Middle Ethical Consumer rating for Environmental Reporting (November 2020)
In November 2020 Ethical Consumer conducted internet searches to find out how Aldi South reported on its environmental impacts. The group's corporate responsibility website, cr.aldisouthgroup.com, and main website, www.aldi.co.uk, were both searched. Ethical Consumer also found its most recent CSR report, entitled: '2017 International Corporate Responsibility'.

Aldi's 2017 CSR report outlined the company's approach with regard to resources. It included the following resources: palm oil, wood and paper, cocoa, coffee, fish and seafood and soy. The report provided information and statistics for all of these resources; for example, the report stated that Aldi's overall share of certified coffee was 43.44% and its share of certified palm oil was 74.14%.

The report also contained a group-wide international climate strategy and discussed refrigeration, lighting, heating, carbon footprint, greenhouse gases, energy and electricity, recycling and construction. Aldi's corporate website also covered the issues of waste and plastic packaging.

The company's website also provided more detailed information about Aldi's energy use. It stated that 94% of the electricity it used in 2015 was from green, renewable energy sources.

However, the company only discussed the use of agrichemicals with regards to its cocoa supply chain and no mention of pesticides or water use was made; therefore it was not considered to have demonstrated adequate understanding of its main environmental impacts.

Aldi provided a number of dated, quantified targets to reduce its environmental impacts, stating that:
- "At present, we are using a refrigerant with a GWP of less than 2,200 for medium-temperature refrigeration in 75% of our stores and aim to increase this share to 100% of our stores by 2025"
- "By 2022 Aldi aims for 100% of all own label packaging to be recyclable, reusable or compostable (where it does not have a detrimental effect on product quality or safety, or increase food waste)."

The report had been independently audited by KPMG and PricewaterhouseCoopers. Independently audited figures were given a tick in the report. This showed that only a select few pieces of environmental performance data had been audited. Ethical Consumer would expect a company of Aldi's size to have its entire environmental report independently audited.

Aldi's 2017 CSR report was now more than 2 years old, but there was some further more up to date information on the company's website, and many of the target deadlines had not been surpassed, therefore Ethical Consumer accepted this as a sufficiently up to date policy.

Due to the fact that Aldi South had an environmental report that included at least two future performance targets dated within the last two years, but was not considered to have demonstrated adequate understanding of its environmental impact or have been adequately audited, it received Ethical Consumer's middle rating for Environmental Reporting. (ref: 59)

In November 2020 Ethical Consumer viewed Aldi South Group’s website, looking for information on what the company was doing to reduce its climate change impact. Ethical Consumer was looking for the following:

1 a) For the company to show that it has a reasonable understanding of its areas of climate impact and how to ameliorate them, and appears to be taking steps to do so

The website stated “Our international climate strategy focuses on the systematic reduction of our energy consumption, employing more environmentally friendly refrigerants, the use of renewable energy, and modern logistics concepts.”

It further stated the company had “continuously improved energy efficiency. Large parts of cooling systems are now using natural refrigerants and 89% of electricity is coming from renewable energy sources” and that "1,800 of the 6,500 stores worldwide have already been fitted with photovoltaic systems on the roofs"

1 b) For the company to have relevant sector-specific climate policies in place

The website stated “In the refrigeration systems installed in all stores, refrigerants with a global warming potential (GWP) of >2,200 are to be replaced by an alternative refrigerant with a lower GWP

1 c) For the company to not be involved in any particularly damaging projects like tar sands, oil or aviation, to not be subject to damning secondary criticism regarding its climate actions.

No evidence of the above was found.

2) For the company to report its scope 1&2 emissions annually

Aldi South Group’s 2017 CR Report contained Scope 1 & 2 emissions data for 2016, however, no more recent data for scope 1 & 2 emissions was found.

The company’s Climate Protection Progress Report 2018 reported data CO2e/m2 for each year up to 2018 for each of the countries in which it operated. However, this was given “per metre squared of sales area” and so did not represent absolute emissions, nor did it specify the scope of emissions

3) For the company to report scope 3 emissions, covering at least tier one suppliers (all greenhouse gases, which means reporting in CO2e, not just CO2).

