Working across the Group and with our partners and stakeholders to drive efficiencies and minimise the environmental impacts of our business, our value chain and our products.

Greener environment

We recognise that the actual and potential environmental impacts of our operations, both as a Group and throughout our supply chain, are wide-reaching. These include energy and resource use, carbon emissions, water use, waste generation and biodiversity.

However, as a result of our materiality assessment, we have prioritised the most material for the purposes of our reporting and therefore focus on climate and emissions and waste.

Our overarching intention is to minimise our negative environmental impacts and improve efficiency wherever possible to reduce the intensity of our impacts.

Climate and emissions

The Group’s activity generates greenhouse gas emissions through operations (stores, warehousing and shipping), products and product packaging. We are committed to minimising the environmental impact involved in the manufacturing, transportation, storage and consumption of the products we sell.

The main direct sources of emissions within our value chain are electricity in our stores, warehouses and distribution centres (DCs) and fuels used in the transportation of goods.

By taking a responsible and appropriate approach to environmental management both within the Group and working with our partners and stakeholders, we can reduce environmental risks and negative impacts.

Energy efficient stores and DCs

Poundland has upgraded its whole refrigeration fleet with doors, increasing energy efficiency by 80%. We are also using messaging on the fridge doors to communicate to our customers about energy savings. Almost all of our stores are now using energy efficient LED lighting and all our new stores install LED lighting. In FY24, solar panels will be installed at two of our UK DCs.

Sustainable energy

Poundland sources 100% renewable electricity. The Pepco Energy Committee is developing renewable energy sourcing strategies across all 21 European markets. This is quite challenging as there is often a lack of renewable energy availability in some markets.

Efficient logistics: DC to store, employee commuting and fuel sourcing

We have banned the use of airfreight for own-brand product shipping and are enforcing this through our Airfreight Policy. Poundland now only provides electric vehicles in the employee company fleet. In the UK, we have invested in gas-powered tractor units and long-semi and double-deck trailers; these are higher capacity which enables us to deliver more and reduces miles driven. In the next year, we will further investigate alternative, lower-carbon fuels for our logistics operations and continue to work on logistics planning efficiencies to reduce road miles and transport-related carbon emissions. In Pepco, about 750 shops are serviced directly by DCs, which additionally lowers costs of trans- shipment and number of kilometres driven.

Energy usage and carbon emission data

We have seen a significant improvement in both absolute terms and the intensity of carbon emissions. This is due to moving our UK operations onto renewable energy for the majority of those sites. We will work in FY24 to transition more of our sites across Europe to renewable power.

In FY24, we will extend our emissions reporting to scope 3 for the whole Group and use the information to build a low-carbon strategy and Group-wide carbon emission goals and KPIs. In line with many companies, we expect the majority of our carbon emissions to reside in products, their packaging and transport to our stores and DCs. We will develop a net zero strategy covering scopes 1, 2 and 3 with an associated decarbonisation roadmap.

As part of our commitment to driving progress across our ESG initiatives and improving transparency and disclosure on an annual basis, we have continued reporting according to the EU Taxonomy and commenced reporting in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in FY23.

Sustainability initiatives

In-store refrigeration

In-store refrigeration accounts for 5%of Poundland scope 1 and 2 carbon emissions. In FY23, we invested in doors for all our in-store refrigeration. This has increased energy efficiency on average per store by 80%. We have also added stickers to the doors – using this as a way to engage our customers in our sustainability strategy.

Waste management

Poundland has achieved its zero waste to landfill goal two years earlier than planned. This was achieved through initiatives including launching a waste management guide, and clear in-store signage to enable store colleagues to better segregate waste. A revised food markdown policy was implemented, and a new unsold food policy introduced, which is offered to colleagues at the end of the day.

Shopping bags

Customer shopping bags are a highly visible indicator of waste and plastic use, so making sure they are recyclable and made of recyclable material is an important first step. To further encourage customers to reuse, Poundland has begun to introduce their new 100% recycled and recyclable bags for life.

Better Cotton Initiative

In FY23, the Group became a proud member of the Better Cotton Initiative (BCI) – the largest sustainability programme in the world formed of over 2,500 multi-stakeholder members, which aims to support farming communities socially, environmentally and economically. In the 2022-2023 cotton season, the Better Cotton programme reached more that 2.8m cotton farmers in 22 countries and trained them to use water efficiently, care for soil health and natural habitats, reduce use of the most harmful chemicals and respect workers’ rights and wellbeing.

