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Environment

 

We mitigate climate change together and promote the sustainable use of natural resources
  • We reduce environmental impacts by working together with supply chains.
  • We promote development towards a low-carbon circular economy.
  • We help our customers reduce their environmental impact.
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Topic Objective
Progress of objectives 2017
Progress of objectives 2016
Progress of objectives 2015

Science Based Targets

We are committed to reducing our Scope 1 and 2 emissions by 18% by 2025, using a 2015 base year.

GRI 305-5

Scope 1 and 2 emission have increased by 14% from the 2015 base level due to the acquisition of Suomen Lähikauppa and Onninen in 2016.

The objective was set in 2017.

The objective was set in 2017.

We are committed to reducing our Scope 3 emissions from the supply chain so that 90% of Kesko’s key suppliers will set greenhouse gas emissions reduction targets by 2025.

GRI 305-5

Of Kesko’s biggest suppliers in 2016, 33% had set their own emission targets.

The objective was set in 2017.

The objective was set in 2017.

Renewable energy

We will purchase 100% renewable electricity in Finland.

All electricity purchased by Kesko in Finland has been produced with renewable energy since the beginning of 2017. We purchase renewable electricity that has the Renewable Energy Guarantee of Origin (REGO) from the Nordic countries. In 2017, the electricity purchased was produced with Finnish bioenergy.

We decided to purchase 100% renewable electricity as from the beginning of 2017.

The objective was set in 2016

We will increase the production of solar power for our own use.

Kesko had 19 solar power plants located on the rooftops of its store properties. A total of 3.0 GWh of electricity was produced with solar power for the use of K-food stores. The combined power of the plants is approximately 5.5 MWp. We are the biggest producer and user of solar power in Finland.

In June 2016, Finland’s largest property-specific solar power plant was completed on the roof of K-Citymarket Tammisto. By the end of 2016, solar power plants were built in two other K-Citymarket stores and nine K-Supermarket stores. 

The objective was set in 2016.

Energy efficiency of stores

During the agreement period 2008–2016: We will improve our annual energy efficiency by 65 GWh by 2016.

GRI 302-4

Objective achieved. As a result of our determined actions, K Group has exceeded the objective and improved its energy efficiency by 67 GWh.

The final results of the agreement will be published by Motiva in summer 2017.

Kesko improved its energy consumption by 64 GWh and achieved 97% of its objective.

During the agreement period 2017–2025: We will reduce our energy consumption by 7.5% by 2025.

GRI 302-4

At the time of publication of the Annual Report, installed solar energy and the known reported actions will allow annual energy savings of 12.4 GWh, which is 29.6% of the interim target for 2020 and 15.8% of the target for 2025.

Kesko signed a retail sector energy efficiency agreement for 2017–2025. In the action plan, we commit to reducing our energy consumption by 7.5%.

The objective was set in 2016

Logistics emissions

We will reduce the emissions of Kesko Logistics’ transports relative to the net sales index by 10% by 2020 from the 2011 level.

GRI 305-5

The relative emissions had decreased by 16.2% from the base level. In 2017, emissions decreased by 11.2% compared to 2016. The decrease was impacted by new emission factors, which include diesel’s bio component share. Emissions decreased even though transport kilometres increased. As in 2016, this can be attributed to the increased number of stores resulting from the acquisition of Suomen Lähikauppa and the conversion of the stores to K-Markets.

The relative emissions had decreased by 1.9% from the base level. In 2016, emissions increased by 3.8% compared to 2015. The increase in emissions can be attributed to the increased number of stores caused by the acquisition of Suomen Lähikauppa. At first, only Kesko’s own brand Pirkka products were delivered to the new stores and as the conversion of the stores to K-Markets advanced,  refill loads were delivered to the stores as separate deliveries.

Relative emissions have decreased by 5.5% from the starting level due to new solutions in transportation management and fleet organisation. A pilot study on using an extra long Ecotruck on the main logistics route between Vantaa and Oulu. The Ecotruck carries twice as many roll containers as an ordinary trailer combination.

Food waste

Kesko’s grocery trade aims to minimise the food waste resulting from its operations and utilise inevitably accumulated organic waste. By 2020 we will reduce identified food waste relative to sales by 10% from the 2013 level.

Food waste

K-food stores have reduced food waste by 7.1% from the 2013 base level.

Some 90% of K-food stores donate edible food products they no longer can sell to local charities, which then distribute the products as food aid to those in need. The amount of food products donated increased by nearly 930,000 kg from the previous year.

K Group and Gasum cooperate in producing biogas from inedible food waste from K-food stores. Food waste unfit for human consumption is now collected from 200 K-food stores and Kesko Logistics’ central warehouse and made into biogas, which is then used as energy in the manufacture of new Pirkka products. Approximately 4,000 tonnes of organic waste was transformed into 3,000 MWh of biogas. CO2 emissions were reduced by 594 tonnes compared to natural gas and by 800 tonnes compared to fuel oil.

By the end of 2016, K-food stores had reduced identified food waste by 3.5% from the base level.

Approximately 90% of K-food stores work together with local charities. The amount of food products donated increased by 1.8 million kg from the previous year.

We continued cooperation with Gasum, Myllyn Paras and Wursti to utilise biogas produced from inedible organic waste collected from retail stores as energy in the manufacture of new Pirkka products. In 2016, approximately 3,700 tonnes of organic waste was transformed into 2,800 MWh of biogas. CO2 emissions were reduced by 550 tonnes compared to natural gas and by 740 tonnes compared to fuel oil.

We started a cooperation with Gasum, Myllyn Paras and Wursti to utilise biogas produced from inedible organic waste collected from retail stores as energy in the manufacture of new Pirkka products. Many K-food stores donate food to charity.

Waste recovery

Our objective is to minimise and recover all waste from our operations.

GRI 306-2

According to statistics, the recovery rate for waste management in Finland was nearly 100% and in the other operating countries it was 53%. The waste recovery rate for stores included in the circular economy agreement in Finland was 100%.

In the renewal of the K-Rauta chain, discarded work clothes, flags and other textiles were collected from 140 stores and recycled. Discarded work clothes from rebranded stores were processed into material that can be utilised, for example, by the car industry.

