B3.1. Protocolo para el seguimiento de la dinámica de conos de deyección de arenas y de los procesos sedimentarios de la
C.1. Cubiertas vegetación terrestre
Environmental program and safety
Environmental friendliness is key for X5’s successful and sustainable long-term development. As our business has grown and evolved, so has our environmental impact. Industrial packaging, bakery waste and waste from preparing meat and fish for sale, used frying oil, polyethylene bags, electricity consumed by refrigeration and lighting equipment, and vehicle exhaust are all examples of how a modern retail company impacts the environment.X5 strives to fully comply with the Russian legislative requirements and the highest international environmental protection standards wherever possible. We believe that environmental care is not just a part of a large company’s social responsibility – it also gives ample opportunities to improve business efficiency and reduce costs, and in some cases, even to generate additional income. While we are still on the first steps of this journey, we can already see achievements in environmental safety.
Waste recycling and disposal
Currently, waste generated by stores is transferred to third parties either for utilization and burial at landfill sites or for further recycling. We have made a list of recyclable waste to be disposed of by third parties, significantly reducing the quantities to be buried and, as a result, the negative environmental impact from landfills, while also cutting our expenses for landfill use and generating income from the sales of recyclable waste.
In 2014, we expanded our list of recyclable waste and increased its volume for sale. Apart from recycling cardboard, polyethylene, used oil, plastic boxes, stretch wrap, banana boxes and polystyrene, we started selling broken shopping trolleys. This helped us generate additional income and reduce our bulk waste removal expenses.
The Company sells its domestic solid waste, in particular used oil from Perekrestok and Karusel grills and roasters, to a specialist company which uses it as feedstock for bio-fuel production.
In 2014, we developed recyclable material shipment
regulations to optimize shipment control and boost our profits. Eco-bags and eco-sacks
Store packaging and polyethylene bags have a considerable share of waste in landfill sites and disposal areas. As part of our environmental protection initiative and to meet the demand from our eco-friendly customers, we have started selling eco-bags and eco-sacks at Perekrestok and Karusel stores. Eco-sacks made of recycled paper can carry up to three kilograms and cost around RUB 10. They are easy to use and decompose rapidly.
Eco-bags made of spunbond, a material produced from oil by-products, can accommodate bulky purchases, replacing eight to ten plastic bags, and cost RUB 20. They can be recycled up to ten times.
In 2014, Perekrestok and Karusel chains sold approximately 1,365,000 eco-bags and eco-sacks, compared to 1,270,000 in 2013 highlighting the growing popularity of these items. Returnable containers
To minimize supply waste and the waste resulting from transportation of products from the distribution centers to the stores we use reusable containers returned to suppliers after deliveries, as well as wooden pallets and trays that are returned to the distribution centers.
The Green Russia National Environmental Volunteering Event
In September 2014, we took part in the Green Russia National Environmental Volunteering Event covering 83 regions and engaging over 5 million people. In Moscow, the campaign took place in the Setun River Valley Nature Reserve. Over
a thousand people, including employees of X5, Russian Railways, Gazprom and other Green Russia partners, participated in the river valley clean-up, while children took quizzes, attended workshops and environmental classes, and played eco-themed games. The winners were awarded prizes from X5. Representing X5, Pyaterochka’s employees also took part in the campaign in Krasnodar, Yekaterinburg and other cities. This major clean-up event was sponsored by the Green Russia social movement and supported
by the Russian Ministry of Natural Resources and Environment, the Federal Service for Supervision of Natural Resources, the Ministry of Culture, the Ministry for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters, the Ministry of Defence, and the Chamber of Commerce and Industry of Russian Federation. Environmental initiatives in logistics
We manage environmental risks separately for our distribution centers and transportation divisions. Our distribution centers transfer plastic shrink wrap, cardboard and packing materials, as well as domestic solid waste, for recycling. The
transportation division disposes of car tires and tubes, batteries, ferrous and non-ferrous metals, car oil and other materials as required by Russian legislation.
