Green and sustainable living for everyone, every day

The trend radar

The Trend Radar was created on the basis of a report on the trends affecting our Responsibility Strategy, which we developed together with infuture.institute. The trends that are closest to the middle of the chart are the leading trends that need to be addressed the soonest. Those in the middle zone should be taken into account particularly when working on a strategy that’s assumed to have a three-to-five year perspective. Although those furthest from the centre have a lesser impact on day-today operations, they are worth watching in the context of how the world is changing.

Definition of trends

Calculating our impact

For yet another consecutive year we decided to analyse our impact based on a proven methodology to better understand our contribution to the socio-economic development of Poland.

Download the infographic.

How we analysed our impact.

Our total annual contribution to the Polish economy was calculated using a method that focuses on the links between specific branches of the economy and companies operating on a given market. The analysis that our organisation performed relied on a methodology based on the Leontief model (also known as the input-output model). The model, in turn, was prepared based on the most recent input-output tables expressed in current base prices for domestic production in Poland in 2015, identified by the Central Statistical Office (GUS) in 2019. The data was adjusted by the inflation rate. The impact of the Żabka Group’s ecosystem on the Polish economy has been analysed with two specific aspects. First is the impact of our purchases on the growth of the individual branches of the economy in Poland, resulting from the operational activity of the Żabka Group (backward linkage); the second one is related to the activity of franchisees who, by selling goods and services to end customers, create additional economic effects (forward linkage).  
  
The analysis is purely of an illustrative nature and the information contained therein may not be complete and cannot serve as a basis for any decision-making processes. Information from sources other than the financial data of Żabka Polska sp. z o.o. (e.g. from public sources), has not been verified.

1.1 Good nutrition

Nutri-Score labelling system

During 2022, we were very proud at Żabka Group to succeed in labelling 100% of our own brand ready-to-eat and ready-to-heat products under the Nutri-Score scheme.

This was a significant step forward in helping our customers make the right purchasing decisions: Nutri-Score is an official, science-based colour-coded food-labelling system, promoted as a candidate to enable uniformity across the European Union and empower people to enjoy well-balanced diets. It does this by indicating at a glance how healthy and nutritious a product is, ranging from A (with plenty of fibre, proteins and vegetables etc) to E (with high levels of saturated fats, sugars, salt and more). Clearly, consumers are encouraged buy products at the healthy end of the spectrum, and research shows that 91% see Nutri-Score as helpful in making the right choices. Close to half (45%) of our own brand products are rated A or B, and this proportion is continuing to improve. To create increased awareness of the system, its value and simplicity, we ran a digital campaign in 2022 with the powerful message: ‘Nutri-Score: it’s a cakewalk ABC’.

1.1 Good nutrition

0% zone

One of the positive consumer trends on the market is the growing popularity of non-alcoholic beverages, with the low and non-alcoholic beer segment growing by 128 million PLN last year to 1.3 billion PLN.https://www.browary-polskie.pl/wp-content/uploads/2023/03/Rynek-piwa-w-Polsce-w-2022-r..pdf

This is a result of the increasing focus on leading a healthy lifestyle, the desire to avoid long-term health consequences and the changing preferences towards drinking alcoholhttps://www.euromonitor.com/spirits-in-eastern-europe/
report?recid=2273335833965&id=679498 of consumers in the millennial and generation Z segments. This trend is also reflected among Żabka consumers – we noticed a significant increase in the value of sales of non-alcoholic beer compared to the previous year. For a growing group of consumers who appreciate the taste of the product itself rather than the amount of alcohol it contains, we have prepared a special offer in our ‘0% Zone’, marked with blue labels to be easily found onshelf or in cooling cabinets. We offer not only 0% beers such as lager, flavoured or speciality, but also wines and gin. This includes a unique product offer dedicated to our customers, which is solely distributed in Żabka stores.

1.1 Good nutrition

Revamped version of Szamamm

In 2021, we embarked on a process of changing the ingredients of Szamamm — one of our most popular own brand ranges. Acting in line with our strategic commitments related to good nutrition, we have reduced, by 5%, salt and sugar content the spaghetti Bolognese meal that is highly popular among our customers. We have also reduced, by 5%, salt content in chicken penne. Those recipe reformulations were preceded by positive laboratory tests and tasting trials. We are currently working on reformulating the recipes of other Szamamm line products — 13 additional products have already successfully completed flavor trials conducted by experts and consumers. Their introduction to our offer is conditioned on a positive result of laboratory tests, By the end of 2021, 87.6% of products other than own brand products sold in Żabka stores and containing palm oil, met the requirements of the policy we had adopted. the last stage of the comprehensive recipe reformulation process. The Szamamm brand was the first own brand range with a Nutri-Score label. In 2021, more than 60% meals were labelled with Nutri-Score of A or B.

1.1 Good nutrition

We have eliminated palm oil

We want our customers’ nutritional choices not only to be good from the health point of view, but also favorable for the planet. That is why we have completely eliminated palm oil from our own brand products. As far as branded products offered by our suppliers are concerned, acting in accordance with the Sustainable Palm Oil Policy, all other products offered in Żabka stores will be allowed to contain only palm oil from certified sources by the end of 2022. The Polish Coalition for Sustainable Palm Oil has decided the RSPO is the best certification scheme currently existing on the market – it guarantees sustainability of crops and an adequate level of protection of the environment, animals, humans and their traditions. By the end of 2021, 87.6% of products other than own brand products sold in Żabka stores and containing palm oil, met the requirements of the policy we had adopted.

