X5 Group (Пятерочка). Годовой отчет за 2021 год - часть 16

STRATEGIC REPORT

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SUSTAINABLE DEVELOPMENT

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COMPLIANCE AND BUSINESS ETHICS

122

X5’s Inside Information and Dealing Code aims to ensure that X5 
employees do not abuse, and do not place themselves under suspicion 
of abusing, inside information and that they comply with their obligations 
under the applicable rules on inside information and securities trading.

As an industry leader, we are aware of our responsibility to the 
government, society, our shareholders and business partners, and we 
aim to fully comply with legal and ethical standards, as well as best 
corporate practices, in order to serve as an example for other market 
participants.  

The Code of Interaction with Business Partners contains provisions 
regarding compliance with trade and competition laws, anti-corruption 
and anti-fraud legislation, legislation on the quality of products and 
services, and legislation on environmental protection and occupational 
health and safety, communication standards, information protection, 
prevention of conflicts of interest, etc. Violations of the Code of 
Interaction with Business Partners are handled by X5’s Conciliation 
Commission.

COMPLIANCE 
POLICY

POLICY ON COUNTERING 
MISCONDUCT INCLUDING 
FRAUD AND CORRUPTION

INSIDE INFORMATION 
AND DEALING CODE

CODE OF INTERACTION 
WITH BUSINESS PARTNERS

In order to ensure compliance with the requirements of regulators and 
stakeholders, as well as internal standards and rules on business 
conduct and ethics, X5 has adopted a Compliance Policy in accordance 
with ISO standards on GRC and management systems.  

Compliance risks are assessed and reviewed by the Audit and Risk 
Committee on an ongoing basis.

X5 and its divisions are committed to conducting business in an 
ethically responsible manner and complying with all applicable laws and 
regulations relating to anti-corruption and bribery.  

In addition to the Code of Business Conduct and Ethics, X5’s Policy 
on Countering Misconduct Including Fraud and Corruption (the 
“Anti-Corruption Policy”) prohibits any form of corruption or bribery, 
including facilitation payments. It aims to create a culture of honesty and 
zero tolerance for illegal behaviour among staff, and also to eliminate any 
risks of involving the Company in corrupt activities. Our anti-corruption 
system includes a set of mechanisms, procedures and tools aimed at 
preventing, uncovering, investigating and responding to all possible 
cases of misconduct. Furthermore, it establishes roles and 
responsibilities for departments and management bodies within the 
anti-corruption system. Our aim is to conduct business only with those 
partners that share X5’s principles of zero tolerance for corruption and 
fraud, and relevant provisions are included in the agreements with our 
suppliers and other business partners.

Policy highlights

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The Ethics Committee includes the Company’s Chief Executive Officer 
(Chairman of the Committee), the Director for Legal Affairs and 
Government Relations, the Security Director, the Business Support 
Director and the Director for Human Resources and Organisational 
Development. The Committee’s decisions are binding on all Company 
employees. 

Our internal procedure for declaring, monitoring and resolving conflicts 
of interest enables managers and employees to disclose situations 
where the personal interests of an employee at any level affects or 
could affect the rights and interests of the Company, and it establishes 
procedures for the purpose of resolving such situations.  

The Compliance Department is responsible for the effectiveness 
of the process involved in declaring conflicts of interest.  

Additional information regarding X5’s corporate governance systems 
and mechanisms for managing conflicts of interest is provided 
on page 146 of the Corporate Governance report.

Employees are encouraged to report any actual or suspected violations 
of the Code of Business Conduct and Ethics or labour laws. An ethics 
hotline is in place for this purpose. Various communication channels are 
available to employees and other whistle-blowers for reporting 
violations: reports can be made by e-mail as well as through the 
Company’s website and intranet.  

Responsible staff are required to review all reports and follow up in 
accordance with internal procedures. Reports via the ethics hotline can 
be made anonymously; moreover, provided that reports are made in 
good faith, employees can contact the ethics hotline without fear of 
retaliation even if an investigation does not confirm that a violation took 
place. The Company guarantees the confidentiality of all reports 
submitted.  

In 2021, there were no substantiated reports of significant financial 
reporting or accounting violations, fraud or other ethical violations.  

In addition to the whistle-blowing channels for employees, the Company 
operates a reporting channel for business partners and other third 
parties. Violations of the Code of Interaction with Business Partners are 
handled by X5’s Conciliation Commission, which serves as a corporate 
arbitrator in disputes with business partners. Reports of violations may 
be submitted through the Company’s website. 

ETHICS COMMITTEE

CONFLICTS OF INTEREST

REPORTING VIOLATIONS 
AND WHISTLE-BLOWING

The Ethics Committee is responsible for:

Objective review of disputes related to alleged violations of the Code 
of Business Conduct and Ethics and the Anti-Corruption Policy;

Resolving conflicts of interest;

Taking measures to combat corruption and fraud. 

