the way in which we interact with them. Stakeholder engagement TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 14G R I 1 0 2 : G E N E R A L D I S C L O S U R E S MEDIA EXAMPLES SURVEYS STAKEHOLDERS PROJECTS MEMBERSHIPS, NETWORKS AND VOLUNTARY COMMITMENTS FORMATS DISCUSSION EVENTS • Website & Webshop • Blog, social media & forums • Newsletter • Annual report and sustainability report • Press releases • Intranet • Public controversies • Customer service • Booklets/magazines • Product information • Certificates & Copies Ausfertigungen • Media and publicity • Communities • Competitors • Banks & insurance companies • Governmental organisations • Employees • Customer service • Consumer protection organisations • Suppliers & business partners • Sustainability reports • ARD/ZDF Markencheck (brand check) • Coffee report • Collaboration with bloggers • Participation in Green Fashion Week • Position on the Supply Chain Act • Employee surveys • Consumer surveys • Market research and trend analysis (internal & external) • Customers • Employees • Media and publicity • Scientific community • Competitors • Trade unions • Consumer protection organisations • Suppliers & business partners • Coffee report • Customer survey on buying back goods • Customer survey on second hand goods • Survey about key sustain ability issues among customers • Sustainability marketing campaign analysis • General meetings • Meetings with alliance partners • Working groups • Workshops • Round Table • Conferences (e.g. environmental) • Sharing best practice • Steering committees • NGOs and initiatives • Competitors • Governmental organisations • Trade unions • Consumer protection organisations, suppliers & business partners • Scientific community • Global Coffee Platform • Fairtrade • Rainforest Alliance • Aid by Trade Foundation • Better Cotton Initiative • Partnership for Sustainable Textiles • Coffee & Climate • Forest Stewardship Council • Fur Free Retailer Program • ACT on Living Wages • Dialogue on specific topics • Collaboration projects • Working groups • Research projects • Collaborations with higher education institutions • Employee training courses • Employee promotions/ campaigns • Workshops • Associations and trade unions • Scientific community & experts • NGOs and initiatives • Competitors • Governmental organisations • Employees and potential employees • Suppliers & business partners • Start-ups • Technology providers • Corporate Volunteering • Coffee Mainstreaming • Developing transparent supply chains • Young Talent Challenge • Sustainability training for employees • New CR coffee strategy • Press events • Sharing best practice • Round Table • Factory exhibitions • Open day • Local events • Working groups • Bilateral meetings • Trade fairs • Symposiums • Training courses • Media and publicity • Communities • Competitors • Governmental organisations • Trade unions • Employees and potential employees • Customers • Consumer protection organisations • NGOs and initiatives • ‘Let’s talk’ events • Tag der offenen Tür • WE programme ‘International Conferences ITC’ • Tchibo Share press events • Workshops as part of the Partnership for Sustainable Textiles • City Nord Sports Week • Participation as part of ACT/ GFA Initially, mapping on its own does no more than provide transparency about the various stakeholder groups. However, due to the constantly changing framework conditions in the field of sustainability and in our own business development, this must be reviewed and adjusted continuously. As a globally operating company with many different areas where environmental protection, social responsibility and social development intersect, Tchibo is therefore constantly updating its list of stakeholders. It is important to note that the selection of stakeholders does not in itself reflect the relevance of the individual stakeholder groups for the company and the implementation of its strategy, nor does it reflect their ability to (help) shape the management of the company. Tchibo therefore supplements its mapping process with corresponding materiality assessments. G R I 1 0 2 - 4 3 & - 4 4 Approach to stakeholder engagement & key issues and concerns As a global enterprise, Tchibo shares responsibility for finding solutions to environmental and social challenges that result from its business activities. We are convinced that solutions to global challenges and the innovations they require can often be better developed in cooperation with other social actors. The close and continuous dialogue we foster with stakeholders both within and outside the company is therefore extremely important to us. We want to understand our stakeholders' expectations and opinions, incorporate their ideas as we continue to develop our sustainable business processes, and work with them to devise forward-looking solutions to the TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 15G R I 1 0 2 : G E N E R A L D I S C L O S U R E S environmental, social and societal challenges they face. Within this context, dialogue with our stakeholders also provides the impetus for important innovation processes – both within the company and at the societal level. At the same time, it is important that we engage in dialogue with our stakeholders in order to identify opportunities and risks for Tchibo's business as early as possible and thus allow us to take proactive action. Involving stakeholders, working with them to identify relevant issues and responding with appropriate measures – this approach reflects our principles of inclusivity, materiality and responsiveness. Relevant stakeholders are involved according to the issue and the occasion, using carefully selected formats such as surveys, open discussions and participation in initiatives and alliances, such as the Global Coffee Platform (GCP) or the Partnership for Sustainable Textiles in Germany. 1. Inclusivity 2. Materiality 3. Responsiveness EVALUATION IMPLEMENTATION STRATEGY DEVELOPMENT ANALYSIS OF RELEVANT STAKEHOLDER CONCERNS IDENTIFICATION OF RELEVANT STAKEHOLDERS IDENTIFICATION OF RELEVANT STAKEHOLDER CONCERNS DIALOGUE WITH RELEVANT STAKEHOLDERS The key issues and concerns raised are detailed in the chapters Non Food, Coffee, People and Environment as well as in the GRI 300s (Economic Standards) and 400s (Social Standards). TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 16G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 4 6 Defining report content and topic boundaries The digital sustainability report comprises two sections: the prefacing web pages, which address the material issues, activities and measures, and the GRI Report. The material issues are taken from our corporate responsibility strategy, which follows the principles of materiality and impact. This strategy is subject to an annual review process as well as to a dynamic, impact-focused management process over the course of the year. The material issues are laid out in GRI 102-47. Review and development: In 2012, we conducted a comprehensive stakeholder survey to form the basis for our materiality analysis. Over 1,200 stakeholders were identified and grouped in the process (see 102-42). We initially used the results of the survey to guide our strategy. The relevance of the issues to Tchibo's stakeholders was also translated into a materiality matrix. Using this matrix, we were able to extract the material issues. The results of the materiality analysis from 2012 are shown in the figure below: Reporting procedure G R I 1 0 2 - 4 5 Entities included in the consolidated financial statements All information in this report relates to the sustainability-related business activities of Tchibo GmbH and the company's locations in Germany. This includes the company headquarters in Hamburg, our roasting facilities in Hamburg and Berlin, and our warehouses. Our international subsidiaries are also covered by this, provided they make use of centrally controlled processes and products. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 17G R I 1 0 2 : G E N E R A L D I S C L O S U R E S Coffee supply chain Social standards in the coffee supply chain Environmental standards in the coffee supply chain Dialogue in partnership with stakeholders Transparency and reporting Involvement of international subsidiaries in sustainability management Structures, guidelines and frameworks for responsible corporate leadership, corporate governance and compliance Political opinion Sourcing sustainable, high-quality green coffee Economic stability Sustainability as a key component of corporate strategy Sustainability management Consumer goods supply chain Social standards in the consumer goods supply chain Qualification of suppliers to improve social standards Environmental standards in the consumer goods supply chain Resource-saving product design of consumer goods Customers Consumer protection and data privacy Customer focus and customer service Product quality and safety Range of sustainable products and information about them Sustainable transport in the vehicle fleet and the company car portfolio Environmental protection Conserving resources in the company Climate protection Nature conservation and biodiversity Eco-friendly logistics solutions Company culture Co-determination Employees Work–life balance Society Training and development Equal opportunities Health and safety Pay and employee benefits Social engagement in the countries where our products are produced (coffee, cotton) Social engagement in core sales markets (Germany, Austria, Switzerland) Encouraging volunteer work / corporate volunteering Funding projects in the social context of the core business, e.g. sponsorship, support for educational initiatives, etc. 5.04.54.03.53.0 3.0 3.5 4.0 4.5 5.0 RELEVANCE FOR STAKEHOLDERS RELEVANCE FOR TCHIBO We are in constant dialogue with sustainability experts and our stakeholders to further develop our corporate responsibility issues and strategies. At the same time, we work closely with our colleagues from all relevant departments to evaluate and select the issues. We use this as the basis for continuously prioritising the issues for our sustainability management and for constantly refining the materiality analysis. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 18G R I 1 0 2 : G E N E R A L D I S C L O S U R E S 2008 KICK-OFF CONTINUOUS STAKEHOLDER MANAGEMENT AND ISSUES MANAGEMENT 2012 FORMALISATION UNTIL 2016 ONGOING INTEGRATION FROM 2017 FURTHER SYSTEMATIC DEVELOPMENT • Defining key spheres of activity and topics • Mapping stakeholder groups • Starting issues management • Stakeholder survey & materiality analysis 2012 (AA1000: inclusivity, materiality and responsiveness) • Confirmation of the main spheres of activity defined in 2008 • Involvement of relevant stakeholders on an ad-hoc and topic-related basis • Continuous comparison of current topics with the Tchibo materiality matrix and corresponding adaptation or expansion of the strategy • Revision and updating of the materiality matrix, expansion to a 4-field matrix • More systematic approach to issues management • Implementation of new, intelligent survey and inclusion formats INTEGRATED STAKEHOLDER MANAGEMENT ISSUES MANAGEMENT IS UNDERGOING FURTHER SYSTEMATIC DEVELOPMENT AND CONSOLIDATION Alongside stakeholder management, we also consider issues management – a kind of issue radar – to be extremely important for the materiality process at Tchibo. It serves to identify, analyse and evaluate societal trends and current developments at an early stage. This radar allows us to identify potential risks and maximise our impact. On the other hand, the current issues can also provide us with opportunities to shape our sustainability strategy and Tchibo's brand positioning and impact management. In this respect, issues management has a direct influence on strategic planning and the prioritisation of issues. It is therefore a vital tool in the materiality process as well. This process can be mapped as follows since 2008: TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 19G R I 1 0 2 : G E N E R A L D I S C L O S U R E S COFFEE SUPPLY CHAIN • Sourcing sustainable, high-quality coffee • Environmental and social standards in the value chains (due diligence) NON-FOOD SUPPLY CHAINS • More sustainable materials, product designs and product range design • Environmental and social standards in the value chains (due diligence) • More sustainable use by customers • Recycling ENVIRONMENTAL PROTECTION IN THE SUPPLY CHAINS AND AT OPERATING SITES • Climate protection • Water stewardship, chemical use and clean drinking water • Biodiversity • Circular economy and conservation of resources HUMAN RIGHTS AND WORKERS’ RIGHTS IN THE SUPPLY CHAINS AND AT OPERATING SITES • Human rights risk management at the factory level (monitoring) • Supplier qualification (WE programme) • Industry-wide change (ACT, Accord, Partnership on Sustainable Textiles) • Grievance mechanisms SOCIETY • Social engagement in countries where our products are produced and sales countries • Corporate volunteering • Sponsoring CUSTOMERS • New solutions/products for more sustainable living • Transparent, honest and authentic communication SUSTAINABILITY MANAGEMENT • Integration in corporate strategies and processes • Corporate governance, compliance and risk management • Stakeholder management and dialogue • Reporting TRANSFORMATION • Changes to the political context • Innovations and prototyping • Empowerment • Transparency in the supply chain EMPLOYEES • Culture and equal opportunities • Pay / employee benefits • Training and development • Co-determination • Health and safety G R I 1 0 2 - 4 8 & - 4 9 Restatement of information & changes in reporting The latest sustainability report is no longer a stand-alone narrative report, but has been converted into a GRI Report. This is complemented by a digital sustainability communication platform and regular publication of a Sustainability Magazine. GRI-Report: The new reporting format is consistent with our alignment with GRI Standards and includes details of management approaches for all topic areas.  In order to generate the publicity needed for the topic of our commitment to sustainability at Tchibo, we have developed an engaging sustainability magazine to complement the GRI Report, which is available to anyone who is interested, both in printed form and as an online download. It covers all material sustainability issues and measures across the company and will be supplemented by individual issues on selected deep-dive topics from 2021 onwards.  In addition, we are using this online presence to provide a digital communication platform, the Digital Hub, to accompany the GRI Report and the sustainability magazine, which, in addition to the GRI Report, contains all the sustainability issues relevant to Tchibo. Moreover, the Digital Hub also features a lot of in-depth background information, a newsfeed, project reports and regular information updates. G R I 1 0 2 - 4 7 List of material issues We have grouped the issues that are of material importance to Tchibo into nine topic areas. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 20G R I 1 0 2 : G E N E R A L D I S C L O S U R E S G R I 1 0 2 - 5 2 Reporting cycle The sustainability report is updated annually and published on the sustainability website. In addition, the digital sustainability website also provides regular updates on projects and a newsfeed with the latest news. G R I 1 0 2 - 5 3 Contact for questions about the report A contact form will be provided on the website to allow anyone with questions about the report to contact the Sustainability Department directly.  Anyone who wishes to do so can also contact us by email at sustainability@tchibo.de. G R I 1 0 2 - 5 4 Explanation of reporting in accordance with the GRI Standards This report has been prepared in accordance with the GRI Standards (Core option). G R I 1 0 2 - 5 5 GRI content index The content index corresponds to the structure outlined in the GRI Report section on tchibo-nachhaltigkeit.de/en. G R I 1 0 2 - 5 6 External auditing An audit is planned for the report in 2021. G R I 1 0 2 - 5 1 Date of last report The last report (Sustainability Report 2018) was published in July 2019. G R I 1 0 2 - 5 0 Reporting period This GRI Report includes measures, results and key performance indicators from the 2019 financial year (1 January 2019 to 31 December 2019), as well as initial forecasts for achievements in the first quarter of the 2020 financial year. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 21G R I 1 0 2 : G E N E R A L D I S C L O S U R E S 21 ECONOMIC STANDARDS G R I 2 0 0 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 22G R I 2 0 0 : E C O N O M I C S TA N D A R D S Management approach GRI 201, 203, 205, 206 Our commitment — responsible corporate governance Our focus on long-term success and the guiding principle of the honourable merchant are what define the way Tchibo, a family-owned company, does business. We consider it our corporate duty to assume responsibility for our actions – along all our global value chains. Because we benefit from the advantages of a globalised world that is based on division of labour, we have an obligation to take responsibility for the impact of our business activities on people and the environment.  With this in mind, in 2006 we made sustainability an integral part of our business strategy, our Tchibo DNA and our Code of Conduct. Our guiding principle was and still is to view sustainability as a process that we work on every day to achieve improvements and thus also ensure our economic success in the long term. Our goal is to ensure fair working and living conditions for the people in our supply chains, greater environmental protection by using resource-conserving materials and employing innovative production processes and new, sustainable product ranges – keeping in mind consumer expectations as well.  In August 2011, we formulated our core strategic goal: Tchibo is on its way to becoming a 100% sustainable business. Accordingly, we are continuously designing our business processes and products to be more environ- mentally and socially responsible. For us, becoming a 100% sustainable company is both an ethos and a journey. An ethos because we always strive to innovate and find novel approaches when faced with obstacles, and a journey because we know that new insights will continually open up new fields of action and that, as a private company, we must at the same time be mindful of economic requirements too. We draw on internationally recognised standards and guidelines as the basis for our approach to doing business, in particular • the International Human Rights Charter, • the ILO Declaration on Fundamental Principles and Rights at Work, and • the OECD Guidelines for Multinational Enterprises. In addition: • we support the United Nations 2030 Agenda for Sustainable Development, • we are a member of the United Nations Global Compact and actively promote the implementation of the Sustainable Development Goals (SDGs), • in our policy statement of May 2018, we explicitly commit to respecting human rights on the basis of the UN Guiding Principles. We are firmly convinced that the only way to secure the future of our company is to do business sustainably. This is dependent on an intact environment which forms the basis for high-quality products, on respect for and observance of human rights in the supply chains, on reliable cooperation with responsible business partners, on passionate employees and, last but not least, on the trust of our customers. G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 23G R I 2 0 0 : E C O N O M I C S TA N D A R D S Our values Yet we aren’t just a big commercial enterprise; we are also a family business that has always had a strong sense of responsibility. It is especially important to us to protect the jobs of the more than 11,000 employees at our sites and in our supply chains. We are also committed to driving growth and generating profit as a business. Our golden rule is this: we believe in making a profit, but not at any price – and certainly not at the expense of people or the environment. Transparency: We don’t go in for greenwashing. We want to make a genuine impact. Whenever we encounter obstacles, we are open and honest about them. Humanity: We put people at the heart of everything we do. We actively seek to include the voices of factory workers and farmers. Results: We believe in the principle of return on investment – not just in financial terms but from an ecological and social perspective as well. We strive to operate efficiently, do what is right and deliver tangible results – for people and the planet, as well as for the Tchibo brand. Fairness and sustainability for all: We are committed to our customers. We take their wishes, their day-to-day needs and their lifestyle seriously and want to help them as best we can with our products and services.. Courage: Rather than simply accepting the status quo, we explore new avenues to find the best way of realising our goals. The Code of Conduct Requirements for employees The key international conventions and fundamental principles are enshrined in the Tchibo Code of Conduct (CoC), a binding document that serves to guide Tchibo employees in everything they do. The CoC forms the ethical basis upon which all employees do business, irrespective of their level within the company: It sets out our commitment among other things to full legal compliance and transparency as well as to the continuous improvement of business processes from an environmental, social and societal point of view. The CoC also governs the way we engage with business partners and customers.  The CoC prohibits all employees from engaging in any form of corruption or granting or accepting advantages. The Code of Conduct is updated regularly and compliance is monitored. Requirements for suppliers and business partners The Tchibo Social and Environmental Code of Conduct (SCoC) forms the basis for cooperation with business partners (except in the coffee sector). It defines binding requirements for the conduct of suppliers, business partners and service providers concerning legally compliant and ethical practices. Among other things, it defines minimum requirements for working conditions and environmental standards in the production of our consumer goods and provides the basis for all purchasing contracts.  We are constantly refining the SCoC against the backdrop of ever-increasing requirements and in line with our voluntary commitments.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 24G R I 2 0 0 : E C O N O M I C S TA N D A R D S Grievance mechanisms Grievance mechanisms are an essential component in ensuring that human rights and environmental protection are firmly embedded in supply chains. They help us to identify violations of labour and environmental standards and then, at the next stage, to work together with those affected and those responsible to remedy the situation.  If grievance mechanisms are to work, people need to know that they exist, how to use them and how to formulate a complaint. And they must feel confident that their concerns will be kept confidential if they so wish. However, grievance mechanisms alone do not necessarily contribute to long-term improvements because they only provide retrospective and selective intervention. In order to change those structures that facilitate violations of workers' rights and environmental damage, we incorporate the insights gained from grievances into our longer-term measures.  Tchibo has established a system consisting of multiple grievance channels, which is intended to allow as many people as possible to report grievances. Grievances are logged and investigated by a designated Tchibo employee, if possible together with local WE experts. We often enlist the help of external and independent expert organisations for the investigation as well. This is used as the basis for an action plan, which is drawn up in collaboration with the relevant Tchibo departments, such as Purchasing. We do everything we can to resolve grievances by working together with those affected and those who caused have caused them. The results are then used to inform our supply chain programmes, training courses and business processes. In doing so, we hope to prevent further violations. Direct grievances: Each and every person affected in our supply chains, their representatives and third parties can contact Tchibo directly, in confidence and anonymously, via any channel. In the past, for example, we have accepted grievances raised with Tchibo employees by phone, email or WhatsApp. The grievances address socialcompliance@tchibo.de is part of our mandatory Code of Conduct (SCoC) and must therefore be visible in all production facilities. It is communicated consistently on our websites. The SCoC obliges producers to have grievance-handling procedures in place and this is verified in audits. The WE programme: If employees are to use the channels available, they need to know about them, know their rights and have confidence in the channels. In the factories producing Tchibo consumer goods, the trainers from our WE programme are often the first point of call for employees seeking to report grievances in the factories. These trainers have developed a relationship with them based on trust. Many problems can be identified and solved together instantly. Trade unions: Employee representatives provide reassurance when raising grievances with superiors. Through our cooperation with IndustriALL Global Union, national and local trade unions alert us to violations of workers' rights, often with a focus on trade union rights. They play a pivotal role in developing and implementing solutions. Bangladesh: In addition to covering fire and building safety, the Bangladesh Accord also has a cross-factory grievance system that workers can also use to file grievances relating to workers' rights. All factories also have a health and safety committee to address safety-related grievances. Whistleblowing:  The whistleblowing system set up by Tchibo's holding company maxingvest ag allows all employees or anyone in a business relationship with Tchibo to contact an independent party at any time with their concerns, information or doubts regarding their own misconduct or the misconduct of others. An ombudsman council, consisting of representatives of maxingvest ag, Tchibo GmbH and the chairman of the Works Council, then draws up measures. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 25G R I 2 0 0 : E C O N O M I C S TA N D A R D S G R I 2 0 1 - 1 Economic performance — economic value directly generated and distributed Economic challenges a. Global macroeconomic perspective and market development  As expected, the pace of growth in the global economy continued to decline throughout 2019 and is slightly below the previous year's level. An economic slowdown was evident in most industrialised nations as well as in the growth markets. Despite signs of recovery in the meantime, growth was significantly impeded by the various international trade conflicts, especially between the USA and China, by Brexit and by markedly weaker growth rates in the eurozone and in parts of Asia.  