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2020 ESG
Report

Corporate website
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tcfd/sfdr
esg
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We develop our activities in accordance with sustainable development

Allegro.pl is an online service but our operations have a real impact on natural environment.
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Our environmental impact

Compared to large industrial facilities, our overall impact is relatively small – we emit as much greenhouse gas (GHG) in a year as a refinery in slightly over 14 hours (about 0.6 days of refinery operation, according to non-financial reports and data on GHG emissions). Despite this fact, we approach environmental issues and our impact on climate change in a serious manner. These areas are increasingly important at Allegro and have an important impact on our business decisions.

Our environmental goals are described in our CSR & Sustainable Development Strategy approved by Allegro’s Management Board. Our goal is to make our operations more environmentally friendly, and we are building our value chain in a transparent, responsible and sustainable manner. Our ambition is to continuously reduce our negative impact on the environment, in particular by reducing our emissions. Shipping parcels is an excellent example of initiatives aimed at reducing emissions. Allegro customers have a wide variety of delivery options with different carbon footprint options attached. Currently, the “greenest” delivery options include parcel lockers and pick-up/drop-off locations. A delivery of several dozen parcels to a single location with a single means of transport helps reduce emissions of exhaust fumes, traffic jams and noise. Our customers can benefit from a network of tens of thousands of collection points across Poland. That way, they can pick up their deliveries on the way back home from work or on the way to a shop, thereby eliminating the need for extra driving.

Key roles and responsibilities

TCFD/SFDR
  • Governance A
  • Governance B
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The role of the Management Board in areas linked to sustainable development and climate

Managers and company employees

  • Participation in creating and updating the strategy
  • Commitment to the implementation of various initiatives
  • Progress reporting

 

CSR & sustainability team

  • Coordination of the CSR strategy implementation
  • Results and progress monitoring towards achieving specific goals
  • Cooperation with project teams towards implementing specific actions/initiatives
  • Reporting results from specific actions and the overall strategy implementation progress as well as drafting progress reports for strategy implementation
  • Communicating the actions undertaken, both internally and externally

Management Committee for CSR & sustainability

  • acceptance of strategic directions and goals as well as recommendations of changes / activities
  • approval of reports on the implementation of the Allegro CSR Strategy
  • supervising the integration of CSR strategy and initiatives with Allegro’s business goals
  • selection of priority areas and long-term strategic planning

 

Management Committee (CEO & Board of Directors)

Environment and climate risks

In line with the recommendations of the TFCD, Allegro carefully maps climate risks and, even more broadly, environmental risks. The process of identifying, assessing and managing climate risks is part of the overall risk management process at Allegro.

The management team oversees matters of sustainable development and climate, especially by monitoring and supervising the company’s CSR & Sustainability strategy. At the same time, since climate and environmental risks are subject to risk management and the Risk Management Policy, all Allegro employees are responsible for risk identification and reporting. The role of the Board of Directors is to supervise corporate risk, define the scope of risk management, define directions for the development of the risk management system, and determine risk appetite levels.

TCFD/SFDR
  • Strategy A
  • Strategy B
  • Strategy C
  • Risk A
  • Risk B
  • Risk C
  • Goals and benchmarks A
  • Goals and benchmarks C
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In 2020, we identified three underlying environmental and climate risks that could affect our business. At the same time, at Allegro, we do not identify these risks as key and having a significant impact on our company’s strategy and our financial plans. In 2020, we did not have any climate scenarios ready in the organization. We plan to develop them and manage environmental risks as we continue to grow in the coming years. Within these activities, targets and references will be set for the assessment and management of climate-related risks and opportunities.

ESG risks, including environmental and climate risks, are part of the company’s risk management system.

Identified environmental and climate risks
New regulations related to the environmental transformation may impose further obligations on companies in the retail sector
Climate change has the potential to lead to significant changes in the way we do business, including in terms of revenues and costs
Initiatives to reduce carbon dioxide emissions may translate into an increase in the costs of our operations

Important environmental themes in the 2020-2023 strategy and the European Green Deal

Allegro’s operations, in particular in retail, are subject to various reporting, recycling and other obligations under packaging and packaging waste management regulations. The European Commission is considering updating the Packaging Directive as part of the European Green Deal, which aims for the EU to achieve climate neutrality by 2050. Achieving this target will require action from all sectors of the economy, including investment in environmentally friendly technologies that support industrial innovation. This may impose additional obligations on retailers and possibly other entities.