Our most significant environmental impact comes from our transportation unit where we use various approaches to minimize the damage caused by transportation from the distribution centers to stores. Х5 has its own transportation fleet, as well as vehicles provided by third parties, to cover 40–45% of our cargo transportation. Contractors are responsible for compliance with environmental requirements, and transportation services agreements stipulate that the trucks meet all legislative requirements, including environmental ones.
Strategic report Governance Financial Statements
Energy consumption structure (%) 2 1 3 1. Refrigeration equipment 39% 2. Lighting 21% 3. Power equipment 11% 4. Other 29% 4
We use certified service stations to provide maintenance to our trucks in line with the legislation and norms established by truck manufacturers based on either the number of kilometers on the odometer or the vehicle’s working life. Daily vehicle condition monitoring, including exhaust systems, is part of mechanics’ and drivers’ responsibilities. If serious failures are detected, the vehicle is withdrawn from use and sent for repair.
In addition, we do not purchase used or outdated vehicles, and over 90% of our transportation fleet meets Euro 3 and Euro 5 standards. Since 2014, we have been purchasing only Euro 4 or higher class vehicles, fueled with high-quality fuel from reliable producers.
Thanks to new distribution centers opened in 2014 in Nizhny Novgorod, Yekaterinburg, Voronezh and Rostov-on-Don, there was only a marginal increase in the total kilometers driven by X5 trucks despite opening new stores. The average number of kilometers driven by an X5 truck were 122,000 km in 2012, 124,000 km in 2013, and 129,000 km in 2014.
Energy consumption and efficiency
The cost of utilities, as a percentage of net sales, amounted to 2.1% in 2014. Out of this, approximately 1.5% represents utility payments, while the remaining 0.6% is made up of cleaning expenses, telecommunications, and other expenses, demonstrating that the energy efficiency program outstrips any other environmental initiative in yielding tangible results. Energy consumption accounts for approximately 80% to 85% of total utilities expense, with heating and water consumption representing approximately 10%–15% and 5%, respectively. Therefore, our energy efficiency program has the most pronounced impact on our cost base of all our environmental initiatives.
Currently approximately 40% of energy consumption is attributable to refrigeration equipment, 20% to lighting and the remainder to other equipment, air conditioning systems and other energy consumption sources.
Recognizing the importance of improved energy efficiency, we have been implementing energy saving technologies since 2011. These have included refrigeration equipment upgrades and installation of power consumption monitoring systems across all our retail chains as well as modernization of existing lighting in our Pyaterochka stores.
In 2013, the installation of automatic monitoring systems for the volume and quality of electrical energy consumed was rolled out, and in mid-2014 the systems monitoring and control center was commissioned. Analysis of the results will enable us to cut electricity costs and further expand the use of energy efficient technologies.
In mid-2014, we launched Russia’s first refrigeration equipment monitoring center. It enables stores operating the system to control energy consumption, while also improving the ability to manage servicing companies and boosting quality control of the refrigerated goods, in order to ensure compliance with the HACCP principles. During the first two quarters of 2015 the system will be rolled out to all the Pyaterochka and Karusel stores.
We continue to test various energy efficiency technologies. In 2013–2014, we installed glass modules on refrigeration equipment in selected stores. Based on the results of these pilots, the Perekrestok chain has decided to use the technology to upgrade all of its existing
refrigeration equipment.
The Pyaterochka refurbishment program is also based on energy efficient technologies, including the installation of improved energy efficient refrigeration and lighting equipment producing more light for less energy.
Our focus on energy efficient technologies applies not only to our stores, but also to our offices. After the successful launch of the ‘Turn off the lights and save money’ program at our Moscow headquarters in 2013 and the installation of highly efficient photodiode indoor lighting equipment, electricity consumption dropped by 63%. Following the office outdoor lighting upgrade in 2014, we also expect to see substantial energy and cost savings in 2015 and significantly better outside lighting during the night.
While we have already made certain progress in reducing utilities expenses, we see the potential for further savings by implementing new technologies and more efficient consumption controls.