CSR CASE STUDY - CSR Hub Ireland

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                                  CSR CASE STUDY
                                      Name: Lidl Ireland
                                     Business Type: Retail
  Location: Lidl Ireland’s Head Office is based in Dublin, with 198 stores and 4 distribution
                           centres throughout the island of Ireland.

Mission Statement:
Our vision is to make life better by providing quality food at market leading value, ensuring
customer satisfaction is at the heart of everything we do.
Our mission is to deliver outstanding customer satisfaction.
We guarantee quality food through a rigorous product development and quality control
process.
We ensure market leading value by constantly optimising our efficient process.
We work with business partners in sustainable relationships, contributing positively to local
communities.
We achieve long term success by investing in the recruitment, training and development of
exceptional talent.
No. of Employees: Approximately 5,000 employees.

Overview of CSR Initiative:
At Lidl, our sustainability philosophy is to provide a safe and nurturing environment for our
colleagues, to be active and positive contributors to the communities in which we operate
and to be good stewards of the environment. Our business challenge was to develop a
comprehensive strategy to show our commitment to sustainability and win the buy-in from
internal and external stakeholders. We also required a systematic approach for monitoring
our progress towards our targets to ensure we could measure progress in our focus areas.
Our strategy, ‘A better tomorrow’, comprises four core pillars; Responsible Sourcing,
Protecting the Environment, Team Lidl and Lidl Community Works, focusing on the most
material topics to our business and our stakeholders, and where we can have the greatest
impact. It is a company-wide programme led by the Head of CSR.
Resources required:
Capital investment, employees and partners time is allotted to the CSR strategy.

Challenges:
Lidl operates 198 stores on the island of Ireland and ensuring standards around waste and
energy are met or maintaining enthusiasm for fundraising efforts can be challenging. It
requires constant reviewing, auditing and encouragement to ensure our sustainability
objectives are met.

Benefits:
The benefits are wide reaching throughout the business. Internally it helps our engagement
levels – with certain environmental programmes also saving us money. Externally it has built
our reputation and positively influences communities in which we operate both in Ireland
and further afield.

Outcome:
There have been numerous positive outcomes from the A Better Tomorrow strategy
including achieving zero waste to landfill, 100% of our properties meeting the ISO 50001

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Standard for energy management and over €400,000 funds raised for our charity partner
Jigsaw. Being a food retailer, we manage to donate approximately 50,000 meals every
month to over 300 charities and certification of nearly 20% of our listed range to social and
environmental standards is very important for us such as UTZ, Fairtrade, Rainforest Alliance
(e.g 97% of cocoa). These are some highlights of our strategy, but it is our customer first
approach and lean business model which enshrines more for the customer and the planet.

How was/is this initiative promoted?
We use an array of communication channels to promote the A Better Tomorrow strategy
both internally and externally. These include an App (called the WeAreLidl App) available to
all Lidl employees, in-store messaging, customer newsletter and producing a sustainability
report. We also promote our charity partner Jigsaw and sponsorship support for the Ladies
Gaelic Football through events as well as above and below the line advertising.

Do you report on CSR in the Annual Report?
We produce a bespoke CSR report.

CSR Dimension
Towards Responsible Business’ Ireland’s National Plan on CSR 2017-2020 identifies 4 core
dimensions of CSR – Environment, Community, Workplace and Marketplace.

   •   Environment - minimising negative environmental impacts
   •   Community - interaction with your local community partners and organisations
   •   Workplace - supporting and engaging with your employees
   •   Marketplace - interaction with your local community partners and organisations.

Please select the dimension(s) that you apply to your CSR Initiative and why?
Protecting the Environment
As a business this will have numerous implications as we all shift towards a low carbon
economy. We are focusing our efforts on energy efficiency, renewables and waste reduction
across our operations.

In 2017, we placed even more focus on assessing and reducing our environmental impact by
completing a carbon footprint analysis of our operations in conjunction with experts in the
Carbon Trust. By analysing where we have the most impact as a business, we are able to
create a targeted climate change strategy to reduce our environmental footprint and
optimise our processes.