 

In Finland, the recovery rate was 99% and in other operating countries, it was 48%. The waste recovery rate of retail stores in southern Finland covered by the waste management agreement was 100%.

The waste recovery rate in the grocery trade was 99%, in the home improvement and speciality goods trade 99.4%, and in the car trade 99.9%. In other operating countries, the waste recovery rate was 46%. The waste recovery rate of retail stores in southern Finland covered by the waste management agreement was around 98%.

Biodiversity

K Fishpaths collaboration with WWF Finland: We will remove at least 50 barriers preventing endangered migratory fish from swimming upstream and create at least 100 spawning grounds in Finland between 2017 and 2021. We will increase awareness of the endangered nature of migratory fish and arrange volunteer events.

GRI 304-3

The K Fishpaths collaboration between Kesko and WWF Finland was launched with an extensive media and social media campaign in August 2017. We promoted the collaboration with the slogan “Mating belongs to all”. On social media, the launch campaign reached 900,000 people, and volunteer events received good coverage in local media.

In autumn 2017, we cleared nine barriers in rivers and streams around Finland and created 40 new spawning grounds for endangered migratory fish. We carried out restoration work together with local operators and volunteers at six locations. We opened up a total of 20,000 metres of new spawning grounds and habitat.

The K Fishpaths collaboration will continue and expand in 2018.

The objective was set in 2017.

The objective was set in 2017.

             

Energy

302-1 Energy consumption within the organization

Kesko participates in mitigating climate change by increasing renewable energy purchases and own production and increasing energy efficiency.

Renewable electricity

Kesko has purchased electricity produced with 100% renewable energy from the beginning of 2017 in Finland. Kesko purchased 504 GWh of electricity for use in K-stores and other Kesko properties in 2017 with Renewable Energy Guarantees of Origin (REGOs) from the Nordic countries. In 2017, the purchased electricity was produced with Finnish bioenergy, which utilises by-products from the forest industry and wood based fuels, for example.

Solar power plants at K-stores

Since 2016, Kesko has made significant investments in the construction of solar power plants. By the end of 2017, Kesko had 19 solar power plants on the rooftops of store properties it manages. A total of 3.0 GWh of electricity was produced with solar power for use in its own stores in 2017. The combined power output of the solar power plants is approximately 5.5 MWp. If three K-retailers' own solar power plants are included, K Group is the biggest producer and consumer of solar power in Finland. Investments in solar power utilisation will continue.

 

Energy consumption of properties
Finland 2017 2016 2015
Electricity1 (MWh) 504,459 458,690 694,544
District heat (MWh) 323,461 308,924 254,214
Fuel for self-produced heat (MWh) 10,978 5,169 3,406
Total energy consumption (MWh) 838,898 772,783 952,164
Total energy consumption (TJ) 3,020 2,782 3,428
Other operating countries 2017 2016 2015
Electricity (MWh) 80,186 100,9282 103,038
District heat (MWh) 17,719 19,3502 17,840
Fuel for self-produced electricity (MWh) 4,055 0 -
Fuel for self-produced heat (MWh) 32,247 30,8312 26,890
Total energy consumption (MWh) 134,207 151,109 147,768
Total energy consumption (TJ) 483 544 532
All operating countries 2017 2016 2015
Total energy consumption (MWh) 973,105 923,892 1,099,932
Total energy consumption (TJ) 3,503 3,326 3,960
1 The reporting boundary has changed in 2016, includes only electricity purchased by Kesko
2 Figure has been adjusted for improved accuracy since the previous report

Energy consumption in properties in Finland

At the end of 2017, properties managed by Kesko in Finland (owned and leased) included offices, warehouses and approximately 1,246 store sites. The total area of the property portfolio decreased by 4% due to the divestment of Indoor Group.

The majority of properties used district heat, but in addition 3.3% of the heat energy was self-produced. In 2017, the heat energy produced with natural gas and oil at properties in Finland totaled 39.52 TJ (11 GWh).

The electricity consumption of Kesko in Finland includes only electricity purchased by Kesko. Heat consumption is reported for all properties managed by Kesko. Calculation methods and electricity and heating consumption statistics by property type and changes in properties in Finland are available in the Energy consumption tracking and Environmental profile reports.

Energy consumption in properties in other operating countries

The heat energy was partly self-produced with natural gas and oil. In Belarus, a small amount of timber (1,467 MWh) and peat (102 MWh) were also used for heating. In addition, a total of 4,055 MWh of electricity was produced with oil in Russia. In 2017, the fuels used for self-produced heat and electricity totaled 130.7 TJ (36.3 GWh).

Subsidiaries outside of Finland report their fuel and purchased energy consumptions to Kesko and statistics per country are compiled from this data. The heat energy data is not reported for some properties (6%, and store sites of Onninen Sweden and Norway) because it is included in the lease or data is not available.

Primary energy consumption

The primary energy consumption for purchased energy in all operating countries in 2017:

  • Renewable: 2,315 TJ (63%)
  • Nuclear power: 79 TJ (2%)
  • Non-renewable: 1,262 TJ (35%)

Fuel consumption of logistics in Finland

The energy consumed by Kesko Logistics' own transportation or that under its direct control was 645 TJ in 2017 (503.9 TJ in 2016). The fuel used was diesel. In 2017, the total distance driven by Kesko Logistics was 34.9 million km (32.3 million km in 2016).

Energy consumption was calculated using data on kilometres driven, volumetric efficiencies and the transportation fleet. The calculation was made according to the Lipasto calculation system of the VTT Technical Research Centre of Finland.

Fuel consumption of logistics in other operating countries

Most of Kesko’s subsidiaries have outsourced logistics operations. In 2017, the logistics in Estonia and Belarus consumed 25.3 TJ of fuel (diesel and gasoline).

Total energy consumption

In 2017, Kesko’s energy consumption in all operating countries totaled 4,173 TJ.

A total of 835.2 TJ of fuels from non-renewable sources were used for transportation as well as self-produced heat and electricity of properties. In addition, 5.3 TJ of renewable fuels were consumed.

