X5 Group (Пятерочка). Годовой отчет за 2021 год - часть 15

STRATEGIC REPORT

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RETAIL INFRASTRUCTURE

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INNOVATIONS

114

As a result of a study of the customer experience 
when purchasing wine, 37% of customers said they 
found it difficult to choose wine. In response, X5’s 
Innovation Lab developed an e-sommelier technology. 
For the convenience of customers, the solution has 
been integrated into ViVino, a popular resource that 
provides ratings of selected wines. Integration with 
electronic price tags makes it easier for users to search 
for selected wines on shelves: a blinking LED on the 
electronic price tag lets them know where the product 
they are looking for is located. The pilot project was 
carried out at 30 supermarkets. Based on the results, 
a decision was made to integrate the sommelier into 
Perekrestok’s existing wine club and to roll out the 
tech at an additional 30 stores.

Sommelier

The Innovation Lab developed a smart scale, a device 
that automatically recognises items sold by weight, 
including fruits, vegetables and sweets. 

The innovation decreases the time needed to process 
items sold by weight at checkout counters at 
Pyaterochka stores and increases the throughput 
capacity of each checkout by about 5%.

This high degree of precision was made possible 
thanks to the neural network used in the computer 
vision system, which is constantly learning and thus 
becoming more efficient.

Smart scales

THE SMART SCALE 
WAS PILOTED AT

WHERE THE 
RECOGNITION 
ACCURACY RATE 
WAS ABOUT

86

STORES

99

%

STRATEGIC REPORT

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RETAIL INFRASTRUCTURE

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INNOVATIONS

115

This technology is a combination system that uses 
facial recognition for employee attendance and 
timekeeping and reads employee badges outfitted 
with RFID tags to monitor their movements to ensure 
that they are in a useful part of the store.  

The pilot project was carried out at 10 supermarkets in 
Moscow involving the participation of 650 employees. 
The system’s facial recognition and geo-locator 
functions achieved a recognition accuracy rate of 
above 99%. In addition to a nearly 5% increase in 
employee productivity, the pilot revealed that staff 
were more disciplined in terms of ensuring that they 
were located in a useful part of the store, depending 
on their position.

Improving staff efficiency

STRATEGIC REPORT

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RETAIL INFRASTRUCTURE

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INNOVATIONS

116

The Innovation Lab developed a new device to replace 
standard price checkers. With wide-ranging 
functionality, the device does much more than simply 
providing the prices of scanned products. As part of 
the pilot project, the following functions were tested: 
product information, in-store stock on hand, product 
evaluation, store evaluation, promotion catalogue, 
personal coupons when scanning a loyalty card, 
comments and offers, store information, job 
application, facial recognition attendance and 
timekeeping, and staff training. 

Touchscreen price checker 

X5’s Innovation Lab developed a proprietary 
technology that enables customers to scan items 
themselves using hand-held scanners and then to pay 
at self-service checkouts. 

The piloting and development of the tech also involved 
an in-depth study of the customer experience, which 
resulted in a substantial increase in the percentage 
of customers using the solution. 

The pilot project showed that a self-scanning service 
is something that customers want, and a decision was 
made to roll out the tech in new stores.

Proprietary self-scan 

THE PROPRIETARY 
TECH ENABLED X5 
TO REDUCE THE 
COST OF 
INCORPORATING 
SOLUTIONS
IN STORES
BY ALMOST

AND THE COST OF 
SUPPORTING THIS 
PARTICULAR TECH 
BY ABOUT

50

%

85

%

STRATEGIC REPORT | SUSTAINABLE DEVELOPMENT | OUR SUSTAINABILITY GOALS

117

Our 

sustainability 

goals

In 2021, we continued our momentum towards 
achieving our sustainable development targets as 
outlined in our Sustainable Development Strategy, 
based on the 17 Sustainable Development Goals 
(SDGs) adopted by the United Nations in 2015. 

We are working toward our 30×30 goals, which include 
a 30% reduction in GHG emissions, 30% share of 
renewable energy used in X5 operations and a 30%  
reduction in the ratio of waste generated to retail sales, 
all by 2030. We also aim to increase the share of solid 
waste from our operations that is recycled to 95% 
by 2023, we are actively working towards achieving 
carbon neutrality by 2050. 
 