Economic development in Germany unexpectedly lost considerable momentum compared to the previous year. The main driver for this was the steady fall in incoming orders in German industrial production since the beginning of the year. The robust economic situation in the service sector and private consumption, supported by the ongoing positive situation in the labour market and wage increases, improve the overall economic picture in Germany somewhat.  According to the Federal Statistical Office, German retail sales, which are of significance for Tchibo, increased by 2.7% in real terms and 3.3% in nominal terms in 2019. The structural change in the retail sector continued in the reporting year. According to the German Retail Association (HDE), this means that purely bricks-andmortar retailers in city centres are particularly affected by an ever-increasing decline in customer traffic. At Tchibo, the structural change in the retail sector continued to have a negative impact on business. In particular, the reduced footfall among our bricks-and-mortar distributors resulted in a decline in turnover in the consumer goods business compared to the previous year.  At 658 million pounds, the market volume for roasted coffee in German households was 1% above the previous year's level of 653 million pounds. This rise can be attributed in particular to the 12% increase in the Espresso/ Caffe Crema market segment. The filter coffee and single-cup segments each declined by 3% compared to the previous year. Measured by value, the German roasted coffee market was 4% below the previous year. This was due in particular to a decline in the filter coffee market segment and a drop in prices more generally.  The consumer goods purchases that are relevant to Tchibo for its core sales in 2019 were primarily made in the previous year, as a result of which the strengthening of the US dollar over the course of 2018 negatively impacted the goods inventory.  b. Risk assessment for the commercial business from the perspective of sustainability Our business is vulnerable to a variety of risks, such as currency fluctuations and environmental events that can affect commodity prices. As part of our holistic risk management system, we identify these dangers and mitigate them by implementing effective preventive measures. Corporate responsibility is a strategic component in Tchibo's risk prevention and business strategy. Thanks to the company's long-standing commitment to sustainability and our strategy of establishing it as the cornerstone of our business, Tchibo is well placed to take advantage of current sustainability opportunities and to manage risks.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 26G R I 2 0 0 : E C O N O M I C S TA N D A R D S 1. Strategic opportunity: Establishing Tchibo as a credible sustainable brand  • Consumer trends: Consumers are increasingly associating their purchasing decisions with a brand's commitment to sustainability. Our programmes enable us to respond to changing customer needs. • Regulatory and ethical License to Operate: On account of its many years of dedication in this area, Tchibo is in a position to respond effectively to the increasing trend towards legislation governing corporate responsibility (regulatory). In addition, Tchibo is seen by stakeholders and increasingly by customers as a pioneer in the mass market and is therefore well supported (ethical). • Safeguarding raw materials: Climate change, extreme weather events, environmental degradation, biodiversity loss, and inadequate wages and farmers' incomes all hamper cultivation of raw materials, leading to resource scarcity. Our programmes ensure access to sustainable resources/supply chains and reduce the risk of shortages.  2. Environmental and human rights regulatory framework at EU and German national level  • Based on the UN Guiding Principles on Business and Human Rights, purchasing companies have a responsibility towards the employees in their production facilities, even if the products are purchased from external suppliers. A Due Diligence Act/Supply Chain Act is being prepared in the German federal government, something that civil society has been demanding. This concerns human rights and environmental issues (e.g. human rights violations, pollution/chemical accidents). Tchibo is proactively advocating for a supply chain law.  3. Liability risks relating to social and environmental responsibility in our supply chain  • In the production of non-food articles, there are risks relating to (occupational) health and safety, environmental protection and building safety, especially in the production of textiles and clothing. In producing countries in Asia, there is often a lack of professional, integrative and effective risk management at the factory level, due in part to a lack of government oversight mechanisms. Tchibo is actively involved in preventive measures in its own supply chains and in sector-wide initiatives.  Measure to increase profitability  To address declining sales revenues and volatile EBIT in the consumer goods sector, we initiated reorganisation and restructuring measures in 2019. The aim of these measures is to optimise critical core processes and systems with a view to increasing the company's customer focus, efficiency and speed, as well as simplifying the organisational structure.  Economic value directly generated and distributed In 2019, organic turnover was € 3,118 million, nominally just under 1% below the previous year's figure of € 3,148 million. Tchibo's coffee business continued to grow, while the consumer goods business weakened slightly.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 27G R I 2 0 0 : E C O N O M I C S TA N D A R D S Breakdown of Tchibo's turnover by percentage, divided into Germany and the rest of the world  GERMANY REST OF THE WORLD 29% 71% G R I 2 03 - 1 Infrastructure investments and services supported A number of our corporate responsibility activities promote services and investment in infrastructure in our supply chains. The list below contains a selection of relevant projects. Further details can be found in the respective sustainability programmes (Coffee, WE programme): 1. Examples of indirect economic impacts in the coffee value chain. In the coffee value chain, we have identified various stages where we are actively working to achieve even greater sustainability. We want to be actively involved at local level - in the form of projects and regional approaches. At the same time, we believe that there is a great need for political discourse and cross-sector The progress made towards consolidating the business was also visible in the operating results (EBIT). We were able to significantly increase our EBIT again, in particular due to improved contribution margins. This figure of € 134 million exceeded the previous year's result by € 54 million. The EBIT return on sales rose to 4.3% (compared with 2.5% in the previous year). Our optimised distribution and product range strategy played a key role in this result. The cost of sales also decreased disproportionately to the turnover. Lower purchase prices for raw materials and falling prices for green coffee contributed significantly to this positive development. Our marketing and distribution costs in 2019 were at the previous year's level.  Further information on employees, payments to investors, payments to state authorities broken down by country and investments at the municipal level can be found in the maxingvest ag Annual Report 2019. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 28G R I 2 0 0 : E C O N O M I C S TA N D A R D S Tchibo Joint Forces!® SUSTAINABLE INCREASES IN YIELD AND PRODUCTIVITY Advice and training • Soil and crop analysis • Sustainable farming practices • Adapting to climate change • Protective and safety distance SOCIAL ENGAGEMENT • Education and training opportunities for young people • Childcare PRINCIPLES OF SUSTAINABLE BUSINESS Advice and training • Accounting • Analysis of income, sales and profits • Cost analysis CERTIFICATION/VERIFICATION • Support in obtaining certification or verification COFFEE QUALITY Advice and training • Analysis of green coffee quality • Harvesting and processing • Storage and transportation • ‘Train the Trainer’ course cooperation, because we cannot do justice to the complexity of the issue if we act alone. Moreover, some of the biggest challenges are the result of systemic failings, some of which can only be addressed through legislation.   a. Certified coffee: We certify our coffees in partnership with the international standards organisations Fairtrade, Rainforest Alliance, UTZ and the European organic certification organisations. Certification can trigger investment in more sustainable farming practices, for example by modifying sowing, tending and harvesting processes. The aim is to improve both the social and environmental impact of growing our green coffees. Today, 100% of our premium coffees and coffees in the higher quality segment are certified. In 2019, certified coffees accounted for 21.8% of the total product range. Certification enables us to support farmers with establishing sustainable farming processes and thus ensure investment in services, such as through local farmer training schemes, for example. b. Tchibo supports coffee farmers and their families under the Tchibo Joint Forces!® programme: In order to fulfil our responsibilities to the people in our supply chains, we have set up projects to support farmers in a number of coffee-growing countries. A total of 17 projects have been set up. The majority of these have been completed, while four projects have been implemented in 2019 and others are in the planning stage. So far, 40,000 farmers have been impacted by the initiatives. For example, we have been actively involved in Guatemala since 2011 and have supported the construction of a daycare centre and a health clinic there. In 2012, we invested in nurseries and a health clinic in Honduras, which were handed over to the local community for them to manage themselves in 2019.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 29G R I 2 0 0 : E C O N O M I C S TA N D A R D S c. Developing sustainable coffee-growing regions: Implementing sustainability in the coffee sector is complex. For this reason, we develop regional approaches that go further than simply implementing projects for a limited period of time. Working closely with local organisations, representatives from civil society, international trading firms and other like-minded people, we are forging alliances that seek to achieve one common goal along the whole length of the supply chain: more sustainable coffee farming. We reached a first milestone by joining the Collective Action Initiative of the Global Coffee Platform (GCP) in Brazil, which seeks to reduce the use of synthetic fertilisers and pesticides and ensures that farmers are well trained and have access to appropriate protective clothing. This initiative has reached around 1,000 coffee farmers within the space of a year and triggered indirect Investment in this region through the local partnerships. In Vietnam, too, we are developing a multi-stakeholder initiative to promote more eco-friendly coffee farming in Vietnam's main coffee-growing regions.  d. International cooperation – Tchibo supports coffee farmers and their families: Just as we do in the non-food sector, we also engage actively with coffee at the political level. After all, it is only with the support of policymakers that suitable framework conditions can be put in place for greater sustainability in the coffee sector. Since 2019, the Sustainability Committee of the European Coffee Federation, chaired by Tchibo, has been committed to ensuring that existing civil society initiatives have their voice heard by decision-makers at the European Commission. In addition, we are replicating the efforts we are making in our own country in support of the Supply Chain Act, both at European level and in the agricultural sector. Thanks to this political engagement, we are able to achieve systemic change alongside our partners, which in the long term will be reflected in investments and transformation within each of the regions in which we operate.  More information on sustainable coffee farming and supply chains can be found here. 2. Indirect economic impacts in the non-food value chain: a. DETOX &Water Stewardship – training programmes: It is particularly important to us that we work closely with suppliers and wet-processing companies. We are proud of the fact that 61% of our textile products are already produced in wet-processing plants that have implemented a detox training programme.  The training programme is wide-ranging: In addition to online training, which enables our factories to learn about chemistry, water and climate, we also support them by providing tailor-made training on site at the factories. We also work alongside our partners to implement programmes in critical river basins, for example around the Taihu River in China and the Büyük Menderes river basin in Turkey. By bringing about changes in the way our producers work, we also indirectly trigger the necessary investments in services that are essential if we are to achieve our common goals.  b. WASH – providing access to clean drinking water: People need water – water for drinking, for sanitation and for hygiene (WASH – Water, Sanitation, Hygiene). In accordance with the UN's Global Sustainability Goals, sustainable water management also includes facilitating access to clean drinking water. The target is for everyone on the planet to have access to safe drinking water by 2030. From 2020, Tchibo will support this goal with its own project in Ethiopia, the country of origin of our organic coffee. This will involve making and generating investments in wells and sanitation facilities. Together with the local non-profit organisation Buna Qela Charity, we will install two wells approximately 50 to 60 metres deep in a coffee-growing region, with completion expected by the end of 2020. The wells will feature solar pumps, supplying water to more than 2,000 families.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 30G R I 2 0 0 : E C O N O M I C S TA N D A R D S G R I 2 0 5 -3 Combating corruption – confirmed incidents of corruption and measures taken  No incidents of corruption were reported or uncovered during the reporting period. G R I 2 0 6 - 1 Anti-competitive practices – legal proceedings on the grounds of anti-competitive practices, cartels and monopolies  No incidents of corruption were reported or uncovered during the reporting period.  c. Energy efficiency in production facilities: We help our textile producers reduce their emissions with the online qualification tool from the Carbon Performance Initiative (CPI2), which we co-founded in 2011. Besides addressing energy efficiency, the tool also tackles issues relating to chemicals and water. In 2019, 73 factories used the tool, with 19 of them achieving the first qualification level "bronze" in the energy category and investing in new production processes.   d. WE – Worldwide Enhancement of Social Quality: In WE, dialogue doesn't just mean getting people to talk to each other. It is a structured process aimed at creating a desirable future. Among other things, it is about motivating people to become actively involved. We have been working with WE since 2008 to improve working conditions in our producers' factories. The aim is to continue to narrow the gaps that exist between business practices and human rights. This means optimising WE in each case according to the local challenges. 82 of our producers are actively involved in the WE programme, with 20 factories in Bangladesh, India, Cambodia, Myanmar, Pakistan and Vietnam joining the programme for the first time. 6,300 workers and managers have taken part in the WE programme (some on a regular basis). These core groups were able to indirectly reach about 85,000 people and their families, because the changes in the factories also trigger investment in local services, processes and change processes by indirect stakeholders. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 31G R I 2 0 0 : E C O N O M I C S TA N D A R D S 31 ENVIRONMENTAL STANDARDS  G R I 3 0 0 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 32G R I 30 0 : E nvironmental Standards The environmental standards – introduction  Our planet is facing serious environmental challenges: The Earth is warming at an ever-increasing rate, important resources are becoming scarce, countless animal and plant species are disappearing every year, and ecosystems that have for thousands of years had a stabilising role are actively being destroyed. These challenges are already clearly apparent in many of our producing countries and countries where we source raw materials – for example in Brazil, Vietnam and India.  Our business relies on keeping the environment intact. At the same time, for decades we have helped to drive these negative developments and in some areas we are still partially responsible for them. In the past, we have recognised that it is time to adopt a way of doing business that prioritises the protection of our environment and its resources. We consider it our corporate duty to take responsibility for our actions, to conduct our business operations in the most ecologically responsible way possible, and thus to safeguard the livelihoods of people everywhere and the economic basis for our company.  In the spotlight: climate, water, biodiversity and the circular economy  We are committed to protecting the climate, water and biodiversity and to ensuring the materials we use come full circle. Water conservation and biodiversity are particularly relevant for coffee and cotton farming and for the production of our non-food products. The threat facing both humans and the natural environment is that the soil will become infertile or that toxic chemicals will enter the water. Climate protection is as much about farming and production methods as it is about transportation of our products and the impact on the climate of CO2 emissions from our offices, warehouses, shops and roasting facilities.   The subject of climate protection impacts us in every area of our business operations – from farming and production to the transportation of our products and the efficient use of energy in our offices, warehouses, shops and roasting facilities.  In pursuit of our goal to make Tchibo a 100% sustainable company, we set out to identify all the critical areas and address problems step by step. Whilst we have already achieved a lot, we have also realised that there are some areas where we cannot make any more progress on our own. In the long term, environmental protection is most effective when all stakeholders work together. That is why, for example, we have  • joined the Zero Discharge of Hazardous Chemicals Initiative (ZDHC) and are working with multiple partners worldwide to develop solutions for eliminating hazardous chemicals. • signed up to the UN Fashion Industry Charter for Climate Action to reduce emissions in textile factories • joined forces with WWF and other companies to find solutions for particularly at-risk water conservation projects.  Our experience has taught us that we can overcome even the greatest challenges – in a collaborative, fair and sustainable way.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 33G R I 30 0 : E nvironmental Standards G R I 3 0 1 Materials  Management approach GRI 301 Every year, humanity consumes 1.7 times more resources than it can replenish. At the same time, every year we put more than 2,000 new products in our supermarket concessions, our stores and our online shop. We strive to minimise the environmental impact of manufacturing and shipping these products.  In recent years, our focus when it comes to materials has mainly been on switching from conventional materials to more sustainable alternatives, for example from conventional cotton to organically grown cotton and the increasing use of recycled synthetic fibres and plastics.  Innovative materials  Challenge  There is no such thing as the perfect material or one-size-fits-all solutions. We must therefore find individual solutions for our many products that will make them environmentally sustainable. At the same time, we want to offer our customers textiles, furniture, household appliances and coffee with the same functionality and quality they have come to expect. To do this, we have to take it one step at a time. After all, at the outset, innovative new materials are not typically available in the quantities required for the mass market. Strategy & measures   We use organically grown natural fibres, synthetic fibres and plastics made from recycled material, and chemical fibres made from cellulose or FSC-certified wood and paper.  Unless necessary for quality reasons or functionality, we try to avoid the use of any materials of animal origin and promote the use of vegan alternatives. We currently use synthetic padding in our quilted jackets. This predominantly contains recycled materials.  From 2021 onwards, we will no longer use conventional cashmere. To this end, we are working to meet the new 'The Good Cashmere Standard' from the Aid by Trade Foundation across our range. There is a lot we have already achieved in making our animal fibre range more sustainable. We have not yet reached our goal and are working towards using more sustainable materials in place of the remaining animal fibres or changing production processes. In 2019, we developed the Animal Protection Policy, which will be published in 2020. It sets out our aspirations and our next steps in more detail.  We are working flat out on new ideas, such as the first consumer goods made from 'I'm Green™ PE', a plantbased polyethylene made from sugar cane instead of the usual fossil resources. The next innovation will be coffee grounds you can wear. We are currently working on textiles made from recycled plastic bottles and coffee grounds. Thanks to the coffee in it, this product is odour-resistant, breathable and quick-drying.     Progress & goals    The most important natural fibre in the Tchibo range is cotton, which accounts for 45% of all textiles in our range. To reduce the human and environmental impact, 89% of the cotton we use comes from sustainable sources. Since 2019, we have been monitoring the supply chains for our organic cotton to verify the precise origin and processing of the raw material.  G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 34G R I 30 0 : E nvironmental Standards 1 Aquafil S.p.A. & Textile Exchange, eigene Berechnung basierend auf Shen L., et al. (2010) Resour Conserv Recy, 55 (1), 34-52 In 2019, our range included various textile products and hard goods made from recycled materials. We recycled 5 tonnes of fishing nets and 12 million plastic bottles in our textile products.1 We used the recycled materials to make women's swimsuits and running shorts, for example. These products alone enabled us to save 263,000 plastic bottles and the equivalent of 11 tonnes of CO2. As in 2018, we again used ECONYL® for our textiles – a fibre made from nylon waste, such as fishing nets, fabric scraps and carpet offcuts. We have increased our ECONYL® range from two to ten products within the space of a year. We have doubled the proportion of textiles made from recycled material compared with the previous year.   6% of our products which use synthetics or plastics as the main material come from recycled sources. We have made it our mission to replace 100% of the polyester and polyamide fibres in our sports textiles with recycled material by 2025. We are currently at 12%. Beyond that, however, we will also promote the use of recycled fibres in other product categories in 2020 and 2021, such as children's textiles, womenswear, menswear and home furnishings. Because our yarns are made from recycled material and are certified with the Global Recycling Standard (GRS) or Recycled Claim Standard (RCS), we are able to prove exactly how much recycled material is in each of our products.   As for our textiles produced from man-made cellulose-based fibres, 76% come from sustainable sources. Animal fibres make up just 1% of our materials and are mainly found in leather, wool or down products. It has been many years since we used real fur and angora wool. Furthermore, as of 2018 we do not use mohair (memorandum) in our products.  In the hard goods sector, wood and paper are key materials for us. 56% of our products containing wood and paper are from more sustainable sources (FSC certified or from European forestry).  Circular economy  Challenge  Textiles made from recycled plastic bottles and fishing nets are a great intermediate goal. Nevertheless, the real challenge is to close the material cycle for textiles and to produce new textiles from old. Realising this vision requires innovation in the production, disposal, sorting and recycling of garments and collaboration between various stakeholders along the value chain and product life cycles. In the future, we want to become increasingly involved in this area by conducting pilot tests on the subject of the circular economy in collaboration with our partners.  Strategy & measures  For us, a circular economy means ensuring that products are used for as long as possible. Yet there are many products that are only used for a short time. Products such as babygrows have a particularly short product life, as babies quickly outgrow them. Expectant mothers or people who are only able to indulge in a sport such as skiing once or twice a year also have the experience of only being able to use something for a limited time. This is why we have used our rental platform, Tchibo Share, to give products that are only used briefly a longer life in more than just one household. In 2019, following on from the children's clothing section, we have added other product categories such as women's everyday wear and occasionwear, camping gear, baby carriers and children's furniture. Rented products are returned, cleaned up according to the highest hygiene standards and rented out again. Products that can no longer be rented out are given a second life by Hamburg-based company Bridge & Tunnel, for example, whose employees have been turning discarded items into products such as bum bags and hair bands since 2019.    TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 35G R I 30 0 : E nvironmental Standards In order to be able to reuse products in the best possible way at the end of their useful life, we are working on designing them so that the majority of their components can be recycled. This involves taking into account the lessons learned about collection and recycling systems and facilitating a consumer-friendly take-back system for our products. With this in mind, we support the recycling of our textiles and in 2017 we joined forces with FairWertung to offer our customers the most consumer-friendly and appropriate method of returning their old clothes. We have found a reliable partner in FairWertung, a company that guarantees the responsible handling of donated clothing and provides transparent information about how the clothing is recycled.   The topic of the circular economy and resource conservation also relates to our range of packaging and reusable products. Since 2019, customers have been able to fill their own coffee cans with coffee beans or ground coffee in our Tchibo shops. We also serve coffee in reusable cups that customers bring with them, rewarding them with a 10-cent discount on each drink. During a pilot test in 2019, customers in 32 of our shops in Bavaria were able to borrow a reusable cup to drink their coffee on the go in exchange for a deposit.  Progress & goals  In order to close the cycle of recyclable materials, in 2018 we used recycled wool for the first time, which is made from reprocessed wool scraps. In 2020, our range included products made from recycled cashmere for the first time.  We sold selected second-hand products on our rental platform Tchibo Share in 2020 alongside the rental service. Sustainable packaging  Challenge    Household appliances, clothing, coffee: Our products come in protective packaging, which protects them on their journey to Tchibo shops, supermarkets and customers and has all the necessary product information printed on it. The customer must dispose of the packaging after removing it, manufacturing the packaging consumes a vast amount of resources and the waste pollutes the environment. In Germany alone, 18.9 million tonnes of packaging waste are generated each year (German Federal Environment Agency, 2018). This is a problem we at Tchibo are acutely aware of.  Strategy & measures  We are continually improving our packaging, focusing on three key aspects. We reduce the amount of material used and promote reusable solutions. We use materials from certified, responsible sources. We make our packaging easier to recycle.  In 2019, Tchibo decided to phase out plastic bags for textile products in an effort to avoid and reduce packaging. New textile packaging made of cardboard means we save 30 million plastic bags a year. Reducing packaging is more of a challenge for other products, such as pans with delicate coatings. For shipping, we tested a reusable shipping bag. We have joined forces with other companies and retailers in the PraxPack pilot project to collect initial feedback on whether customers return reusable shipping bags to us.  When it comes to choosing materials, we use certification to ensure that they come from sustainable sources, e.g. in accordance with the criteria of the Forest Stewardship Council (FSC®). We have also gradually increased the use of recycled materials, such as in our shipping bag, which is made from at least 80% recycled plastic waste.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 36G R I 30 0 : E nvironmental Standards G R I 3 0 1 -2 Recycled materials used  The percentages of recycled source materials used to produce our main products and services are:  • Textiles: 3 % • More than 6% (2019) of hard goods products from recycled plastic  Progress & goals    A lot of packaging is created behind the scenes, unseen by the customer, when the products are transported. We are proud to have reduced not just the amount of material and weight, but also CO2 emissions and water by using thinner corrugated cardboard for the transport boxes. One of our targets for 2020 is to reduce paper and cardboard consumption in B2B and B2C shipments by 30% per sales unit compared to 2014.  In 2020, we introduced our new packaging for consumer goods. It is mostly paper, with a plastic hook made from recycled plastic. Plastic outer packaging is used only for a few products made from delicate materials. Overall, our aim is to constantly reduce the amount of packaging used for our consumer goods in the years ahead.   Currently, 93% of the printed packaging used for our consumer goods is made from sustainable, FSC-certified cardboard. Consumer goods packaging is already 97% recyclable. Our goal for 2020 is to increase the recyclability of our consumer goods packaging to 98%. The Cafissimo and Qbo coffee capsules can be put in the yellow recycling bag in Germany. It is our ambition – and our responsibility – to achieve even more with other coffee packaging. We still use non-recyclable materials to protect the coffee aroma.  Outlook: In 2020, we have largely abandoned single-use plastic for our consumer goods. We now only use it as protective outer packaging for a few products made of very delicate materials. Overall, our aim is to constantly reduce the amount of packaging used for our consumer goods in the years ahead.    G R I 3 0 1 -3 Reclaimed products and their packaging materials We are not currently taking back any products or packaging directly after their usage phase.  The take-back and recycling of packaging is regulated by law in Germany. Tchibo fulfils this legal obligation, licensing all packaging placed on the market and thus ensuring that 100% of the packaging used can be disposed of by consumers, free of charge and with minimal effort, by placing it in the recycling bins or the yellow recycling bags or by taking it to their local recycling centre.   We meet the legal requirements for electrical and electronic equipment and batteries by participating in takeback systems. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 37G R I 30 0 : E nvironmental Standards G R I 3 0 2 Energy Management approach GRI 302  Challenges  From roasting the coffee and providing lighting in our distribution centres to packaging our Tchibo products and shipping them to the customer, energy is a resource that is vital to our business. Yet fossil fuel reserves are finite, and using them releases critical greenhouse gases. As yet, there are still not enough carbon-neutral solutions available. The goal must therefore be to minimise consumption across the board. That is why we are systematically reducing the use of energy at all of our sites in Germany (head office, roasting facilities, warehouses and shops) as well as in our subsidiaries in other countries.  Strategy & measures  What we are doing:  • To manage the environmental impact of our administrative and warehouse sites, we follow the ISO 14001 standard and document any significant consumption.  • We also have a certified energy management system compliant with ISO 50001 at our production sites (roasting facilities) in Germany.  • Our sites in Germany have been supplied with electricity from certified 100 % renewable energy sources since 2008. This applies to the two roasting facilities in Hamburg and Berlin, the distribution centres in Gallin and Neumarkt, the company headquarters in Hamburg and all Tchibo shops in Germany, the electricity for which we purchase ourselves.  At our distribution centre in Gallin, we started an energy-saving process in 2017 that continues on an ongoing basis. We have implemented an energy management system with improved metering, for example. Heating pipes were insulated in the outgoing goods area. Furthermore, the lighting was also optimised in many areas and upgraded to LED.  Progress & goals  Tchibo's total energy consumption has fallen steadily in recent years. Whereas in 2018 it was 198,634 MWh, in 2019 it fell to 194,187 MWh – a decrease of over 2%.  This was achieved primarily by reducing natural gas consumption in the roasting facilities and in our German shops.  Our energy reduction target is to save 10% by 2030 based on 2018 levels. In order to achieve this energy reduction target, planned energy-saving measures include the following:  • increasing energy efficiency in the roasting facilities by 1.5% year on year,  • gradually transitioning to electric vehicles for our vehicle fleet,  G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 38G R I 30 0 : E nvironmental Standards G R I 3 0 2 - 1 Energy consumption within the organisation  2017 2018 2019 FUEL CONSUMPTION (NON-RENEWABLE) 117,753 MWh 113,724 MWh 109,668 MWh FUEL CONSUMPTION (RENEWABLE)  0 MWh 0 MWh 0 MWh ELECTRICITY CONSUMPTION  80,276 MWh 78,656 MWh 78,236 MWh HEATING ENERGY COOLING ENERGY  STEAM CONSUMPTION  7,120 MWh 6,254 MWh 6,264 MWh ELECTRICITY SOLD  0 MWh 0 MWh 0 MWh HEATING ENERGY SOLD  0 MWh 0 MWh 0 MWh COOLING ENERGY SOLD  0 MWh 0 MWh 0 MWh STEAM SOLD  0 MWh 0 MWh 0 MWh TOTAL ENERGY CONSUMPTION  205,149 MWh 198,634 MWh 194,187 MWh Energy consumption within the organisation is calculated using the following standards and methods: WW • The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)  • The Greenhouse Gas Protocol: Scope 2 Guidance • expanding the use of LED lighting at the head office and in our shops in Germany, and  • saving energy by adopting green IT.  By implementing these measures, our total energy consumption is projected to drop from 199,000 MWh in 2018 to 179,000 MWh by 2030.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 39G R I 30 0 : E nvironmental Standards Biodiversity  Management approach GRI 304 Challenges  The number of species on our planet that are disappearing for good is increasing at an alarming rate, and intensive land use is a major factor driving the deteriorating state of the planet. At Tchibo, we are witnessing biodiversity loss at the beginning of our supply chains in particular, in those countries where the raw materials for our products are grown and produced. For us, the most pressing problems are in the areas of coffee and cotton farming, textile production and forestry.  Strategy & measures  In 2018, we conducted a risk analysis as part of our analysis of the impact of the company's activities on biodiversity. We developed our own biodiversity indicator for this purpose, which shows what risks we face in which countries.  The goals of the risk analysis were:  • To identify the biodiversity risk for each country and draw comparisons between countries.  • To understand in more detail the risks in each country  • To ensure transparency regarding the protection status in each country.  • To provide greater transparency about Tchibo's impact on biodiversity in the countries in which we operate.  An overview of Tchibo's strategies for protecting biodiversity, divided into spheres of activity, is provided below.  Coffee and cotton farming  • Tchibo promotes environmentally friendly coffee and cotton-growing methods in a variety of projects, by reducing the use of fertilisers and pesticides.  • Tchibo is committed to using GM-free seeds, including in India as a member of the Organic Cotton Accelerator (OCA). • Tchibo is committed to protecting fertile soils and has raw materials certified: 21.8% of Tchibo's green coffee is certified under Rainforest Alliance, UTZ, Fairtrade or Organic standards.  89% of Tchibo's cotton comes from more sustainable sources and is certified, for example, according to the Organic Content Standard or the Global Organic Textile Standard (GOTS) (as of 2019). G R I 3 0 4 G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 40G R I 30 0 : E nvironmental Standards • Textile production • Tchibo is committed to textile production methods that do not use chemicals hazardous to the environment or human health.  • To achieve this, we offer training for factory workers and help monitor chemical stocks using professional, digital systems. • Since 2019, we have been supporting WWF in the protection of water conservation areas in China and Turkey. The rivers in question are particularly threatened by the release of chemicals.  Forestry  • Tchibo is committed to protecting biodiversity in forests and prohibits the practice of illegal logging for its products.  • Tchibo is increasing the proportion of wood products that are Forest Stewardship Council (FSC®) certified or that originate from regional forestry schemes with strict environmental standards.  Progress & goals  As part of the revision of the environmental protection strategy in 2018, 'biodiversity protection' was defined as one of four strategic fields of action.  • Circular Economy • Climate protection • Water conservation • Biodiversity protection  Biodiversity is so closely entwined with every other issue that we have formulated specific goals for coffee, cotton, timber, and even climate and water. The measures and actions defined are generally based on the principle of materiality and impact: Where does Tchibo have the greatest possible influence and how can a scalable impact be achieved?  As part of the development of the Biodiversity Strategy, it was determined that steps should be taken to help protect biodiversity (impact) with targeted activities in all main purchasing countries and high-risk countries (materiality). Tchibo firmly believes that this can only be achieved through a broader, whole-society, crosssector approach. That is why we support the development of stewardship approaches. These approaches involve all relevant stakeholders in change processes. This allows solutions to be developed that are socially just, ecologically sustainable and economically beneficial for all parties.  The targets for the integrated measures will be revised in 2020. A selection of past key targets, together with the degree to which they have been achieved, can be seen here:  • Increase the proportion of certified sustainable green coffee to 50% in 2016  After setting this target, Tchibo decided to gradually reduce the proportion of verified coffee (4C Standard). As a result of this reduction, the proportion of certified green coffee is currently 22%. The funds that are freed TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 41G R I 30 0 : E nvironmental Standards up as a result go towards developing projects and measures aimed at establishing sustainable coffee-growing regions. Among other things, these projects and measures are helping to protect biodiversity, for instance by encouraging a switch to sustainable and low-pesticide coffee farming.  In 2018, the proportion of certified coffees was just under 30%. The target was reformulated in 2019, taking into account the regional approach. Accordingly, the share of certified green coffee in 2019 was 21.9%.  • Increase the proportion of sustainable coffee to 100% in 2021  In 2019, the proportion of sustainable cotton was 89%. We want to completely eliminate unsustainable cotton from our products in the years ahead. We have therefore set ourselves the target of increasing the proportion of sustainable cotton to 100% by 2021.  • Increase the proportion of wood and pulp from responsible forestry In 2018, the share of sustainable wood and paper products was 63%. This includes FSC-certified products and products from regional forest management programmes. G R I 3 0 4 -3 Habitats protected or restored  Tchibo has no designated protected habitats of its own and is not currently carrying out any rewilding projects. Nevertheless, Tchibo is involved in various environmental projects that contribute to rewilding measures, such as projects to improve water quality and use in river basins in collaboration with WWF.  Broadly speaking, Tchibo's focus is on reducing the environmental impact in our supply chains, particularly in coffee, timber and cotton growing countries. To this end, we are involved in numerous alliances and initiatives alongside other key players in the sector.  Tchibo is a member of the following initiatives, which are committed to protecting biodiversity:  Biodiversity in Good Company  • Member since 2012  • Initiative of Germany's Federal Environment Ministry   • The aim: To preserve biological diversity   To protect ecosystems in the coffee-growing sector To raise public awareness on the issue of biodiversity • Signatory of the Leadership Declaration –> Commitment:  To analyse the impact of our business activities on biodiversity To protect biodiversity To include the sustainable use of raw materials in our environmental management  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 42G R I 30 0 : E nvironmental Standards Partnership for Sustainable Textiles • Member since 2015  • Alliance set up by the Federal Ministry for Economic Cooperation and Development • The aim: To improve social and environmental conditions in textile manufacture  • A joint initiative on chemicals and environmental management in production facilities, based on the strategic alliance on chemicals management with the German Society for International Cooperation (GIZ) and REWE Group.  Coffee and Climate • Co-founded by Tchibo in 2010 • Purpose: To support coffee farmers in adapting to the impacts of climate change on coffee farming  • To translate scientific approaches and solutions into workable guidelines and to communicate/disseminate these recommendations for action. • To develop climate-friendly agricultural practices Cotton made in Africa (CmiA) • Member since 2007 • Initiative for the growing and use of organic cotton Detox Commitment • Member since 2014 • Greenpeace campaign: regulating the use of hazardous chemicals in textile production  • The aim: To reduce the use of hazardous chemicals in textile production by 2020.  Forest Stewardship Council (FSC) • Member since 2010 • Guidelines for growing and processing wood and paper from responsible sources Global Coffee Platform (GCP) • Member since 2016  • GCP was formed in 2016 with the merger of Sustainable Coffee Program (SCP) and 4C Association  • A network of coffee producers, retailers, industry and civil society organisations with the aim of making the coffee sector sustainable.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 43G R I 30 0 : E nvironmental Standards • „Vision 2020/2030 – Call for Action“: Appeal to 30 GCP members from the private sector and their commitment to the common agenda:  To organise small-scale farmers to form cooperatives To improve productivity and income To avoid and prevent illegal child labour To promote equality between women and men, girls and boys To restore ecosystems To adapt to climate change and reduce their contribution to climate change To provide access to finance and improve business management skills To encourage sustainability agendas in producing countries International Coffee Partners (ICP) • Founded in 2001 by Tchibo and four other leading private coffee companies (Löfbergs, Lavazza, Paulig and Neumann Kaffee Gruppe) • The aim: To boost the performance of small-scale farmers and their families around the world, in particular by increasing the competitiveness of farmers using sustainable farming methods.  • To reinforce the organisation of small-scale farmers into cooperatives  • Achievements: 18 projects completed in 12 countries, involving more than 13.3 million euros of private and public investment. This partnership has so far reached over 63,000 small-scale farmers’ households.  Organic Cotton Accelerator (OCA) • Member since 2016 • A commitment to farming and using organic cotton at the sector level Tchibo Joint Forces!® • Our own Initiative: Qualification programme for protecting biodiversity in the coffee-growing sector  Water Stewardship-Projekte in der Turkey und China • WWF project for sustainable cotton farming and for cleaning up critical river basins near our production facilities  • Tchibo has been involved since 2019  • Project model on the Büyük Menderes River: The river is home to 40% of Turkey's leather production, 60% of its textile production for export and 14% of its cotton production. The aim: To protect biodiversity, to use water responsibly as a resource and to improve water quality  • Project model in the Taihu River Basin: According to WWF's Water Risk Filter, China is the country with the most significant water risks in our textile supply chain. The Taihu River Basin is highly significant for Tchibo, as the wet-processing plants that are based there are responsible for two-thirds of the products we manufacture in China. The aim of the project is to improve the condition of this river basin. Factory training programmes devised in 2019 are being implemented in stages in 2020.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 44G R I 30 0 : E nvironmental Standards Zero Discharge of Hazardous Chemicals Initiative (ZDHC) • Member since 2018  • The aim: To establish a global network to change the way (hazardous) chemicals are used and handled in the textile industry.  • To provide training on and implementation of chemical management best practices.  To assess the risk to biodiversity  The sub-indicators 'biodiversity loss', 'biodiversity protection' and 'Tchibo's impact on biodiversity' were developed to determine the risk to biodiversity. Breaking down the risk in this way enabled a more nuanced evaluation of the overall biodiversity risk for each country.  Tchibo indicators for determining biodiversity risk BIODIVERSITY LOSS ... HIGHER DUE TO: Species diversity – and the loss of it Population decline THE OVERALL RISK IS ... BIODIVERSITY PROTECTION ... LOWER DUE TO: Biodiversity protection status Rule of law and thelegal framework TCHIBO’S IMPACT ON BIODIVERSITY AS A RESULT OF THE INTENSITY OF COFFEE AND COTTON FARMING ... HIGHER DUE TO: Intensity of land use, farming, irrigation, fertilisers Sourcing volumes Approved indices, internal data and external information were analysed in order to calculate the sub-indicators. Care was taken to ensure that the data was obtained from recognised sources, that there were no gaps in the data either in the timeframe or the geographical area covered, and that the data was relevant to the Tchibo supply chain. This made it possible to obtain a consistent and comparable picture for each individual country and for all countries combined.  The results of the analysis show that the biodiversity risk in those countries where Tchibo buys coffee and cotton is very similar, with an increased risk in Indonesia, India, China and Mexico.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 45G R I 30 0 : E nvironmental Standards Biodiversity risk Globally, by country TURKEY 53,8 UZBEKISTAN 38,5 KYRGYZSTAN 23,3 TAJIKISTAN 29,4 PAKISTAN 45,0 CHINA 57,5 INDIA 53,8 KENYA 52,6 ETHIOPIA 34,2 UGANDA 36,0 TANZANIA 41,8 INDONESIA 65,5 VIETNAM 38,5 UNITED STATES 52,4 MEXICO 57,4 GUATEMALA 48,1 EL SALVADOR 40,9 COSTA RICA 43,5 PERU 39,0 HONDURAS 47,4 COLOMBIA 55,9 BRAZIL 47,4 0 = no risk/100 = very high risk low high To identify which countries Tchibo should focus on, the biodiversity risk was considered in relation to the purchasing volume.  System for identifying priority countries PURCHASING VOLUMES BIODIVERSITY RISK Priority countries low low high high PERU BRAZIL INDIA HONDURAS COLUMBIA INDIEN VIETNAM BRASILIEN GUATEMALA CHINA INDONESIA CHINA USA TURKEY KENYA MEXICO EL SALVADORETHIOPIA COSTA RICA UGANDA USBEKISTAN PAKISTAN KYRGYZSTAN TAJIKISTAN TANSANIA TANZANIA green coffee cotton The overview below shows the status of all areas at the end of the reporting period.  Based on this analysis, Brazil, Vietnam, Honduras, India and Colombia were identified as priority countries. These countries will be the main focus of biodiversity activities in the coming years.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 46G R I 30 0 : E nvironmental Standards G R I 3 0 5 G R I 1 03 - 1 /2 / 3 Emissions  Management approach GRI 305 Challenges Coffee, cotton and wood are raw materials we use on a daily basis here at Tchibo. If global warming continues unabated, these raw materials will become scarce and many millions of people who grow them will lose their livelihoods.  The findings of international climate research show that we must change course immediately and make effective reductions in emissions. The 2015 Paris Climate Agreement sets out the goal of limiting the global temperature increase to 1.5 degrees. At Tchibo, we are committed to this climate goal and are implementing concrete and ambitious climate protection measures.  Strategy & measures  Our analysis has shown that more than 80% of our CO2 emissions (Scope 1, 2 & 3, see below) are generated by growing coffee and by manufacturing textiles and other products. We therefore see great value in selling sustainable products that are produced in a climate-friendly way.  This means: • Reducing our CO2 emissions by using sustainable raw materials (e.g. organic cotton)  • EUsing more sustainable materials and recycled materials for our products • Making our transport and logistics processes environmentally friendly • Encouraging suppliers of our products to minimise their energy use and use renewable energy • For electrical devices, developing appliances that have good consumption values throughout their life cycle  • We also want to be ambitious in the climate protection measures we implement at our own sites. We use electricity from renewable sources at all our German sites and are investing in energy-saving measures By taking this holistic approach, we will have cut CO2 emissions by more than half in our own organisational processes (Scope 1 & 2) and by 15% in upstream and downstream stages of the value chain (Scope 3) by 2030.  Effective climate action is achieved through cooperation. We will only be able to achieve the 1.5-degree target if policymakers, business leaders and society as a whole pull together. That is why, for many years now, we have been working closely with our suppliers and other partners to develop fair solutions. We have signed up to the Science Based Targets Initiative (SBTi), the Fashion Industry Charter for Climate Action (UNFCCC) and the coffee & climate initiative, thereby ensuring effective action on climate change through global alliances.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 47G R I 30 0 : E nvironmental Standards Progress & goals In 2019, Tchibo emitted 39,000 tonnes of CO2 at its own sites, with its own vehicles and through the purchase of electricity from the power grid (Scope 1+2). This is roughly equivalent to the annual emissions of 450 private households, or nearly 16,000 long-haul flights. Our roasting facilities account for the largest share of emissions at 60%, and we aim to achieve further savings here with our ISO 50.001-certified energy management system. Overall, we were able to slightly reduce emissions by just under four percent compared to 2018.  The Tchibo 2030 climate change target  Tchibo will be helping to limit global warming to 1.5 degrees with three climate change targets:  1. Reduce energy consumption at Tchibo sites by more than 10%.  