302-3 Energy intensity

Specific consumptions of energy, properties managed by Kesko
kWh/br-m2 2017 2016 2015
Finland
Specific consumption of electricity 214 204 207
Specific consumption of district heat 86 79 76
Other operating countries
Specific consumption of electricity 73 88 99
Specific consumption of heat 43 441 43
1 Figure has been adjusted for improved accuracy since the previous report

The cold chain and the need for heated premises in food stores and warehouses require greater amounts of energy in comparison with other retail sectors.

The calculation methods for the properties in Finland are available in the Energy consumption tracking report. The specific consumptions of properties in the other operating countries are calculated based on the total area of properties (1,160,000 m2 in 2017).

302-4 Reduction of energy consumption

K Group participates in the 2017–2025 action plan of the commerce sector Energy Efficiency Agreement. In accordance with the agreement, K Group commits to reducing its energy consumption by 7.5% through various energy saving measures. All K Group store chains are included in the agreement. At the time of publication of the Annual Report, installed solar energy and the known reported actions will allow annual energy savings of 12.4 GWh, which is 29.6% of the interim target for 2020 and 15.8% of the target for 2025.

During the previous trading sector energy efficiency agreement for the period 2008–2016, K Group was committed to improving its annual energy consumption by 65 GWh by the end of 2016. Due to determined actions K Group was able to surpass the target and improve its energy efficiency by 67 GWh.

Energy solutions in K-stores
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1. Lighting

LED lights are used in all lighting solutions of property development projects. Adjustable, correctly directed LED-lighting can help save up to 60% of electricity consumed compared to traditional fluorescent tube and metal halide lighting solutions.

2. Lids and doors on refrigeration units

In food stores, the consumption of refrigeration systems can account for more than half of the total electricity consumption at small store sites. Lids on freezer chests save 40% of the electricity consumed by uncovered equipment. Doors on dairy and juice cabinets also help save electricity.

3. Real estate managers

Kesko has around 45 Real Estate Managers to help K-stores find ways in which to make their energy consumption more efficient. Regular monitoring, technical supervision and comparison of reports from different properties are used to maintain an optimal level of energy consumption. Real Estate Managers also help stores with long-term planning. Renovation programmes contain estimates of the refurbishment that should be made within five to six years.

4. Remote monitoring

In February 2017, the building automation of 214 Kesko facilities was monitored by a remote energy management centre. The set points of properties and equipment running hours can be changed from the management centre as necessary, which also enables rapid response to disturbances. Setting the correct running times and set points is the easiest and most effective way to improve energy efficiency. Remote monitoring enables refrigeration equipment to be adjusted for optimum temperatures and defrosting cycles. In addition, deviations can be responded to immediately.

5. Condensation heat recovery

Condensation heat from refrigeration equipment is recovered at nearly all K-food stores, which means additional heat energy is needed only during very low sub-zero temperatures.

Increasingly many K-food stores also save energy by using carbon dioxide recovered from industrial processes as the refrigerant in their refrigeration equipment. Carbon dioxide is an environmentally friendly refrigerant.

6. Solar power

Solar power plants are becoming more widely used on the rooftops of K-stores. The electricity consumption of food stores is greatest during the summer, when the stores and their refrigeration equipment require a lot of electricity for cooling. On a sunny summer day, solar power can cover as much as 60% of the food store's current consumption.

The solar panels installed on K-food store roofs cover around 10-15% of the store’s annual electricity consumption. The life cycle of a solar power plant is as long as 35 years. Modern technology enables solar power production even in overcast weather and during wintertime.

Water

Finland has abundant water resources. However, due to the large consumption of imported processed goods and the virtual water footprint associated with them, almost half (47%) of the water footprint of Finnish consumption falls outside of Finland. Kesko’s most significant impacts from water consumption are thus caused by imported products for sale which originate from areas suffering from water scarcity or contamination.

Kesko has initiated a water risk assessment for its own brand products in order to identify the water basins most affected by water scarcity or contamination issues in its supply chain. The water risk assessment is in progress and results will be used to plan actions.

303-1 Water withdrawal by source

Properties managed by Kesko use water from municipal water supplies in all operating countries. In addition, a few wells are in use on properties in Estonia, Lithuania and Belarus. However, water from these wells accounts for only a minor portion (3%) of total water consumption and is thus reported with the municipal water consumption. Waste water from Kesko's operations goes to municipal sewer systems.

Water consumption by country
m3 2017 2016 2015
Finland 977,989 933,812 884,081
Sweden 6,777 7,1071 6,354
Norway 144 1,424 1,445
Estonia 7,421 5,922 4,954
Latvia 9,210 9,480 10,128
Lithuania 39,780 40,268 38,472
Poland 4,754 3,100 -
Russia 30,015 84,431 79,755
Belarus 51,047 48,797 43,342
Total 1,127,137 1,134,341 1,068,531
1 Figure has been adjusted for improved accuracy since the previous report

In K Group's own operations, water is mainly used for cleaning purposes. Maintaining a high level of hygiene is particularly important in food stores and legal requirements for hygiene must be fulfilled. Car wash facilities at Neste K service stations in Finland are big individual consumers of water.

The consumption of water at Finnish properties increased in 2017 especially in shopping centres, VV-Autotalot and K-Supermarkets. Water consumption statistics by property type and changes in the property portfolio in Finland are available in the Energy consumption tracking report.

The divestment of the grocery trade business in Russia at the end of 2016 resulted in a significant decrease in water consumption in Russia in 2017. The water consumption data from other countries is compiled from figures reported by the companies, which are based on water billing or consumption data. At some stores located in leased properties, water consumption is included in the lease and data is not available for reporting (4% of locations in other operating countries). Consumption data is also not available for Onninen’s store properties in Sweden and Norway.

Biodiversity

Kesko has identified biodiversity impacts and opportunities in its operations. The objective is to reduce adverse biodiversity impacts in the supply chain and to take part in projects that promote biodiversity in cooperation with other operators. Kesko participates in the Business & Biodiversity Finland programme, organised jointly by the Corporate Responsibility Network FIBS and the Ministry of the Environment Finland.