1.1 Good nutrition

Plant Hunter – a 100% plant-based brand

In April 2021, we launched our first 100% plant-based own brand range known as Plant Hunter, actively pursuing our strategic commitment to increase the sales of plant-based products. Customers enjoy a choice of snacks, salads, lunch dishes, ready meals and sweets. In the lunch dishes, meat has been replaced by a GMO-free soy-based product. The recipes of Plant Hunter meals have been developed by professional chefs. The products contain no sweeteners, hardened fats and preservatives. Plant Hunter dishes are suitable for consumption as is, or , in the case of ready meals, after being heated in a microwave. They are a perfect fit with the modern convenience format, offering our customers a fully balanced, plant-based meal that may be enjoyed without long waiting times. The launch of the Plant Hunter brand has won us the second award in the 2021 Plant-Based Game Changer contest organised by RoślinnieJemy.org.

1.2 Food waste prevention

Food waste reduction in own operations

According to UN’s agenda, the amount of food wasted shall be reduced by half by 2030 (compared to 2014). As a dynamically growing chain with an annual growth rate with more than one thousand new stores, we face challenges connected with managing food waste. Therefore, we are actively seeking solutions that will enable us to reduce food waste in the whole value chain. In 2022 we looked closer at our own operations and implemented effective improvements, which led to 27% reduction of food waste intensity in our own operations. Having in mind goal of reduction -25% till 2025 we don’t stop and plan actions to reduce food waste further till 2030 to be able to reach UN Goal. We expanded our approach to food waste by testing new initiatives in areas with highest losses and now we tend to minimise the causes of waste at each stage of the process, from supply planning, through storage to distribution. We set a reporting process focused on food waste reduction, including daily reporting of reasons for food liquidation and products at risk of expiry. Moreover, thanks to a close cooperation with our suppliers we managed to optimise stock levels of fresh produce and implemented additional quality verification for fruits and vegetables with the possibility of longer release to franchisees without loss of quality.

1.2 Food waste prevention

Good package

Expanding our ‘simple solution for zero waste.’

Following a successful pilot after its initial launch in late 2021, we extended our special Good Package service in August 2022 to reach more customers through additional stores in Poznań and Wrocław. It is now available at over 1000 Żabka stores. The service, positioned as a ‘simple solution for zero waste’ enables customers to buy a parcel containing two or three fullvalue products at half price on the last day of their shelf life. Interestingly, the customers do not know precisely what they are buying – merely that the ‘surprise’ packages have been specially created to meet the needs of either vegans, vegetarians or those with no specific preferences. The popularity of the scheme has grown rapidly since launch, engaging customers and leading to the decision to increase its reach. Its benefits also extend beyond reducing waste, to helping people cut the cost of living and enabling franchisees to sell more and reduce the expense of disposal after a product’s expiry date.

1.2 Food waste prevention

We provide food to those in need

Close cooperation with social welfare organisations finding good use for unsold foodstuffs by effectively distributing them to locations where they are actually needed is one of the methods we rely on to manage the scale of food waste. Products with a short shelf-life date are transferred to, among other places, Caritas, the Federation of Polish Food Banks and the Kamiliańska Social Assistance Mission. Foodstuffs provided to branches of non-governmental organisations are later shipped to local communities via various institutions, such as canteens, social and therapeutic daycare centres and homeless shelters. Żabka products are used there for preparing hot meals. The food is donated directly to individuals and families in the form of packages. We cooperate with our social partners in order to increase the efficiency of distribution of food products to people in need of such a form of support. In 2021, we donated almost 630 tonnes of food to non-profit organisations — 15% more than the year before.

1.3 Services for sustainable lifestyle

Pioneering coffee scheme sets the standards for service and value

In a step to continue differentiating itself by offering the highest levels of customer service and value, Żabka has become the first Polish retailer to offer a coffee-subscription service at a monthly cost of just PLN 49.99.

This enables consumers who elect to have any coffee once a day for 30 days to pay an average of just over PLN 1.61 per cup. This is made possible because Żabka stores are open on Sundays and public holidays. In addition, any customer who uses up the daily limit is eligible once during the subscription period to receive a free muffin or a 200ml coffee from an instore machine. Importantly, this new service is enabling Żabka to plan a range of other subscription-based offers to provide exceptional value based on using the unique Żappka app. All users need to do is launch the app, select coffee from the list of subscription schemes, activate it, select their payment method and pay. The service has proved itself to be an immediate success among customers. In the first month following launch, Żabka sold more than 6,500 subscriptions.

1.3 Services for sustainable lifestyle

One app, numerous benefits

Each Żappka user receives a personalised offer prepared based on their own shopping history. They are also given the opportunity to collect żapps — points that can be exchanged for selected products, including of the own brand variety, promoting a sustainable lifestyle. Żappka offers also the Żappka Post functionality allowing to monitor the status of and to easily collect any parcels. The process of sending a parcel is simple and convenient. The customer orders the service online, and no labels are required to be printed out. All they have to do is to label the parcel by hand, with the appropriate number generated online, and deliver it to a store of their choice. In 2021, through the app, we conducted the pilot phase of the “Good Package” programme that supports the prevention of food waste in our stores. As far as social engagement is concerned, customers could also use the app to support the initiatives of our choosing. Additionally, the app allows customers shopping at Żabka Nano stores to make purchases in the simplest possible way — by taking products from shelves, without the need to scan and pay at the cash desk. The technology used in the store recognises Żappka users and automatically processes the payment.

