Partner Portrait – Sustainable Supply Chain Management with Migros

Migros is one of the most sustainable retailers in the world and has set itself ambitious goals. Since the start of 2018, Migros has introduced internal CO₂ pricing and is now compensating for all greenhouse gas emissions that are created by the air transportation of its goods in specially developed climate protection projects. These are realised by myclimate in the Migros supply chain internationally and throughout Switzerland. Thomas Paroubek, Head of Sustainability & Quality Management at Migros, talks to myclimate about Migros’s general commitment to climate protection and specific projects.

Thomas Paroubek, Head of Sustainability & Quality Management at Migros, is proud that Migros can do away with some air transportation from abroad thanks to beef sourced from Romania.

Mr Paroubek, as part of its sustainability strategy, Migros is committed to the <link - external-link "Opens external link in current window">UN Global Compact</link>, a United Nations (UN) initiative that was founded by the recently deceased Kofi Annan. Its goal is for companies to do business sustainably. Where is Migros in relation to its own sustainability objectives?

We are on track! Despite the difficult market environment, sustainability is part of Migros’s DNA, as can be sensed in the company’s daily work. However, for us sustainability is not a goal but a process of constant further development. We pursue milestones holistically in all dimensions of sustainability and assess them regularly. We focus on the areas in which we at <link - external-link "Opens external link in current window">Migros</link> can have the greatest impact, and this is largely in our product value-creation chains. And this is where the my M climate fund comes into play…

Since the start of the year, Migros has been compensating for all greenhouse gas emissions that are created by the air transportation of its goods in specially developed climate protection projects. Why does Migros want to compensate for its emissions in its own supply chain?

Because it is our responsibility to offset the emissions that we generate. Within their supply chains, large companies have highly effective leverage for cutting back on CO₂ emissions. Projects can be developed within the supply chain to offset the emissions created. Often these also bring many positive aspects for the local population and nature. Long-term supplier relationships are created and develop continuously – a win-win situation.

The my-M-climate fund supports projects through a financial contribution that are meaningful from a climate protection viewpoint but that would not be realised without funding. The potential within the Migros supply chain in this regard is considerable.

Why did Migros choose a partnership with myclimate?

It was clear to us from the start that we wanted to work with an external partner. In myclimate, we were able to gain a credible and experienced project partner that has supported us for a long time. myclimate not only takes on the realisation of projects for us; as an independent body, it also checks that all CO₂ emissions that were emitted during a flight are actually saved elsewhere. This combination of implementation partner and inspection body has proven to be very efficient.

At the moment, initial climate protection projects are being drawn up. What is crucial for Migros when it comes to choosing a specific project?

The impact is always most important for us. We want to carry out projects that not only look good on paper but also effect a measurable change. One project is looking to shift production from Australia or South America to Europe. This would not only eliminate air transportation, it also means we could strive for holistic, location-adapted meat production. This is a long-term strategic objective that is reliant on the climate contribution for the establishment of such production.

Another example is sustainable rice production in Thailand: the climate-smart farming system (System of Rice Intensification (SRI)) not only saves on CO₂ thanks to the change in water management but also on water, seeds, fertilizer and pesticide. The higher harvests also lead to an increase in income for the farmers.

In short: the choice of a project not only depends on the amount of CO₂ saved but also on the project’s contribution to sustainable development. Of course, this doesn’t just apply to agricultural production; projects can be realised throughout the entire value-creation chain, e.g. in the transport area or in branches.

How do you assess the potential for the establishment of climate protection projects in your own value-creation chain?

There are numerous approaches to projects within Migros’s value-creation chains. They allow new production facilities to be set up in nearby foreign countries, which makes it unnecessary to import products from countries overseas and thus avoids the emissions caused by their transportation by air. Sustainable organisation and improved use of space in coffee and tea cultivation offers a good deal of potential for effective climate protection with significant socio-economic benefits.

In Switzerland too there are opportunities within the Migros supply chain for greater climate protection. Ten additional project ideas are currently being evaluated. Migros has also implemented internal CO₂ pricing by specifying that a monetary amount is due for every tonne of CO₂ arising through air transport.

To what extent has this price impacted business decisions?

The pricing has actually triggered several events internally. Quite a few projects for reducing air transport are being discussed, particularly in areas where flying is common. This is also in line with the strategic objective to continuously reduce air transport – as well as to compensate for it. But we have managed to exert our influence externally too: thanks to transparent declarations on products, consumers can consciously choose or reject products that have been transported by air.

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