Compliance and ethics systems

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In addition to the fact that all Company employees are required to 
familiarise themselves with the Code of Business Conduct and Ethics, 
the Company conducts regular training on the Code of Business 
Conduct and Ethics and related policies, during which employees are 
required to take part in sessions covering the practical application 
of these documents.  

The development of training programmes in the areas of compliance 
and ethics are entrusted to the Compliance Department.  

More detailed information on the Company’s performance in the areas 
of compliance and business ethics in 2021 will be published in X5 
Group’s Sustainability Report.

TRAINING

Compliance and ethics systems

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LOCAL COMMUNITIES

125

Local 

communities

Since its founding, X5 Group has been committed 
to playing a role in ensuring the health and well-being 
of the people in the regions where it operates. We will 
continue to engage in such activities in accordance 
with our sustainable development strategy, which 
is focused on achieving the UN SDGs aimed at ending 
hunger and ensuring good health and well-being. 
The community-focused projects that we implement 
have been developed based on our understanding 
of the priority areas where we can make a significant 
contribution to ensuring the health and well-being 
of local communities.  

In our activities, we are also guided by Russia’s 
National Development Goals to 2030, the opinions 
of civil society experts and international best practices. 
X5’s corporate brand division, the marketing division 
for the Company’s retail formats and Pyaterochka’s 
transformation office are responsible for the 
implementation of charitable programmes.  

In 2021, the Company conducted a comprehensive 
assessment that included a calculation of the impact 
of its charitable programmes on various aspects of the 
life of local communities. As a result of these efforts, 
a monitoring system and a regulation on the conduct 
of regular assessments were developed.

X5 Group’s key forms of interaction with local 
communities are its charitable and social projects.  

The general principles and rules for charitable activities 
are set out in X5’s Charity Policy, which also specifies 
the roles and responsibilities of employees involved 
in the implementation of charitable programmes. 
The Policy applies to all X5 Group business divisions. 

The Company has identified the following priority 
areas for charitable activities:

food assistance

the creation of a comfortable and safe 
environment

health and healthy lifestyles, physical education 
and children’s sports

In order to maximise its contribution, the Company 
promotes and develops corporate volunteer activities 
by encouraging employees to take part in charitable 
and volunteer projects.  

The key groups of beneficiaries are children, the 
elderly, people in difficult life situations and local 
communities.  

Upon the completion of each project, we receive 
feedback from the non-profit organisations 
we work with. 

Local communities

UP TO

30

%

Annual increase in the number 
of families receiving support 
through the Basket 
of Kindness project

Long-term 30×30 goals

Medium-term goals for 2023

100

%

Increase compared with 
2019 in the number of families 
receiving support through 
the Basket of Kindness project 
by 2023 

The participation of all stores 
by 2023 in a programme 
aimed at finding missing 
people 

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Food assistance

Health

FOOD COLLECTION

In August 2015, X5, together with Foodbank Rus, 
launched the Basket of Kindness national project 
to collect and distribute food to those in need. 
In 2021, 3,769 stores took part in the project. Some 
355.7 tonnes of food was collected and distributed 
to the elderly, families with children and people with 
disabilities. No fewer than 9,817 volunteers were 
involved in the project. More than 184,900 people 
received assistance.  

In 2021, X5 Group launched a new means of providing 
assistance: charitable food cards. Some 2,940 families 
from 15 cities received cards for shopping 
at Perekrestok stores, and Foodbank Rus adds 
RUB 1,000 to the balance every month. 

HELP PROJECT

In 2021, Perekrestok supported the Help project run 
by the Here to Help Foundation. The retail format 
invests in the development of the project’s digital 
platform and is a general partner in the grocery retailer 
category. In 2021, the Company donated about 
RUB 31 million to the project. Thanks to our 
cooperation with the Foundation, 1,216 beneficiaries 
in 26 Russian cities receive monthly food assistance 
in the form of a selection of 33 items weighing 20 kg 
and valued at RUB 3.5 thousand.

CANDIES OF KINDNESS PROJECT

Through this project, customers at all Pyaterochka 
stores can purchase Candies of Kindness at checkout 
counters. RUB 5 from the sale of every candy helps 
cover the cost of operations for beneficiaries 

of the Life Line Foundation. In 2021, the project raised 
almost RUB 10 million for the treatment of 45 seriously 
ill children.