Climate risk management is linked to the Paris Agreement, in which governments have agreed to:

  • the long-term goal of keeping the global average temperature increase well below 2 ° C above pre-industrial levels;
  • strive to reduce the growth to 1.5 ° C as this would significantly lower the risk and impact of climate change;
  • the need to reach a turning point for the maximum level of emissions on a global scale as soon as possible, assuming it will take longer for developing countries to do so;
  • bring about a rapid reduction in emissions according to the latest scientific information available, to achieve a balance between greenhouse gas emissions and their absorption in the second half of the 21st century. [EC Paris Agreement]

The Paris Agreement, adopted during the Paris Climate Conference (COP21) in December 2015, is the first-ever universal, legally binding climate agreement. Almost 190 countries have acceded to the Paris Agreement, including the European Union and its member states.

The EU formally ratified the agreement on October 5 2016, which allowed it to enter into force on November 4 2016. For the agreement to enter into force, instruments for ratification had to be deposited by at least 55 countries representing at least 55% of the total global emissions.

Taking into account the scenario analyses prepared by the experts of the World Economic Forum, Global Risk Report 2020 study as part of the assessment of the effects of climate change on business, the following events may take place in the next 10 years:

Extreme weather [+ALLEGRO]
Climate action failure [+ALLEGRO]
Natural disasters [+ALLEGRO]
Biodiversity loss
Human-made environmental disasters [+ALLEGRO]
Data fraud or theft [+ALLEGRO]
Cyberattacks [+ALLEGRO]
Water crises
Global governance failure [+ALLEGRO]
Asset bubbles

Categories: Economic  Geopolitical  Environmental  Social Technological

[+ALLEGRO] – highlighted threats that may have an impact on the company’s operations

Climate action failure [+ALLEGRO]
Weapons of mass destruction
Biodiversity loss
Extreme weather [+ALLEGRO]
Water crises
Information infrastructure breakdown [+ALLEGRO]
Natural disasters [+ALLEGRO]
Cyberattacks [+ALLEGRO]
Human-made environmental disasters [+ALLEGRO]
Infectious diseases  [+ALLEGRO]

Categories: Economic  Geopolitical  Environmental Social Technological

[+ALLEGRO] – highlighted threats that may have an impact on the company’s operations

In addition to physical risks, it is also worth mentioning the transformation risks associated with the growing expectations of investors and regulators towards sustainable development. Due to the nature of our business, we are not able to directly manage and respond to physical risks, both unexpected (resulting from extreme weather phenomena such as droughts, floods or fires) and chronic (resulting from long-term processes such as temperature changes or raising the level of oceans).

Transformation risk and risk management method

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Transformation risk Risk management method
legal and regulatory risk (risk arising from current or future regulations)
  • we constantly monitor legislative projects that may be important for Allegro. We always check whether our activities may affect the operations of Allegro and our partners
  • we take part in consultations and submit opinions on the proposed solutions
technological risk (e.g. the need to invest in innovative technologies)
  • we base all our activities primarily on technology, using research and development investments to increase the scale of our operations; for example CAPEX is expected to reach PLN 560-600 million in 2021, compared to PLN 230 million in 2020
market risk (resulting from changing consumer behaviour, rising costs of raw materials, etc.)
  • we conduct research and analyses regarding customer preferences, we constantly monitor their net promoter score (NPS)
  • the group has long-term contracts with many external suppliers
  • processes related to the delivery of products and services are also monitored
risk of image loss
  • as part of the implemented CSR & Sustainability Strategy, Allegro works to increase brand awareness
  • Allegro acquires users, increases buyer and seller loyalty and expects to continue to spend significant sums on acquiring new and retaining existing buyers and sellers in the future
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Allegro.eu’s highest governing body, the Board of Directors, takes ESG matters into account in its supervisory duties. ESG issues are discussed at meetings of the Board of Directors. The company has established a CSR & Sustainability Management Committee, which includes General Counsel and Corporate Affairs Director, Communications Director and Chief Security Officer. The Steering Committee, in turn, includes the CEO and the Board of Directors. The duties of the Committees are described above.