1.3 Services for sustainable lifestyle

Żabka without waiting in line

In 2021, we introduced cash registers which, depending on the mode they are operating in, are capable of playing different roles. These are ordinary cash desks operated daily by store employees. However, after the register’s screen and scanner are turned to face the customer, the devices switches into self-service mode, allowing customers to scan products, read the Żappka code and pay by card. The fact that the cash register may be operated by customers shortens the service time and is a quicker and more convenient form of shopping. It also supports the work of franchisees and their employees who are able to handle more customers more quickly, especially during peak hours. It is also an option for customers who prefer to make purchases without contacting the store’s staff. Self-service cash registers have become very popular among customers, in particular those who come to the store to pick up a few things only. In the satisfaction survey, users of such self-service cash registers express their satisfaction with the ease and intuitive character of the solution — the NPS survey One app, numerous benefits Each Żappka user receives a personalised offer prepared based on their own shopping history. They are also given the opportunity to collect żapps — points that can be exchanged for selected products, including of the own brand variety, promoting a sustainable lifestyle. Żappka offers also the Żappka Post functionality allowing to monitor the status of and to easily collect any parcels. The process of sending a parcel is simple and convenient. The customer orders the service online, and no labels are required to be printed out. All they have to do is to label the parcel by hand, with the appropriate number generated online, and deliver it to a store of their choice. In 2021, through the app, we conducted the pilot phase of the “Good Package” programme that supports the prevention of food waste in our stores. As far as social engagement is concerned, customers could also use the app to support the initiatives of our choosing. Additionally, the app allows customers shopping at Żabka Nano stores to make purchases in the simplest possible way — by taking products from shelves, without the need to scan and pay at the cash desk. The technology used in the store recognises Żappka users and automatically processes the payment. score for this form of shopping equalled 74 points. The result serves as a basis for future activities promoting this type of service among our customers. In 2021, approximately 10% of them took advantage of our self-service cash registers.

2.1 Fostering entrepreneurship

Celebrating
9,000^th and 9,001^st stores

In an important milestone for the business, in late December 2022 Żabka opened the 9,000th and 9,001st stores in our network. These are on the A2 motorway, at Gnilec (the last stop before the German border) and Sosna (the first on entering Poland from Germany).

The new-format stores, which include self-service checkouts, are designed to give customers quick and convenient round-theclock access to a wide range of hot snacks, sandwiches and salads, meeting the particular needs of those with little time. The new format gives franchisees a great opportunity to run a strong local business. The franchisees in this case are a married couple who have worked with Żabka for several years, making them living proof of the entrepreneurial opportunities that the right people can gain from a close relationship with us. The dynamic design of the new stores aims to enable private and professional drivers to easily identify where they can get the rest

2.1 Fostering entrepreneurship

Smart solutions supporting smart business

Żabka Group is committed to using smart technologies as a
means of realising some of the primary aims of our Responsibility
Strategy. These include reducing emissions intensity related
to franchisees’ stores by 2026, doing so in own operations by 25% by 2025, and empowering franchisees to operate safe and successful local businesses.

Central to our efforts to provide our franchisees with only the best technology is Żabka Smart, our Poznań-based centre of excellence. From here we provide selected stores with a range of innovative, energy-efficient solutions for testing.

These range from flood sensors and stock-control devices to automatic temperature and energy-consumption gauges that communicate with managers, enabling better customer service as well as more efficient energy usage. Vision and voice systems, meanwhile, are designed to deter potential burglars, improving security and making our stores a safer place to work. After analysing the test results, we then implement the best solutions across more stores. It’s an approach that’s driving environmental, satisfaction, safety and sales improvement in a single unified programme.

2.1 Fostering entrepreneurship

Reducing business risk

Running a business involves a series of inherent risks, also those of a financial nature. In the interest of our franchisees we are the first franchise network in Poland to prepare a new product, “Business Insurance Programme,” in cooperation with Towarzystwo Ubezpieczeń Wzajemnych Polski Zakład Ubezpieczeń Wzajemnych (TUW PZUW). “Business Insurance Programme” is the first product on the Polish insurance market that increases the security of running a business through the compensation of a portion of the potential debt. The monthly cost of the policy and the sum insured depend, among other things, on the number of stores operated by the franchisee. Attractive insurance premiums are guaranteed not only by the scale of Żabka’s operations, but also by the fact that financial support is provided to cover the expenses of the policy at the initial stage of its term. Work on the terms of the policy was performed asked franchisees cooperating with us to participate in the campaign. This attractive offer stands out from the proposals of other chains on the market, as confirmed by the franchisees’ willingness to contribute with the participation of a wide range of franchisees, and the solution itself is intended for all of them, regardless of their history of cooperation with the chain, or of their financial standing. By the end of 2021, all franchisees enjoyed protection offered under this risk-mitigating instrument.

2.1 Fostering entrepreneurship

Stimulating the entrepreneurial spirit

In 2021, we launched a new campaign known as “To żabkość na rynku” (a play of words in Polish incorporating the word “Żabka” to convey the message “It’s a rare thing on the market” — translator) targeted at potential entrepreneurs who do not have a specific business plan or the funds required to start a business. In 2021, our campaign focused on informing about the financial conditions of operating one’s own Żabka store: an upfront payment of PLN 5,000, PLN 16,000 in basic revenue per month, a fully equipped and stocked store for starter, and emphasised how efficient the process of establishing your own company is. We want to offer greater support and to foster local entrepreneurship all over Poland, which is why we asked franchisees cooperating with us to participate in the campaign. This attractive
offer stands out from the proposals of other chains on the market, as confirmed by the franchisees’ willingness to contribute to the campaign and share their own experiences. In our communications, we
also emphasise the support tools and mechanisms which franchisees take their first steps in the world of business.

2.1 Fostering entrepreneurship

Optimising the work of our franchisees

We provide our franchisees with a set of tools helping them run their stores in an effective manner. OptiPlan is a set of initiatives and solutions aimed at optimising the activities performed in the day-to-day management of the store. The proposed, tested solutions will support some aspects related to the store’s work. The said set comprises solutions related to food safety management and store logistics. It also includes the following: Żabka Assistant (an app allowing each franchisee to conveniently check and plan the scope of works for the coming days), and planograms available in the Żabka Manager app. We support franchisees in their daily operations, thus allowing them to find the time to care for their store, to expand their knowledge and to stimulate the engagement of their employees.