304-2 Significant impacts of activities, products, and services on biodiversity

Supply chain

Kesko’s greatest impacts on biodiversity occur throughout the lifecycle of the products on sale. Raw materials critical to biodiversity in Kesko’s supply chain include fish and shellfish, timber, palm oil, and soy. Their sustainable sourcing is guided by sourcing policies. Read more about the objectives of the sourcing policies in our responsibility programme.

In April 2017, Kesko added the Pirkka fish patty to the selections of K-food stores. The Pirkka fish patty is made from bream caught in John Nurminen Foundation’s Local Fishing Project, which aims to promote sustainable fishing. Baltic bream has not been used as extensively in consumer products before. The use of bream effectively reduces the environmental burden on the Baltic Sea.

Plastics

K Group’s objective is to reduce plastics ending up in water bodies and elsewhere in the environment. K Group is creating operating models to promote the recycling and reuse of plastic.

In its plastics policy K Group commits to measures to reduce the consumption of plastic bags. In 2017, Kesko removed microbeads from its own brand cosmetic products. K-stores offer consumers the possibility to recycle packaging plastics in 173 Rinki eco take-back points. Read more about the progress made regarding the targets of our plastics policy in our responsibility programme.

Food waste and climate change

Minimising food waste throughout the whole food chain from agriculture all the way to the end consumer reduces the need for primary production and thereby impacts on biodiversity. When food ends up in waste, all environmental impacts and emissions from its production, transportation, sales, storage and preparation have been useless.

Climate change also impacts biodiversity, especially as areas of drought expand.  Read more about Kesko’s diverse efforts to reduce food waste and greenhouse gas emissions in the responsibility programme.

304-3 Habitats protected or restored

K Fishpaths

In August 2017, K Group and the environmental organisation WWF Finland began an extensive multi-year collaboration to save and restore Finland’s endangered migratory fish populations. Of Finnish migratory fish, the maraena whitefish, salmon, trout and eel are endangered. Their situation is dire because obstacles in rivers and streams are preventing the fish from swimming to suitable spawning grounds. The swimming of fish upstream can be stopped by a single culvert or an old mill dam.

The objective of the K Fishpaths collaboration is to remove such obstacles in a spirit of cooperation with local operators, landowners, K-retailers and volunteers. The removal of a single obstacle may help open up several kilometres of flowing watercourses suitable for spawning.  In addition to obstacle removal, the collaboration also involves restoring spawning grounds and habitats for migratory fish. It is estimated there are tens of thousands of such barriers in Finland.

K Group and WWF Finland’s objective is to remove at least 50 barriers and to create at least one hundred spawning grounds for endangered migratory fish in Finland between 2017 and 2021. K Fishpaths also aims to increase awareness of the endangered status of migratory fish, and to organise events for volunteer work.

In 2017, nine barriers in rivers and streams around Finland were removed and 40 new spawning grounds for fish created. Restoration took place together with local operators at the Ingarskilanjoki river in Inkoo, Syvänoja in Suomusjärvi, Koirajoki in Tuusniemi, Unterniskanjoki in Imatra, Vaalimaanjoki in Luumäki and Juottimenoja in Perniö. As a result, a total of 20,000 metres of new spawning grounds and habitat were opened up.

Read the NGO perspective by WWF Finland.

Store sites

Kesko builds store sites only in areas planned by municipalities for business properties. Surveys of contaminated land are made annually in connection with construction work and real estate transactions. In 2017, two Kesko sites were restored.

A soil remediation project was carried out at one of Kesko’s sites in Vantaa, where a total of approximately 4,049 tonnes of contaminated soil was removed from a 16,700 m2 lot. The remediation work was completed when the target concentrations set by the Uusimaa ELY centre were achieved; in other words, when soil exceeding the higher reference values had been removed from the site. Concentrations of contaminants which exceeded the lower reference values but remained below the remediation targets still exist in some areas of the walls and bottoms of excavations. A carwash is being planned for the site, so the contaminant levels that exceed the lower reference values will not require any further action based on the current use of the lot. 

Another Kesko site underwent soil remediation measures in Turku. A total of 2,299 tonnes of soil that contained elevated levels of hydrocarbons were removed from a 6,072 m2 lot. Based on the residual concentration samples taken from the excavation sites, the north edge of the property still had soil in which the higher reference values for hydrocarbons were exceeded. A bentonite mat was installed as an insulating structure at the pipeline on the wall. The other residual concentration samples did not contain hydrocarbons exceeding the reference values. The soil remediation work was carried out in accordance with the principles agreed on with the City of Turku Environmental Protection Department, and no further environmental engineering measures are necessary in the area.

Kesko does not have protected habitats of its own.

Emissions

Kesko reports direct and indirect (Scope 1 and 2) greenhouse gas (GHG) emissions from its operations according to the GHG Protocol standard.

  • Scope 1: GHG emissions caused by fuel consumption for producing heat and electricity at properties managed by Kesko and for transportation of goods directly controlled by Kesko
  • Scope 2: GHG emissions caused by generation of electricity purchased by Kesko and district heating consumed in properties managed by Kesko

305-1 and 305-2 Direct and energy indirect GHG emissions (Scope 1 and 2)

Scope 1 and 2 emissions, Finland

* The reporting boundary changed in 2016.

Scope 1 and 2 emissions, all operating countries

* The reporting boundary changed in 2016.

Scope 1 and 2 GHG emissions
Tonnes CO2e 2017 2016 2015
Direct (Scope 1) 48,219 43,002 43,302
Finland 38,506 36,478 34,977
logistics (Kesko Logistics) 35,801 35,079 34,117
self-produced heat (natural gas and oil) 2,705 1,399 860
Other operating countries 9,713 6,524 8,325
logistics (Belarus and Estonia) 1,870 344 1,115
self-produced heat and electricity (natural gas, oil, peat and timber1) 7,843 6,180 7,210
Indirect (Scope 2) 82,421 81,963 144,266
Finland 55,004 56,533 121,115
purchased electricity (market-based) 0 0 73,734
purchased electricity (location-based)2 91,224 95,866 153,087
purchased district heat (location-based) 55,004 56,533 47,381
Other operating countries 27,417 25,430 23,151
purchased electricity (location-based) 22,803 20,218 18,475
purchased district heat (location-based) 4,614 5,212 4,676
Total 130,640 124,965 187,568
Finland, Scope 1 and 2 total 93,510 93,011 156,092
Other operating countries, Scope 1 and 2 total 37,130 31,954 31,476
1 The biogenous CO2 emission figure of the timber used for heating one facility in Belarus is reported in Scope 1, because its proportion of the total fuel quantity is insignificant (about 2%).
2 Following the GHG Protocol standard, the location-based emission figure for electricity consumption in Finland has been reported. The market-based figure is used for the emissions totals. Location-based emissions are calculated with national emission factors and market-based emissions with energy supplier emission factors.