Reaching these ambitious goals requires 
accountability and collaboration at all levels. We have 
already published our first Sustainability Report under 
GRI Standards, and we expect to publish our second 
report in the first half of 2022. We also established 
a Sustainable Development and Innovation Committee 
at the Supervisory Board level and hosted the Growing 
Sustainable Conference, the first conference 
on sustainable retail, which was attended by 70 people 
offline and more than 1,000 people online.

https://esg.x5.ru

The following section provides an overview of our key 
goals and achievements in 2021.  
Additional information, including an ESG databook, can 
be found at 

. 

100

%

Share of Pyaterochka stores 
participation in the Liza Alert 
programme to help people who 
are lost or disoriented by 2023

Increase share of SMEs among 
X5 suppliers 

Double the number of people 
who receive food aid as part 
of the Basket of Kindness 
programme by 2023 

UP TO

50

%

Increase share of fresh and F&V 
products by 2023

75

%

Increase employee engagement 
by 2023

Entire Company to meet 
designated occupational health 
and safety standards by 2023

–

10

%

Reduction in GHG emissions 
(Scope 1 and Scope 2) per sqm
of selling space by 2023

vs 2019

UP TO

95

%

Share of recyclable waste sent 
for recycling by 2023

>

50

%

Share of private label goods 
in sustainable packaging by 2023

UP TO

40

%

Share of non-expired food waste 
sent for reprocessing by 2023

UN SDGs¹

Key goals for X5

1 Primary goals are highlighted with a larger scale, secondary goals with a smaller size

STRATEGIC REPORT

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SUSTAINABLE DEVELOPMENT

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STAKEHOLDER ENGAGEMENT

118

Stakeholder engagement

Maintaining a regular dialogue with our stakeholders 
is essential to growing our business in a sustainable 
and profitable way while creating value.  

Our key stakeholders include customers, employees, 
shareholders and investors, suppliers, local 
communities, as well as regulators and government 
officials. On this and the following pages are highlights 
of our stakeholder engagement activities and 
an overview of how and why we engage with our 
stakeholders. Highlights of what we did in 2021 
will also be available in our 2021 Sustainability Report.

How we interact

Customers

Employees

Make more informed decisions about 
customer demand through use of big data 
analytics of consumer transactions 

Maintain a variety of channels for 
interaction with customers, ranging from 
chatbots in messenger apps 
to a telephone hotline

Monitor our apps’ feedback and rating 
tools to collect data and develop analysis 
of customer preferences

Conduct a country-wide Net Promoter 
Score (NPS) assessment to determine 
customer satisfaction levels

In addition to providing meaningful career 
opportunities, ensure competitive, fair and 
transparent salaries plus motivation 
schemes

Upgraded and expanded channels for 
employee feedback to hone our strategy 
more effectively in areas such as working 
conditions, compensation, management 
and corporate culture

Training, skills assessment and overall 
career growth are linked via digital tools 
for a seamless employee experience

The X5 Digital Academy and other 
professional learning programmes support 
and enable employee growth and 
development consistent with our strategic 
priorities

Uphold our human rights policy, provide 
employees with the freedoms they 
are entitled to 

Implement strict occupational health 
and safety policies and inform employees 
about workplace health and safety 
requirements

Support employees in crisis, such as due 
to long-term illness or accidents, 
bereavement or loss of property

Notable contributions to the Company’s 
performance are recognised 

Employees are encouraged to engage 
with our social responsibility agenda and 
make a positive social impact

STRATEGIC REPORT

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SUSTAINABLE DEVELOPMENT

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STAKEHOLDER ENGAGEMENT

119

How we interact

Suppliers and business partners

Society and local communities

Government/regulators

Provide suppliers with access 
to comprehensive insights about 
consumer demand and trends through 
the use of big data–powered tools

Ensure business relationships meet high 
standards of trust and respect while 
collaborating with suppliers to develop 
quality responses to customer ratings 
and complaints

Increase the share of local goods offered 
across our formats through education 
and outreach to regional producers

Ensure access for both large federal 
and smaller local suppliers to our 
transport and logistics infrastructure, 
and train suppliers on how to work with 
said infrastructure effectively

Gather supplier feedback via regular 
surveys and other engagement activities

Continued expansion of community 
wellness initiatives such as the Basket 
of Kindness food bank and Liza Alert 
search-and-rescue operations 

Collaborate with municipal, regional 
and federal governments on initiatives 
to support historically disadvantaged 
groups, such as pensioners 

Prioritise programmes that encourage 
our customers to donate to good causes 
together with X5 

Host local community improvement 
events such as tree planting, green-up 
days and Victory Day celebrations  