Plans are in place here to introduce energy-saving measures in various areas. These measures include increasing energy efficiency in our roasting facilities by 1.5% year on year, switching to electric vehicles for our vehicle fleet, increasing energy efficiency at our administrative sites and in our shops by using LED lighting, and green IT. By implementing these measures, our total energy consumption is projected to drop from 199,000 MWh in 2018 to 179,000 MWh by 2030. 2. Reduce Scope 1 and 2 emissions by 51% The use of renewable energies abroad is a key means of achieving this. Increased energy efficiency at production and logistics locations and the transition to electric vehicles also play a role. By implementing these measures, our total emissions are projected to drop from 41,000 tonnes of CO2 in 2018 to 20,000 tonnes of CO2 by 2030.  3. Reduce emissions from upstream and downstream supply chains by 15% (Scope 3)  Initial measures have been identified to reduce emissions from upstream supply chains. The increased use of sustainable materials such as organic cotton and recycled polyester, for example, play an important role here. Likewise, improvements in energy efficiency by logistics service providers (shipping and trucks) and the use of renewable energies by suppliers will make an important contribution.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 48G R I 30 0 : E nvironmental Standards Tchibo 2030 climate change target* We are helping to limit global warming to 1.5° with three climate protection goals 1 2 3 Reduce energy consumption by 10% (electricity, gas, district heating, fuels) Reduce scope 1+2 emissions by 51% Reduce emissions from upstream and downstream supply chains by 15% (Scope 3) Reduction targets in line with climate science REDUCTION IN TCHIBO'S SCOPE 1+2 EMISSIONS REQUIRED ACCORDING TO SCIENCE BASED TARGETS DIRECTEMISSIONS(SCOPE1+2)INTONNES *accordingtotheScienceBasedTargetIntelligencemethod 5.000 0 2018 2020 2025 -30 % -51 % -100 % 2030 2035 2040 2045 2050 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000 • 2006: Sustainability forms an integral part of Tchibo's corporate strategy • 2007: ‘Logistics towards Sustainability’ (LOTOS) project launched in collaboration with the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) and HamburgHarburg Technical University • 2009: Tchibo Joint Forces is launched. Since then, 40,000 coffee farmers have been provided with support to grow coffee more sustainably. • 2008: 100% certified green electricity at all sites in Germany • 2010: ‘coffee & climate’ initiative launches • 2010: Magazine paper and shipping boxes switched to FSC paper • 2011: Tchibo is on track to become a 100% sustainable business Climate action milestones at Tchibo since 2006 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 49G R I 30 0 : E nvironmental Standards • 2011: Founding member of the Carbon Performance Initiative (CPI2) to reduce carbon emissions in textile production • 2011: Tchibo becomes a member of the Clean Cargo Working Group, aimed at reducing logistics emissions • 2013: Tchibo's commitment to sustainability recognised with the Supply Chain Sustainability Award and the CSR Award from the German Federal Government • 2013: The Hamburg roasting facility receives the exacting ISO 50001 energy management certificate • 2014: Tchibo has been the market leader in sustainable filter coffee since 2014 • 2015: Member of the Partnership for Sustainable Textiles, set up by the German Federal Ministry for Economic Cooperation and Development • 2016: Award for being Germany's most sustainable large company • 2017: Introduction of sustainable household items made from recycled plastics • 2018: Tchibo Share launches with a rental service for baby clothes and children's clothing • 2019: 12 million plastic bottles and 5 tonnes of fishing nets recycled in textile products • 2019: Carbon footprint calculated according to the recognised Greenhouse Gas Protocol • 2019: The logistics division receives the Lean & Green 1st Star from GS1 for emissions reductions • From 2021: 100% sustainable cotton • Tchibo has set itself the target of halving CO2 emissions at its own sites by 2030 Tchibo Climate Protection Milestones 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 50G R I 30 0 : E nvironmental Standards G R I 3 0 5 - 1 Direct GHG emissions (Scope 1) The gross volume of direct GHG emissions (Scope 1) in 2019 was equivalent to 23,211 tonnes of CO2 .  The calculation focuses on CO2 . Other gases are not relevant in Tchibo's operational processes and were therefore not included in the materiality analysis.  Biogenic CO2 emissions are not relevant in Tchibo's Scope 1 and were not recorded.  The 2018 reporting year is also the baseline year for our climate targets. In 2019, we completely overhauled the way we calculate our carbon footprint. We now also include emissions from all our overseas facilities, as well as emissions from all stages in the value chain, both upstream and downstream, such as coffee growing. Our carbon footprint is calculated according to the Greenhouse Gas Protocol (GHG), which defines best-practice reporting standards.   The Tchibo carbon footprint manual stipulates that the following cases trigger a recalculation of the baseline year emissions:  1. Structural changes to the organisational structure (e.g. mergers, acquisitions and divestments; outsourcing and insourcing of emitting activities).  2. Changes to the calculation method or a change in the source of emission factors with a significant impact on the baseline year data  3. Discovery of significant errors in the calculation  Another rationale for using 2018 as the baseline year is our participation in the Science Based Target Initiative, whose regulations state that the baseline year must not be more than two years ago. Having committed to the 2020 initiative, Tchibo is using 2018 as our baseline.  The emissions factors used are taken from the following sources: DEFRA, VDA, GEMIS.  Operational control was used as the consolidation approach for the emissions. With this approach, Tchibo assumes responsibility for activities that are within the control of the company and its employees and can therefore be influenced directly or indirectly.  Our carbon footprint analysis is based on the following standards and methodologies:  • The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) • The Greenhouse Gas Protocol: Scope 2 Guidance • Smart Freight Centre: GLEC Framework for Logistics Emissions Methodologies Indirect energy-related GHG emissions (Scope 2)  The gross volume of location-based, indirect energy-related GHG emissions (Scope 2) in 2019 was equivalent to 45,061 tonnes of CO2 . G R I 3 0 5 -2 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 51G R I 30 0 : E nvironmental Standards The gross volume of market-based, indirect energy-related GHG emissions (Scope 2) in 2019 was equivalent to 15,835 tonnes of CO2 . Our climate targets refer to the market-based value.  The calculation focuses on CO2 . Other gases are not relevant in Tchibo's operational processes and were therefore not included in the materiality analysis.  The year 2018 is the baseline year for our climate targets.  In 2019, we completely overhauled the way we calculate our carbon footprint. We now also include emissions from all our overseas facilities, as well as emissions from all stages in the value chain, both upstream and downstream, such as coffee growing. Our carbon footprint is calculated according to the Greenhouse Gas Protocol (GHG), which defines best-practice reporting standards.  The Tchibo carbon footprint manual stipulates that the following cases trigger a recalculation of the baseline year emissions:  1. Structural changes to the organisational structure (e.g. mergers, acquisitions and divestments; outsourcing and insourcing of emitting activities)  2. Changes to the calculation method or a change in the source of emission factors with a significant impact on the baseline year data  3. Discovery of significant errors in the calculation  Another rationale for using 2018 as the baseline year is our participation in the Science Based Target Initiative, whose regulations state that the baseline year must not be more than two years ago. Having committed to the 2020 initiative, Tchibo is using 2018 as our baseline.  The emissions factors used are taken from the following sources: DEFRA, VDA, GEMIS.  Operational control was used as the consolidation approach for the emissions. With this approach, Tchibo assumes responsibility for activities that are within the control of the company and its employees and can therefore be influenced directly or indirectly.  Our carbon footprint analysis is based on the following standards and methodologies:  • The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) • The Greenhouse Gas Protocol: Scope 2 Guidance • Smart Freight Centre: GLEC Framework for Logistics Emissions Methodologies Other indirect GHG emissions (Scope 3)  The gross volume of other indirect GHG emissions (Scope 3) in 2019 was equivalent to 569,541 tonnes of CO2 . Gases included in the calculation are: CO2 , CH4 , N2 O, HFCs, PFKW, SF6 and NF3 . The selection of gases included varies depending on the emission factor. Biogenic CO2 emissions have not been explicitly included in Scope 3, but may be part of the emission factors used.  G R I 3 0 5 -3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 52G R I 30 0 : E nvironmental Standards The following categories were included in the calculation:  • 3.1 purchased goods and services • 3.2 capital goods  • 3.3 fuel- and energy related activities • 3.4 transportation and distribution (upstream) • 3.5 waste generated through operation • 3.6 business travel  • 3.7 employee commuting  • 3.11 use of sold products • 3.14 franchise The 2018 reporting year is the baseline year for our climate targets. In 2019, we completely overhauled the way we calculate our carbon footprint, backdated to 2017. We now also include emissions from all our overseas facilities, as well as emissions from all stages in the value chain, both upstream and downstream, such as coffee growing. Our carbon footprint is calculated according to the Greenhouse Gas Protocol (GHG), which defines best-practice reporting standards.   The Tchibo carbon footprint manual stipulates that the following cases trigger a recalculation of the baseline year emissions:  1. Structural changes to the organisational structure (e.g. mergers, acquisitions and divestments; outsourcing and insourcing of emitting activities)  2. Changes to the calculation method or a change in the source of emission factors with a significant impact on the baseline year data  3. Discovery of significant errors in the calculation  Another rationale for using 2018 as the baseline year is our participation in the Science Based Target Initiative, whose regulations state that the baseline year must not be more than two years ago. Having committed to the 2020 initiative, Tchibo is using 2018 as our baseline.  The emissions factors used are taken from the following sources: DEFRA, VDA, GEMIS.  Operational control was used as the consolidation approach for the emissions. With this approach, Tchibo assumes responsibility for activities that are within the control of the company and its employees and can therefore be influenced directly or indirectly.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 53G R I 30 0 : E nvironmental Standards G R I 3 0 6 Waste Management approach GRI 306 Challenges  No manufacturing company can avoid generating waste. At Tchibo, we address this issue on several levels. At the production level in our two coffee roasting plants, for example; at the packaging level, because many of our products – such as coffee, for example – cannot be sold without packaging; and also at the level of our administrative and warehouse buildings. Raw materials are needed in our supply chains as well, such as in the processing of coffee cherries to produce coffee beans, but also right from the growing stage. One particular challenge we are working on is the volume of packaging material in logistics.  Strategy & measures  Our strategy can be summarised in three words: reduce, reuse, recycle. This means reducing our use of paper and cardboard, for example, and meeting the demand that remains with materials from certified responsible forestry and recycled materials, such as recycled plastic. We have reduced our plastic consumption by using paper sleeves to package our clothing rather than plastic film, for example.  We are developing solutions that enable our packaging to be recycled after use and returned to the raw material cycle. Where possible, we use reusable transport boxes for the delivery of picked goods to our shops and supermarkets.   We are constantly looking for innovative ways to use and recycle the waste generated in the production of our coffee. We have used paper made from coffee grounds for the cover of our 2019 Sustainability Report.  As a producer of waste, Tchibo is responsible for ensuring that the waste it generates is properly disposed of or recycled. For this reason, we collect data regarding waste at our own administrative, production and warehouse sites, as well as at warehouse sites operated by external service providers.   Progress & goals  Our 3-year waste balance from 2017 to 2019 clearly shows a decreasing trend, although there was a slight increase from 2018 to 2019. One possible explanation for this increase is the calculation method used by the new disposal service provider, with whom we have been working since April 2018. The current data represents a projection based on the values from April to December 2018.  Tchibo has not set any quantifiable targets for waste reduction and avoidance. Nevertheless, we are working constantly on new and innovative solutions to reduce the amount of waste generated by our company.  G R I 1 03 - 1 /2 / 3 Our carbon footprint analysis is based on the following standards and methodologies:  • The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) • The Greenhouse Gas Protocol: Scope 2 Guidance • Smart Freight Centre: GLEC Framework for Logistics Emissions Methodologies TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 54G R I 30 0 : E nvironmental Standards G R I 3 0 6 -2 ALL FIGURES ARE IN TONNES  2018 2019* WASTE AT TCHIBO SITES  8,424.66 8,623.42 WASTE AT SITES OPERATED BY SERVICE PROVIDERS  4,497.47 4,197.86 HAZARDOUS WASTE  11.03 175,645 COMPOSTED  N/A 0 RECYCLED  N/A 1,446 INCINERATED  N/A 1,016 LANDFILLED  N/A 173,183 NON-HAZARDOUS WASTE  12,911.10 12,645.64 COMPOSTED  N/A 1,769.35 RECYCLED  N/A 10,561.25 INCINERATED  N/A 315,035 LANDFILLED  N/A 0 *This data was collected for the first time in 2018 because of our cooperation with a new waste disposal partner.  The waste disposal method is determined from the information provided by the utility service provider  G R I 3 0 6 -3 Significant release of harmful substances No incidents were reported or known to us during the reporting period.  Waste by type and disposal method  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 55G R I 30 0 : E nvironmental Standards G R I 1 03 - 1 /2 / 3 G R I 3 07 & 3 0 8 Management approach GRI 307 & 308  Challenges  Regulations and laws or voluntary initiatives aim to increase environmental protection and conservation of resources – nationally, EU-wide and globally. Examples of regulations we are bound by include the European Timber Trading Regulation governing the import of timber products, the European Chemicals Regulation governing the marketing of products, emission limits for our roasting facilities and the Packaging Act.  It is of great importance to us that our business activities do not damage the environment.  That is why we are proactively working on solutions that go beyond compliance with legal requirements, with the aim of making a significant contribution to greater environmental protection and conservation of resources.  This presents us with the particular challenge, among other things, of establishing mechanisms and structures for increased environmental protection and conservation of resources in all the relevant phases of a product's life cycle: from design to manufacture and the selection of raw materials, from production processes to packaging and returning waste to the cycle of materials.   In our own roasting facilities, environmental teams ensure compliance with legal requirements. The roasting facilities are also inspected annually by the appropriate environmental authorities.  Tracking down environmental violations in our supply chains is something that is far less easy for us. The greatest risk here comes from the farming of raw materials and subsequent processing of raw materials outside the EU.  When it comes to the farming of raw materials in particular, the challenge of identifying violations throughout all our supply chains is extremely difficult and sometimes almost impossible to achieve. One reason for this is that coffee, cotton and wood farming is done on a very small scale. In many cases, farmers only cultivate a few hectares. Due to the complexity of the supply chains, it is often impossible to trace the exact origin of the coffee. This makes it difficult for us to check every single farm. Given our purchasing volumes, it is not realistic for us to individually inspect every single coffee farm throughout the whole supply chain.   This is somewhat easier when it comes to the processing stages, since we are able to audit our direct suppliers and their production facilities.  Strategy & measures    The strategies and measures we use to ensure that the environment is protected and to prevent environmental violations can be divided into four areas:  1. The Codes of Conduct – the principles underlying the way we do business  2. Measures at our own sites  Environmental compliance & environmental assessment of suppliers TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 56G R I 30 0 : E nvironmental Standards 3. Measures relating to subsequent processing/in factories  4. Measures relating to the farming of raw materials  1. Codes of Conduct – the principles underlying the way we do business  Our Tchibo Code of Conduct (CoC) and Tchibo Social and Environmental Code of Conduct (SCoC) set out the binding principles of how we do business for our employees and all our business partners. They are integral parts of our contracts. Any infringement of these codes of conduct will result in the contractual relationship being terminated.  The key international conventions and fundamental principles are enshrined in the Tchibo Code of Conduct, a binding document that serves to guide Tchibo employees in everything they do. The CoC also forms the basis for ensuring legal compliance at every level within the Tchibo organisation. ‘We take responsibility for the environmental and social impacts of our actions’ – this fundamental principle shapes our work in all aspects of our business processes. The Tchibo Code of Conduct defines requirements for working conditions and environmental standards.  2. Measures at our own sites  Tchibo has implemented a multi-year investment programme to bring its coffee roasting facilities up to date with the latest roasting technologies. By the end of 2020, a total of 20 million euros will be invested in our main roasting facility in Hamburg alone, to be spent on state-of-the-art drum and hot-air roasters. This upgrade work will turn Tchibo's main plant into one of the most modern roasting plants in Europe, saving more than 1,000 tonnes of CO2 per year in the future. This means that all roasting facilities will have been fully modernised by 2020.  We are also continuously reducing energy consumption in all of our roasting facilities by implementing energy management measures in accordance with ISO 50001.  In 2019, we commissioned a software-based energy-monitoring system at our Berlin plant. 3. Measures relating to subsequent processing/in factories  Every two years, we assess the human rights situation in our manufacturing countries based on recognised indices and publications by expert organisations. The results from this analysis are used to group countries into five categories, which in turn indicate the degree of scrutiny required of producers: 1) No human rights review of the individual production facility necessary 2) Review of workers' rights and environmental standards as part of other factory visits and quality audits 3) One-day external social and environmental audits 4) Two-day external social and environmental audits 5) No purchasing permitted at all. Additional data and information can be found in the Key Figures table. Country-specific social and environmental risks and policies (PDF)  We conduct social and environmental audits to verify compliance with the standards set out in the contractually binding Tchibo Social and Environmental Code of Conduct (SCoC). New factories are audited before a contract is signed with the supplier. The outcome of the audit determines the purchasing decision: Only those that meet the minimum requirements are included in our portfolio – no matter what the product TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 57G R I 30 0 : E nvironmental Standards or how big the order. Any zero-tolerance violations must be rectified before any orders can be placed with the producer. These include, for example, obstruction of emergency exits, failure to provide employment contracts, payment below the legal minimum wage, or discharge of chemicals into the groundwater. In the case of any other violations – such as workers failing to wear the protective clothing provided, missing information in employment contracts, late payments or a lack of safety labelling on chemicals – we give producers more time to rectify them. Orders can be placed once suppliers have submitted their plans for improvement.  We use our WE dialogue programme and our Global Framework Agreement with IndustriALL to assist in the improvement of working conditions at factories we regularly work with. Those producers who are not covered by our WE programme are audited every three years. These factories are given a period of four weeks to rectify zero-tolerance shortcomings. If this deadline is not met, the producer will be suspended. They will not receive any new orders until the shortcomings have been remedied. This sends a clear message that the violations found are unacceptable, whilst at the same time giving our existing business partners time to address them. If we did not, factories would conceal shortcomings. Terminating the business relationship should always be the last resort where producers are unwilling to implement improvements.  Producers need considerable resources for the audits performed by their customers. This leaves very little time for them to look after the needs of their own employees. We therefore also accept audit results from independent standard organisations, which producers can submit themselves. BSCI, WRAP, SMETA 4-pillar audit, SA8000 with ISO. However, these must cover all the issues that we have categorised as zero-tolerance deficiencies with respect to our SCoC. Where appropriate, we still check specific aspects of our zero-tolerance requirements. Where we have trading partnerships with other reputable brands, we do not carry out our own audits if the producers can prove that they have their own programme for compliance with human rights and environmental standards.  Details of our textile producers and their suppliers for wet processing  are published on our website and on the Open Apparel Registry every six months. Effective grievance mechanisms (consumer goods)  Grievance mechanisms are important to ensure that human rights and environmental protection are firmly embedded in supply chains. They help us to identify violations of labour and environmental standards and to work together with those affected and those responsible to remedy the situation. Tchibo has established a system consisting of multiple grievance channels, which is intended to allow as many people as possible to report grievances. Grievances are logged and investigated by a designated Tchibo employee, whenever possible together with members of the local WE programme. We often enlist the help of external and independent expert organisations for the investigation. This is used as the basis for an action plan, which is drawn up in collaboration with the relevant Tchibo departments, such as Purchasing. We do everything we can to resolve grievances by working together with those affected and those who have caused them. The results are then used to inform our supply chain programmes, training courses and business processes. The following grievance channels exist: direct grievances at Tchibo, WE programme, trade unions (Global Framework Agreement), Bangladesh Accord, whistleblowing for Tchibo employees and business partners.    4. Measures relating to the farming of raw materials  Our biggest challenge is tracing the supply chains for sourcing raw materials like cotton and coffee. We employ a number of strategies here to avoid or minimise environmental damage in the producing countries:  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 58G R I 30 0 : E nvironmental Standards • We use certified raw materials for the majority of our non-food goods, which help to improve the environmental situation in the countries of origin thanks to their environmental standards.  • We know which regions our raw materials come from and are committed to regional engagement and local cooperation in order to improve the overall situation in the region.  • We conduct global hotspot analysis to identify environmental risks regarding biodiversity, water and climate, and use this as the basis for local environmental projects.  • We have developed a position statement setting out targets and zero tolerances on the topic of 'farming and its environmental impact'.  • We are now using this positioning as the basis for a purchasing policy to integrate our sustainable farming goals into our supply chains too.  • As part of our coffee sustainability strategy, we are committed to educating small-scale farmers and sharing knowledge about sustainable farming methods and environmentally responsible and healthconscious use of pesticides and agrochemicals.  • Since it is impossible to overcome major ecological challenges - such as the use of banned pesticides, for example - purely through legal regulation, we are also addressing these problems at a global level and via international cooperation, with joint initiatives in Brazil and Vietnam, for example, alongside other stakeholders from the Global Coffee Platform.  Progress Non Food: We are constantly increasing the proportion of certified raw materials: • 62% of our products with a wood/pulp component are FSC® certified or come from regional forestry  • 94% of the cotton processed for our clothing and home textiles was grown in a more sustainable way in 2019 (Organic Content Standard [OCS], Global Organic Textile Standard [GOTS], Cotton made in Africa [CmiA], Appachi ECO-LOGIC Cotton)  • Increased proportion of FSC-certified wood  Coffee: We believe in sector-wide transformation processes and our own programmes:  • 40,000 farmers helped by Tchibo Joint Forces measures  • We have developed a position statement setting out clear guidelines for our buyers, including on compliance with environmental criteria.  