Pepco is the first Poland-based company which is part of this initiative. By sourcing cotton through Better Cotton, Pepco contributes to raising the standards of cotton production, which translates into the wellbeing of farmers and the local environment. By 2025, our target is to source at least 25% of our cotton from sustainable crops.


The Group’s activity generates waste through both products and product packaging, in its supply chain, in store, distribution and head office operations and tertiary waste in customer households.

Efficient and effective stock management is the most important tool the Group uses to minimise product waste in our stores and distribution lines and reduce our impact on the environment while ensuring commercially efficient operations. We are also conscious of the fact that wasteful packaging can contribute to pollution in a variety of ways and customers increasingly seek more sustainable packaging.

Avoiding or minimising waste is a key element of our approach to sustainability.

However, it is also important to note that packaging can play an important role in minimising waste – particularly related to food. We work with our specialist waste management suppliers to ensure that waste is recycled correctly and, within our Poundland stores, we achieved our zero waste to landfill goal two years early and have now set a goal to reduce all waste by 50% by 2024, from a baseline set in 2019.

Responsible waste management

In the UK, once again we hit our zero waste to landfill goal. In FY23, 21,327 tonnes of waste was generated, with 99.7% of this being diverted from landfill and 55 tonnes directed to disposal.

Below we describe some of the activities we have undertaken to reduce waste and increase recycling.

In March and April 2023, we organised a second clothing collection event in selected stores in Italy and Spain. This was the second edition of the campaign “#Old clothes, New stories” held in collaboration with our social partner Humana People to People.

In total, we collected 1,316 kg of used clothing in over a month, of which as much as 70% will be reused. Reuse and recycling can have many positive environmental impacts which include avoiding CO2 emissions, water consumption and use of pesticides and fertilisers.

Environmental training and awareness

  • “Every footprint is better than a carbon one” is a campaign organised by Pepco Croatia, the aim of which was to educate customers and young people about the importance of caring for the environment. The event included: interactive workshops for students conveying the importance of forests in our lives and voluntary action of reforestation, in which 3,000 trees were planted.
  • “WE DO” was a one-day environmental clean-up campaign organised by our colleagues from Pepco Lithuania. Its aim was to remove rubbish and waste from public areas on the shoreline of a local lake in Vilnius. This initiative not only had a positive impact on the environment and the local community, but also provided a great forum for team integration and working together outside the Company.
  • At Poundland, we trained our store staff in optimising recycling practices, with new bins to separate waste streams and posters explaining what goes where. We have also updated our packaging handbook to make it more user-friendly and trained 100% of our buyers in its use.

Better products

As part of our focus on providing value to our customers, we want to address the myth that price is a barrier to sustainable and ethically produced products. One of the most impactful ways

we can positively contribute to our customers and communities is through offering a larger range of affordable and sustainable products available in our stores.

In addition to our focus on environmental protection, Pepco Group attaches the highest importance to the quality and safety of our products. Our quality assurance processes ensure that our products comply with safety standards and current legislation. Our suppliers receive clear instructions on legal requirements and product specifications.

Avoiding waste – product packing

Clear packaging materials labelling provides our customers with information on how they can better recycle packaging at home – in the UK we have adopted the OPRL guidelines and are rolling them out across our own-label products.

Pepco Group has three main aims when it comes to packaging:

  • 100% of our packaging to be recyclable in all the markets we operate in;
  • reduce the amount of packaging produced by 20% by 2025; and
  • use 30% recycled materials in packaging.

We implemented a comprehensive packaging policy in FY23 in response to the need for collective action in limiting plastic pollution and driving towards a circular economy.

Additionally, in order to learn about the best industry standards, we joined the Polish Plastic Pact in February of 2023.

Environmentally responsible production

Some of our own-brand clothing has been a member of the Better Cotton Initiative (BCI) for a number of years. We have extended this further across the whole Group, with Pepco achieving membership in FY23 for all own-brand clothing and textiles. Through our retail partnerships with Better Cotton, the tonnage of cotton sourced under the BCI scheme is recorded via the BCI membership platform each calendar year, independently assessed and subsequently reported at Group level, providing an external membership validation of this data point.

Our clothing range also includes organic cotton items sourced under the Global Organic Textile Standard (GOTS) and the Organic Content Standard (OCS).

In addition to responsibly sourced cotton, we provide our customers with a range of affordable, sustainable product options across our clothing, general merchandise and FMCG lines including Oeko-Tex and Forest Stewardship Council (FSC) eco-certified products, recycled polyester clothing and vegan and vegetarian ranges. We label those products accordingly, to help our customers clearly identify more sustainable choices and show our commitment to environmentally responsible production.