Communication on Progress

  • 2022/04/20
Time period
  • January 2021  –  December 2021
  • Stand alone document – Basic COP Template
Differentiation Level
  • This COP qualifies for the Global Compact Active level
  • Includes a CEO statement of continued support for the UN Global Compact and its ten principles
  • Description of actions or relevant policies related to Human Rights
  • Description of actions or relevant policies related to Labour
  • Description of actions or relevant policies related to Environment
  • Description of actions or relevant policies related to Anti-Corruption
  • Includes a measurement of outcomes
  • Statement of continued support by the Chief Executive Officer
  • Statement of the company's chief executive (CEO or equivalent) expressing continued support for the Global Compact and renewing the company's ongoing commitment to the initiative and its principles.

  • Tomislav Čizmić, President of the Management Board:

    "Mercator is one of the most important generators of development in Slovenia and in the region, as it promotes the economic, social, and societal development of each local environment in which it operates. We create wider economic and social impacts, build a friendly and orderly environment for consumers and employees, and improve the quality of goods and services offered. We are aware that only by acting in a socially responsible way can we achieve greater business performance, competitiveness, and productivity. In the Mercator Group, we understand sustainable development as a balanced and progressive action in all relevant areas: resource management, providing a safe working environment, equality and diversity for employees, and a tailored and uninterrupted supply of services to the population. We operate with transparency and the highest business standards, treating all stakeholders equally and doing our best to contribute to the development of a fair society for all."

Human Rights
  • Assessment, policy and goals
  • Description of the relevance of human rights for the company (i.e. human rights risk-assessment). Description of policies, public commitments and company goals on Human Rights.

  • POSLOVNI SISTEM MERCATOR is an integral part of the Fortenova Group, one of the largest groups in South-Eastern Europe, employing more than 50,000 people. The fundamental document governing human rights in the Fortenova Group and in the POSLOVNI SISTEM MERCATOR company is the Fortenova Group Code of Ethics (hereinafter the Code), which is implemented in all Fortenova Group companies.

    This Code establishes a basic set of rules and principles in the field of morality and professional ethics that apply to day-to-day business operations in order to establish and maintain corporate responsibility and an organisational culture among all stakeholders of the Fortenova Group and POSLOVNI SISTEM MERCATOR and to put in place mechanisms that protect against potential violations.

    The Code applies to all natural and legal persons who have any business relationship with the Fortenova Group, including but not limited to: employees of the Group, its subsidiaries, business partners, consultants, suppliers, customers, etc.

    All stakeholders are required to fulfil the following obligations at all times and in all situations:

    - adhere to and demonstrate unconditional respect for the human rights of every individual, according to the applicable laws;

    - respect and promote diversity among people by openly accepting, respecting, and proactively assisting every person regardless of race, gender, ethnicity, nationality, ethical affiliation, personal values, religion, social status and/or origin, colour, sexual orientation, trade union membership, education, health status, or any other characteristic that could distinguish that person from other people for any reason;

    - adhere to and promote a zero-tolerance policy regarding discrimination, harassment and/or mobbing, under which any discrimination, harassment and/or mobbing against any person is strictly prohibited;

    - reduce the risks of adverse environmental impacts of their daily operations, taking into account the latest applicable technological and ecological guidelines;

    - comply at all times and without exception with all prescribed rules and procedures to ensure health and safety at work;

    - not engage in or allow any illegal practices (e.g. corruption, money laundering, fraud, or violation of fair competition).

  • Implementation
  • Description of concrete actions to implement Human Rights policies, address Human Rights risks and respond to Human Rights violations.

  • The ethical principles, standards, rules and procedures set out in the Code can only be achieved through the joint efforts and personal responsibility of all stakeholders and others. To this end, effective and clearly defined mechanisms are established to implement the Code with a clear definition of:

    - rights, obligations, and roles in relation to the implementation of the Code;
    - publication and accessibility of the Code (a special booklet is issued to each new employee, and the document is also available in the ISO standards database);
    - the system to ensure compliance with the Code;
    - sanctions for any violations of the Code.

    Each business function in the Fortenova Group and in POSLOVNI SISTEM MERCATOR is authorised and obliged to monitor the implementation of the Code and to ensure that all business activities within the Fortenova Group are conducted according to the Code.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates performance.

  • An Ethics Committee based on the Code is established in order to handle reports of any conduct that is unethical and/or in any way inconsistent with the Code.

    Any stakeholder may file a report of unethical conduct. The procedure for filing a report is defined in the Rules of Procedure of the Ethics Committee.

  • Assessment, policy and goals
  • Description of the relevance of labour rights for the company (i.e. labour rights-related risks and opportunities). Description of written policies, public commitments and company goals on labour rights.