In line with our CSR and sustainable development strategy, we set ourselves ambitious goals such as reducing CO2 emissions and implementing the climate agendaa in our supply chain and deliveries to customers.

Magda Andrejczuk CSR Expert
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  • Internal indicator
TCFD/SFDR
  • Indicator
  • Indicator
  • Indicator
  • Indicator
  • Goals and benchmarks B
ESG
  • E-M1
  • E-M2
  • E-M3
  • E-S1
  • E-S3
GC
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GHG emissions [in CO2e tonnes][1] 2020 2019
Scope 1 226.10 320.75
Scope 2 (location-based method) 8,286.30 7,509.56
Scope 2 (market-based method) 8,464.35 7 ,452.01
Scope 3 3.046.33 2,809.84
Scope 1+2+3 (location-based method) 11,558.73 10,640.15
Scope 1+2+3 (market-based method) 11,736.78 10,582.60
[1]The greenhouse gases identified and included in the calculation are CO2, CH4 and N2O and are expressed as CO2 equivalent. No biogenic emissions have been identified. The emissions from 2019 were adopted as the base year. The source of the emission indicators were the publications of KOBIZE (National Center for Balancing and Management of Emissions) on gasoline, diesel oil, natural gas, electricity and heat. For other emission sources, the DEFRA database (Department of Environment, Food and Rural Affairs in the British Government) and the Ecoinvent 3.6 database were used. The GWP factors are based on the Fourth Assessment Report (AR4). Calculations were performed for each subsidiary and the results were consolidated according to the operational control. 100% of emissions from individual Allegro Group locations were taken into account. The amount of emissions from the production of consumed electricity was calculated according to two methods: the location-based method and the market-based method. In the case of the location-based method, the average emission factor for Poland was used. In the market-based method, indicators for energy suppliers were used.

 

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Source of GHG emissions [CO2e in tonnes] 2020 2019
Scope 1
Natural gas 190.92 226.84
Diesel 14.18 4.20
Fuel 21.00 48.71
Scope 2
Electricity* 7,882.21 7,042.43
Heat 582.15 409.58
Scope 3
Purchased goods and services 340.99 188.20
Processing of sold end-of-life products 6.41 3.29
Downstream – leased assets 87.04 79.32
Activities related to fuels and energy not included in Scope 1 or Scope 2 1,248.02 1,249.88
Waste generated during operation 4.93 0.23
Business trips 73.55 649.21
Downstream – transport and distribution 1,285.38 639.70
Total emissions 11,736.78 10,582.60
Total emissions (CO2e tonnes) against GMV (PLN million) 0.33 0.46
Total emissions scope 1+2 (CO2e tonnes) against GMV (PLN million)
 		0.25 0.34
* The emissions from the production of consumed electricity (scope 2) were calculated according to the market-based method. In the case of the location-based method, it would be 7,212.37 tonnes of CO2e in 2020 and 7,099.98 tonnes of CO2e in 2019.

 

To calculate the carbon footprint in 2020, we used the KOBIZE 2018 benchmark relevant for that period. However, on 23 December 2020, the National Centre for Emission Balancing and Management published updated benchmarks. According to them, the emissions in 2020 in the case of Allegro.eu would total 11,733.01 tonnes of CO2e (market-based) and 11,063.18 tonnes of CO2e (location-based). In the case of the former, the change is -0.03% relative to the data above, and -4.29% in the case of the latter.

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We measure our environmental impact. Compared to 2019, the total GHG emissions (calculated using the market-based method) per GMV (in PLN million) decreased by 27.98% in 2020.

This decrease was mainly due to the intensive growth in operating activities with the increased consumption of electricity in data centers. Taking into account only emissions compared to the previous year, in 2020 greenhouse gas (GHG) emissions (calculated using the market-based method) increased by 10.91%.

  • Scope 1 direct emissions decreased by 29.51% as a result of lower fuel consumption.
  • Scope 2 emissions increased by 13.58% due to higher consumption of purchased electricity.
  • Scope 3 emissions increased by 8.42%, mainly due to more shipments and more packaging being introduced to the market.