2017 report Aldi South Group’s 2017 CR Report contained emissions data categorised as cope 3 covering “Third-party logistics only”. This was not considered adequate as the majority of scope 3 emissions would come from the company's supply chain.

4) For the company to have a target to reduce its greenhouse gas emissions in line with international agreements (counted as the equivalent of at least 2.5% cut per year in scope 1&2 emissions), and to not count offsetting towards this target.

Aldi South Group’s website stated “we aim to reduce our overall operational GHG emissions by 26% by the end of 2025 (against baseline year 2016).” It stated that this target was in line with the Science Based Targets initiative (SBTi),

Overall, while Aldi South Group had measures in place that adequately addressed parts 1 and 4 of the rating, it did not appear to be reporting its 1&2 emissions annually, as this data was not available for years later than 2016. The company therefore received Ethical Consumer’s Worst Rating for carbon management and reporting and lost a full mark under the Climate Change category.

The campaign group Feedback published a report in June 2018 entitled 'The food waste scorecard: an assessment of supermarket action to address food waste'. The report ranked UK supermarkets based on publicly available information, mainly from their websites or news articles, to assess their efforts to tackle food waste in the industry.

The report measured supermarkets against the food use hierarchy. Feedback established key indicators for each facet of the food use hierarchy, which include reducing and preventing surplus food as a priority, followed by redistributing surplus food, recycling surplus food and finally the proper disposal of food waste. Supermarkets scored a point for each of the 32 key indicators successfully implemented.

Aldi scored a D+ rating overall and ranked 3rd out of 10 supermarkets assessed in the report.

On reducing and preventing surplus food, Aldi was found to have implemented 8 of the 20 key indicators, however had not released any publicly available information on food waste. Aldi, along with Tesco, was one of the only supermarkets to sign up to the UN’s Sustainable Development Goal (SDG) of halving food waste from farm to fork by 2030. The SDG is deemed by Feedback to be a more ambitious target than the UK’s national voluntary agreement (Courtauld 2025), to which all the UK supermarkets assessed in the report are signed up.

The second step in the food use hierarchy is redistribution, which involves surplus food that is fit for human consumption being sent to charities and organisations that redistribute food. Aldi was found to have implemented 2 of the 4 key indicators and scored 1 out of 3 available points for the quantity of food redistributed, which totalled 112 tonnes based on the most recent data available at the time of publishing.

The food use hierarchy holds that food surplus unfit for human consumption should be used to feed animals. Aldi did not score any points under this criteria and was not found to be engaging in this activity.

The final step in the food use hierarchy is the disposal of inedible food waste. Most UK supermarkets have a zero waste to landfill commitment. Instead, large quantities of food suitable for human consumption is being sent to Anaerobic Digestion (AD) to be converted into energy. According to the Feedback report, AD should only be used to process food waste which is unsuitable for redistribution or animal feed. Aldi was recognised for fulfilling 1 of the 3 key indicators under the disposal criteria due to its zero waste to landfill commitment.

The report stated, "Producing our food costs our planet dearly, with Greenhouse Gas Emissions (GHG) from agriculture, forestry and fisheries doubling over the past 50 years (FAO 2014) to nearly 20% of emissions resulting from human activity. Globally, around one third of all food produced is wasted (FAO 2011)". As Aldi scored well in this report, this reference is for information only.

In November 2020, Ethical Consumer searched the Aldi South Group corporate website for the company's policy on the use of the hazardous chemicals parabens, triclosan and phthalates.
Some forms or uses of these chemicals were banned or restricted in the EU or the USA.

Triclosan is an antibacterial and a suspected endocrine disruptor. Parabens are also endocrine disruptors and have been linked to breast cancer. They are used as preservatives. Phthalates, usually DEP or DBP, are used in fragrances and are endocrine disruptors.
A strong policy on toxics would be no use of these chemicals or clear, dated targets for ending their use.

The company appeared to have no policies on the use of toxic chemicals in household and personal care products, therefore it lost a whole mark under Ethical Consumer's Pollution and Toxics category.