Comfortable and safe 
environment

SAFE SPACE

In 2021, store employees and volunteer rescuers from 
the Liza Alert search-and-rescue team helped 
1,370 people, including 68 children, return home. 
The Safe Space project was launched in the spring 
of 2019 at more than 2,600 Pyaterochka stores 
in Moscow and the Moscow region, and that autumn 
it was expanded to every Pyaterochka store 
in the 66 regions where the retail format operates.  

Perekrestok stores also joined the project in November 
2020. Safe spaces are special areas in stores marked 
by distinctive signage in the form of an orange 
geolocation pin, which acts as a reference point for 
anyone who is lost or disoriented. Anyone in such 
a situation can enter a Pyaterochka or Perekrestok 
store and make contact with a store employee or wait 
until help is offered.

PREVENTION OF CHILD ABANDONMENT

With the support of X5, SOS Children’s Villages arrange 
individual consultations according to a plan specially 
developed for each needy family as well as a variety 
of events, workshops, training courses, educational 
assistance and comprehensive support for family 
members. In 2021, 447 families (578 children and 
747 adults) benefitted from the programme. 

Plans for 2022

30

%

Increase in the number 
of families receiving food 
assistance through 
the Basket of Kindness 
project

UP TO

100

%

Share of Pyaterochka and 
Perekrestok stores that 
continue to support the 
operation of the Safe 
Spaces programme to help 
lost or disoriented people

Develop 
programmes 
focused on local 
communities 

Piloting of 
foodsharing in 
several regions

STRATEGIC REPORT | SUSTAINABLE DEVELOPMENT | RATIONAL CONSUMPTION OF RESOURCES

127

Under the sustainable development strategy approved 
in December 2019, we continue to implement 
measures aimed at supporting UN SDG 12 – 
responsible consumption and production – which 
we have identified as a priority for X5.  

In order to continue to improve our performance 
in this area, we are also piloting and introducing new 
and innovative ways to optimise our own resource 
consumption and further encourage our customers 
to reduce, reuse and recycle. 

At the end of 2021, X5 affirmed its commitment 
to sustainable development by introducing 
a Decarbonisation Plan and setting an ambitious goal 
of reaching carbon neutrality by 2050. Our target will 
be reviewed against science-based criteria  over 2022 
to ensure that we are on track to meet the goals of the 
Paris Agreement. We are also investing considerable 
efforts into meeting our target of achieving a 30% 
reduction in greenhouse gas (GHG) emissions intensity 
per square metre of retail space by 2030.  

First, we began a process of calculating indirect GHG 
emissions, which covers most of our value chain 
processes.  Moreover, X5 conducts climate risk 
assessment and scenario analysis.  

¹

²

³

Please refer to the section “How We Manage Risk” 
in this Report and our forthcoming 2021 Sustainability 
Report for further details.   

An assessment of Scope 3 GHG emissions was carried 
out for the first time in 2020, resulting in an increase in 
reported gross emissions in 2020 compared with 2019. 
The inclusion of Scope 3 emissions in our calculations 
ensures the integrity of our approach to assessing our 
level of emissions, which is important for monitoring 
the attainment of our climate targets.

20

%

Share of suppliers to develop 
sustainable packaging⁴

>

50

%

Share of private labels 
sustainably packaged

Promote sustainable sourcing 
programmes and principles 
across the supply chain

UP TO

10

%

Reduction in GHG emissions 
per square metre of retail space 

Use of renewable energy 
in X5 operations 

UP TO

95

%

Share of recyclable waste  from 
X5 operations to be sent 
for recycling by 2023

⁵

UP TO

40

%

Share of non-expired food waste 
to be reprocessed by 2023

30

%

Reduction in GHG emissions 
(Scope 1 + Scope 2) per 
square metre of retail space 
vs 2019

30

%

Share of energy from 
renewable sources for 
in-house operations

30

%

Reduction in ratio of waste 
generation to retail sales

Rational 

consumption 

of resources

Long-term 30×30 goals

Medium-term goals for 2023

1 X5 announced its commitment to the Science Based Target initiative (SBTi) in December 2020.

2 X5 disclosed its direct (Scope 1) and indirect (Scope 2) GHG emissions in 2020.

3 X5 uses the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) for the assessment of climate-related risks. 

4 In line with X5 Retail Group recommendations for suppliers.

5 Recyclable solid waste: plastic, cardboard, wrapping film, banana boxes, wooden pallets, tires, scrap metal, etc.

Protecting the planet

Sustainable supply chain

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Promoting responsible consumption and use of resources

Perekrestok

1.

Thirty-nine stores were connected 
to our smart store system, 
reducing energy consumption 
by 12% on average. In total, 
416 stores have been connected, 
with plans in place to connect 
100 more in 2022. 

2.

The refrigeration system was 
integrated into the smart store 
system at 189 stores, reducing 
the cost of electricity by 4%. 

3.