Objectives  This year, we have developed a guideline with social and environmental criteria for the farming of our raw materials. Whereas some of the criteria indicate which labour practices we do not tolerate when it comes to people and the environment, the other part of the policy describes the direction in which we want to take in the long term when it comes to farming. This agricultural purchasing policy will come into effect in 2021 and will at the same time serve as a guideline for the development of new support programmes for farmers.      TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 59G R I 30 0 : E nvironmental Standards G R I 3 07- 1 Non-compliance with environmental laws and regulations  No incidents were reported or known to us during the reporting period.  G R I 3 0 8 -2 Negative environmental impacts in the supply chain and measures taken One issue that has been identified as particularly relevant is the need to reduce the negative environmental impact of using chemicals. To this end, we have implemented the following measures:  Detox Commitment In 2014, Tchibo committed to eliminating the use of hazardous chemicals in textile production by 2020. The Manufacturing Restricted Substances List (MRSL) forms the basis for removing such chemicals from our supply chains. This list contains chemicals that are either entirely prohibited or whose use is severely restricted by limit values.  Tchibo has also been a member of the Zero Discharge of Hazardous Chemicals Initiative (ZDHC) since 2018. We have adapted the ZDHC Manufacturing Restricted Substances List (ZDHC MRSL) to form an integral part of our Social Code of Conduct. The ZDHC MRSL is already recognised as an industry standard in several producing countries, and is followed by chemical suppliers and the Partnership for Sustainable Textiles. By taking a joint approach, we want to drive forward the standardisation of requirements in the industry.  Since signing the Detox Commitment in 2014, Tchibo has systematically created transparency regarding the upstream stages relevant to the detox – such as dyeing plants, laundries, printing plants, etc. – in its textile value chains. The following requirements formulated in the Tchibo MRSL are continuously being further refined. • Since 2017, we have identified wet-processing factories for around 96% of our orders and conducted wastewater tests there. This provides us with information about the use of hazardous chemicals. The effluent tests are published online on the Zero Discharge of Hazardous Chemicals (ZDHC) platform.  • We banned PFCs in our outdoor clothing as far back as 2016.  • The use of flame retardants, biocides and many other critical substances is prohibited in the production of Tchibo products.  We also work continuously to train our suppliers.  Targets for cotton: 100 % more sustainable cotton by 2021, development of a cotton project involving integration within the supply chain.  Long-term target: Introduction of environmental projects in all environmental hotspot regions and in all topic areas.Themenbereichen. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 60G R I 30 0 : E nvironmental Standards • Since 2017, Tchibo has participated in the Advanced Chemical Management Training (ACMT) (DeveloPPP programme until 2019): In a strategic alliance with REWE Group and GIZ, Tchibo has developed a qualification programme under the umbrella of the  DeveloPPP programme by the German Federal Ministry for Economic Cooperation and Development (BMZ) for chemical and wastewater-intensive production areas  • Development of a training concept and related materials. Findings from factory visits and training sessions were incorporated into the concept  • 20 producers took part in the kick-off workshop, and 110 producers are due to be trained in Bangladesh and China by 2020.  • Long-term target: Establishment of a training and advisory network for all producers in the region  In 2019, Tchibo has worked in partnership with 308 different wet-processing factories. Of these, wastewater analysis was conducted at 183 factories to provide transparency around the use of hazardous or prohibited chemicals. In the event of violations of the ZDHC MRSL, improvement measures are defined that support the wet-processing factories in establishing a sustainable chemical management system:  • 20% of wet-processing factories have drawn up a Corrective Action Plan (CAP)  • 46% of wet-processing factories have assessed their chemical inventories for ZDHC compliance using digital solutions  • 31% of wet-processing factories have participated in a Detox training programme   Hazardous chemicals found in wastewater do not automatically result in a business relationship being terminated. Instead, Tchibo's approach is to engage in dialogue with its suppliers, initiate improvement measures and help wet-processing factories to establish environmentally friendly production.  In 2017, Tchibo also developed scenarios for sustainable chemistry in 2030 as part of a research project at Darmstadt University of Applied Sciences. Water stewardship project in China and Turkey  Since 2019: Collaboration with WWF on a project to clean up critical river basins in the vicinity of our production facilities. At the centre of the project is the Taihu River Basin, which is particularly significant for Tchibo as the wet-processing plants that are based there are responsible for two-thirds of the products we manufacture in China. The aim of the project is to improve the condition of this river basin. Factory training programmes devised in 2019 are being implemented in stages in 2020.  Since 2019: Collaboration with WWF on a project for sustainable coffee farming in the Büyük Menderes River Basin. The Büyük Menderes is one of the most heavily polluted rivers in Turkey. The river is home to 40% of Turkey's leather production, 60% of its textile production for export and 14% of its cotton production. Due to the discharge of polluted water by the textile industry and the farming of raw materials, biodiversity in this river basin is declining sharply and the water quality is deteriorating. The water stewardship project launched by WWF also has the backing of H&M, IKEA and Tommy Hilfiger. Tchibo is focusing on more environmentally friendly, ecological cotton farming in the region. It is hoped that the project will act as a model that can later be applied to other river basins in Turkey.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 61G R I 30 0 : E nvironmental Standards SOCIAL STANDARDS G R I 4 0 0 61TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 62G R I 4 0 0 : S ocial standards Introduction – People  Putting people centre stage Tchibo is a family-owned company that has been putting people centre stage ever since its founding in 1949. Our founding father, Max Herz, was himself a firm believer that motivated, skilled employees are a company’s most important resource. Today, 70 years later, we go one step further: The same applies to the people in our supply chains. Our business culture is based on dealing fairly with others within our company and with all those from whose work we benefit.  A responsibility to people in our supply chains  As a traditional trading company, Tchibo relies on partnerships with textile and consumer goods suppliers in Asia and Eastern Europe. They manufacture many of the products that we sell to our customers week after week. Our coffee business is also not possible without the people in the coffee-growing countries. In addition to excellent quality and fair prices, our primary goal in these partnerships is to uphold and improve human rights standards. A complete list of Tchibo's textile producers and wet-processing companies can be found in the Download section under Supply Chain Transparency. Die Globalisierung bietet viele Vorteile für unsere Kund*innen und Chancen für die Menschen in unseren Produktions- und Anbauländern. Sie bringt aber auch Risiken mit sich und Herausforderungen, denen wir uns stellen müssen: Dazu zählt die Missachtung von Arbeits- und Sozialrechten, die in vielen Hersteller- und Anbauländern und an vielen Produktionsstätten leider immer noch häufiger Regel ist als Ausnahme. Wir haben das Ziel, die Chancen und Risiken zum Wohle aller beteiligten Menschen auszubalancieren und die Menschen vor Ort in diese Veränderungsprozesse einzubeziehen. G R I 4 0 1 & 4 0 2 G R I 1 03 - 1 /2 / 3 Employment & employee–employer relationship  Management approach GRI 401 & 402  Challenges  Tchibo is a global company with approximately 11,450 employees worldwide, 7,000 of which are in Germany. In order to succeed as a company, we need the expertise, passion, commitment and team spirit of all our employees. That is why we are dedicated to attracting the very best, keeping them long-term and reigniting their passion and their performance time and time again. Faced with demographic change and a shortage of skilled workers, it is also crucial that we attract and inspire new skilled employees to join Tchibo. This means we must constantly evolve, anticipate change and react quickly. As an employer, it is our desire and our duty to offer our employees an attractive working environment.  Strategy & measures  We cultivate a company culture at Tchibo in which we promote dialogue and create opportunities for codetermination. It is just as important to us that we are open and honest with each other as it is that we work together in a way that is governed by clear rules of conduct and a strong focus on values. These values are enshrined in the Tchibo DNA, which we published in 2011. The Tchibo DNA is complemented by the Tchibo Code of Conduct, which was revised in 2017 and defines behavioural standards for our day-to-day business as well as TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 63G R I 4 0 0 : S ocial standards other important core values of our company. In 2019, the Tchibo values were discussed with all our employees, renewed and then published.  Alongside a working environment that offers a variety of opportunities for personal development, Tchibo employees also enjoy a number of other benefits. For example, we help them find a good work–life balance by allowing flexible working hours and giving them the option of working from home, or by helping them find childcare places.  Under the ONE Tchibo agenda, which was launched in 2017 and aims to place the customer more firmly at the centre of what we do, we have developed a number of measures that enable our employees to communicate more effectively and stay informed about what is happening within the company. For example, we have developed an employee podcast that is released on a regular basis, providing employees with a mix of customer feedback and the latest business news.  Under the motto ‘ONE Tchibo erLEBEN’ (experience ONE Tchibo), we are also promoting dialogue between all departments and at all levels within the organisation through a new series on our intranet.  We want our employees to be not just satisfied but also actively engaged and involved in shaping the company. Employees can have an influence on company decisions by participating in the Works Council or the supervisory board based on the principle of co-determination. In compliance with the requirements of Germany's Works Constitution Act (BetrVG), the Works Council consists of 35 members and five youth and trainee representatives. The supervisory board is made up of equal numbers of employees and shareholders. The two bodies work closely with each other. Works Council meetings are held regularly both at the head office in Hamburg and at other sites and provide employees with information about the activities of the Works Council, the company's business development and selected topical subjects. Tchibo employees have the opportunity to put any pressing questions which they consider important to the Works Council and the Tchibo Board of Directors, and these questions are then answered at the meetings.  Goals & achievements  Company culture  • Enshrining our values in the Tchibo DNA, which was revised jointly with employees in 2019 and supplemented by the revised Tchibo Code of Conduct in 2017. This contains guidance on how to conduct business and provides information about day-to-day operations.  • Initiating the ONE Tchibo agenda: Under the motto 'agile, simple and customer-focused', innovative dialogue and work formats inspire and support employees with implementing their ideas.  • NewWorkplaces@Tchibo: We promote innovation and collaboration with innovative interior design with a variety of flexible workspaces.  Talent management • 70% of management positions are filled internally  • Over 40,000 hours of training and development are provided for Tchibo employees at the Tchibo CAMPUS every year.  • More than 250 young people have successfully trained as warehouse clerks since 2000  • An average of 70 young trainees begin their training at Tchibo every year  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 64G R I 4 0 0 : S ocial standards Employer branding relaunch  • 2nd place in the renowned Universum employer ranking for 'highest climber' (2020 forecast)  • Launch of the employer branding campaign in 2019  Offers and service for employees  • Since 2006, Tchibo has been helping its employees to find childcare through our partnership with Elbkinder – an association of daycare centres in Hamburg.  • We offer all our employees at the head office in Hamburg and in the staff canteens at our production and logistics sites freshly cooked, healthy meals every day – including veggie days, eco dishes and vegan options.  • Flexible working hours and the option to work from home as well as sabbaticals  • We help our employees find a way to escape the stresses and strains of work and stay healthy, for example by offering sports classes at our on-site leisure centre with swimming pool  • Tchibo provides a range of benefits (such as group accident insurance, company pension scheme), anniversary bonuses, employee discounts and a monthly coffee allowance, as well as a contribution towards public transport costs  • Coffee pantries on every floor, offering a range of coffee, tea, hot chocolate and mineral water free of charge for employees  Young Talents • Tchibo offers seven programmes for people starting out in their careers: apprenticeships, combined vocational training and degree programmes, internships, student traineeships, final theses, trainee programmes and management trainee programmes.  Childcare and caring for relatives      We also support parents with childcare and provide daycare places at partner childcare centres close to our Hamburg headquarters. For many years, we have been working closely with pme family service to enable us to meet the various family needs that our employees are confronted with in the course of their working lives in the most appropriate way possible. It provides advice on everything to do with childcare and arranges emergency childcare. We work in partnership with the holiday camp provider kidzplayground to offer our employees holiday activities three times a year for children over the age of six.   pme family service also provides our employees with advice on caring for relatives and arranges the appropriate services. As of November 2016, we also have a ‘Work–Life Balance Coordinator’ to provide our employees with even better support in reconciling work and looking after family members. The initiative for such a service as the first point of contact in companies was developed by the Hamburg Alliance for Families, an alliance between the Senate, the Chamber of Commerce and the Chamber of Crafts.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 65G R I 4 0 0 : S ocial standards G R I 4 0 1 - 1 New employee hires and employee turnover Overall, we saw a rise in the number of new recruits in 2019, in contrast to 2018. Significantly more new employees were hired in our stores and administrative offices. We can also report an increase in the number of trainees.  Staff turnover remains at a comparatively low level. We see this as a sign of our attractiveness as an employer and our employee policy. What's more, there are no significant differences between the turnover rates for women and men. We therefore conclude that there is no striking discrimination or anything similar against either women or men that would result in a remarkably high number of job terminations by either gender.  New appointments  New appointments (excluding apprentices and trainees), broken down by age group, gender and area of employment in Germany.  FIGURES IN ABSOLUTE NUMBERS  2018 2019 TOTAL 796 1,119 OF WHICH WOMEN  623 867 OF WHICH MEN  173 252 UNDER 30  386 547 OF WHICH WOMEN  309 411 OF WHICH MEN 77 134 30–50 346 485 OF WHICH WOMEN  258 335 OF WHICH MEN 88 101 OVER 50 64 136 OF WHICH WOMEN  56 121 OF WHICH MEN 8 15 IN STORES 528 793 OF WHICH WOMEN 487 800 OF WHICH MEN 41 93 IN OFFICES 249 277 OF WHICH WOMEN  130 158 OF WHICH MEN 119 119 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 66G R I 4 0 0 : S ocial standards FIGURES IN ABSOLUTE NUMBERS  2018 2019 IN THE FIELD 3 20 OF WHICH WOMEN  3 8 OF WHICH MEN 0 20 IN ROASTING PLANTS 15 29 OF WHICH WOMEN 3 1 OF WHICH MEN 13 28 Staff turnover  Number of staff leaving as a proportion of the average number of staff, broken down by area of employment and gender  FIGURES AS A PERCENTAGE  2018 2019 TOTAL 11.8 12.9 WOMEN 11.6 12.9 MEN 12.5 12.8 UNDER 30 N/A 31.2 30–50 N/A 13.0 OVER 50 N/A 5.7 IN STORES 13.3 15.6 OF WHICH WOMEN  12.7 14.7 OF WHICH MEN 41.1 49.1 IN OFFICES 10 9.4 OF WHICH WOMEN 8.8 8.5 OF WHICH MEN 11.8 11 IN THE FIELD 8.2 6.6 OF WHICH WOMEN  7.6 8.6 OF WHICH MEN 8.9 5.6 IN ROASTING PLANTS 5.8 6.4 OF WHICH WOMEN  0 0 OF WHICH MEN 6.5 7.2 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 67G R I 4 0 0 : S ocial standards G R I 4 0 1 -2 Company benefits offered only to full-time employees, but not to temporary or part-time employees  When it comes to providing voluntary employee benefits, Tchibo does not make a distinction between different employment contracts and treats all employees with the same fairness, whether they work full-time, part-time or on a permanent basis. Our employees are our greatest asset, so we must invest in all of them equally.  Attractive employee benefits and fringe benefits are an integral part of our corporate culture and recognise the commitment and dedication of our employees. These extras include company pension schemes, healthy living initiatives, group accident insurance that also covers our employees' private lives with 24-hour cover, and employee discounts on Tchibo products and travel. We also promote employee safety on the way to work by offering driver safety training, which is partially funded by the German Employers' Liability Insurance Association. As part of our company health campaign, we offer our employees a comprehensive range of services, most notably at our leisure centre at the Hamburg head office: for a monthly fee of just two euros, they can take part in a variety of sports and use the in-house swimming pool and weights room. For employees who live outside Hamburg, we offer gym memberships at reduced rates.  G R I 4 0 1 -3 Parental leave  All of our approximately 7,000 employees in Germany are entitled to parental leave. In 2019, a total of 146 employees took parental leave. In 2019, the number of employees who were employed by Tchibo three months after taking at least three months of parental leave was 126.  Numbers taking parental leave  The table below shows the total number of employees who claimed parental leave. (Including those who worked part-time whilst on leave)  FIGURES IN ABSOLUTE NUMBERS  2019 TOTAL  366 WOMEN 321 MEN 45 IN STORES 174 WOMEN 172 MEN 2 IN OFFICES 178 WOMEN 141 MEN 37 FIGURES IN ABSOLUTE NUMBERS  2019 IN THE FIELD 10 WOMEN 7 MEN 3 IN ROASTING PLANTS 4 WOMEN 1 MEN 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 68G R I 4 0 0 : S ocial standards Employees on parental leave  The table below shows the total number of employees on full parental leave for at least three months (without working part-time at the same time).  FIGURES IN ABSOLUTE NUMBERS  2019 TOTAL 126 OF WHICH WOMEN  124 OF WHICH MEN  2 IN STORES 68 IN OFFICES 56 IN THE FIELD 2 IN ROASTING PLANTS 0 Integration of parental leave after 12 months  The table below shows the percentage of employees who were employed at Tchibo 12 months after the end of a period of parental leave lasting at least three months.  FIGURES AS A PERCENTAGE  2019 TOTAL 90 WOMEN 90 MEN 100 IN STORES 93 IN OFFICES 89 IN THE FIELD 0 IN ROASTING PLANTS n/a G R I 4 0 2 - 1 Minimum notice period for changes to operations  Employees at Tchibo are represented by the Works Council. In the event of significant changes in operations (restrictions or closure or relocation of operations or of significant parts of operations, merging or splitting of parts of operations, fundamental changes in the organisation of work, the purpose of operations, plant facilities or the introduction of fundamentally new working methods or production processes), the Works Council shall be informed in accordance with the Works Council Constitution Act (BetrVG) in good time and in sufficient detail to enable it to exercise its rights to consultation and, if necessary, to safeguard its interests. The more far-reaching rights (to conclude works agreements, reconciliation of interests, redundancy packages, etc.) are also observed. Any change will be implemented only after proper implementation of this consultation process and in compliance with the agreements reached with the Works Council.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 69G R I 4 0 0 : S ocial standards G R I 4 0 2 - 1 B Does not apply as Tchibo is not bound by collective agreements. . G R I 4 03 Health and safety in the workplace  Management approach GRI 403 Challenges  Our employees perform to high standards on a daily basis. Their commitment, their performance and in turn the success of our company is founded on a working environment that promotes and safeguards their health and enables each and every one of them to maintain a good balance between their professional and private lives. It is our responsibility as a family company to implement management methods, processes and support services that enable employees to maintain a healthy balance.  Measures & strategies  Our occupational health management programme is designed to ensure that our employees are actively invested in their own health. In order to make better use of the synergies involved, we founded the HR Balance team in 2015 and introduced the interdisciplinary Balance project, which is dedicated to promoting employee health and to reconciling work and family life. HR Balance brings together our occupational health management (OHM) programme and all of our measures and offerings concerning 'work and life'.  The core areas covered in the Balance project include 'My Family', 'My Health', 'My Exercise' and 'My Diet'. We offer a range of activities and information in these core areas and have collaborated with a health insurance company to develop new activities for our staff.  Activities regularly offered to our employees include the weekly 'active break' at two of our sites in Hamburg, mobile massages for employees at the logistics site in Gallin and our large leisure centre at the head office in Hamburg. More than 30 classes are offered here every week, and staff can also use the gym, swimming pool, squash court, relaxation lounge and other facilities.  We believe that a healthy working environment also means regularly reviewing the ergonomic design of the workplace and assessing any exposure to stress in the workplace, for instance due to noise, and taking appropriate steps to improve the situation. As part of our efforts to promote health, we have also included the topic 'Healthy and safe leadership' in the handbook for managers.  Our health concept also includes nutrition: we serve freshly cooked meals every day in our on-site canteens. We have been expanding the daily selection of vegan and vegetarian dishes in our staff restaurant, Nordlicht, since 2019. Thanks to our cooperation with BRIGITTE DIÄT – the diet and nutrition section of Germany's largest women's magazine – and the North German Broadcasting Corporation's 'Nutrition Doctors', we inspire our employees to opt for healthy, light meals and to carry these eating habits into their private lives as well. This is also something we promote with our podcast 'Five Cups a Day', which regularly focuses on the topic of nutrition (e.g. on 24 February 2020: ‘Bye bye sugar – so rettet ihr Gesundheit und Klima’ [Bye bye sugar – how to eat to improve your health and save the planet]).  Our company integration management programme provides support for employees who have been absent due to illness for more than six weeks within the space of a year, helping them to return to work. We offer them tailored and flexible workplace and working hours arrangements and, where appropriate, we also work with them to redefine their duties. Our goal is to settle employees back in quickly and gently and to help them stay G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 70G R I 4 0 0 : S ocial standards fit for work in the long term. We run a special integration programme for those employees returning to work following parental leave.  Support for our employees with severe disabilities is provided in the form of a representative body for the severely disabled, as well as seminars and talks. In the past seven years, we have increased the quota of severely disabled employees to a share of over six percent of the total workforce.  Health and safety in the workplace outside Germany  In 2012, Tchibo became the second company in the world to negotiate and sign the 'Accord on Fire and Building Safety in Bangladesh', initiated by leading trade unions and non-governmental organisations. Over 200 other international garment companies have joined the agreement since May 2013. As a member of the steering committee from November 2014 to September 2015, Tchibo drove forward implementation of the measures together with representatives from other companies and trade unions. The agreement centres on independent expert inspections into fire protection, electrical safety and building safety. If these inspections identify any deficiencies, the owners are obliged to remedy them within the specified deadlines. By the end of 2014, inspections had been carried out at all factories producing goods for Tchibo in Bangladesh. We assist the owners, working closely with the companies to improve building and fire safety on an ongoing basis, for example by modernising the fire protection systems. Workers are encouraged and trained to report any safety risks they identify.  