There is an inevitable environmental footprint involved in the construction and
maintenance of our operations. We endeavour to mitigate these impacts by embedding
sustainability in the design, construction and management of our stores and distribution
centres – at Lidl, we expand with sustainability in mind.

All of our operations are certified to the ISO 50001 Energy Management Standard and we
moved to sourcing green electricity in 2018. Another significant development for us is the
integration of solar photovoltaic (PV) panels and electric vehicle charging points in all our
new builds and major refurbishment projects. We currently provide the largest network of
electric vehicle chargers in the supermarket sector, enabling customers to charge their
electric vehicles for free while they shop.

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Our teams continuously measure logistical data for store deliveries, ensuring cost effective
and efficient pallet planning for distribution. This requires close collaboration with our
haulage suppliers. Delivery vehicles back-haul materials to our distribution centres for
recycling purposes.

At Lidl, we are proud to boast an award-winning recycling and waste management
programme. Our in-store and warehouse waste management concept is integral to our Zero
Waste Commitment. We have also set ambitious target for plastic reductions and are
installing recycling stations in-store if customers want to leave excess packaging after their
purchases.

Lidl Community Works
Our objective is to be a good neighbour by positively contributing to the communities in
which we live and work. We are continuously developing our community work, fundraising
initiatives for charity partners, volunteering programme and local sourcing and employment
opportunities.

We are delighted to partner with Jigsaw – the National Centre for Youth Mental Health.
Through this partnership, we are pledging to raise €1 million over 3 years.

Not only are we aiming to raise funds to help Jigsaw expand their services, but we are also
aiming to raise awareness of youth mental health across Ireland and encouraging all of our
customers and colleagues to be One Good Adult to a young person in their lives by being
there to listen, support and advise when times are tough.

Last year we implemented weekly “Autism Aware Quiet Evenings” in all stores to help
people and families who may struggle with the weekly shop run. Between the bright lights,
crowded spaces, noise and sensory overload, grocery shopping can sometimes be a
very stressful task for people with autism. The “Autism Aware Quiet Evenings” provide a
more sensory friendly environment with reduced lighted, noise and priority queuing.

At Lidl Ireland, we are extremely proud to continue to be the biggest supporter of women's
sport in the country and have invested €3.5 million since the beginning of our partnership
with the Ladies Gaelic Football (LGFA). When we partnered with the LGFA in 2016, we made
a promise to elevate Ladies Gaelic Football to a new level and we feel we have delivered on
that promise. We are part of communities all over Ireland and we are committed to
supporting the organisation from the grassroots right up to county level.

Working in conjunction with FoodCloud, a social enterprise, we redistribute surplus food
from our warehouses and stores to over 300 local charities. Our aim is to tackle food waste
and contribute to our local communities to help those who need support.

To date, we have donated over 780,000 meals to charities all over the country and by 2020
our goal is to donate surplus food to Irish charities equating to over 1 million meals. Every
month we donate 50,000 meals to over 300 charities across Ireland.

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Team Lidl
Our #WeAreLidl people strategy brings to life our philosophy that our colleagues are part of
one team. Our strategy is focused on developing sustainable relationships by engaging
leaders, implementing consistent and transparent two-way communication and prioritising
employee wellbeing while positively contributing to business objectives.

‘Work Safe. Live Well.’ is the ethos of our health and wellbeing strategy. Designed to take a
holistic view of employee health and wellness, the strategy focuses on 3 core areas; physical
safety at work, physical and mental health, and financial wellbeing. Mental health is a
critical aspect to our strategy with our partner charity Jigsaw, being the national centre for
youth mental health in Ireland.

We have been working with Princes Trust in Northern Ireland under our ‘Get into Retail’
scheme and Business in the Community in Ireland with our ‘Ready for Work’ scheme to help
disadvantaged and marginalised develop employability skills within retail- a project which
has resulted in excellent business benefits for us.

We were also delighted to be the first major retailer in Ireland and Northern Ireland to
commit to paying the increased living wage to each of our team members. The living wage is
an independently assessed and measured rate of income considered necessary to meet
basic needs such as housing, food, clothing, transport and healthcare – the cost of which is
not always covered by the national minimum wage.