Ensure X5 operations are compliant 
with environmental regulations

Measure and communicate our 
sustainable development progress, 
and educate the community about X5 
initiatives that successfully reduce 
emissions, consumption and waste

Represent the interests of retailers with 
regard to regulation and legislation 
via active involvement in leadership 
of relevant associations

Highlight how X5 creates jobs and 
supports local producers by engaging 
with relevant government officials at key 
events such as DC openings

Participate in working groups at federal 
and regional levels

Test technological changes such 
as labelling for various categories of 
goods, electronic document exchange 
and electronic signatures

Maintain an open dialogue with 
the industry association AKORT 
and provide X5’s position on vital industry 
topics such as environmental and sanitary 
legislation

Shareholders/investors

Proactively communicate updates 
and shifts in X5 strategic priorities

Ongoing improvement of our ESG 
disclosure practices based on globally 
recognised best practices

Outline our corporate view of the food 
market and competitive environment, 
plus how it will develop

Corporate governance systems 
are aligned with global best practice

Regularly publish timely, accurate and 
relevant information about Company 
performance via our investor website, 
including but not limited to annual reports, 
sustainability reports, financial statements, 
press releases and presentations

Directly engage with stakeholders 
and investors via: virtual and in-person 
roadshows, via virtual and in-person 
investor conferences, conference calls, 
and group meetings with analysts and 
investors

STRATEGIC REPORT

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SUSTAINABLE DEVELOPMENT

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COMPLIANCE AND BUSINESS ETHICS

120

Compliance and 

business ethics

When conducting business, X5 Group is committed 
to a corporate culture of shared values based on ethical 
standards, mutual respect and compliance with 
applicable laws and regulations.  

The values and standards of conduct common 
to all X5 divisions are reflected in the Code of Business 
Conduct and Ethics and in the policies developed 
on the basis thereof. These documents serve to help 
employees act in accordance with the law and 
to follow ethical principles in the performance of their 
work duties. The above-mentioned documents are 
published on the Company’s website and/or intranet, 
thus enabling all employees to familiarise themselves 
with them. The Code and its underlying policies 
are reviewed and updated on a periodic basis 
in response to changes in legislation and Company 
processes.

Principal documents

Code of Interaction 
with Business Partners

Code of Business 
Conduct and Ethics 

Policy on Countering 
Misconduct Including Fraud 
and Corruption

Declaration on Human 
Rights Protection 

Compliance Policy

Inside Information 
and Dealing Code 

STRATEGIC REPORT

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SUSTAINABLE DEVELOPMENT

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COMPLIANCE AND BUSINESS ETHICS

121

Policy highlights

The Code of Business Conduct and Ethics sets standards of conduct 
that employees are expected to strictly observe in relations with 
customers, suppliers and other employees, as well as a set of basic 
principles that guide our business practices.  

The Code covers areas such as fair competition, fighting bribery and 
corruption, care for the environment, protection of personal data and 
Company assets, avoiding conflicts of interest, and equal opportunities 
for employees and safe working conditions; it also establishes principles 
for interaction with customers, suppliers and competitors. Furthermore, 
the Code contains provisions on how to report violations of the Code. 

The Code applies to all employees regardless of their position or 
function, and during the course of regular training, its provisions are also 
examined from a practical point of view based on examples and real-life 
case studies. 

Throughout the Code, one of the key approaches is “when in doubt, 
ask”. If employees have a question concerning the Code or any ethical 
issue that they encounter in their work at X5 Group, they are obliged 
to contact their immediate supervisor or upper/regional management 
or report to the Compliance Officer or X5 hotline.  

A special email for reporting to the Compliance Officer is available: 

. Anyone who writes to the indicated address will 

receive advice on any issue related to the application of the Code 
of Business Conduct and Ethics.  

Certain individual issues governed by the Code are covered in additional 
documents described on the following pages. 

compliance@x5.ru

DECLARATION ON HUMAN 
RIGHTS PROTECTION

CODE OF BUSINESS 
CONDUCT AND ETHICS

X5’s Declaration on Human Rights Protection defines principles and 
rules in respect of compliance with and promotion of high international 
standards for the protection of human rights at every level of the 
Company’s operations: 

Prohibition of discrimination and forced labour 

Prohibition of harassment 

Respect for cultural diversity and values

Respect for the right to freedom of assembly and association

Occupational health and safety

As a complement to the Code of Business Conduct and Ethics, 
the Declaration on Human Rights Protection is a binding document 
for all X5 employees.