  • • Principle 1:
    Dialogue with employees and social partners is a priority in our HR strategy. We consult with representative trade unions before we make any important decission regarding our employees and also with workers council according to the law.
    Management board of Mercator Group meets trade unions representatives every quarter and also workers council. Current affairs are assessed at monthly meetings between HR leaders and trade unions. Our employees are also presented at Supervisory board of Mercator Group.
    Principle 2:
    Mercator is a company that not just meets but also exceeds legal restictions. We bring our corporate culture, especialy values and standards at every single market.
    Respect of every individual is one of our basic corporate values. It is also written in business strategy. A lot of our communication is dedicated to corporate values: employee satsfaction surveys and visits of business units. In 2021, The Code of Ethics was adopted, a general act that establish general rules and principles in the field of morals and professional ethics for companies within the FNG.

    Principle 3:
    We don't employ people that are younger than 15 years. We are obliged by that with legal restrictions and rules of our corporate culture. Since we are Familiy friendly company, we cooperate with students of our employees during summer months. Students perform easier tasks at the shop and earn budget for vacation, get familiar with real job and use their free time for new experiences.
    Principle 4:
    We don't make differentiate between nationalities, gender, generations and religions when we employ new collegues. Women have equal opportunities for carrer advancement.

  • Implementation
  • Description of concrete actions taken by the company to implement labour policies, address labour risks and respond to labour violations.

  • The areas of the operation and key activities of employees are defined in the Rules of Procedure of HR and Organisation Management.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates performance.

  • Key HR KPIs are defined and monitored quarterly. All the activities in the HR strategy also have measurable KPIs

  • Assessment, policy and goals
  • Description of the relevance of environmental protection for the company (i.e. environmental risks and opportunities). Description of policies, public commitments and company goals on environmental protection.

  • Mercator's wholesale and retail activities do not make us one of the most environmentally hazardous companies in Slovenia, but we do have an impact on the natural environment due to the presence of a large number of stores and our activities across the entire country. We are aware that we operate in a country with a very diverse and rich natural environment, as the proportion of land in Slovenia covered by Natura 2000 (an area of high biodiversity value) is the highest in the European Union and Slovenia is one of the most forested countries in the European Union.

    In running our business, we strive to reduce our consumption of natural resources such as water, energy, and packaging as well as our production of waste, emissions, and wastewater. We pay attention to biodiversity, supplier choice, and compliance with environmental legislation. As a socially responsible company, we continuously strive to improve our business processes in a systematic way according to the requirements of the ISO 14001 environmental standard and legal and other requirements so as to preserve the natural environment in which we operate.

    Environmental objectives were established on the basis of defining the environmental context, understanding stakeholder needs and expectations, and analysing risks, opportunities, and obligations regarding compliance related to important environmental aspects. The purpose of defining environmental objectives is to reduce and prevent negative impacts on the environment over time by preventing or reducing pollution, reducing the use of natural resources, preventing emergency situations (spills, fires, etc.) and improving the environmental management system itself. Environmental objectives are achieved through environmental projects and tasks.

  • Implementation
  • Description of concrete actions to implement environmental policies, address environmental risks and respond to environmental incidents.

  • Environmental Management System in 2021
    • We successfully passed the renewal external audit of our ISO 14001 environmental management system and extended the validity of the certificate until 30/09/2024.
    • Within the Fortenova Group, we have adopted an environmental reporting approach in line with the GRI 300 (Global Reporting Initiative) environmental reporting standard. To this end, we have engaged colleagues with expertise in individual environmental topics. More attention will need to be paid to the topics of biodiversity (GRI 304) and supplier assessment (GRI 308).
    • We hold regular periodic meetings of Mercator's environmental management system coordinators to discuss environmental factors and stakeholder expectations, business compliance with environmental legislation, and to analyse environmental risks and opportunities. Environmental objectives were defined for the identified environmental aspects and their implementation was monitored. We produced reports on Mercator's environmental management.
    • We were active in the Environment Commission of the Slovenian Chamber of Commerce and Industry, which brings together companies to define environmental legislation and share good environmental practices.

    • In order to raise awareness in consumers that waste packaging can be recovered and reused to produce the same or even a new product, thus conserving natural resources and raw materials, we participated in the Tetra Pak education project of the company for the fifth year in the row. The project informs consumers of the importance of separating and disposing packaging waste properly so that it can be recycled and used to make new products such as paper tissues, towels, toilet paper, etc. The project ran for a month in Mercator hypermarkets, where customers who bought five products from the project partners in Tetra Pak packaging received 10 packets of recycled paper tissues made from the cardboard part of the Tetra Pak packaging waste as a gift. This promoted customers’ understanding of the connection between recycled products and proper packaging waste management.
    • We have updated the reporting system for electrical and electronic equipment and packaging of products placed on the Slovenian market by Mercator, thus ensuring better quality of data on the materials of the products that are placed on the market.