In order to offer new products and product innovations and to remain competitive, new suppliers and factories are constantly required. We use our monitoring programme to select those factories which meet a minimum standard in terms of human and labour rights. In factories that we buy from regularly, as part of our WE programme we work together with workers and workers' representatives, as well as managers, to implement improvements.  If a zero-tolerance infringement is identified at a producer during an audit, we allow them four weeks to rectify it. If this deadline is not met, the supplier will be suspended from further orders. These zero-tolerance infringements include, for example, obstruction of emergency exits, failure to provide employment contracts, payment below the legal minimum wage, or discharge of chemicals into the groundwater. In the case of any other violations – such as workers failing to wear the protective clothing provided, missing information in employment contracts, late payments or a lack of safety labelling on chemicals – we give producers more time to rectify them. Orders can be placed once suppliers pledge to make improvements.  Achievements & goals  We have already achieved a lot for the health of our employees since 2015 with our HR Balance project and healthy food in our canteens.  The Accord on Fire and Building Safety in Bangladesh was extended in 2016. This ensures that the measures to improve safety in the factories will continue to be monitored by independent bodies in the future and that workers' rights will be strengthened until the authorities in Bangladesh have set up the new structures necessary to continue the work of the Accord. The measures of the Accord are making an impact: Five years on from the conclusion of the Accord, around half of the country's 1,600 factories are considered safe. 92% of the shortcomings identified have since been rectified in the 27 factories with which Tchibo has cooperated during this period. This puts us above the industry average of 82%. One factory at risk of collapse was identified and closed in accordance with the provisions of the Accord.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 71G R I 4 0 0 : S ocial standards G R I 4 03 - 1 Employee representation on formal employer-employee health and safety committees  In accordance with statutory requirements (§ 11 of the German Occupational Safety Act, ASiG), Tchibo has a health and safety committee at site level, which represents not only the central administrative offices but also the sales outlets (shops & stores and retail concessions). Its members include a member of the executive board, members of the Works Council and representatives of the severely disabled, experts on health and safety in the workplace, representatives of the various specialist departments and the safety officer.  At Tchibo, 100% of the workforce is represented in health and safety committees.  G R I 4 03 -2 Type and rate of injuries, occupational diseases, working days lost, absenteeism and number of work-related fatalities  OCCUPATIONAL HEALTH MANAGEMENT  BREAKDOWN  UNIT 2016 2017 2018 2019 WORKPLACE ACCIDENTS PER 1,000 EMPLOYEES I  TOTAL Number 25 24 20 22.6 WORKING DAYS LOST I   TOTAL Number 12.3 11.9 12.9 12.5 WOMAN Number 12.8 12.5 13.7 13.1 MEN Number 10 9.3 9.7 10.1 BY AREA OF EMPLOYMENT AND GENDER IN STORES Number 13.5 13.2 14.7 13.9 WOMAN Number 13.5 13.2 14.8 14.0 MEN Number 13.9 12.5 14.5 10.2 IN OFFICES Number 10.0 9.7 10.0 10.0 WOMAN Number 10.5 10.5 10.7 10.4 MEN Number 9.2 8.6 8.9 9.3 IN THE FIELD Number 6.8 7.5 8.9 8.5 WOMAN Number 8.5 10.8 13.0 11.4 MEN Number 6.0 6.1 7.0 7.2 We now want to build on the success of this collaborative approach with the same stakeholders in the 2018 Transition Accord for Bangladesh. Further information and content can be found in the section ‘Identifying and eliminating risks’.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 72G R I 4 0 0 : S ocial standards IN ROASTING PLANTS Number 17.6 15.0 14.6 16.1 WOMAN Number 21.6 15.2 13.2 15.4 MEN Number 17 14.9 14.8 16.1 ABSENCE RATE I  TOTAL % 4.8 4.7 5.0 5.0 WOMAN % 5.0 5.0 5.4 5.3 MEN % 4.1 3.8 4.0 4.3 BY AREA OF EMPLOYMENT AND GENDER IN STORES % 5.2 5.1 5.7 5.4 WOMAN % 5.2 5.1 5.7 5.4 MEN % 6.1 5.2 6.2 4.3 IN OFFICES % 4.4 4.3 4.4 4.5 WOMAN % 4.8 4.8 4.9 4.9 MEN % 3.9 3.6 3.7 4.0 IN THE FIELD % 3.0 3.2 3.8 3.8 WOMAN % 4.1 5.0 5.8 5.5 MEN % 2.5 2.5 3.0 3.1 IN ROASTING PLANTS % 7.3 6.2 6.1 6.9 WOMAN % 9.7 7.3 6.4 6.8 MEN % 7.0 6.0 6.1 7.0 WORK-RELATED FATALITIES I  TOTAL Number 0 0 0 0 The reporting obligation is laid down in the Social Security Code VII §193. The obligation to provide documentation is based on the provisions of the German Social Accident Insurance (DGUV) V1 §24, paragraph 6.  G R I 4 03 -3 Employees with a frequent occurrence of or at risk of diseases related to their occupation We are not aware of any occupational diseases.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 73G R I 4 0 0 : S ocial standards G R I 4 0 4 Training and education  Management approach GRI 404  Challenges  The German labour market faces a shortage of skilled workers in many sectors. As a large, globally operating trading company with more than 7,000 employees in Germany, we feel it is important to provide training for the next generation in our company and, as an attractive employer, not only to fill our apprenticeship positions but also to encourage these young professionals at the start of their careers to stay with our company long- term.  Our working world is constantly changing – and the challenges and tasks within our company are changing with it. The professional and personal development of our employees and managers is therefore very important to us and is a crucial factor in our competitive ability.  Measures  Training We provide junior employees seeking to start their career at Tchibo with a variety of entry-level opportunities – from internships to apprenticeships, combined vocational training and degree courses to trainee programmes.  In doing so, we start with pupils who are already interested. We have been involved in the annual Girls' and Boys' Day since 2000. This means that we welcome more than 40 schoolchildren from years 5 to 10 to Girls' and Boys' Day at the head office every year. They are given the opportunity to spend a day shadowing Tchibo employees as they go about their work.  We offer various training courses, mainly in business management and technical/industrial careers. We attach great importance to teaching trainees to work independently and to take responsibility. For example, our trainees take over the entire management of a Tchibo shop during our 'trainee week'. In our sales countries Germany, Austria and Turkey, we are committed to a three-stage action plan for refugees and provide special internships and apprenticeships for them.  We use our trainee programmes to secure talented employees for the long term and to provide targeted training for our junior (management) staff. Rather than being static, we develop these further in line with our needs and any changes that may occur.  We offer a management trainee programme for economics graduates specialising in trade and sales and with initial sales experience. Participants are given mentoring, seminars and feedback sessions, with the aim of training them to become sales all-rounders within 24 months and then taking them on in a management role, mainly in field sales but also in-house.  G R I 1 03 - 1 /2 / 3 G R I 4 03 - 4 Health and safety issues addressed in formal agreements with trade unions Health and safety at work is regulated by law in Germany and is implemented by Tchibo in accordance with the requirements. In addition, works agreements and company guidelines on issues relating to health and safety in the workplace are drawn up in cooperation with the Works Council.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 74G R I 4 0 0 : S ocial standards Further development  We offer our employees a wide range of development opportunities through our central Tchibo CAMPUS learning platform. With a diverse programme of courses, we encourage them to take a self-directed approach to learning and to experience new things continuously. Topics focus primarily on new challenges in our company such as digitalisation and 'New Work'.  Employees can explore and try out agile working methods as part of their training. Our offering for managers relating to agile leadership and mindset has made the change in leadership principles tangible and inspired a shift in thinking.  A special section of the Tchibo CAMPUS is the Coffee Academy. Employees can attend seminars to learn everything they need to know about coffee and take part in coffee tastings and roasting plant tours.  Employees can access the Tchibo CAMPUS programme via the myTRACK digital platform. Among the services offered is a library containing e-books that can be downloaded free of charge.  Leadership development also follows the approach of self-directed, sustainable learning. We nurture our junior managers with the six-month "Learn to Lead" programme, which helps them to build personal networks and expand their skills. New management staff complete the "Leading People" programme, which teaches them leadership tools, among other things. Since 2017, we have also been offering a new format: the 360-degree feedback process. This process involves colleagues, employees, supervisors, customers and external business partners giving feedback to managers. This 'panoramic view' provides each individual leader with the opportunity for self-reflection and to tailor their development path to their own particular situation.  Regular feedback is also given to our employees working below the management level. This is done using the myTRACK platform, which not only gives employees access to the Tchibo CAMPUS but also allows them to keep track of their tasks and view their own performance. The TRACKS performance management process enables us to evaluate the data from myTRACK and thus increase the visibility of talent at Tchibo. In addition, employees take an active role in the transparent process of performance evaluation.  Achievements & goals  • Implementation of two new trainee programmes in E-Commerce and Planning & Allocation since 2019  • Implementation of a new combined vocational training and degree course in IT Management, Consulting & Auditing (B.Sc.)  • Simplification of application processes, for example by omitting traditional covering letters and focusing on the motivation and skills of applicants  • Simplification of the performance management system for regular 360° feedback assessment of all employees  • Successful implementation of the first Tchibo Hackathon with over 60 participants and 14 teams, three of which will go on to further implementation at Tchibo.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 75G R I 4 0 0 : S ocial standards G R I 4 0 4 - 1 Average hours of training per year per employee Our employees are our most important asset. That is why Tchibo offers a wide variety of training and development opportunities. In 2019, a total of 35,584.5 hours of training and further development were therefore taken up by 5,628 employees. This does not include any training that takes place directly in our shops.  G R I 4 0 4 -2 Programs for upgrading employee skills and transitionassistance programs Talent management: developing employees, bringing new talent on board  We recognise the potential and talent of each and every individual at Tchibo. That's why we nurture our employees to enable them to develop and flourish even more – and thus stay with Tchibo in the long term. As part of our talent management strategy, we have set ourselves the goal of successively filling 70% of all management positions with internal talent. Accordingly, we place a high value on training and continuing development in our company, as well as on cross-divisional career development. What's more, because we firmly believe that a good relationship between manager and employee produces the best development opportunities and results, we view our managers as the first talent managers and first HR developers on the ground.  Talent Navigator: providing orientation  Our talent management approach invites all potential and current employees to use interconnected processes to develop themselves for the right position at the right time and to fully unlock existing potential and expertise. This is achieved through clear orientation and target group-specific support within the framework of our ‘Talent Navigator’.  Condensing job descriptions into simple cross-divisional role profiles highlights career paths and development opportunities and provides better orientation for employees and managers. The Talent Navigator transparently maps out our job architecture with all the relevant information and is therefore a fundamental part of our HR work. It is stored in our digital talent management platform 'myTrack', enabling managers, employees and HR staff to access it at any time for the purposes of HR development.  Giving feedback, presenting perspectives  Each year, all employees at Tchibo are given detailed feedback via a feedback platform, covering their performance and their progress towards their targets as well as the resulting career prospects, thus enabling them to actively manage their own career development. The respective focus topics always play a key role in agreeing targets. In 2019, these targets included repositioning the non-food business, modernising the distribution system and building a multi-channel business, as well as increasing various operational processes.  Core elements of the platform are the process for assessing performance and potential as well as the process for agreeing and achieving targets. All employees (excluding industrial employees and shop staff, including shop managers) conduct the feedback process based on the role architecture of the Talent Navigator, on the digital platform for talent management and with updated core competences.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 76G R I 4 0 0 : S ocial standards Campus: promoting employee development  Tchibo CAMPUS is the central development programme in our company. As part of our diverse programme of courses, we offer employees and managers a variety of development opportunities and encourage them to take a self-directed approach to learning and to experience new things continuously.  We are convinced that Tchibo knows more than Tchibo realises. That is why we have created the ‘Lunch and Learn’ format, which is offered by employees for employees. The lunch break is all about exchanging ideas and sharing knowledge. Here, any member of staff can introduce a topic that they are working on. It started with a colleague giving practical tips on the topic of 'working in a network'. Other topics followed, such as sustainability and order processing. The response to 'Lunch & Learn' has been very positive and in 2019 we have introduced further free learning opportunities provided by colleagues for colleagues, involving our staff offering their expertise.  G R I 4 0 4 -3 Percentage of employees receiving regular performance and career development reviews  All employees at Tchibo are entitled to an annual development review. During the reporting period, 61% of all employees completed a voluntary self-assessment, providing the basis for jointly exploring development opportunities within the company.  Percentage of employees with a performance review  FIGURES AS A PERCENTAGE  2019 TOTAL 27 WOMEN 20 MEN 52 IN STORES 0 WOMEN 0 MEN 0 IN OFFICES 67 WOMEN 71 FIGURES AS A PERCENTAGE  2019 MEN 61 IN THE FIELD  90 WOMEN 89 MEN 90 IN ROASTING PLANTS  7 WOMEN 13 MEN 7 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 77G R I 4 0 0 : S ocial standards Challenges  Tchibo employs more than 11,000 people worldwide. These employees come from vastly differing cultures, from different social classes, from different religions and from different generations. As an employer, we therefore consider it our duty to create an environment in which all our employees are treated with respect and without prejudice.  Measures & strategies  We require all our employees to comply with our Code of Conduct. Among other things, it states:  ‘All employees and business partners have the right to fair, courteous and respectful treatment by superiors and colleagues. No one shall be discriminated against, i.e. disadvantaged without objective reason, on the grounds of their ethnic origin, skin colour, nationality, ancestry, gender, faith or world view, political opinion, age, physique, sexual orientation, appearance or other personal characteristics'.  Violations of the Code of Conduct may have consequences under labour law. Decisions about this will be made consistently and with a sense of proportion on a case-by-case basis. All employees can report violations of the Code of Conduct to their line manager, the Works Council or – anonymously – to the external whistleblowing hotline.  Goals & successes  We are proud of the high proportion of women here at Tchibo and are continuously working towards gender balance, as shown by the increase in the proportion of women on pay grades 3 and above.  We consider our efforts to protect our employees a success in that there have been no reported breaches of the Code of Conduct or any associated proceedings in recent years.  G R I 4 0 5 & 4 0 6 Diversity/equal opportunities & non-discrimination Management approach GRI 405 & 406  G R I 4 0 5 - 1 Diversity in supervisory bodies and amongst employees  We are unable to disclose any information on diversity in supervisory bodies and amongst employees for the year 2019. We are therefore working on a concept for 2020 that will allow us to present the required information.  G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 78G R I 4 0 0 : S ocial standards FIGURES AS A PERCENTAGE  2016 2017 2018 2019 GRADE 7-5 54 53.6 53 51.4 WOMEN 56.9 57.5 56.8 56.3 MEN 43.1 42.5 43.2 43.7 GRADE 4 36.7 37.5 37.9 39.9 WOMEN 54.7 55.1 56 55.8 MEN 45.3 44.9 44 44.2 GRADE 3-2 8.3 8 8 7.7 WOMEN 39 38.1 35.6 40.5 MEN 61 61.9 64.4 59.5 HIGHER PAY GRADES  1 1 1.1 1 WOMEN 13.6 13 20.8 23.8 MEN 86.4 87 79.2 76.2 G R I 4 0 5 -2 Ratio of basic salary and remuneration of women to men By paying all employees according to their employee group, we ensure that pay is determined on a uniform and non-discriminatory basis. Employees can view the remuneration policy on the Intranet. In addition, compliance with the guidelines for pay decisions is regularly reviewed by the HR department to ensure that the guidelines are implemented fairly. In accordance with the German Pay Transparency Act (Entgelttransparenzgesetz), we give employees the opportunity to request information on the distribution of pay between women and men in the same role. Employees can submit their request to the HR department anonymously via the Works Council and will receive the information relevant to them as required by law.  Distribution of pay grades  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 79G R I 4 0 0 : S ocial standards G R I 4 0 6 - 1 Discrimination incidents and measures taken to address them No cases of discrimination were reported within the company during the reporting period.  Management approach GRI 407, 408, 409, 411, 412, 413, 414  Challenges  Tchibo produces textiles, consumer goods and coffee and maintains trading relationships with suppliers all over the world. Every year we buy consumer goods from approximately 700 producers in Asia and Europe, of which around 250 are manufacturers of textiles, leather goods, shoes and accessories. We source our coffee from hundreds of thousands of small-scale farmers via traders. These international partnerships enable us to offer our customers exciting non-food products, the best coffee and a wide variety of services. At the same time, they also represent a great deal of responsibility for us.  We publish our textile producers and their suppliers for wet processes on our website and on the Open Apparel Registry every six months.   The failure to observe workers' rights and social rights is unfortunately still more often the rule than the exception in many of our producing countries and at many production sites. We want to improve compliance with human rights standards in these places. Our aim is to achieve a balance between the opportunities and risks presented by globalisation for the benefit of all those involved and to include local people in the processes of change. This requires extensive cooperation with companies, non-governmental organisations, trade unions, human rights organisations and local politicians. Tchibo has been forming regional and international alliances for many years in order to ensure that there is a firm foundation on which to build new insights and developments, both locally and within the supply chains.   Strategy & measures  Human rights due diligence is an integral part of our business practices. Our work is founded on the UN Guiding Principles on Business and Human Rights, and consequently on the requirements of Germany's National Action Plan on Business and Human Rights (NAP). We are committed to upholding human rights, taking systematic action to prevent human rights violations, and addressing any violations by means of targeted measures and constant improvements.   The principles of human rights due diligence   The National Action Plan (NAP), produced by the German Federal Foreign Office, implements the requirements of the UN Guiding Principles on Business and Human Rights (UNGPs) in Germany. There are five basic elements to the human rights due diligence obligations set out in this document, which we have integrated in our management approach:  1. Policy statements and guidelines 2. Assessment of any specific risks and implications for human rights 3. Implementation and review of measures 4. Introduction of effective grievance mechanisms 5. Transparent reporting These principles are also set out in the OECD Guidelines for Multinational Enterprises  and, based on this, are expected to be upheld by members of the Partnership for Sustainable Textiles.  G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 80G R I 4 0 0 : S ocial standards Policy statement and guidelines      Our approach to doing business draws on internationally recognised standards and guidelines. The fundamental principles of these are enshrined in the Tchibo Code of Conduct (CoC), a binding document that serves to guide Tchibo employees in everything they do. Our minimum requirements for working conditions and environmental standards, as defined in the Tchibo Social and Environmental Code of Conduct (SCoC), apply to the producers of our consumer goods as well as to our service providers and external partners. They are essentially based on the relevant conventions of the International Labour Organization (ILO), the Universal Declaration of Human Rights and the Tchibo Detox Commitment. All our core business policies are summarised in our policy statement, in line with the NAP and the UN Guiding Principles.  The policy statement and other guidelines are also available in the download area. Assessment of any specific risks and implications for human rights (risk management for consumer goods)  We continually review our decisions about where we buy from or have our products manufactured, and who we work with. To this end, in 2012 we identified those human rights and workers' rights that are particularly at risk in our consumer goods supply chains. We took into account the respective industry sector, the stage in the supply chain, the national context and local conditions on the ground. We evaluate how likely it is that a human rights violation will actually occur, how severe the impact on those affected may be, and how easily it can be prevented using Tchibo's influence. This analysis reveals both the specific human rights risks in our supply chains and also leads to guidelines specific to each country and topic.   Specific human rights risks in our consumer goods supply chains (2012)   SPHERE OF ACTIVITY  STAGE IN THE SUPPLY CHAIN  Health and safety in the workplace  Manufacture, pre-stages, raw materials  Freedom of association and the right to collective bargaining  Manufacture, pre-stages  Living wages  Manufacture, pre-stages, logistics/transport  Discrimination, harassment and violence in the workplace  Manufacture, pre-stages  Forced labour and modern slavery  Pre-stages, raw materials, logistics/transport  Child labour  Pre-stages, raw materials  working hours  Manufacture, logistics/transport  Every two years, we also assess the general human rights situation in our manufacturing countries based on recognised indices and publications by expert organisations. The results from this analysis inform our purchasing strategy and form the basis for our human rights work in relation to risk management and measures (see paragraph GRI 414). Country-specific social and environmental risks and policies (PDF) TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 81G R I 4 0 0 : S ocial standards Implementation and review of measures (consumer goods)  We address any specific risks in our supply chains by means of tiered measures. We are gradually designing our products and processes to be more environmentally and socially responsible. Our focus is on those areas where our impact on people is greatest and where we can also have the biggest influence. Our strategy:  LBuilding long-term partnerships with suppliers and producers: This allows our partners to plan with certainty, which in turn provides a stable framework within which to improve conditions throughout the supply chain in the long term. We follow strict selection criteria when deciding which factories to work with to ensure that they meet our quality and sustainability requirements. Compliance with our human rights and environmental policies is ensured through a comprehensive audit programme (see paragraph GRI 414).  