2.1 Fostering entrepreneurship

Assistance in hiring staff

The range of systemic solutions supporting franchisees is supplemented by flexible forms of assistance in emergency and unforeseen situations. Although the franchisees, being private entrepreneurs, are responsible for all personnel-related issues at their stores, they may count on significant support offered by the “Here and now” programme enabling every franchisee to take advantage of the services of a temporary worker. As in any other business, emergency situations take place in commerce too. They affect the number of staff reporting to work or require that additional help be provided during the peak season. If any of the employees calls out sick, or if additional support is needed during the holiday season, it is often the case that help for the store’s team must be found very quickly. The programme allows those running Żabka stores to pay only for the time during which the temporary employee is completing the tasks ordered. In practice, this means that franchisees are able to conveniently plan labour costs and the division of tasks in the store, regardless of unforeseen situations and unplanned emergencies. Depending on the actual needs of the store, temporary workers may be providing assistance over a period of several hours, days or months.

2.2 Partnerships for positive change

Sustainable collaboration

Sustainable development requires efficient cooperation, sharing experiences, inspiration and joint actions.

“We believe that the key to success is sustainable and collaborative action. Our business partners play a key role in fulfilling our mission, so we actively want to engage them in building a partnership based on shared values, principles and trust. We believe that this is the only way our business can bring real change and enable responsible business and value creation for our customers. To strengthen our collaboration we introduced fair business platform – an online space, where we support and communicate on various shared projects. We regularly gather feedback as part of the dialogue. We obtained first place in the nationwide satisfaction study (NFS), ahead of the 20 retail chains participating. Moreover, we received the Grand Prize ‘Retailer of the Year 2022 – Chosen by Suppliers’in the category Small Format/Convenience Chain and special award Sustainable Retailer of the Year.”

Piotr Rajewski,
Trading Director

2.2 Partnerships for positive change

Foodtech lab acceleration

The Żabka Group is always seeking solutions whose implementation will accelerate the development of the convenience ecosystem. We do this through our Venture Studio, whose task is to search for and attract to the organisation modern solutions that give a new perspective to the whole Group. 150 startups from 20 countries have taken part in the Foodtech Lab Acceleration Programme launched in 2022, in which we seek solutions that approach nutrition and its impact on the planet in an innovative way. Projects were selected according to current business needs, considering the most important trends that stimulate the development of the retail industry – not only in Poland but also across the world. For the best startups the Group offers collaboration, consumer tests, commercial pilots, and even financial support for further development. In addition, startups can receive access to a sensory laboratory, expert support and personal opportunities to navigate key relationships in this industry. During the final, held in January 2023, 11 companies presented their products, from which we selected five winners.

2.2 Partnerships for positive change

Cooperation with start-ups

We hold meetings with the authors of projects that may exert the greatest positive impact on the Group’s business. Having conducted a careful analysis of the presented solutions, we decide to cooperate with start-ups at different stages of their development journey. The MIT Enterprise Forum CEE accelerator programme is one of the tools we rely on while looking for ESG-related solutions. Our attention is drawn by projects focusing on alternatives to plastic packaging and on replacement protein sources, i.e. solutions helping reduce meat consumption. Together with Huge Thing, an accelerator of innovative solutions, we launched the Żabka Future Lab accelerator programme. We also strive to attempt cooperation with start-ups whose solutions will be helpful in reducing the amount of wasted food (by supporting stock management), or in increasing the comfort of consumers taking advantage of autonomous stores. We have also become a partner of the “Positive Impact Start-ups” campaign overseen by the Koźmiński University’s Koźmiński Business Hub. It focuses on supporting those initiatives that contribute to improving the quality of life and the quality of the environment.

2.2 Partnerships for positive change

We grow together with our business partners

Acting together, we analyse the results of our cooperation, so as to make the necessary changes in real time. In order for this to be possible, we have introduced the Advanced Customer Insight Tool (ACIT) providing us and our partners with access to the same multidimensional data, based on which new solutions related to our cooperation are implemented. The work based on ACIT data is accompanied by joint workshops with our trading partners – 170 such working meetings were held in 2021. It is crucial for bilateral development to ensure that our partners are engaged in thinking about the strategic development of the Żabka Group. By presenting the Group’s long-term plans and regularly meeting for a joint review of the results achieved, we provide partners with the knowledge enabling them to build scenarios for the long-term growth of their own companies. Open dialogue and readiness to implement our partners’ ideas are important element of cooperation as well. The workshops are used to jointly identify the changes in the range of products carried by the individual companies, so that they are able to best respond to changing consumer needs. Our suppliers value the openness and cooperation characterising our relations. In 2021, they voted us the Retailer of the Year. We also ranked first in the nationwide NFS survey in which over 400 suppliers and 20 retailers participated.

2.3 Communities activation

Helping people settle in Żabka and in Poland

It is important to Żabka that the business presents a friendly face to everybody in the workplace. The Group has therefore created the role of ‘Cultural Assistant’, especially to help colleagues for whom Poland is a new country. The key aim is to prove that diversity – of nationality as well as of age and gender – can help the business be more successful and profitable. To this end, the Cultural Assistants have been recruited to help find a common language between recent arrivals and native Poles, helping them settle in and properly feel part of the organisation. There are many areas in which the Cultural Assistants are able to provide support, from helping with documentation to explaining cultural and linguistic differences. Offering guidance on settling into life in Poland can be very valuable too, from dealing with public organisations to getting the right work-life balance. They can also help our recruitment professionals by preparing written information in various languages for recent joiners, as well as helping with workshops, webinars and materials on equality, diversity and cultural inclusivity.