In May 2016, Oxfam Germany published a report called: “Sweet Fruit, Bitter Truth: German Supermarkets’ Responsibility For The Inhuman Conditions Which Prevail In The Banana And Pineapple Industries In Costa Rica And Ecuador.”
The report followed an investigation undertaken by Oxfam Germany in 2008 which revealed the shocking conditions in the pineapple production industry in Costa Rica. In 2016 Oxfam found that little had improved.
Dr. Franziska Humbert, Advisor for business and human rights at Oxfam Germany and author of the report said “the conditions on plantations have barely improved over the past eight years. The water tanker is still needed to provide drinking water to the communities whose groundwater has been contaminated in the areas around pineapple plantations. Large companies which boast of their own sustainability dump their waste water right next to drinking water reservoirs, not even making any effort to hide it. Companies which share responsibility for the contamination of ground water do not pay any compensation to those affected, nor do they construct new waterworks. The workers’ complaints concerning their wages, working hours or the breaches of their trade union rights also shocked me.”
The report went onto blame supermarkets – in particular the German retailers including Aldi - for the untenable conditions which prevail in the banana and pineapple industries. It said “they abuse their market power in forcing down prices paid to producers and suppliers. For example, the import prices for pineapple decreased by around 45 per cent from 2002– 2014, despite increasing production costs. This contributes to the intensification of traditional exploitative structures in both countries, to the fact that the plantation workers’ wages in Costa Rica and Ecuador are too low to support a family, and to the perpetuation of unstable employment conditions. While the supermarket chains meticulously check the imported fruits’ appearance, refusing to accept entire deliveries due to even the smallest flaw, they take social and ecological criteria much less seriously. This investigation reveals (too) many violations of human and labour rights in the production of bananas and pineapples.”
The report talked about the use of highly hazardous pesticides and contamination of ground water. Many of the workers surveyed reported a high rate of disabilities, miscarriage and cancer in the areas around plantations. They also reported frequent respiratory disease, nausea, skin allergies and dizziness.
It said “The Ecuadorian banana industry uses highly poisonous substances such as Paraquat, which is not licensed for use in the EU, or the cancer-causing products Mancozeb and Glyphosate. Spraying pesticides from airplanes is standard. During a survey on a plantation which supplies Lidl amongst others, 60 per cent of the interviewed workers stated that they work on the plantations during or straight after airplane spraying has taken place – a clear violation of state-recommended re-entry safety periods. In Costa Rica too, workers of producers which supply German supermarkets report that pesticides are sprayed whilst they work on the fields.”
Issues such as repression of trade unions and precarious working conditions were also found.
Oxfam demanded that German supermarket chains do justice to their ecological and social responsibility.
Aldi lost whole marks in the categories of Pollution & Toxics and Workers' Rights in light of this story.

In November 2020, Ethical Consumer searched Aldi South Group website for a cotton sourcing policy.

The company's International Buying Policy for Cotton was downloaded. This document outlined the company's target to source 100% sustainable cotton in the future:

"By 2025, we will [...] require the cotton used for our own-brand products to be of either recycled origin or certified according to one of the following internationally recognised sustainability standards:• FAIRTRADE • Global Organic Textile Standard (GOTS)• Organic Content Standard (OCS) 100/blended• Cotton made in Africa (CmiA)• Better Cotton Initiative (BCI)"

The company was not a signatory to RSN but had a detailed public commitment regarding sourcing cotton from Uzbekistan and Turkmenistan:

"We prohibit our business partners from using cotton sourced from countries where cultivation and harvesting are systematically associated with human rights violations. For example, ALDI has contractually prohibited the use of cotton grown in Uzbekistan and Turkmenistan for the production of its merchandise."

As a result of its policy, the company retained full marks in the Human Rights category due to the commitment not to source from Uzbekistan and Turkmenistan.

Although the target to source 100% of its cotton from certified sustainable sources was commendable, due to the fact this target was not yet attained, Aldi South Group was marked down under the Pollution & Toxics and Controversial Technology categories for the reasons outlined below.

The Organic Trade Association website, www.ota.com, stated in July 2018 that cotton covered roughly 2.78% of global arable land, but accounted for 12.34% of all insecticide sales and 3.94% of herbicide sales. Due to the impacts of the widespread use of pesticides in cotton production worldwide the company lost half a mark in the Pollution & Toxics category.