We reduce CO2 emissions by:

measures to reduce emissions from the delivery of Allegro orders
introduction of a logistics centre for companies selling on Allegro
introduction of reusable packaging
use of renewable energy
In practice
Waste heat recovery system

The data centre used by Allegro is being fitted with a photovoltaic system and a waste heat recovery system. Its Intelligent Energy Management System will help reduce CO2 emissions by an estimated 1,000+ tonnes per year.
In practice
BREEAM certificate

BREEAM is an international system that provides independent, external certification of individual buildings, communities and infrastructure projects for compliance with sustainable development principles. The Warsaw Q22 office building, where our office is located, has a BREEAM certificate at the "Excellent" level. The Pixel building, our headquarters in Poznań, has obtained the BREEAM certificate at the "Very Good" level. Pixel uses a number of environmentally friendly solutions, including: a rainwater tank for watering plants, a recuperator in the ventilation system, a complex system enabling real-time control of temperature and media consumption, dry coolers for chillers, reusable filters, a meadow on the building roof, etc. In 2021, office building transfers are scheduled to new locations in Warsaw, Kraków and Poznań. We made sure that the new buildings were also BREEAM certified.
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Environmental indicators

At Allegro, we do not break down our energy reports into renewable and non-renewable energy sources.

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Energy consumption 2020 2019
Electricity [GJ] 38,301.20 35,297.50
Heat [GJ] 6,032.60 4,244.37
Natural gas [GJ] – storage facility 3,445.61 4,092.44
Fuel [GJ] 315.56 724.94
Diesel [GJ] 191.60 609.99
Total Energy consumption [GJ] 48,286.57 44,969.24

 

The above data have been updated with the average biofuel blend index applied to fuels [GJ] and diesel [GJ] as well as the total value of electricity [GJ], compared to the previous conversion factor for 100% mineral fuels. As regards total value, the changes amounted to 0.05% for 2019 and 0.03% for 2020, respectively,relative to the published non-financial report for 2020.

Data from February 2021 was used to calculate the carbon footprint. After the publication of the non-financial report in which carbon footprint data was included, we received corrected energy consumption data for our location in Poznań in March 2021. According to the corrected data, consumption in October and November was lower by 167 MWh which is 601.2 GJ (which is 1.6% of total energy consumption).

In 2020, energy consumption increased by 3,317.32 GJ, i.e. by 7.38%, compared to 2019. This increase was caused by higher energy consumption, including in data centres.

The water used by Allegro comes from the municipal water supply. Allegro does not use water for production purposes.

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Utilities consumption 2020 2019
Electricity (MWh) 10,639.22 9,763.99
Heat (GJ) 6,032.60 4,244.37
Natural gas (m3) – storage facility 94,296.82 111,754.36
Fuel (l) 9,434.86 21,674.75
Diesel (l) 5,304.48 16,887.84
Water consumption (m3) 4,627.03 9,771.57

 

Data from February 2021 was used to calculate the carbon footprint. After the publication of the non-financial report in which carbon footprint data was included, we received corrected energy consumption data for our location in Poznań in March 2021. According to the corrected data, consumption in October and November was lower by 167 MWh (which is 1.6% of total energy consumption).

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Materials purchased in offices 2020 2019
Paper (reams) 2,438.00 3,080.00
Envelopes [no. of items] 70,000 190,000
Printer paper [kg] 1,671.90 2,531.20
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Packaging used in the warehouse [tons] 2020 2019
Cardboard packaging – 70% recycled paper 234.85 117.05
Original stretch film – no recycling 48.80 22.40
Half-pallet wood 9.97 10.98
Fully recyclable foil fillers, HDPE foil 7.30 3.50
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Waste 2020 2019
Waste [t] 184.01 1.06
Recycled paper and cardboard packaging (warehouse and data centres) 146 n/d
Recycled plastic packaging (warehouse and data centres) 20 n/d
Sorted waste (different locations) 7 n/d
Mixed packaging waste (warehouse and data centres) 4 n/d
Other waste (various locations) 6 n/d
Waste electrical and electronic devices subject to disposal or sale (data center and offices) 1.01 1.06
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Business travel 2020 2019
Flight [km] 292,295.00 3,047,158.00
Train [km] 552,543.00 2,389,917.00
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In 2020, no significant financial penalties or non-financial sanctions were imposed at Allegro for non-compliance with laws or regulations in environmental matters.

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