2.3 Communities activation

Helping by shopping

We encourage our customers to support initiatives promoting social engagement – when shopping at Żabka stores, taking advantage of the Żabka Jush! platform or using the Żappka app. As it is the case each year, our franchisees were collecting money for Wielka Orkiestra Świątecznej Pomocy and were the largest group of volunteers participating in the effort nationwide. Donations could be made via money boxes available in stores. Cashless deposits could be made as well, (for instance via the e-money box, by transferring funds to the Foundation’s account or by using payment cards). The users of our app were able to exchange Żapps loyalty points collected during shopping, for charity donations. The total value of funds transferred in 2021 amounted to PLN 3 million. The mechanism relying on using Żapps points for supporting charities is very flexible and we rely thereon as one of the means of implementing our Social Engagement Strategy. In 2022, our customers using the app were also able to donate their Żapps points for supporting refugees from Ukraine. The total amount of support amounted to over PLN 1 million.

2.3 Communities activation

Supporting those willing to engage

In 2021, we continued to pursue Żabka’s Scholarship Programme that has been, for a number of years now, an important part of our social engagement initiatives. The programme is aimed at ambitious and talented children of franchisees, employees and co-workers who, thanks to our monthly support, are able to develop their extraordinary passions and skills. During the 11th edition of the programme, we awarded as many as 60 scholarships: 13 for artistic, 9 for scientific and 38 for sports achievements. Biographical notes of the scholarship holders, along with a description of their talents and the results they achieved, are published in Żabka’s information materials. This allows the young people to communicate the impact of support they receive under the programme has on the expansion of their passions. For employees and co-workers valuing cooperation and physical activity, we have created Żabka’s Sports Team. It is made up of active members of our company’s staff who are keen on practicing sports, often work out together and represent Żabka at numerous sports events. The team is currently made up of approximately 130 people showing interest in individual and team sports. They participate in a number of competitions, primarily between March and October, but our players train all year round — they run, ride bicycles, swim, and play basketball and football.

2.3 Communities activation

Offering a good start

When defining our agenda for the “Equal Opportunities” pillar of our Social Engagement Strategy we relied, among others, on the experience gained while supporting youths in a difficult situation and at risk of exclusion. The “Safe internship with Żabka” programme is aimed at people over the age of sixteen. It allows them to take part in an internship at a selected store, thus taking their first steps along the path towards independence. The programme is implemented in cooperation with Fundacja Samodzielni Robinsonowie, with active participation of our franchisees who, as mentors and caretakers, share their experience with our trainees and help them build entrepreneurial skills. During eight editions of the programme, we organised internships for 146 young males and females that the Foundation is caring for. Interns have already worked more than fifteen thousand hours in Żabka stores. Eighteen of them were employed at Żabka stores after the programme had ended, and one of the female interns became our franchisee. So far, ninety franchisees operating Żabka chain stores have been involved in the programme at seventeen locations throughout Poland. Young interns could also count on the support of twenty-six mentors designated by the Foundation.

2.3 Communities activation

Olympic silver medal

In August 2021, we took part in a charity auction organised by Maria Andrejczyk — a silver Olympic medalist from Tokyo. Maria put up her medal for sale, with all proceeds benefiting a campaign raising funds for medical treatment (available in the US) needed by an eight-month-old boy named Miłosz. We offered PLN 200,000 for the medal and won the auction. Maria Andrejczyk admitted the medal was “a symbol of struggle, faith and ability to make dreams come true, despite many difficulties”. It was natural for us, as winners of the auction, that this extraordinary symbol should remain where it belonged. That’s why we returned it to our proud champion. In addition to the PLN 200,000 from Żabka, Maria’s fans raised an additional PLN 300,000 for the treatment of Miłosz. The fund raiser has allowed to finance the child’s heart surgery at the Stanford hospital in the US. Maria Andrejczyk’s gesture was widely commented by Internet users. Information about the auction was trending very high on social media. The event was reported by the largest media in Poland and by the press worldwide (“The Times” or “The Sun”).

3.1 Empowering culture

Measuring engagement and inclusivity across the group

According to Gallup Institute, our employee’s engagement level is five times higher than the average Polish company.

Behind our business success are several thousand committed employees, and franchisees. Together we have created an organisation based on standards of equal treatment and transparency, where every employee, co-worker and franchisee has equal opportunities and can openly talk about and implement their ideas. Achieving this requires an appreciation of many different needs and points of view, which is why we conduct the Gallup Q12 (measuring engagement level of employees) and Gallup Inclusion Index survey.

The Gallup questions are a framework for us to know how to create and improve our working environment. We analyse the data and prepare action plans to address issues that have impact on engagement and inclusion of our employees. As a result, we create a unique organisational culture, able to recognise the potential of everyone, while creating an environment for open collaboration and sharing experiences.

3.1 Empowering culture

Żabka with EQUAL-SALARY
certification

Żabka has become the first Polish company to receive certification from the EQUAL-SALARY Foundation, confirming that gender has no role to play in determining how much employees are paid.

The certification is based on UN guidelines and recognised by the EU. The awarding body is the Swiss EQUAL-SALARY Foundation, an independent non-profit organisation formed in 2010 to take a science-based approach to the inspection and certification of organisations’ payroll policies. As well as auditing salary data, the inspectors ran focus groups where employees could openly discuss their perceptions of equal pay. The certification therefore confirms the Żabka’s credibility in the eyes of the workforce as a true equal-pay employer. Żabka is naturally pleased with this recognition, as its values-based Payroll Policy is designed to ensure that employee remuneration depends entirely on an individual’s skills, the results they achieve and their impact on the organisation. The requirement for certification to be renewed after three years means the Group needs to continuously monitor and improve its salary processes.