Since 2021, Perekrestok has been 
outfitting its refrigerated display 
cabinets at 86 stores with 
thermopane glass, which will 
reduce stores’ energy 
consumption by 11%; the 
thermopane glass was purchased 
in 2021, and installation is well 
underway.

X5 consistently works to optimise our use of resources. 
In 2021, X5 converted 11 DCs to low-carbon energy 
sources. Now, all X5-owned Pyaterochka DCs have 
moved to low-carbon energy sources. In 2022, 
Pyaterochka and Perekrestok will continue their shift 
to green energy sources at their stores and DCs. 
Initiatives include the installation of solar panels and 
the use of alternative-fuel vehicles for transportation. 

Following a review of our sustainability performance 
and related ongoing and planned investment projects, 
the Company identified opportunities for improving 
operational efficiency and set annual targets for 
reducing GHG emissions through 2023 to limit its 
climate impact.  

All new outlets and stores slated for refurbishment 
are being equipped with a smart store system, which 
deploys special sensors, monitoring devices and 
software to integrate into existing operating processes, 
thereby helping to reduce energy consumption, 
automate equipment control (for refrigerators, 
refrigerated display cabinets, heating and air 
conditioning units, lighting and heating solutions 
for selling space and utility rooms) and minimise 
the risk of accidents. 

Pyaterochka

1.

In 2021, Pyaterochka signed 
an agreement to switch its stores 
in the Karelia Region to renewable 
energy sources. 17% of total 
energy consumption in 
Pyaterochka’s stores in the region 
now constitutes green energy. 

2.

Pyaterochka is piloting a transition 
to more environmentally friendly 
CO2 refrigerants (the Podolsk DC 
is the first to pilot the new 
refrigerants). 

3.

In 2021 four of our Pyaterochka 
shops installed solar panels.

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Waste management

IMPROVING INTERNAL WASTE 
MANAGEMENT PROCESSES

PREVENTING WASTE 
GENERATION

Improving waste management is a key 
priority of X5. The Company’s retail formats 
have been working hard to evaluate and 
advance their waste management 
processes and to educate their employees 
in this direction.  

Pyaterochka has improved its waste 
management processes – for example, 
by setting standards for the generation 
of recyclable materials for each store 
depending on its turnover, improving 
the system for monitoring the volume 
of recyclable materials being transferred 
from stores to DCs, equipping DCs with 
scales and screening incoming materials 
in order to check actual amounts against 
the established standards. 

Improving the accuracy of inventory 
planning is an important tool for reducing 
waste generation.  

We continue to manage waste generation 
by reducing waste through big data–driven 
demand modelling, more frequent product 
deliveries, better adaptation of the product 
mix to customer needs, smaller minimum 
orders negotiated with suppliers and strict 
compliance with temperature requirements 
during transportation. 

We are piloting new solutions that help 
prevent waste: in 2021, Perekrestok 
launched a pilot of irrigated shelves 
to extend the shelf life of greens.

Doing away with printed receipts 

Both Pyaterochka and Perekrestok now 
enable customers to choose electronic 
receipts instead of printed ones, thereby 
reducing wastepaper. Customers can 
choose this option in each retail format’s 
mobile app. 

RECYCLING OF WASTE 
GENERATED BY X5

Vprok.ru Perekrestok continued collecting 
delivery plastic bags for further recycling. 
Customers can return plastic bags used 
during delivery to the courier.

X5 continued projects with Unilever and 
Henkel, collecting used plastic and 
aluminium containers via reverse vending 
machines installed in our stores. 

We continued to expand our refilling project 
for household chemical containers with 
BioMio by installing refilling stations at 
Perekrestok stores. Containers for collecting 
clothes were installed at Perekrestok. 
We added a range of interchangeable soft 
containers produced with 50% less plastic. 
In partnership with Henkel, 343 Perekrestok 
supermarkets installed containers for 
collecting plastic caps, the recycled plastic 
from which will be used to create special 
ramps that will be installed at the entrance 
to the format’s supermarkets in various 
regions.

In an effort to expand the reuse of materials 
in its logistics operations, Pyaterochka 
began repairing pallets at DCs so that they 
can be reused.  

FOOD WASTE

As a food retailer, we are committed 
to minimising food waste and the impact 
of its disposal. 

All food waste generated by X5 stores 
is sent to third parties for landfilling 
or recycling. We are looking for opportunities 
and piloting technological solutions 
to transfer food waste for further processing. 
As noted above, in 2020, Pyaterochka and 
Perekrestok launched an initiative 
to increase deliveries of unsold food 
for recycling into animal feed; in 2021, 
Vprok.ru Perekrestok joined the initiative 
as well. Since the project was launched in 
2020, we have increased deliveries fivefold.