Scope 1

In 2017, the Scope 1 emissions of Kesko in Finland increased due to the acquisition of Suomen Lähikauppa in 2016 and the continued increase in own production of heat.

Emissions from logistics in the other operating countries were reported for Belarus and Estonia in 2017. Most of the logistics in the other operating countries are outsourced.

The transportation of goods for Kesko's grocery trade in Finland is managed by Kesko Logistics and includes its own transportation and that under its direct control. Kesko Logistics’ emissions were calculated based on data including kilometres driven, volumetric efficiencies, and the transportation fleet using the Lipasto calculation system developed by the VTT Technical Research Centre of Finland. The emissions for logistics operations in Belarus and Estonia were calculated based on fuel consumption.

Scope 2

Kesko has purchased electricity produced with 100% renewable energy from the beginning of 2017 in Finland. The renewable electricity purchased with the Renewable Energy Guarantees of Origin (REGOs) from the Nordic countries was produced with Finnish bioenergy, which utilises by-products from the forest industry and wood based fuels for example.

The emissions from purchased electricity for the other operating countries increased by approximately 13% due to emission factor updates, although electricity consumption decreased significantly due to the divestment of the grocery trade in Russia in 2016.

The calculation principles and more detailed calculations for Scope 1 and 2 emissions attributed to properties managed by Kesko can be found in the Environmental profile reports for Finland and the other operating countries.

305-3 Other indirect (Scope 3) GHG emissions

Scope 3 GHG emissions
Tonnes CO2e 2017 2016 2015
Upstream
Purchased goods and services 7,698,000 6,910,000 5,936,000
Capital goods (buildings) 33,500 35,200 18,200
Indirect emissions of purchased energy (other than Scope 1 and Scope 2) 30,900 49,400 69,300
Transport and distribution of goods 14,400 18,400 18,300
Waste 10,300 11,400 9,000
Business travel 3,100 3,000 2,700
Employee commuting 20,800 21,000 6,700
Downstream
Customer commuting (shopping trips) 164,900 157,400 154,400
Use of sold products 1,771,000 1,685,800 852,900
End-of-life treatment of sold products 38,600 36,500 16,300
Franchises (retailer entrepreneurs) 102,700 114,700 22,800

The greatest other indirect emissions of Kesko are caused in the supply chain of the products for sale (78%), in the use phase of the products (18%) and by the shopping commutes of customers (2%).

The Scope 3 calculation principles can be found in the Kesko Scope 3 Report.

305-4 GHG emissions intensity

The Scope 1 and 2 greenhouse gas emissions intensity is calculated based on net sales (€10,676 million in 2017), the average number of employees (22,077 in 2017) and the area of properties managed by Kesko (4,185,000 m2 in 2017).

Scope 1 and 2 GHG emissions intensity
2017 2016 2015
Based on net sales (tonnes CO2e / € million) 12.2 12.3 21.6
Based on average number of employees (tonnes CO2e / person) 5.9 5.6 9.9
Based on area of properties managed by Kesko (tonnes CO2e / 1,000 m2) 31.2 28.5 -
The Scope 2 reporting boundary for 2016 has changed

305-5 Reduction of GHG emissions

Science Based Targets

Kesko is the first Finnish company to set climate targets approved by the the Science Based Targets initiative. The emissions targets set in line with two degree climate warming were approved in June 2017.

Kesko commits to reduce its direct and indirect (Scope 1 and 2) emissions 18% by 2025 from base year 2015. In addition, Kesko is committed to reduce its supply chain emissions so that 90% of its key suppliers will set their own GHG emissions reduction targets by 2025. 

In 2017, the direct and indirect emissions had increased by 14% from base year 2015, due to the acquisitions of Suomen Lähikauppa and Onninen in 2016. Out of Kesko’s key suppliers of 2016, 33% had set their own emission reduction targets by the end of 2017.

Renewable energy and energy efficiency

Since the beginning of 2017, Kesko has purchased electricity produced with 100% renewable energy in Finland and invested in solar power plants on the rooftops of its stores in the past few years as well. Read more in the Energy section.

K Group participates in the 2017–2025 action plan of the commerce sector Energy Efficiency Agreement and is committed to reducing its energy consumption by 7.5% through various energy savings measures.

During the trading sector energy efficiency agreement for the period 2008-2016, K Group’s target was to improve its annual energy consumption by 65 GWh. Due to determined actions K Group was able to surpass the target and improve its energy efficiency by 67 GWh.

Logistics

The target of Kesko Logistics is to reduce CO2 emissions relative to the net sales index by 10% during 2012–2020 from the 2011 base year. By the end of 2017, the relative emissions had decreased by 16.2% from the base level. In 2017, the emissions decreased by 11.2% in comparison to 2016. The decrease in emissions was affected by new emission factors, which include the biocomponent of diesel fuel. The emissions decreased while the driven kilometres increased, which was due to the increase in the number of stores resulting from the acquisition of Suomen Lähikauppa and their conversion to K-Markets similar to the previous year.

Kesko Logistics works ambitiously to reduce emissions:

  • Efficiency of logistics: centralised distribution, optimisation of delivery routes and high volumetric efficiency
  • Efficient reverse logistics: collection of purchase loads, carrier trays, pallets, roll containers and recycled bottles and cans on the return route
  • Economical driving courses: all of Kesko Logistics’ more than 500 contract drivers have been trained
  • New replacements in the vehicle fleet: eleven two-tier trailers and one extra-long HCT ‘Ecotruck’ in use in long-distance transportation between main warehouses; in 2018 two new HCT-trailers will be added
Efficient logistics fleet
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Scope 3 emissions reductions

Products for sale

By far, the greatest indirect emissions of Kesko are caused in the supply chain and during the use phase of the products for sale. These emissions can be influenced by offering selections of products and services causing less emissions and by customer communications.