3.1 Empowering culture

Promoting equity

The commitment to implement a culture of equal opportunities and an inclusive organisational culture is expressed in the Equity Policy we have adopted. Its implementation, communication and monitoring are the responsibilities of the Equity and Inclusive Organisational Culture Manager. That is how we guarantee that decisions are taken without prejudice, based on competence, experience and the work results achieved. The Żabka Group is open to people with different identities, experiences, competences and prospects, and that is the spirit we desire to build our teams on. The positive results of our activities are confirmed by the outcome of the pulse survey. This year, its scope was expanded to include questions about diversity and inclusive organisational culture: “the company is open to diversity among employees” and “I am treated equally in the company, regardless of who I am”. The aim of those questions was to verify whether employees have a sense of equal treatment and whether the Żabka Group, as an organisation, is open to diversity. The study participants assessed both statements as highly accurate: on a scale from 1 to 10, the score regarding the first question equalled 8.7, and in the other, it amounted to 9.1.

3.1 Empowering culture

Caring for our employees’ growth

Żabka Academy is a platform offering a series of training programmes and development activities tailored to the needs of employees, as well as our co-workers and franchisees. We offer on-boarding, specialist and managerial training. The Academy also conducts unique projects designed in cooperation with schools or universities, such as doctorate theses implementing specific solutions. All employees can also benefit from subsidies for English language courses — group or individual classes are offered, and the courses are supplemented by access to an e-learning platform. In 2021, a new module Logistics Manager Academy was introduced in response to the development needs of personnel performing logistics-related tasks. We have also ensured that managerial competences were strengthened. The management staff commenced a dedicated Senior Leader Development Programme. The most experienced managers participate in a diagnostic programme leading to the development of growth programmes tailored to their individual needs. The most talented in the organisation are able to boost their qualifications through training sessions organised by INSEAD, Stanford University, Yale and other institutions. All those activities gradually bring us closer to achieving the strategic objective. In 2021, the average time spent by each employee on their development equalled 22 training hours, without the mandatory OHS training considered.

3.2 Resilient management

New policies for suppliers

We want the process of making products to have no negative impact on forests, soils, waters or animals, and that those employed in production are treated in a way that respects human rights by providing decent working conditions and preventing child labour.

We have taken steps to minimise the ecosystem impact of our own brand products, including coffee, tea, cocoa, soya, fish and seafood across our own brands ranges. Therefore, we implemented an Animal Welfare Policy and Policy of Sustainable Harvesting of Plant Raw Materials and Sustainable Fishing of Fish and Seafood. We have eliminated palm oil from our own brand products and in accordance with our Sustainable Palm Oil Policy – from 1 January 2023, 100% of producers brand products contain only palm oil from certified sources. We implemented Water Policy that sets out the rules relating to the reduction of water use and the protection of water resources and Waste Management Policy, by which we aim at reducing the amount of waste that is sent to landfills. We are conducting an analysis of our own operations to limit the risks of operational activities in areas in close proximity to critical biodiversity of global or national importance, which will See our policies conclude as Biodiversity Policy in 2023.

3.2 Resilient management

Code of ethics and conduct for franchisees

We are concentrating on building a complex ethical system that covers all of our operations. In order to do this, apart from Code of Ethics for our employees and business partners, we have also implemented the Code of Ethics and Conduct for our franchisees. To date, nearly 97% of franchisees have signed it and more than 60% have completed the associated e-learning course. The document is aimed at supporting franchisees and their employees in making decisions that comply with the ethical standards adopted by Żabka. It therefore addresses aspects such as the need to operate in compliance with the law, respect for human rights, principles of fair competition, conflict of interest, environmental protection, working and pay conditions or relations with the environment. In order to check franchisees’ compliance with the Code, Żabka reserves the right to external verification. The franchisee is obliged to report any violations through the whistleblowing platform or in writing, by sending a letter addressed to the Żabka headquarters and in in case of any questions concerning the provisions of the Code, the Compliance Department is there for a help. We guarantee a full anonymity to a person who reports any violation.

3.2 Resilient management

We have adopted the Code of Conduct and Ethics for Employees

The document supports our employees whenever they face an ethical dilemma. It is applied throughout the entire value chain, referring both to relationships existing within our organisation and to those with external stakeholders. Provisions reminding about ways of reporting any violations of the Code, as well as about other applicable policies and procedures constitute a key element of the Code. The strengthening of ethical standards is supported by two mandatory annual training programmes focusing on compliance issues and on the Code of Ethics. In 2021, 90% and 77% of our employees completed those programmes, respectively. We are continuing our efforts to increase the share of those trained in the coming years. By expanding our employees’ knowledge, we also ensure more efficient management of the whistleblowing process. In 2021, we received four reports about potential violations of the Code. They were all subjected to internal investigations performed by the Ethics Committee and were deemed justified. They Approximately 190 suppliers generating more than 30% of our total turnover are being assessed in the pilot phase of the project. In the process, we use the global SMETA platform, developed to exchange information on production standards within the supply chain. Suppliers are evaluated in five areas, and the verification results in an assessment of the risk of cooperation with a given company. included allegations of discrimination and corruption, but the investigations failed to confirm any of those accusations. We have taken steps to prevent the similar situations from occurring in the future, in accordance with the procedures in effect.

3.2 Resilient management

We have implemented the Code of Conduct for Business Partners

The document is based on key international and national legislation. Its provisions cover the full spectrum of business activity – from ethical business management and respect for workers’ rights, through the quality of products and services offered, to environmental and climate impacts. We build our business relationships based on mutual trust. That is why the Code identifies channels for reporting potential violations of its provisions and clearly presents mechanisms for handling these. We require all business partners to confirm, with their signature, that they have read and understood the document. We also work on introducing a system for verifying our business partners and for analysing supply chain risks. Approximately 190 suppliers generating more than 30% of our total turnover are being assessed in the pilot phase of the project. In the process, we use the global SMETA platform, developed to exchange information on production standards within the supply chain. Suppliers are evaluated in five areas, and the verification results in an assessment of the risk of cooperation with a given company.