At Lidl, all employees are provided with the training and support they need to reach their
full potential and to progress within the organisation. In fact, many of our managers
successfully advanced their careers from starting positions in our stores. Structured, on-the-
job training is the foundation of our training concept, giving our employees the opportunity
for further development, both professionally and personally.

Responsible Sourcing
As a large grocery retailer, we strive for greater sustainability across our business through
the sourcing of our products. We are fully committed to ensuring that our buying power is
driving positive change for producers, communities and the environment as a whole, both in
Ireland and further afield.

We take pride in building long-term relationships with our Irish suppliers, these home-
grown partnerships provide long-term growth for both sides. Since entering the market in
2000, the proportion of our purchases from Irish suppliers has grown year-on-year. In the
Republic of Ireland, we buy €700 million worth of goods annually from over 200 suppliers.

We also run a supplier development programme, Kick Start, developed in conjunction with
Bord Bia, with the objective of giving small and medium sized Irish food and drink suppliers
the chance to showcase their products in Lidl stores across the country. As part of the
programme we invited each of our Kick Start suppliers to attend a series of seminars, led by
our team of experts to talk about important topics such as quality control, packaging,
marketing & PR building to help develop their businesses.

We offer a wide variety of fresh fruit and vegetables all year round, sourced to extremely
high-quality standards. Our fruit and vegetable suppliers are either certified to the Bord Bia

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Quality Assurance Scheme or Global Gap. 100% of our banana range now comes from farms
certified to Fairtrade, Organic or Rainforest Alliance standards.

As a low-price grocery retailer, we are considered by some to be gatekeepers of the food
system. With this comes responsibility for people’s health and we are committing to making
our product range healthier and encouraging our customers to buy a basket that is good for
them as well as good for their pocket. We will reduce the added sugar content in own brand
products by 20% by the end of 2020 focusing primarily on foods that are popular with and
consumed by children. Food categories such as breakfast cereals, spreads, sauces and sweet
confectionery will be a major focus. We will be reviewing approximately 350 own brand
products in order to reach this sugar target.

We will reduce the salt content of own-brand products in line with the UK’s Food Standards
Agency (FSA) 2017 salt targets by the end of 2020. The reduction of salt first focuses on food
categories that are consumed on a regular basis and generally make up a large share of the
daily salt intake including; ready meals, soups, pizzas, crisps, cakes and meat products. Over
500 of Lidl Ireland’s own brand products will be reviewed to reach this salt target.

Social and environmental programmes are a key way we can ensure sustainability in our
supply chain. We have also committed to certifying our cocoa in all our own-brand products
to Fairtrade, UTZ or Rainforest Alliance standards and/or certified as organic (current status
is 97% certified). 100% of our own-brand black, green and Rooibos tea will be certified to
Fairtrade, UTZ or Rainforest Alliance standards and/or certified as organic. By the end of
2020, 50% of our own-brand coffee will be certified to Fairtrade, UTZ or Rainforest Alliance
standards and/or certified as organic. We also support the work of the Roundtable on
Sustainable Palm Oil (RSPO) who have developed a set of environmental and social
standards for the sustainable production of this commodity and the protection of worker’s
rights. 100% of Palm Oil in our food products are already certified to RSPO on a mass
balance basis and will soon be all segregated RSPO palm.

We are committed to sourcing 100% of our own-brand permanent chilled and frozen fish
products, from independently certified sustainable fisheries by the end of 2019 (MSC or
recognised Irish FIP’s for wild caught fish and ASC or GLOBAL G.A.P. Aquaculture Standard
for farmed fish).

In addition, we have pledged to meet the goals of Greenpeace’s Detox commitment to
eliminate the discharge of all hazardous chemicals from the whole lifecycle and all
production procedures of apparel and footwear products no later than 2020.

Business Impact:
How has the CSR initiative benefitted your business and demonstrated a win:win in the
short-term and/or long-term?