Grocery trade

Customers are increasingly aware of the environmental impacts of their consumption choices. By reducing the amount of animal-based products and household food waste consumers can reduce the environmental impact of their food consumption. Vegan products increased in popularity in the shopping baskets of Finns in 2017. The number of plant-based Pirkka products increased by 16 new products in 2017 and the selection now numbers over one hundred. By the end of 2017, around 250 K-food stores already had a 'Veggie shelf", which gathers plant-based products in one place to make choosing environmentally friendly products easier for the customer. Additionally, the K-Ruoka media offers diverse recipes and tips for cooking vegetarian meals.

K Group and Gasum cooperate to produce biogas from inedible food waste collected from K-food stores. The inedible organic waste from around 200 K-food stores and the Kesko Logistics central warehouse  is utilised as energy in the manufacture of new Pirkka products. In 2017, approximately 4,000 tonnes (3,700 tonnes in 2016) of organic waste was transformed into 3,000 MWh (2,800 MWh in 2016) of biogas. CO2 emissions were reduced by 594 tonnes compared to natural gas (calculated with emission factor 198 g CO2/kWh) and by 800 tonnes compared to fuel oil (calculated with emission factor 267 g CO2/kWh). The cooperation is rapidly growing into a nationwide operating model as the network of biogas plants expands.

In 2017, K Group participated again in the Ham Trick campaign, in which customers could donate fat from roasting their Christmas hams to collection points at K-food stores. The fat was used to make renewable diesel. A total of 44 tonnes of ham fat was collected, of which around 81% was collected at K-Citymarket stores.

Read more about our work to reduce food waste.

Building and technical trade

The building and technical trade offers consumers and business customers diverse product selections and expertise for improving the energy efficiency of building and renovation projects. The K-Rauta stores and Onninen offer environmentally friendly solutions for homes and properties from practical energy saving tips to intelligent energy management systems solutions. These include heating, cooling, solar and wind energy solutions.

Car trade

In February 2018, the selection of VV-Auto included six plug-in hybrid car models (PHEV) and two electric cars. In addition, the selection included seven car models using natural gas or biogas as fuel. In 2017, the registrations of Volkswagen, Audi and Porsche plug-in hybrids in Finland increased 54.1% compared to the previous year.

Customer shopping commutes

The emissions caused by customer shopping commutes are a significant source of indirect emissions for Kesko. The majority of shopping commutes are made by car.

Kesko is building an extensive network of electric vehicle charging points adjacent to K Group stores in order to progress the electrification of cars. In February 2018, already 23 K Group stores and 13 Neste K service stations offered a total of 121 electric and hybrid charging points for customer use. The aim is to build charging stations at all Neste K stations and 10–15 charging stations at K-Citymarket parking lots annually during the next few years. K Group has the largest private network of electric vehicle charging points in Finland.

K Group offers Finland’s most comprehensive network of neighbourhood stores with the best services. The stores are tailored to each store’s own customer demand. When the nearby neighbourhood store offers a selection suited for its customers, shopping commutes are shortened and they can be travelled more often by foot, bicycle or public transportation, especially in cities. The extra services available at K-stores reduce emissions caused by customer commuting, because many errands can be run during the same shopping trip. Increasingly, online shopping also reduces customer commuting.

Employee commuting and business travel

In December 2016, a survey on commuting to work was conducted for the Helsinki area office workers by using the Helsinki Region Transport (HSL) commuting calculator. According to the survey, the average emissions per employee were 8.8 kg CO2/working day. The results of the survey will be used as a basis for developing the employee commuting for Kesko's new K-kampus main office building. An employee commuting plan will be made in order to encourage commuting to the K-kampus which is sustainable and improves the wellbeing of employees.

At the end of 2017, Kesko had 668 company cars in use in Finland (690 in 2016).

  • 2 ethanol-fueled cars (6 in 2016)
  • 329 petrol-fueled cars (312 in 2016)
  • 336 diesel-fueled cars (370 in 2016)
  • 1 natural gas car (2 in 2016)

According to Kesko's company car policy, Kesko’s company cars have an emission level below 150 g CO2/km. Since December 2017, the employees’ pay share will be discounted by 10% of the tax value if the emission level of the company car is below 105 g CO2/km. In 2017, the average emission level was 122 g CO2/km (122 g CO2/km in 2016) and the emissions from company cars totalled 2,477 CO2 tonnes (2,648 CO2 tonnes in 2016). This calculation also includes private use of company cars.

In 2017, the air miles of Kesko employees travelling for business totalled 9.8 million (8.2 million in 2016). Encouraging the use of virtual meetings is one of the ways Kesko endeavours to decrease the amount of air travel. The amount of virtual meetings held via the Skype for Business application has increased by approximately 3% since the previous year. In 2017, a total of 69,858 hours of Skype meetings were held (67,842 hours in 2016). At the end of 2017, the Kesko Group had 28 Videra video conferencing facilities in use and the total duration of all video meetings between two or more facilities was 1,494 hours (1,793 hours in 2016).

305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

The electricity and heating energy consumed in properties managed by Kesko in Finland in 2017 caused:

  • 134 tonnes of NOx emissions (130 t in 2016)
  • 119 tonnes of SO2 emissions (115 t in 2016)
  • 0 tonnes of radioactive waste (1.2 t in 2016)

The calculation principles and more detailed calculations are available in the Environmental profile report. The figures for 2016 have been adjusted for improved accuracy since the last report. Only CO2 emissions data is collected for transportation of goods.

Effluents and waste

Circular economy

Shifting to a circular economy requires increasingly efficient circulation of materials. Kesko provides customers with diversified recycling services for waste and discarded items and develops innovative circular economy solutions in cooperation with other operators.