According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), a non-profit pro biotech organisation, genetically modified cotton accounted for 80% of cotton grown in 2017. Due to the prevalence of GM cotton in cotton supply chains and the lack of any evidence that the company avoided it, it was assumed that some of the company's cotton products contained some GM material. As a result it lost half a mark under the Controversial Technology category.

In November 2020, Ethical Consumer viewed Aldi South Group’s website for information about its timber sourcing. It stated, “We focus on sourcing all timber used for our own-brand products and packaging in a sustainable manner. We have set the goal to use only certified materials according to the FSC, PEFC, SFI, Blue Angel standard, or made from recycled materials by the end of 2020. In 2019, 79% of our own-brand products and 54% of our own-brand product packaging were certified or recycled.”

Ethical Consumer's timber sourcing ranking required companies scoring a 'best' to cover six of the below issues:
1. Having a timber sourcing policy that covers all timber and timber-derived products
2. the exclusion of illegal timber or that sourced from unknown sources and...
3. ...a discussion on how a company ensures/ implements this
4. clear targets for sourcing timber from sustainably managed sources
5. a discussion of a good minimum standard
6. preference given to certified sources
7. a discussion about tropical hardwoods (THW) and the percentage of THW sourced that are FSC certified
8. involvement with a multi-stakeholder initiative or bridging programme such as the World Wildlife Fund- Global Forest Trade Network
9. use of reclaimed or recycled wood/ paper
10. a high total percentage (50%+) of FSC certified timber sourced by the company.*

Aldi was considered to have met criteria 1, 4, 6 and 9. As a result it received Ethical Consumer’s Middle rating for its timber sourcing policy and lost half a mark in this category.

On issue number 10: Although Aldi South Group stated that 79% of own-brand products and 54% of own-brand product packaging were certified or recycled, it did not state what percentage was specifically FSC certified.

On issue 2: as the company did not explictly exclude illegal timber and was not yet sourcing from 100% certified, and thereby legal, sources, it was not considered to meet criteria 10.

In 2016 Greenpeace released an updated version of its Tuna League Table (www.greenpeace.org.uk/tunaguide2016) which was viewed by Ethical Consumer in February 2017. Greenpeace sent questionnaires to each of the eleven major supermarkets and tuna brands in the UK. The companies were judged over seven criteria. 1. Traceability 2. Sustainability 3. Legality 4. Equity 5. Sourcing Policy 6. Transparency and customer information 7. Driving change
Aldi ranked 5th out of 11 in the Guide. Greenpeace said: "Aldi’s own ‘Ocean Rise’ brand sources only pole and-line or free-school tuna (no destructive Fish Aggregating Devices are used), meaning 100% sustainable fishing methods and impacts on wildlife are minimised. However, Aldi should commit to avoiding overfished or problem stocks."
Due to the fact Aldi was not yet considered a leader in the Greenpeace ranking it lost half a mark under Ethical Consumer’s Habitats and Resources category.

In April 2018 the Marine Stewardship Council (MSC) issued a press release estimating the proportion of fish sold by supermarkets which was MSC certified. Aldi had 80%.

The MSC label was reported to ensure that the fish being bought had been caught in an environmentally friendly way. MSC stated “Only seafood from fisheries that meet our strict standard for sustainability can be sold with the blue MSC label. These fisheries ensure that fish are caught at levels that allow fish populations and the ecosystems on which they depend to remain healthy and productive for the future… All along the supply chain, from ocean to plate, MSC certified fish and seafood is separated from non-certified. It is clearly labelled and can be traced back to a certified sustainable source.”

As Aldi had more than two thirds of its range certified it was not marked down in the Habitats and Resources category.

In November 2020 Ethical Consumer downloaded the ALDI International Services GmbH & Co. oHG (Aldi South) 2018 Annual Communication on Progress (ACOP) to the Roundtable on Sustainable Palm Oil (RSPO) from the RSPO's website and looked at the information provided on the company group's website.

100% of the total palm oil, palm kernel oil and palm oil derivatives used by the company was reported to be certified by the RSPO and 29% of this was through a segregated mechanism. The company picked up additional marks for disclosing volumes and having a group wide commitment. It was not conducting any additional positive initiatives regarded as significant and it did not disclose its suppliers. It received Ethical Consumer's Middle rating for its palm oil policy and practice and lost half a mark in the Palm Oil category.