Empowering employees, qualifying factories: Audits are not capable of revealing the full picture of what goes on in factories. They are just a brief snapshot and provide little incentive to initiate lasting change. Our WE programme provides room for manoeuvre, enabling effective improvements to be implemented. It provides support for the manufacturers we work most closely with, enabling them to meet and exceed the requirements of our SCoC. The aim of the WE Programme is to improve working conditions in our supply chains in a lasting and self-sustaining way. It is a dialogue-based programme that runs in factories located in our major producing countries. WE was developed from the specific human rights risks in our consumer goods supply chains and is based on the standards of the International Labour Organisation (ILO) and international human rights conventions. The programme centres on those areas with the greatest need for improvement in five priority areas: 1) Wages and working hours 2) Freedom of association and workers’ representatives 3) Discrimination and sexual harassment 4) Health and safety in the workplace 5) Modern slavery and child labour  For more information on the WE programme, see the Human Rights Report. Establishing social dialogue: In the long run, workers' rights can only be secured if workers are given the opportunity to represent their own interests. Workers’ representatives and trade unions are the instruments that enable workers to demand – and monitor – enforcement of their rights in the workplace in the long term. That is why we work in partnership with IndustriALL Global Union, an international confederation of trade unions. In 2016, we entered a Global Framework Agreement relating to our consumer goods supply chains (see GRI 407).  The Global Framework Agreement with IndustriALL is available in the download area.  Driving change across the industry: Within the sectors we operate in, we are often confronted with systemic challenges that have become an established part of the global economy, such as low wages or unsafe working conditions. These are the areas where we cannot go any further on our own. Instead, what is needed is a coordinated effort by politicians, companies, employers' associations, trade unions and non-governmental organisations – both in Germany and in the producing countries. Since 2013, we have been collaborating with companies and trade unions under the Bangladesh Accord on Fire and Building Safety with the aim of improving building safety and fire protection in the textile industry in Bangladesh. In order to implement living wages in the textile industry, we have been involved in the ACT on Living Wages initiative since 2016, once again working alongside other businesses and trade unions. We have been a member of the Partnership for Sustainable Textiles multi-stakeholder initiative since 2015. We have also been a member of the Organic Cotton Accelerator (OCA) multi-stakeholder initiative since 2016, which is dedicated to the farming and use of organic cotton at the sector level. Tchibo co-founded all four initiatives.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 82G R I 4 0 0 : S ocial standards Implementing human rights in Tchibo consumer goods supply chains Procurement strategy: concentrated producer portfolio, direct business, supplier partnerships Fair purchasing practices Risk management and auditing before order placement TCHIBO CONSUMER GOODS SUPPLY CHAINS TESTS AND PILOT PROJECTS Chetna Organic participatory audits (India) INDUSTRY-WIDE AND WHOLE-SYSTEM APPROACHES (FURTHER) DEVELOPMENT OF FACTORIES GLOBAL FRAMEWORK AGREEMENT WITH INDUSTRIALL GLOBAL UNION Dialogue programme in Myanmar Progress & goals  For the period 2020 to 2022, our goal is to make our human rights management system even more deeply embedded in everything the company does, drawing on the NAP and the UN Guiding Principles on Business and Human Rights, by extending its scope to other areas of the company. To this end, we will conduct a new assessment of our specific human rights risks and the implications of this in the areas of consumer goods, coffee, human resources/employees and internal procurement. This will also cover freedom of association, child labour and forced labour (GRI 407-409). As part of this process, we will revise our human rights requirements and guidelines for our coffee supply chains. We are also laying the foundations for improving the collection of supply chain data in order to enable even better public transparency for our stakeholders and to empower us to take stronger action on human rights.   In 2019, 100% of our suppliers of consumer goods and services signed our SCoC. Our auditing rate for producers in risk markets is 97%.   In the future, we intend to cooperate with other companies and organisations in the field of social and environmental audits. In 2020, we have resolved to do our bit to reduce the number of repeat audits and thus reduce the burden placed on producers.  We are not able to include all the factories we buy from in the WE programme: In some countries we do not buy enough to set up a permanent local WE team. For many factories, we want to wait and see how the business relationship develops before we start the long-term programme. However, it seems to us that conducting just one social and environmental audit is insufficient to initiate the improvements that are needed. We are currently in the process of designing a tool which will take our positive experiences with the dialogue approach in the WE Programme and translate them into a shorter, self-contained process; the first test runs are planned for 2020 under the name 'Participatory Audit'. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 83G R I 4 0 0 : S ocial standards G R I 4 07- 1 Freedom of association and collective bargaining – sites and suppliers where the right to freedom of association and collective bargaining may be threatened Operating sites Our Code of Conduct applies to all Tchibo employees and operating sites. It explicitly states that human rights and fundamental social standards must be respected, including the right to freedom of association and collective bargaining.  All employees are encouraged to report violations of the Code of Conduct. Tchibo will ensure that this does not have any negative consequences for these and other individuals affected.   There was no increased risk concerning the right to freedom of association and collective bargaining at Tchibo operating sites during the reporting period.  We are not aware of any violations of the right to freedom of association and collective bargaining at Tchibo operating sites during the reporting period. Coffee suppliers The right to freedom of association and collective bargaining is one of the universal human rights, is enshrined in the UN International Covenant on Economic, Social and Cultural Rights, and is covered by the core labour standards of the International Labour Organisation (ILO), which apply worldwide. The same applies to the seals which we use to certify our green coffees: Rainforest Alliance, UTZ, Fairtrade.  In most of the countries where we source our green coffee, there is an increased risk of this right being violated.  We are not aware of any violations of the right to freedom of association and collective bargaining at Tchibo coffee suppliers during the reporting period. However, it is likely that this does not reflect the reality. Suppliers for consumer goods  Our Social and Environmental Code of Conduct (SCoC) is contractually binding for all our consumer goods suppliers, service providers and partners. It explicitly states that the right to freedom of association and collective bargaining must be respected. Violations of this right constitute a zero-tolerance infringement of our SCoC (see paragraph GRI 414). The following certifications and standards, which we use for raw materials of consumer goods, include the right to freedom of association and collective bargaining: Cotton made in Africa (CmiA), Fairtrade, Forest Stewardship Council (FSC), Global Organic Textile Standard (GOTS).  In many of the countries where we source our consumer goods, there is an increased risk of the right to freedom of association and collective bargaining being violated.  That is why, in 2016, Tchibo became the first retail company in Germany to conclude a Global Framework Agreement with IndustriALL Global Union, an international confederation of trade unions. It applies to our consumer goods supply chains and ensures that workers have the ability to unionise and to engage in TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 84G R I 4 0 0 : S ocial standards collective bargaining beyond our SCoC. We equip the facilitators of our WE programme with the necessary skills to identify problems relating to freedom of association and the right to collective bargaining in factories and to resolve them with those affected. This reinforces the idea of ‘freedom of association and workers' representation’ in WE.  Together with the German Society for International Cooperation (GIZ), we launched a social dialogue programme in Myanmar in 2017, which is part of the pan-regional programme 'Promoting Sustainability in the Textile and Garment Industry in Asia' (FABRIC) commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ). The programme is partnered with the largest trade union in the country's textile and garment industry, the Industrial Workers Federation Myanmar (IWFM). All our garment producers in Myanmar are required to participate in the programme.  As part of our membership of ACT on Living Wages, we are promoting the right to collective bargaining and pay negotiations in the textile industry in Bangladesh, Cambodia, Myanmar and Turkey.  We are not aware of any substantiated violations of the right to collective bargaining and pay negotiations at Tchibo operating sites during the reporting period. However, it is not likely that this reflects the reality.  Operating sites  Our Code of Conduct applies to all Tchibo employees and operating sites. It explicitly states that human rights and fundamental social standards must be respected. This also includes the prohibition of child labour. All employees are encouraged to report violations of the Code of Conduct. Tchibo will ensure that this does not have any negative consequences for these and other individuals affected.  There was no increased risk relating to child labour at Tchibo operating sites during the reporting period.  We are not aware of any violations of the ban on child labour at Tchibo operating sites during the reporting period.  Coffee suppliers  The ban on child labour is one of the universal human rights, is enshrined in the UN International Covenant on Economic, Social and Cultural Rights, and is covered by the core labour standards of the International Labour Organisation (ILO), which apply worldwide. The same applies to the following seals, which we use to certify our green coffees: Rainforest Alliance, UTZ, Fairtrade.  In most of the countries where we source our green coffee, there is an increased to high risk of child labour. This applies in particular to the agricultural sector, which also includes coffee production.  Since we are unable to inspect every production site and every coffee farm ourselves, we work with our partners as part of Tchibo Joint Forces! to develop regional projects that take a proactive approach to combating child labour: Since 2011, we have been working alongside our local partner Coffee Care to run daycare centres in Guatemala during the harvest season. The coffee harvest is seasonal and is often carried out by migrant workers. They leave their homes for several months to do this, bringing their families with them. Although children are not usually employed as labourers in the harvest, they follow their parents into the G R I 4 0 8 - 1 Child labour – Operations and suppliers at significant risk for incidents of child labor TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 85G R I 4 0 0 : S ocial standards fields or take on family-related work. It is for the same reason that we have been setting up daycare centres in Honduras during harvest season together with our partner Fairtrade since 2019. Fairtrade is invaluable to the project because of its local structures. In Tanzania, we founded so-called Coffee Clubs in 2017. Here, the children of coffee farmers are given access to parts of their parents' farm and, once they have finished their daily schooling, they are taught about productive and sustainable coffee farming, including irrigation and environmental protection methods, for example. This gives parents a stronger incentive to keep their children in education for longer and not to put them to work in their fields at an early age or for the majority of the time. There are currently 392 young people taking part in the Coffee Clubs. More information can be found on our topic pages on Guatemala and Tanzania and on the Fairtrade website.  We are not aware of any substantiated violations of the ban on child labour at Tchibo coffee suppliers during the reporting period. However, it is likely that this does not reflect the reality.  Suppliers for consumer goods  Our Social and Environmental Code of Conduct (SCoC) is contractually binding for all our consumer goods suppliers, service providers and partners. It explicitly states that Tchibo does not tolerate child labour and specifies restrictions and conditions under which young people may be employed. Any violations of this constitute a zero-tolerance infringement of our SCoC. We verify compliance with these requirements in all quality audits as well as social and environmental audits (see GRI 414). The following certifications and standards, which we use for raw materials of consumer goods, include the ban on child labour: Cotton made in Africa (CmiA), Fairtrade, Forest Stewardship Council (FSC), Global Organic Textile Standard (GOTS). If a business partner or its suppliers are found to be using child labour, an improvement plan must be implemented to ensure the long-term protection of the child and its family through remedial action. Such a process is closely overseen by Tchibo.  In many of the countries where we source our consumer goods, there is an increased risk of child labour. This is especially true for the lower levels of the supply chain, in other words in the production of intermediate products and raw materials.  Our policy for dealing with child labour and potential risks that may encourage child labour is provided here:  Country-specific social and environmental risks and policies (PDF)  We counter the risk directly and indirectly with a range of preventive measures. In addition to strict auditing in all our audit processes, we are also committed to long-term partnerships with suppliers and producers. This allows our partners to plan with certainty, which in turn provides a stable framework which does not incentivise the use of child labour. One of the five focus areas of our WE programme is ‘Modern slavery and child labour’. Thanks to the programme's many years of experience working with factories, our WE facilitators are able to identify child labour, even if it has not been exposed by an audit. Through our Global Framework Agreement with IndustriALL Global Union (see GRI 407), we support trade unions in our supply chains, which in turn mandate and monitor compliance with human and workers' rights in the workplace. We have also established multiple grievance channels, by means of which the individuals affected, other employees and third parties can report any violations of workers' rights to Tchibo (see Management Approach GRI 407-414).  We are not aware of any substantiated violations of the ban on child labour at Tchibo consumer goods suppliers during the reporting period.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 86G R I 4 0 0 : S ocial standards G R I 4 0 9 - 1 Forced or compulsory labour - sites and suppliers with a significant risk of incidents of forced or compulsory labour  Operating sites  Our Code of Conduct applies to all Tchibo employees and operating sites. It explicitly states that human rights and fundamental social standards must be respected, including the ban on forced labour. All employees are encouraged to report violations of the Code of Conduct. Tchibo will ensure that this does not have any negative consequences for these and other individuals affected.  There was no increased risk relating to forced labour at Tchibo operating sites during the reporting period.  We are not aware of any violations of the ban on forced labour at Tchibo operating sites during the reporting period.  Coffee suppliers  The ban on forced labour is one of the universal human rights, is enshrined in the UN International Covenant on Economic, Social and Cultural Rights, and is covered by the core labour standards of the International Labour Organisation (ILO), which apply worldwide. The same applies to the following seals, which we use to certify our green coffees: Rainforest Alliance, UTZ, Fairtrade.   In the areas where we source our green coffee that are dominated by small-scale farming, there is no increased risk of forced labour. On large farms, however, there is an increased risk of forms of modern slavery, such as bonded labour.  We are not aware of any substantiated violations of the ban on forced labour at Tchibo coffee suppliers during the reporting period. However, it is likely that this does not reflect the reality.   Suppliers for consumer goods  Our Social and Environmental Code of Conduct (SCoC) is contractually binding for all our consumer goods suppliers, service providers and partners. It explicitly states that Tchibo does not tolerate any practices that constitute modern slavery, and this includes forced labour. Any violations of this constitute a zero-tolerance infringement of our SCoC. We verify compliance with these requirements in all quality audits as well as social and environmental audits (see GRI 414). The following certifications and standards, which we use for raw materials of consumer goods, include the ban on forced labour: Cotton made in Africa (CmiA), Fairtrade, Forest Stewardship Council (FSC), Global Organic Textile Standard (GOTS).  In some countries, regions and sectors and at certain processing stages of our consumer goods, there is an increased risk of forms of modern slavery. This is especially true for the lower levels of the supply chain, in other words in the production of intermediate products and raw materials.  Our specific risks for forms of modern slavery and corresponding instructions for action to be taken are provided here: Country-specific social and environmental risks and policies (PDF). We counter the risk directly and indirectly with a range of preventive measures. In addition to strict auditing in all our audit processes, we are also committed to long-term partnerships with suppliers and producers. This allows our partners to plan with certainty, which in turn provides a stable framework which does not incentivise TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 87G R I 4 0 0 : S ocial standards the use of modern slavery. One of the five focus areas of our WE programme is ‘Modern slavery and child labour’. Thanks to the programme's many years of experience working with factories, our WE facilitators are able to identify forced labour, even if it has not been exposed by an audit. Through our Global Framework Agreement with IndustriALL Global Union (see GRI 407), we support trade unions in our supply chains, which in turn mandate and monitor compliance with human and workers' rights in the workplace. We have also established multiple grievance channels, by means of which the individuals affected, other employees and third parties can report any violations of workers' rights to Tchibo (see Management Approach GRI 407-414).  Under the Tamil Nadu Partnership Initiative of the Partnership for Sustainable Textiles, we actively engage with non-governmental organisations and other companies to combat the form of modern slavery known as 'Sumangali' that is practised in spinning mills in the southern Indian state of Tamil Nadu. Details of the ‘Tamil Nadu’ Partnership Initiative can be found here.  Since 2019, there have been reports in the media and from international non-governmental organisations about the widespread use of state-organised forced labour through so-called re-education camps for ethnic minorities in the western Chinese province of Xinjiang. For Tchibo, this situation is a flagrant violation of a large number of international human rights conventions and of our own standards. China is the world's biggest cotton producer, and Xinjiang is in turn by far the most important growing region in China. It is therefore likely that cotton and intermediate products from Xinjiang are also used for Tchibo goods – even if they do not come directly from factories that use forced labour. Nevertheless, we cannot rule this out at present. We have analysed our supply chains accordingly and currently do not, nor will we in the future, work with any company that, according to media reports, is alleged to use forced labour in Xinjiang. Those companies with a potential link to forced labour in Xinjiang Province must provide a binding declaration of their commitment. We are in discussions with the Partnership for Sustainable Textiles and cotton certification organisations regarding future measures to prevent and remedy this situation.    We are not aware of any substantiated violations of the ban on modern slavery at Tchibo consumer goods suppliers during the reporting period. However, it is likely that this does not reflect the reality.   TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 88G R I 4 0 0 : S ocial standards G R I 4 1 1 - 1 Rights of indigenous peoples – incidents of violations of the rights of indigenous peoples We are not aware of any substantiated violations of the rights of indigenous peoples at or by Tchibo operating sites, or at or by our suppliers of green coffee and consumer goods, during the reporting period.      For more information on upholding the rights of indigenous peoples, see GRI 414. G R I 4 1 2 -3 Human rights due diligence – significant investment agreements and contracts that contain human rights clauses or refer to human rights considerations  Our Social and Environmental Code of Conduct (SCoC) is contractually binding for all our consumer goods suppliers, service providers and partners. It includes all human and workers' rights relevant to our sectors, as well as related international conventions.  G R I 4 1 3 - 1 Local communities – operating sites with local community involvement, impact assessments and support programmes There were no company-owned operating sites with a specific negative impact on local communities during the reporting period. Accordingly, there were no significant programmes for their involvement or support.  Coffee suppliers  With our Tchibo Joint Forces!® qualification programme, we champion coffee farmers in our supply chains through stewardship projects and industry-specific activities. We support them as they make the gradual transition from conventional coffee farming to environmentally and socially sustainable and economically viable coffee farming, implementing measures that are tailored to their specific challenges. These include training sessions, educational programmes for the whole family, access to infrastructure and the development of long-term supplier relationships. Our work for Tchibo Joint Forces!® involves collaboration with green coffee exporters, green coffee traders, agronomists, international standards organisations, governmental and nongovernmental organisations. Since the programme was launched in 2009, we have reached around 40,000 coffee farmers in Brazil, Honduras, Kenya, Colombia, Papua New Guinea, Tanzania, Guatemala and Vietnam with the Tchibo Joint Forces!® programme and enabled around 20,000 to obtain certification in accordance with the requirements of the internationally recognised standard organisations Fairtrade, Rainforest Alliance and UTZ or validation in accordance with the former basic standard of the 4C Association.  In 2017, we launched three new Tchibo Joint Forces!® projects in Guatemala, Honduras and Tanzania. We source sustainable, high-quality green coffee from these regions, for example for our private coffees. We work with non-governmental organisations, standards organisations and traders on these projects. Our aim with these projects is to help make coffee farming sustainable and profitable for the farmers in the long term, so that they and their families can improve their living conditions and we can guarantee the quality of our green coffee. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 89G R I 4 0 0 : S ocial standards G R I 4 1 4 - 1 & 2 Social assessment of suppliers  Suppliers for consumer goods  Every two years, we assess the human rights situation in our manufacturing countries based on recognised indices and publications by expert organisations. The results from this analysis are used to group countries into five categories, which in turn indicate the degree of scrutiny required of producers: 1) No human rights review of the individual production facility necessary 2) Review of workers' rights and environmental standards as part of other factory visits and quality audits 3) One-day external social and environmental audits 4) Two-day external social and environmental audits 5) No purchasing permitted at all.  Additional data and information can be found in the Key Figures table. Country-specific social and environmental risks and policies (PDF) We conduct social and environmental audits to verify compliance with the standards set out in the contractually binding Tchibo Social and Environmental Code of Conduct (SCoC). New factories are audited before a contract is signed with the supplier. The outcome of the audit determines the purchasing decision: Only those that meet the minimum requirements are included in our portfolio – no matter what the product or how big the order. Any zero-tolerance violations must be rectified before any orders can be placed with the producer. These include, for example, obstruction of emergency exits, failure to provide employment contracts, payment below the legal minimum wage, or discharge of chemicals into the groundwater. In the case of any other violations – such as workers failing to wear the protective clothing provided, missing information in employment contracts, late payments or a lack of safety labelling on chemicals – we give producers more time to rectify them. Orders can be placed once suppliers have submitted their plans for improvement.  We use our WE dialogue programme and our Global Framework Agreement with IndustriALL to assist in the improvement of working conditions at factories we regularly work with. Those producers who are not covered by our WE programme are audited every three years. These factories are given a period of four weeks to rectify zero-tolerance shortcomings. If this deadline is not met, the producer will be suspended. They will not receive any new orders until the shortcomings have been remedied. This sends a clear message that the violations found are unacceptable, whilst at the same time giving our existing business partners time to address them. If we did not, factories would conceal shortcomings. Terminating the business relationship should always be the last resort where producers are unwilling to implement improvements.  