Building our CSR strategy has resulted in numerous benefits for the business ranging from
cost savings to increased engagement and brand recognition. Lidl’s work in creating a better
tomorrow for the communities in which it operates in has been recognised and applauded
externally, in 2018, Lidl was awarded the coveted ‘Outstanding Achievement in Corporate
Social Responsibility’ at the Chambers Ireland CSR Awards, retained the award for Excellence
in Environment and also won the Excellence in Community. Also, in 2018, the retailer picked

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up the ‘Green Retailer of the Year’ and ‘Excellence in Waste Management’ awards at the
Green Awards 2018 as well as the ‘Business Recycling Champion’ at the 2017 Pakman Awards.

Some examples of key results include:
   - Our Brand reputation has developed significantly since the launch of our CSR
      strategy- this is measured with our brand tracker as well as the Reptrak report.
   - Internally participation with our programme has increased with an uptake in our
      volunteer days and fundraising events.
   - Employee engagement – surveys demonstrated that CSR and our impact on local
      communities has improved significantly in recent years.
   - Energy Efficiency – 50% decrease in Carbon emissions through sourcing 100%
      renewable electricity and achieving the ISO50001 energy management standard
      across all operations.
   - Zero Waste to Landfill commitment – achieved for the second consecutive year.
   - Charity Partner Jigsaw - Over €400,000 funds raised for Jigsaw the National Centre
      for Youth Mental Health. Awareness of Jigsaw has doubled since partnering in April
      2018 and 43% of people who are aware of Jigsaw, heard about them through Lidl.
   - Food Redistribution – donated over 780,000 meals to 300 charities all over the
      country. The initiative also reduces our food disposal costs and positively impacts
      employee engagement.
   - #SeriousSupport - We are extremely proud to continue to be the biggest supporter
      of women's sport in the country after investing €3.5 million since the beginning of
      our partnership. With stores nationwide, we are part of communities all over Ireland
      and we are committed to supporting the organisation from the grassroots right up to
      county level. This brings Lidl into the conversation around sports in schools, builds
      our brand and helps deepen our connection with the local communities we support.

Sustainable Development Goals (SDGs):
Please identify which SDG goal(s) apply to your CSR initiative.
Protecting the Environment
SDG 12 – Responsible Consumption and Production
SDG 13 – Climate Action

Lidl Community Works
SDG 1 – No Poverty
SDG 2 – Zero Hunger
SDG 3 – Good Health and Well-being

Team Lidl
SDG 1 – No Poverty
SDG 10 – Reduced Inequalities

Responsible Sourcing
SDG 1 – No Poverty
SDG 8 – Decent Work and Economic Growth
SDG 14 – Life below Water
SDG 15 – Life on Land

Learning:
What did you learn from your experience of creating and implementing a CSR initiative?

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At Lidl, we are suitably positioned with our lean business model designed for efficiency to
develop our CSR strategy. We have a responsibility to the 2 million customers passing
through our doors every week.

Change is a process which requires patience in any business but especially when operating
on a larger scale. However, at certain times the pace of change has been remarkably swift
and we can leverage our efficient processes for rolling out initiatives such as autism aware
evenings across all of our stores.

A particularly bright idea may simply make business sense such as cutting out black plastic
from our packaging. Taking that holistic view of the product life cycle and pairing the
producer with the end user highlighted that although it may be recyclable, the facilities in
most recycling centres in Ireland sort black plastic with landfill items. For our producer there
is no additional economic costs by switching to a widely recycled transparent plastic
observing real benefits for waste management.

Another learning is that although yes corporations are large entities, they are comprised of
people. People who live in this world and want to breath clean air and eat food which
nourishes them without depleting the planet. This human perspective helps put
sustainability at the heart of Lidl’s business objectives as we continue to grow with a
mindset for a better tomorrow.

What advice would you give a business starting on their CSR Journey?
Start measuring. It’s important in beginning any journey to first get a footing on where you
are, to then anticipate where you’d like to go. Having data can help to speak the language of
other departments and make the case for the ‘nice to have’ to become a ‘need to have’.
Our philosophy is to provide a safe and nurturing environment for our employees, to
contribute positively to the communities in which we operate, and to be good stewards of
the environment. Operating from this premise helps us assess and inform our strategy
towards a better tomorrow.

Case study provided by
Lidl
April 2019