Recycling services for customers

In December 2017, there were 399 Rinki eco take-back points intended for recycling consumer packages (fibre, glass, metal) in connection with K-food stores. Plastic was collected at 173 eco take-back points (160 in 2016). Since January 2017, Pirkka ESSI circular economy bags have been made from plastic recycled by customers.

In connection with K Group stores, customers can also return deposit beverage containers, batteries and accumulators, WEEE, lead accumulators, impregnated timber and discarded clothing for recycling.

 

Packages and items returned by customers to recycling points at K Group stores
 
2017
2016
2015
Deposit aluminium cans (million pcs)
 374
378
311
Deposit recyclable plastic bottles (million pcs)
 120
116
94
Deposit recyclable glass bottles (million pcs)
 30
29
26
Batteries and accumulators (tonnes)
 303
289
210
WEEE (tonnes)
 68
92
 95
Lead-acid accumulators, K-Rauta (tonnes)
 0.8
3.5
1.6
Impregnated timber, K-Rauta (tonnes)
 859
814
914
Used clothing, UFF recycling points (tonnes)
 n/a
3,123
2,915
Kesko Logistics’ centralised collection services

Cardboard and plastic bales from 284 K-food stores (236 in 2016) were centrally directed by Kesko's grocery trade for industry reuse in 2017. Around 2,912 tonnes of cardboard (2,806 in 2016) and 54 tonnes of plastic (70 in 2016) were collected.

The reverse logistics operations of Kesko Logistics transport beverage containers and boxes from stores for reuse and recovery.

Packaging collected by Kesko Logistics reverse logistics for reuse and recovery
   
2017
2016
2015
Aluminium cans (1,000 pcs) 87,676 82,169 96,479
Recyclable plastic bottles (1,000 pcs) 60,606 54,648 61,403
Recyclable glass bottles (1,000 pcs) 12,305 11,292 9,462
Reusable crates (1,000 pcs) 20,241 17,893 17,294

 

Circular Economy Agreement for stores in Finland

Since 2016, all K Group stores in Finland have had the opportunity to participate in a national centralised waste management agreement, which was renamed the Circular Economy Agreement in 2017. The target is to increase the efficiency of recycling at K Group stores and advance the circular economy.

At the end of 2017, a total of 426 stores (139 in 2016) participated in the Circular Economy Agreement. The recovery rate of the waste generated in these stores was 100% (100% in 2016) and the recycling rate was around 67% (66% in 2016).

306-2 Waste by type and disposal method

Kesko’s objective is to minimise and recover all waste from its operations.

Waste in all operating countries
Tonnes 2017 2016 2015
Non-hazardous waste 36,401 38,051 27,832
Recycling/recovery 26,917 27,444 18,474
Landfill 9,484 10,607 9,358
Hazardous waste 1,404 774 1,261
Recycling/recovery 983 524 171
Hazardous waste treatment 421 250 1,090
Total 37,805 38,825 29,093

Waste recovery rates

Kesko’s waste statistics in Finland mainly cover warehousing operations, while in the other countries, the majority of waste statistics cover store operations. According to statistics, the recovery rate in Kesko’s waste management in Finland was nearly 100% in 2017 and in the other operating countries it was 53%. The recovery rate includes all waste except waste to landfill. The type of waste treatment was determined by the waste management company

Waste: Finland, Sweden and Norway
Finland Sweden Norway
Tonnes 2017 20161 2015 2017 2016 2015 2017 2016 2015
Non-hazardous waste 17,469 18,366 10,737 3,533 3,479 2,692 723 410 633
Recycling/recovery 17,467 18,204 10,621 3,182 3,220 2,470 723 410 593
Landfill 2 162 116 351 259 222 0 0 40
Hazardous waste 354 273 1,125 227 81 60 511 215 15
Recycling/recovery 258 183 160 7 3 3 494 200 -
Hazardous waste treatment 96 90 965 220 78 57 17 15 15
Total 17,823 18,639 11,862 3,760 3,560 2,752 1,234 625 648
Recovery rate % 99.99 99 99 91 93 92 100 100 94
1 A small part of the data is based on estimation (0.3% of total waste in Finland)
Waste: Estonia, Latvia and Lithuania
Estonia Latvia Lithuania
Tonnes 2017 2016 2015 2017 2016 2015 2017 2016 2015
Non-hazardous waste 924 733 680 911 640 612 5,973 3,946 2,605
Recycling/recovery 834 689 608 171 163 156 2,657 2,271 1,699
Landfill 90 44 72 740 477 456 3,316 1,675 906
Hazardous waste 37 27 20 9 5 3 166 152 36
Recycling/recovery 1 1 - 0 - - 125 119 8
Hazardous waste treatment 36 26 20 9 5 3 41 33 28
Total 961 760 700 920 645 615 6,139 4,098 2,641
Recovery rate % 91 94 90 20 26 26 46 59 66

Waste: Poland, Russia and Belarus
Poland Russia Belarus
Tonnes 2017 2016 2015 2017 2016 2015 2017 2016 2015
Non-hazardous waste 404 218 - 4,970 8,594 8,303 1,494 1,665 1,570
Recycling/recovery 127 51 - 1,463 2,382 2,279 293 55 48
Landfill 277 167 - 3,507 6,212 6,024 1,201 1,610 1,522
Hazardous waste 17 15 - 1 1 1 82 3 1
Recycling/recovery 17 15 - 0 - - 81 2 0
Hazardous waste treatment 0 - - 1 1 1 1 0.6 1
Total 421 233 - 4,971 8,595 8,304 1,576 1,668 1,571
Recovery rate % 34 28 - 29 28 27 24 3 3

Food waste

We are reducing food waste through cooperation throughout the whole food chain, from primary production to the end user. K Group’s goal is to minimise the food waste resulting from its operations and utilise the inevitably accumulated organic waste. Our objective is to reduce identified food waste relative to sales by 10% from the 2013 level by 2020.

K Group food waste hierarchy
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Food waste prevention

K Group’s primary means of reducing food waste is selection management. K-food stores maintain selections that suit their customer base, and complement the selections through forecast-based requirements planning. Efficient transport and store logistics, self-control system and staff training also help to prevent wastage. The optimisation and continuous development of packaging features play a key role in reducing wastage.