Producers need considerable resources for the audits performed by their customers. This leaves very little time for them to look after the needs of their own employees. We therefore also accept audit results from independent standard organisations, which producers can submit themselves. BSCI, WRAP, SMETA 4-pillar audit, SA8000 with ISO. However, these must cover all the issues that we have categorised as zero-tolerance deficiencies with respect to our SCoC. Where appropriate, we still check specific aspects of our zero-tolerance requirements. Where we have trading partnerships with other reputable brands, we do not carry out our own audits if the producers can prove that they have their own programme for compliance with human rights and environmental standards.  We publish our textile producers and their suppliers for wet processes on our website and on the Open Apparel Registry every six months.   TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 90G R I 4 0 0 : S ocial standards G R I 4 1 5 Public Policy  Management approach GRI 415  Challenges  These days, companies take more responsibility for the way in which their goods and products are manufactured and for the impact this has on people and on the environment. Nevertheless, human rights and environmental protection are still under threat in most producing countries even today and are still a long way from becoming something that can be taken for granted. From years of experience on the ground, we know that it is not enough for individual companies to make a voluntary commitment. This approach has reached its limits in view of the complexity of the challenges. As a result, good measures taken by companies, both collectively and individually, fail because a critical mass of partners is not reached or because organisational and financial burdens cannot be shared. Fairness is also a cost issue and still represents a competitive disadvantage for companies. Within this context, tangible benefits are needed to improve the way we do business: corporate responsibility must no longer be an option, but rather the rule.    Measures & strategies  In 2019, Tchibo began campaigning for legislation on human rights in supply chains. Our aim is to spark a debate in the political and business communities about how businesses can be compelled to implement human rights due diligence and, where appropriate, environmental due diligence with their suppliers. In doing so, we are building on the National Action Plan on Business and Human Rights (NAP) in Germany, which was launched in 2016. In the coalition agreement for the 19th legislative period, the parties of the Federal Government stipulated that they would work to ensure consistent, voluntary implementation of the NAP and, in the event of inadequate implementation, to initiate statutory regulation.    We foresee great opportunities for people and for companies, should all market players be held to the same standards of corporate responsibility. As envisaged in the NAP, the United Nations Guiding Principles on Business and Human Rights (UNGP) provide the best basis for this. The challenges described above are G R I 1 03 - 1 /2 / 3 Effective grievance mechanisms (consumer goods) Grievance mechanisms are important to ensure that human rights and environmental protection are firmly embedded in supply chains. They help us to identify violations of labour and environmental standards and to work together with those affected and those responsible to remedy the situation. Tchibo has established a system consisting of multiple grievance channels, which is intended to allow as many people as possible to report grievances. Grievances are logged and investigated by a designated Tchibo employee, whenever possible together with members of the local WE programme. We often enlist the help of external and independent expert organisations for the investigation. This is used as the basis for an action plan, which is drawn up in collaboration with the relevant Tchibo departments, such as Purchasing. We do everything we can to resolve grievances by working together with those affected and those who have caused them. The results are then used to inform our supply chain programmes, training courses and business processes. The following grievance channels exist: direct grievances at Tchibo, WE programme, trade unions (Global Framework Agreement), Bangladesh Accord, whistleblowing for Tchibo employees and business partners.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 91G R I 4 0 0 : S ocial standards complex, and companies are at very different stages of development in their responses to these challenges or have not yet taken any action. In our experience, three basic principles are crucial to distributing the burden created by legislation equitably, while at the same time promoting systemic progress in the producing countries:    Good regulation must be focused on impact. In addition to existing transparency and reporting requirements, companies should be obliged to introduce corporate management systems that bring about long-term and sustainable improvements in production conditions and impacts.  Taking responsibility drives innovation and performance. A regulatory framework should leave enough room for this and acknowledge individual responsibility, such as voluntary commitments. This takes into account companies' different business models as well as their size, performance and industry specifics.  Regulation should both demand and encourage sector-wide cooperation. This enables the burden to be shared and the impact to be amplified. At the same time, it will also stimulate learning between companies and, ideally, engage the groups affected.  Progress     In April 2019, Tchibo organised a panel discussion with the motto ‘On fairness in unfair times. or: the end of sustainability?’ At the event, Tchibo CEO Thomas Linemayr and Nanda Bergstein, Director of Corporate Responsibility, discussed fair wage regulation in the textile industry and debated legal issues with German Development Minister Gerd Müller, Managing Director of the ACT on Living Wages initiative Frank Hoffer, former Foreign Minister Joschka Fischer and other industry experts. In December 2019, Tchibo published a position paper entitled 'It is time for binding and effective rules for everyone’. In it, we call for a debate on a German supply chain law, citing the three principles mentioned above. The position paper is available in the download area.  At the same time, together with 42 other companies, we called for legislation on human rights and environmental due diligence on the online platform of the Business & Human Rights Resource Centre. Objectives  In 2020, we want to intensify our work in this area. We want to help ensure that policymakers and companies have an honest and results-orientated debate about why respect for human rights and environmental protection should be mandatory in supply chains and how this should be done. We will focus on Germany and Europe. We will promote public and internal platforms to achieve this.   TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 92G R I 4 0 0 : S ocial standards G R I 4 1 5 - 1 Party donations  No financial contributions or benefits in kind were made to political parties or similar institutions in the reporting period.  G R I 4 1 6 Customer health and safety  Management approach GRI 416 Challenges  At Tchibo, we produce and sell a wide range of products: from coffee to textiles to household goods. This involves production steps in many countries where the standards regarding the use of chemicals, for example, are not as strictly regulated as in Germany. Despite or precisely because of these difficulties, our top priority is to ensure premium product quality, maximum safety and unrestricted consumer protection. Our customers should be able to rely on our coffees to deliver the best aroma and taste, as well as on the safety and durability of our innovative consumer goods. Measures & strategies To ensure the safety and harmlessness of our products, we always produce according to consistent and strict standards. We consider legal requirements to be minimum requirements, and we go far beyond them in many ways. We test the strict quality specifications of our products both ourselves and with the support of independent, accredited external institutes.  We set clear requirements for the safety, functionality, workmanship and material of our products. Our Tchibo Social and Environmental Code of Conduct (SCoC) also prescribes social and environmental standards for their production - because the Tchibo quality promise applies not only to the product characteristics, but also to the manufacturing conditions.  The Tchibo quality management process comprises four steps: product development, quality development, quality assurance and ensuring customer information compliance. They therefore cover the entire production and supply chain.  For example, our dedicated coffee experts are on site in the growing countries to verify the quality of the green coffee. Following transportation and before roasting in Germany, we subject the beans to another quality check. All our roasting facilities comply with International Food Standards (IFS 6). They guarantee strict hygiene standards and comprehensive documentation of the entire roasting process. We also guarantee the safety of the materials used in our coffee packaging.  For our consumer goods, quality inspectors are involved right from the development stage of new products and guarantee product safety. Regular inspection of the manufacturing process by means of product samples and site visits to the production facilities are indispensable for quality development. Our packaging is made of recyclable materials and of course meets consumer protection requirements, for example with regard to safety features for toys.  All consumer goods are subjected to a final incoming goods inspection according to the ‘Acceptable Quality Level’ (AQL) method. This ensures that all quality requirements have been implemented and that the goods sold to the customer are free of defects. The final inspection is carried out in an inspection centre in the G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 93G R I 4 0 0 : S ocial standards G R I 4 1 6 -2 Incidents of non-compliance concerning the health and safety impacts of products and services None of the incidents mentioned occurred at Tchibo during the reporting period.  G R I 4 1 7 Marketing and labelling  Management approach GRI 417 Our guiding principles for sustainability communication are honesty, equality, credibility or provability and transparency.  Honesty is essential for change: We need the courage to address grievances, to question what we have learned, to welcome innovations and not to turn a blind eye to difficult issues such as child labour and water pollution. If we want to evolve, we need to communicate our successes and our advances in understanding, and we need to develop tools to document the change in our system. We reject greenwashing in any form because any downplaying of the issues will stand in the way of genuine change.  The Tchibo Code of Conduct (CoC) forms the basis for our corporate communication - both internally and externally. It compels us to be honest, fair and respectful. We are committed to the values that are recognised and observed in liberal democracies and respect the personal dignity and privacy of all people, regardless of their ethnic origin, skin colour, nationality, ancestry, gender, age, religion, physique, sexual orientation or world view, political affiliation, appearance or other personal characteristics.   G R I 1 03 - 1 /2 / 3 respective producing country before shipment or on delivery to the main warehouse in Bremen – or in both countries, depending on the product.  Detailed product information and operating instructions are supplied with all our products and are also available in our online shop. Of course, we also observe the relevant standards for the structure and comprehensibility of instruction manuals.  Throughout our supply chains, we implement the EU REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulation, one of the most comprehensive regulations to date on the registration, authorisation and restriction of hazardous chemicals. Implementing REACH requires a general rethink and a major commitment from all the stakeholders in the supply chain. We started pushing for implementation of the regulation early on. We are working to find new and REACH-compliant solutions for ourselves, our suppliers and of course our customers. As a matter of principle, we contractually exclude chemicals restricted under REACH in our consumer products. We therefore have them tested regularly in independent laboratories. These include, for example, the 'substances of very high concern' (SVHC) on the REACH candidate list.  If, despite our high standards, something does not work or a product does not meet our customers' expectations, we help to implement warranty and complaint claims and take an accommodating approach.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 94G R I 4 0 0 : S ocial standards G R I 4 1 7- 1 Requirements for product and service information and labelling We make sure that products are correctly labelled with environmental or social product seals and standards at all times, based on our strict monitoring and certification management process.  We try to keep the amount of information as streamlined and customer-friendly as possible: The information about the positive and negative economic, environmental and social effects that is necessary when deciding whether to buy a product is briefly summarised on the packaging. Further information is available on flyers in our shops, for example. We go into more depth on our website, where we aim to answer any questions our clients may have through direct dialogue.  By providing transparent information about the material used in our products and information about how to use and dispose of them correctly, we enable our customers to make informed purchasing decisions. We also include information about the environmental impact of our sustainable materials in our relevant customer communication channels, ensuring it is as easy to understand as possible.  We also integrate the following international standards and guidelines into our communication work:  • the United Nations (UN) Declaration on Human Rights,  • the UN Convention on the Rights of the Child,  • the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises,  • the fundamental conventions of the International Labour Organisation (ILO) and  • the United Nations Guiding Principles on Business and Human Rights.  We also draw clear frameworks for corporate communications from our own strategic and political stances (see position paper section). For example, we pay careful attention to compliance with our animal welfare criteria in the production of our non-food products. This attitude is also reflected in the choice of text and images in all areas of corporate communication. As another example, we ensure strict observance of data protection and fairness towards people from our supply chains in the production of all communication tools.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 95G R I 4 0 0 : S ocial standards G R I 4 1 7-2 Violations relating to information about products and services and labelling  In the 2019 reporting year, there were isolated violations at Tchibo relating to information about products and services and labelling. The violations related to labelling, claims and illustrations and were remedied promptly.  G R I 4 1 7-3 Violations relating to marketing and communication  In the 2019 reporting year, there were isolated violations at Tchibo relating to marketing and communication. The violations related to labelling, claims and illustrations and were remedied promptly.  G R I 4 1 8 Customer privacy  Management approach GRI 418G R I 1 03 - 1 /2 / 3 Challenges Delivering an outstanding shopping experience for our customers requires the support of IT systems that store and process data and information. The same also applies to human resources management and our diverse internal administrative processes.  We know that cybercrime is on the rise. Our goal is therefore to ensure that data has the best possible protection against misuse. This includes all personal data, as well as our trade secrets and strategies, contracts, invoices, planning and reporting data.  Measures and goals  Handling sensitive data in accordance with legal requirements forms an important part of our corporate responsibility. As a matter of principle, Tchibo treats all personal data confidentially and complies with all applicable legal requirements. Our security standards are aimed in particular at preventing unlawful access to and use of data by unauthorised parties.  Legal compliance, fair conduct and honesty in the way we handle our data are implemented through efficient corporate structures and procedures for compliance, data protection and risk management.  The EU General Data Protection Regulation (GDPR) sets strict rules for companies and grants authorities powers over the handling of personal data. Data protection is therefore a management issue that is integrated into all relevant corporate processes at Tchibo. Data protection responsibilities are clearly defined.  The internal data protection officer is responsible for auditing, raising awareness and providing advice on all matters relating to data protection. Responsibility for implementing legal and internal data protection and information security requirements lies directly with individual departments and foreign subsidiaries. TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 96G R I 4 0 0 : S ocial standards This means that  each and every employee shares responsibility for compliance with data protection laws. Compulsory training courses on this topic are held regularly for all staff members.  If personal data is collected and processed, Tchibo complies with extensive reporting obligations. Data subjects (customers, employees, applicants, etc.) are given the opportunity to make their own decision about the disclosure and use of their data with full knowledge of all the circumstances. The information is made available to data subjects in a transparent, understandable and easily accessible form and in clear and simple language.  In the case of projects affecting data protection and requiring the transfer of data to or the processing of data by service providers, individual departments are obliged to involve the data protection officer and to sign corresponding contracts.  The security of our IT systems is also essential for effective data protection.  It protects information and systems from a wide range of threats, from simple operating errors to hardware defects and cyber-attacks. The information security management system (ISMS) required for this is based on the nationally and internationally recognised standards ISO 27001, BSI Grundschutz and the NIST-SP-800 series, and is constantly being further developed in the area of IT governance.  In the event of any acute data or information security threats or breaches, these are reported directly to the responsible IT governance and data protection department. If necessary, this is followed by the involvement of supervisory authorities, crisis management teams and/or the executive board.  A variety of coordinated technical and organisational measures are used to ensure information security at Tchibo. Technical measures include multi-level detection of malware or encryption of data and transmission paths, for example. We also bring in specialist service providers, for example to defend against cyber-attacks or to monitor and respond to new threats. Organisational measures include guidelines, standards, works agreements and work instructions.  The interplay of various measures in particular is crucial to achieving an appropriate level of security. For example, technical security measures go hand in hand with the creation and communication of guidelines or regular checks.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 97G R I 4 0 0 : S ocial standards G R I 4 1 8 - 1 Substantiated complaints regarding data protection violations and the loss of customer data We did not identify any significant data protection violations during the reporting period in 2017. There were only minor violations due to insufficient processing of requests for information and the incorrect sending of advertisements. These were corrected with measures to raise awareness.  However, we are not aware of any data leaks or thefts or any other data losses.  G R I 4 1 9 Socio-economic compliance  Management approach GRI 419  Challenges  At Tchibo, legally compliant conduct is ensured at all levels within the company. This is rooted in the Tchibo Code of Conduct (CoC), which we updated in 2017. It is binding for all employees of Tchibo GmbH and its national subsidiaries and governs interactions with business partners and customers. The CoC draws on the core labour standards of the International Labour Organisation (ILO), among other things, as well as on international guidelines such as those of the OECD and the United Nations Guiding Principles on Business and Human Rights, and prohibits any form of corruption, for example, as well as the granting or acceptance of advantages. Any employee who violates one of these principles may be subject to sanctions under labour law.  We provide our management staff with regular training on how to apply the Code of Conduct. Managers also regularly confirm in writing that they have understood and complied with the rules of the CoC and have reported any violations that have come to their attention. In addition, by providing their signature they confirm that they have explained the CoC to their employees and that they monitor compliance with the CoC. All new employees are given a copy of the CoC.  Compliance with internal and external requirements is assessed by maxingvest ag's Group Internal Audit Department via internal audits. We provide employees, suppliers and customers with the opportunity to report any suspected misconduct by telephone via an anonymous contact facility operated by an independent body (whistleblowing).  Any information received is referred to the Compliance Committee as an internal investigative body. The Compliance Committee consists of various divisional heads of maxingvest ag and Tchibo GmbH as well as the chairman of the Works Council. Grievances can also be reported via the Works Council, the Human Resources Department, the Legal Department, the Corporate Responsibility Directorate and the Group Internal Audit Department.  Measures  We are now restructuring the company's numerous compliance activities carried out to date within a compliance management system (CMS) that is based on the PS 980 standard of the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, IDW). The compliance officer is responsible for the organisation of the CMS. They develop Group-wide standards and guidelines, oversee measures and processes within the various divisions of the company, and provide them with advice.  G R I 1 03 - 1 /2 / 3 TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 98G R I 4 0 0 : S ocial standards Our CMS is divided into seven interdependent core elements: compliance culture, compliance goals, compliance risks, compliance programme, compliance organisation, compliance communication, compliance monitoring and compliance improvement. Our CMS creates a solid framework for ensuring that ethically responsible and lawful practices are implemented throughout the Tchibo Group. The compliance programme – as part of the CMS – encompasses principles and measures designed to reduce compliance risks. It is therefore made up of the following components: preventative measures (regulations and awareness-raising), monitoring of compliant behaviour, response to misconduct and continuous improvement of the system, for example following on from self-assessments. Integration into the company's processes is a key aspect of this.  Our business is vulnerable to a variety of risks, such as currency fluctuations and environmental events that can affect commodity prices. As part of our holistic risk management system, we identify these dangers and mitigate them by implementing effective preventive measures. We draw a fundamental distinction here between business risks and supply chain risks. We assess all significant risks as part of our risk inventories. This also includes compliance risks that can emerge as a result of failure to comply with legal requirements.  We sort risks into risk clusters, broken down into three categories: short-term operational risks, functional risks and strategic risks. Further distinctions are made within these categories. Acute risks are reported to the Executive Board immediately as they arise in order to bring potential dangers under control swiftly. Up-todate information on risk developments is fed into Tchibo's management and planning systems several times a year. The internal audit department continuously reviews the effectiveness of risk management. It keeps the Executive Board and the Supervisory Board informed about the current risk situation by submitting regular reports. These reports are taken into consideration in the risk-orientated audit planning carried out by the Group Internal Audit Department. Information about any threats is passed on to these bodies immediately.  To guard against risks in procurement, we are integrating social and environmental requirements into our purchasing and quality processes. This enables us to gradually reduce the number of our suppliers of consumer goods, develop the remaining suppliers to become strategic partners and support them with the WE (Worldwide Enhancement of Social Quality) qualification programme. We continuously analyse the concerns raised by our stakeholders in the framework of our issues management process. In 2014, we decided to integrate the Greenpeace standards underpinning the Detox Commitment into our purchasing and quality processes. Moreover, we consistently monitor our suppliers as part of our risk management.  The compliance risks identified and assessed as part of the risk analysis are prioritised according to the top risks and form the framework for the Tchibo compliance management system. This provides the basis for our activities, such as training, processes and internal procedures. In addition, the compliance risks identified form the basis for the ongoing development of our compliance programme.  G R I 4 1 9 - 1 Non-compliance with laws and regulations in the social and economic sphere No significant fines were imposed during the reporting period.  TC H I B O S U S TA I N A B I L I T Y R E P O R T 2 0 1 9 99G R I 4 0 0 : S ocial standardsW W W.TC H I B O - N A C H H A LT I G K E I T. D E / E N