    • In 2021, we carried out actions for efficient energy use, such as:
    o replacing cooling technology;
    o renovation of boiler rooms;
    o replacement of existing lighting with LED lighting.

    Water and wastewater
    • We have implemented water efficiency and wastewater treatment activities to reduce the consumption of drinking water and the pollution and wastewater generated by our activities. In 2021, we replaced or reinstalled water reduction equipment (e.g. sensor taps, water-saving toilet flushers, etc.) at two locations, connected one location to the public sewerage system and thus abandoned the use of a septic tank, and replaced or reinstalled wastewater treatment plants at two locations.

    • Mercator has two outlets in the Triglav National Park (IUCN category II) and one outlet in the Strunjan Landscape Park (IUCN category V), where it supplies the local population with commercial goods.
    • Our main impact on the protected environment is through the use of transport infrastructure and the operation of small outlets, which were already operating on the sites before the legal protection of the parks came into force and do not significantly impact the environment.
    • By operating in a sustainable way, we provide a service to local people that supports the preservation of settlements, a quality living environment, and the maintenance of traditions by taking into account all the requirements of protected areas and thus contributing to the conservation of biodiversity.

    • In 2021, Mercator produced fewer CO2 emissions than in the previous year.
    • Mercator is switching to more ozone-friendly refrigerants and regularly conducts leak tests on refrigeration equipment to prevent potential leaks.
    • To prevent the sudden releases of refrigerant gases, we have set up and upgraded remote monitoring of refrigeration equipment at certain locations, especially where larger systems are installed, which immediately alerts technicians to gas leaks so they can take timely action.

    • In order to improve waste separation and reduce the amount of waste generated, various activities have been carried out at Mercator sites, such as adjusting the volumes and number of waste containers, changing the method and frequency of waste collection, installing separate waste collection bins for customers, etc. This has ensured a more optimal management of all types of packaging and municipal waste generated on our sites in the course of regular business operations and even more accurate separation of waste.
    • In all food stores, we carried out activities to reduce the amount of food waste, such as systematic verification of food shelf life in stores (the price of goods just before expiration date is reduced), proper food storage (as specified by the manufacturer), donation of safe food to humanitarian organisations, etc.
    • We have implemented projects to reduce business operations with paper documents or to transition to paperless business operations such as by expanding the number of business partners issuing e-Invoices, introducing e-payment slips to replace paper-based payment slips, introducing a new form of dispatch note which accompanies goods from warehouses to delivery points and reduces paper use, introducing computerised document exchange or e-commerce between Mercator and the suppliers of trade goods, etc. This helps us to use less renewable raw materials and reduce paper waste.
    • In the area of re-use, we cooperated with Re-use Centres (RRCs) by delivering them damaged and written-off goods that are no longer suitable for sale (e.g. toys, cups, crockery, sanitary ceramics, glues, paints, etc.). After repair, rework, redesign, etc., the finished products are suitable for use again. In addition, we cooperated with the Ljubljana Secondary School of Construction, Geodesy and Environmental Protection, to which we donated discarded tiles from discontinued programmes for use in practical training for future tilers. In both cases, we ensured the re-use of products that would otherwise have become waste. We prevented waste generation and reduced the use of raw materials needed to make new products.

    Environmental compliance
    • We have carried out an assessment of compliance with environmental legislation, an evaluation of the compliance of our business with environmental legislation, and an analysis of deviations from environmental requirements.
    • We have introduced into our business operations the new requirements and provisions of the Decree on packaging and packaging waste (Official Gazette of the Republic of Slovenia, No. 54/21 and 208/21), the Decree on the prohibition of placing certain disposable plastic products on the market in the Republic of Slovenia and on the labelling of certain plastic products (Official Gazette of the Republic of Slovenia, No 131/21 and 192/21), and the Act on the on the prohibition of placing certain disposable plastic products on the market in the Republic of Slovenia (Official Gazette of the Republic of Slovenia, No 192/21), thus ensuring compliance with the environmental legislation in question.
    • We have updated the reporting system for the payment of environmental taxes for products placed on the Slovenian market by Mercator. In addition, we have set up reporting for the environmental levy on lubricating oils and fluids.
    • We have consistently carried out activities in the context of inspections by national and municipal inspectors in the field of environmental protection. In 2021, only eight cases of irregularities were detected and requests for corrective actions issued. Seven irregularities were corrected by the deadline and in line with the requirements, while only one is still in the resolution phase, as it has a deadline of 2022.