3.3 Trust and transparency

ESG-linked financing

Modern business must be credible and transparent in its operation, and responsibility and trust are currently the most valuable assets.

Our goal is to plan the development of our entire organisation in a responsible manner. We have already signed six agreements related to sustainable finance instruments, and we are actively cooperating with other market participants in this matter. Financial instruments based on ESG goals are an additional motivation for us to meet our commitments and proof that we take these commitments seriously. All agreements contain the company’s commitments related to the implementation of selected, measurable ESG goals, consistent with the Responsibility Strategy announced by Żabka Group in 2021. The first aspect is decarbonisation with goals validated by Science Based Target Initiative, the second one related to good nutrition area, where we support our customers to make more informed choices. The progress in achieving the objectives set out in the agreement will be verified after the end of a given financial year by an independent assurance provider. If we fail to achieve specified targets within an agreed timescale, we will provide additional funding for activities supporting United Nations Sustainable Development Goals (SDGs).

3.3 Trust and transparency

Our commitment to transparent reporting

Reporting on our ESG performance is a key aspect of our stakeholder communications and an essential way of building the credibility of the Żabka Group.

To ensure the highest standards of disclosure, we have prepared this, our fifth Responsibility Report, according to the latest Global Reporting Initiative Standards and the requirements of the Sustainability Accounting Standards Board (SASB). To ensure compliance and data reliability, we have procured an independent external verification in accordance with ISAE (International Standard on Assurance Engagements) 3000.

Having in 2020 become one of the first companies in Poland to publish a Climate Report, we have included this as part of this Responsibility Report, setting out our decarbonisation plan and reporting on progress against our science-based targets. Our approach has been rewarded in the past by prestigious awards. Our 2021 report was selected in the Hallbars Awards 2022 as one of the five best such disclosures in Central Europe.

3.3 Trust and transparency

Verification and certification of ESG activities

In 2021, we underwent the external EcoVadis certification process again. After receiving the medal last year, we developed a remediation plan aiming to make our undertakings more professional. The said plan has been successfully implemented throughout the organisation. It has resulted in a significant increase of scores in all areas subject to assessment. Twenty-one criteria divided into four categories are taken into consideration during the certification process: human and employee rights, the environment, ethics and sustainable procurement. As a result of the assessment, we have received the highest possible distinction — a platinum medal. This ranked us among 1% of companies globally that are most successful in integrating ESG aspects into their strategies and operations. Additionally, we received the highest possible score (“best in class”) for managing our carbon footprint. This was possible thanks to implementing a system for measuring, monitoring and reporting emissions and thanks to setting reduction targets approved by SBTi.

4.1 Circularity

Small gesture, great impact

It’s a remarkable fact that a returnable glass bottle is used on average between 15 and 26 times, significantly reducing the carbon footprint during its lifecycle.

This is why during summer 2022 Żabka Poland ran an educational programme to encourage customers to bring empty returnable beer bottles back to our 8,400+ stores. Anyone doing so received a 50 gr price reduction on a full replacement bottle, up to a total of 20 bottles per transaction. We noticed year-on-year increase in returns by 10 p.p.

This is particularly heartening because the positive impact of any
increase in the re-use of glass bottles is significant.www.browary-polskie.pl/wp-content/uploads/2021/07/butelka-zwrotna_-
infografika.pdf According to The Union of Brewing Industry Employers – Polish Breweries, producing one ton of glass consumes on average 800kg of sand, 280kg of calcium, 230kg of soda and 30kg of dyes. It also takes an average 1.1 MW of power per bottle. The fact that we at Żabka reach millions of customers across Poland every day enables us to have a significant impact on consumer habits across many areas. This promotion shows how important even small gestures can be to the environment when made en masse.

4.1 Circularity

The second life of packaging

As part of our ‘Green Renewal’ pilot project, implemented in partnership with the Bydgoszcz City Hall, our customers can return disposable beverage plastic and aluminium packaging in 120 Żabka stores across the city. The collected raw materials will be used to create new packaging, thanks to which less waste will be sent to landfill. The campaign also aims to build environmental awareness among customers and develop the habit of returning plastic and aluminium beverage packaging. Our advantage lies in the proximity of the stores: the multiple collection points, and the ease and speed involved in returning the packaging. We are also rewarding customers for their pro-ecological attitude: for every plastic bottle or aluminium can returned, they receive 50 żapps. There are two ways to return packaging: via special EKOmat machines for selective waste collection or it is possible to return the packaging directly to the salesperson, who will also award the bonus żapps.

4.1 Circularity

Electric vehicle fleet in the pilot phase

We are implementing a pilot phase of the programme under which heavy goods vehicles will be procured in partnership with two entities. Since 2019, we have been testing zero-emission commercial vehicles in cooperation with the Volkswagen Group. We use four electric ABT transporters and two e-Crafter vans. We have also invested in our own electric car charging stations at the distribution centres in Nadarzyn and Plewiska, and in our headquarters. In 2021, we started cooperation with Volvo Polska, testing a zero-emission refrigerated Volvo FL Electric truck. It is used for delivering goods to stores in the Silesia region. It is the first fully electric distribution truck in Poland that was for working in the city. We are also gradually modernising our fleet of passenger cars and are conducting tests aimed at replacing combustion engine vehicles with their electric and hybrid counterparts. New electric and hybrid cars reduce greenhouse gas emissions and noise levels, so that they can be successfully used in clean transport zones.