At the store

Stores are instructed to pay special attention to the expiration dates of fresh foods and foods with short expiration times. As a product’s ‘best before’ or ‘use by’ date approaches, K-food stores can sell the product at a discount. The deregulation of store opening hours in Finland in 2016 has had an impact on food waste: as stores are open for longer, sales are steadier and there is less wastage.

Food donations

Some 90% of K-food stores donate edible food products they no longer can sell to local charities, which then distribute the products as food aid to those in need. In 2017, the amount of food products donated increased by nearly 930,000 kg. Some food waste is also given to farms for animal feed.

Energy from organic waste

K Group and Gasum cooperate in producing biogas from inedible food waste collected from K-food stores. By the end of 2017, organic waste was being collected from 200 K-food stores and the Kesko Logistics central warehouse. The biogas produced is transmitted to Gasum’s gas network, and then utilised as energy in the production of new Pirkka products. As the biogas transmission network expands, the operating model is quickly becoming nationwide.

In 2017, some 4,000 tonnes of organic waste was turned into some 3,000 MWh of biogas, with three manufacturers of Pirkka products included in the operating model.

 

Food waste from K-food stores
2017 2016
Identified food waste (tonnes) 19,511 20,591
Identified food waste in proportion to sales 1.6% 1.7%
Development of food waste in proportion to sales (from base year 2013) -7.1% -3.5%
Share of food aid donations from identified food waste 46% 39%
Household food waste

Households can reduce their food waste through better planning of food purchases. The K-Ruoka mobile app helps customers plan their food purchases by offering personalised benefits, store-specific offers, a smart shopping list and over 6,000 K-ruoka.fi recipes. At the end of 2017, the app had 450,000 users.

K-food stores took part in Food Waste Week in September 2017 with their “To the last crumb” campaign, offering food waste related recipes and tips for food shopping and meal planning.

GRI Management approach

Material aspects

  • Energy
  • Water
  • Emissions
  • Wastewater and waste
  • Biodiversity
  • Food waste

Policies, principles and commitments

K Group's environmental and energy policy covers the operations of the Group and the stores both in Finland and the other operating countries. K Group's key business partners are also expected to observe corresponding environmental management principles.

Environmental management is part of K Group's management system and is based on the ICC Business Charter for Sustainable Development, environmental management standards, as well as requirements set by legislation and the authorities.

Kesko is committed to UN's Global Compact initiative and Sustainable Development Goals.

Monitoring and control systems

Kesko Group's Corporate Responsibility Advisory Board defines the main policies for environmental work and the target levels. The divisions specify the main policies of their environmental work into environmental action programmes which support their business operations. The action programmes are monitored and updated annually as part of the strategy work.

Kesko's maintenance partners monitor the energy consumption of properties with the help of the EnerKey.com system supplied by Enegia Oy. Enegia remotely reads energy consumption measurement terminals located in properties and records the data in the database by the hour. The consumption figures for properties where the data are collected manually are also saved in the EnerKey system. The EnerKey programme responds to even minor location-specific changes in consumption and sends an alarm to the person in charge.

Water consumption monitoring is part of consumption monitoring in the properties. Kesko's goal is to maintain a high level of water consumption efficiency in all operations.

Environmental systems at Kesko

All of Onninen's operations in all operating countries are ISO 14001 certified.

The operations of Kesko Logistics are ISO 14001 certified.

In the food stores and the building and home improvement stores, environmental management is based on the K-responsibility concept. For K-Citymarkets, K-Supermarkets and K-Markets, the K-responsibility concept is a requirement for inclusion in the chain. A K-responsibility concept inspection is carried out every three years at the K-Rauta stores by an independent external partner.

VV-Auto Group Oy fulfils the requirements of the ISO 9001 quality system and VV-Autotalot Oy fulfils the requirements of the quality and environmental action programme of the Finnish Central Organisation for Motor Trades and Repairs (AKL).

Division of responsibilities and resources

  • Group's Corporate Responsibility Advisory Board
  • Group's Environmental Steering Group
  • Store Sites and Real Estate Unit
  • Logistics Units

Programmes, projects and initiatives

In June 2017, Kesko was the first Finnish company to set Science Based Targets for reducing emissions from its properties, transportation, and supply chains. Kesko is committed to reducing its Scope 1 and 2 emissions by 18% by 2025, using a 2015 base year, and reducing the Scope 3 emissions from the supply chain so that 90% of Kesko's key suppliers will set greehouse gas emissions reduction targets by 2025.

Kesko participates in the retail sector energy efficiency agreement for 2017–2025. In accordance with the agreement, Kesko is committed to reducing its energy consumption by 7.5% by means of various savings measures. The agreement covers all of the K Group’s store chains. Kesko has joined the amfori Business Environmental Performance Initiative (BEPI). Amfori BEPI aims to help member companies in the management of global supply chains and, consequently, in increasing the transparency and risk management of their product supply chains.

Kesko's timber and paper policy was updated in June 2017. The objective of the policy is that by 2025 all timber and paper products in Kesko's product range will come from material of sustainable origin.

K Group’s fish and shellfish statement directs its sourcing of Kesko's grocery trade and Kespro, as well as K-food retailers' sourcing to safeguard the responsible fishing and management of fish.

Kesko’s grocery trade is a member of the RSPO (Roundtable on Sustainable Palm Oil). The objective is that by 2020, all palm oil in own brand grocery products will be responsibly produced (CSPO).

Kesko is a founding member of the Finnish soy commitment group. Kesko has become a member in the RTRS (Roundtable on Responsible Soy) and made a commitment that by 2020, all of the soy in the production chains of its private label products will be responsibly produced, either RTRS or ProTerra certified soy. The commitment covers both the Finnish production chain and sourcing from other countries.

Grievance mechanisms

SpeakUp reporting channel

Boundaries

Energy and water Kesko
Biodiversity Kesko
Emissions Scope 1 and 2: Kesko; Scope 3: K-stores and supply chain
Waste Finland: Kesko’s warehousing operations; other operating countries: stores
Food waste Kesko's grocery trade and K-stores