    Procurement and supplier evaluation processes
    • In the past, we did not evaluate suppliers on the basis of environmental criteria. A system for evaluating suppliers is being developed, which will also include environmental criteria.
    • Slovenian suppliers occupy important positions on our shelves. We place particular emphasis on developing local suppliers under the slogan: “We love local products”
    • We have paid a lot of attention to environmentally friendly packaging for Mercator products.

    Logistics processes
    • In 2021, we optimised transport routes and vehicle utilisation. We established the indicator “Ratio between the distance travelled and the weight of goods distributed from the Market Programme warehouses”, which is 33.75 km/tonne of goods in 2021.
    • We have partially renewed our fleet, which is now more environmentally friendly. The obsolete freight vehicles were taken out of service and replaced by 15 new vehicles with the Euro 6 environmental standard (13 vehicles for the Logistics Executive Field and 2 vehicles for the Wholesale Executive Field). We have also modernised our fleet of forklift trucks – of the 56 new forklift trucks in Mercator, 49 are electric, four are gas-powered and three are diesel-powered due to the higher load capacity required.
    • We have been working on a project to build a new central warehouse to replace the existing warehouses (the plan is to relocate the operations to an energy-efficient facility, thus relieving the environment of the existing warehouses by eliminating heavy goods vehicle traffic, noise and pollution generated by lights. The construction of the central warehouse will further optimise transport routes and fleet utilisation).

    Sales processes
    • In 2021, we reduced the sale of plastic carrier bags at retail outlet checkout counters. The number of bags sold per purchase decreased by 1%. Sales of durable shopping bags increased by 8%.
    • We have raised awareness of our customers with our Bio Zone organic food brand, which we are improving in both quality and choice, with more than 160 product types. They are produced without the use of artificial fertilisers, pesticides, or genetically modified organisms, with respect for animals and nature. In March 2021, Mercator opened a renovated and expanded Bio Zone section in our largest store, the Šiška hypermarket, where most of our special and organic products are gathered in one place.

    Property management and maintenance processes
    In order to improve and optimise our property management and maintenance processes, we have upgraded the following segments of our operations:
    • Preventive inspections of electrical installations and lightning conductors and rectification of deficiencies to prevent potential damage.
    • Preventive maintenance of equipment (split air conditioners, ovens, refrigeration technology, air conditioners, lifts, etc.).
    • Increasing energy efficiency by installing LED lighting.
    • To prevent the release of refrigerant gases, we have upgraded the remote monitoring system for monitoring the refrigeration technology.
    • At locations where we have transitioned from fuel oil heating to remote heating, abandoned tanks have been properly emptied and cleaned to prevent potential releases into the environment.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates environmental performance.

  • • At Mercator, we monitor and evaluate our environmental performance in a systematic way. We carry out the legally required measurements in the field of environmental protection and collect data for individual environmental aspects, on the basis of which we have established environmental indicators according to the requirements of environmental legislation and standards (ISO 14001, GRI 300). We have analysed environmental indicators over the last five years, monitoring their trends and taking action where necessary.
    • Monitoring of environmental performance is carried out by process operators who take appropriate action in case of deviations and document the findings in the system for recording non-conformities, opportunities, commendations, and actions (NPPU), internal control operators such as internal controllers and internal auditors who verify the compliance of the business with environmental requirements, and external control operators such as inspection services and external auditors who verify the compliance of the business with environmental legislation, standards, and other requirements to which Mercator has committed itself.

  • Assessment, policy and goals
  • Description of the relevance of anti-corruption for the company (i.e. anti-corruption risk-assessment). Description of policies, public commitments and company goals on anti-corruption.

  • Corruption results from a lack of moral and ethical values. Due to its negative effects, it is necessary to constantly respond to it or prevent it. In our company, there is zero tolerance of any form of corruption.

  • Implementation
  • Description of concrete actions to implement anti-corruption policies, address anti-corruption risks and respond to incidents.

  • We have adopted a whistleblowing policy. A mechanism for disclosing controversial practices in the company has been established, which we have named “Say it”. The Policy on Promoting Responsible and Fair Practices sets out the procedures for reporting improper conduct, protecting the confidentiality of whistle-blowers, and handling disclosed practices and the responsibilities and powers of all that are involved in this process. The “Say it” mechanism aims to ensure that the controversial practices and irregularities discussed in these binding guidelines are detected, resolved, and remedied at the earliest stage within the company.

    We have also made our business partners aware of the possibility of reporting any questionable conduct or bad business practices by including an anti-corruption clause and a "Say it" clause in all our contracts. This possibility of reporting is also published on the Mercator website.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates anti-corruption performance.

  • There were no reported cases of corruption in 2021.