4.1 Circularity

Lowering emissions in the supply chain

Our suppliers of goods and services are responsible for 68% of scope 3 carbon footprint emissions, which is why we involve partners from various industries in search of innovative solutions to reduce emissions in the value chain. An example is cooperation with the carbon neutral brand Goodvalley, whose products have a zero carbon footprint, and Grupa Żywiec, which uses only electricity from renewable sources in its production process. We also look for emission reduction opportunities through convenienct services, as we reduce emissions through delivery to pickup points in cooperation with InPost and other logistics operators in Poland. Delivering a parcel to Żabka generates a lower carbon footprint than direct delivery to the customer personal address. By encouraging conscious food choices, we are also expanding the range of plantbased products as an excellent alternative to animal products. We have introduced products of such brands as Garden Gourmet, Dobra Kaloria or Alpro. In 2021, we also created our own 100% plant-based brand, Plant Hunter.

4.2 Decarbonisation

Lowering GHG emissions in own operations

We approach the issue of reducing CO2 emissions in a comprehensive manner. In 2022, are focus was on driving down emissions in own vehicle fleet and energy efficiency.

We progressed with decarbonisation of own fleet of around 1,600 passenger cars by taking on 500 new Toyota Yaris Cross hybrids. They are used by field employees who historically consume significant amount of fuel due their type of work. In addition, we have invested in our own charging stations for electric cars at our Poznan headquarters and logistics centres in Nadarzyn and Plewiska to support employees traveling with electric vehicles. In addition, we organized a competition for energy efficiency ideas for franchisees and employees, which received 999 entries, mainly related to areas of equipment, lighting and heating. We also initiated the construction of two photovoltaic power plants in the Gliwice and Radzymin distribution centres. For consecutive year, 100% of electricity in own operations comes from renewable sources.

4.2 Decarbonisation

Reducing environmental impact across the value chain

In 2022, we introduced the first climate neutral product of our own brand – Od Nowa water. By calculating its carbon footprint, we managed to ascertain the emissions that arise in the product life cycle. We then reduced the carbon footprint as much as possible – using bottles from recycling, which have a lower carbon footprint than bottles made from virgin materials and supplying energy from renewable sources for a half of the Żabka stores. However, it was not possible to eliminate all the greenhouse gas emissions arising from the life cycle of Od Nowa water, so we neutralised the remaining emissions by purchasing offset credits. Apart from environmental impact of products sold in Żabka stores, we also care about the place itself. In 2022 in Poznań, Żabka opens its first Eko Smart store – a laboratory of ecological innovations enriched with smart solutions, e.g. green energy – PV panels, new innovative perovskite photovoltaic installation on the wall, refrigerators with glycol-filled shelves for better efficiency. On top of that, the entire wall is covered with plants to produce oxygen and digest harmful substances. Customers are also encouraged to use EKOmat – a machine for collecting plastic packaging and cans for recycling.

4.2 Decarbonisation

We joined the Polish Plastic Pact

The pact is part of the global Plastics Pact Network operated by the Ellen MacArthur Foundation. More than four hundred companies responsible for introducing 20% of packaging to the global markets, institutional stakeholders, non-governmental and industry organisations, as well as scientific centres and investors participate in the initiative globally. The aim of the Polish Plastic Pact is to change the current model of using plastics in packaging materials, to ensure that the principles of circular economy are followed. Members of the Pact shall take effort to increase the recycling rate and, consequently, reduce the carbon footprint. They also commit to initiate consumer awareness projects and contribute to increasing the level of correct segregation of packaging materials. The objectives set by the signatories of the Pact for the period until 2025 reach beyond the legal regulations in force in Poland.

4.2 Decarbonisation

We have implemented the Circularity Policy for Plastic

It allows our business partners to be involved in activities that maximise our impact on ensuring circularity of plastic use throughout the entire value chain. The policy will be implemented gradually, in cooperation with all business partners. It is based on the original green circulation model, which provides guidance on responsible resource management in seven areas: eco-design, resource-conscious creation, sustainable distribution, responsible sales, conscious consumption, efficient collection as well as comprehensive recovery and recycling. We have established a set of clear principles we follow in our endeavors towards circularity, and we are applying accountability rules to the entire process – from design, to ensuring a second life and revitalising the environment.

4.2 Decarbonisation

We have developed our Eco-design Policy

The Policy serves as a roadmap, presenting clear rules for designing and selecting suitable raw materials for the packaging of own brand products and for materials used in stores. It is based on four principles: loop, reduce, simplify and communicate. We reduce the weights and volumes, as well as promote reusable types of packaging. When designing packaging, we place an emphasis on the choice of materials and the use of recycled products. Components that are preferred in recycling processes are given priority as well. We simplify the form of packaging by ensuring its shape allows the product to be emptied. Using a system of pictograms placed on the packaging, we offer consumers advice on which fraction of waste should it be disposed of to after the contents have been used. In accordance with the Policy, we avoid contrast colours, soot-based pigments and solid, inseparable labels made of materials other than the packaging itself. All these measures make the packaging easier to recycle.

4.2 Decarbonisation

Eliminating plastic and foil packaging

We have replaced plastic coffee cup lids and shopping bags with their equivalents made of paper with the FSC certificate. Such an approach ensures that at least one new tree is planted for each that has been felled. The paper used in the manufacture of shopping bags and coffee cup lids decomposes naturally over the course of several weeks. Due to these changes, we have reduced the use of plastic by approximately one thousand tonnes per year. We are developing solutions with our suppliers to reduce the use of foil packaging in our products. Thanks to cooperation with Carlsberg Poland, we introduced to the market six-packs of beer relying on Snap Pack technology. Instead of wrapping cans with foil, they are attached to each with the use of adhesive. This reduces the consumption of foil by as much as 82% compared to standard packaging.