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Report TABLE of CONTENTS 2012 Sustainability progress report WWW.DELHAIZEGROUP.COM TABLE OF CONTENTS APPROACH CASE STUDIES 3 CEO & Chairman Interview 69 Sustainable Private Brands 5 2012 Highlights 69 Sustainable Seafood 7 The Big Picture 72 Palm Oil 9 Our Materials Issues 74 Zero Waste 11 Our Strategy 77 Healthy Lifestyles 15 Sustainability Governance 81 Associate Diversity & Management 84 Everyday Practices 17 Our Stakeholders 84 Food Donations 19 Compliance & Ethics 86 Natural Refrigerants 20 Our Sustainability Timeline 88 Commuting PERFORMANCE ABOUT OUR REPORT 26 Sustainable Private Brands 91 About our Report 26 Introduction 93 Our Performance Against Goals 30 Health 95 Our 2012 Data Table and 33 Environmental Methodology 36 Social 102 External Assurance Statement 39 Zero Waste 106 GRI Cross-Reference Table 39 Introduction 112 CDP - Carbon Disclosure Project 41 Reducing, Reusing, Recycling Report 44 Food Waste 113 Sustainable Seafood Brochures 45 Healthy Lifestyles 114 List of Awards We Won for Achievements in 2012 45 Introduction 118 Our Banners’ Sustainability 47 Associates Web Pages 48 Customers 119 Our Banners’ Community 50 Associate Diversity Programs 50 Introduction 120 Our Banners’ Food Safety Tips 52 Diversity & Inclusion 121 Our Partners 54 Everyday Practices 124 Glossary 54 Introduction 56 Food Safety 58 Associate Development 61 Community 64 Greenhouse Gas Emissions APPROACH www.delhaizegroup.com/sustainabilityreport/2012 SUSTAINABILITY PROGRESS REPORT 2012 // APPROACH // 2 APPROACH CEO & CHAIRMAN INTERVIEW INTERVIEW WITH PIERRE-OLIVIER BECKERS & MATS JANSSON Pierre-Olivier Beckers, CEO and President Delhaize Group Mats Jansson, Chairman of the Board of Directors Q. In 2012, Delhaize We also heard a clear message from our an ambition that would engage and inspire embarked on a new phase stakeholders, who wanted us to focus more our associates, as well as be relevant to our deeply on the environmental, social and nu- customers. of its sustainability efforts, tritional aspects of the products we sell. They the 2020 Global Ambition. encouraged us to be more ambitious and to Why have you adopted a work harder to embed sustainable business new sustainability strategy? practices throughout our operations. Mats Jansson, Chairman: We felt the time We agreed that it was time to challenge our- was right to outline a long-term vision for selves and outline bold goals that will help our sustainability efforts. We have learned a us become the sustainability leader in all lot from our past successes and challenges. of our markets. And we knew we needed www.delhaizegroup.com/sustainabilityreport/2012 SUSTAINABILITY PROGRESS REPORT 2012 // APPROACH // CEO AND CHAIRMAN INTERVIEW // 3 Q. How did you define the Q. 2012 was a difficult year Q. How can key elements of this new financially for Delhaize sustainability play a role in strategy? Group. What were some of meeting those challenges the major challenges you and drive improved Pierre-Olivier Beckers, CEO: We examined faced worldwide, and how business performance? the progress made toward sustainability in are you addressing them? areas under our direct control and looked Pierre-Olivier Beckers, CEO: Sustainability for ways to expand our impact up and down Mats Jansson, Chairman: Like other food is one of the three pillars of our business our entire value chain. We started by listen- retailers, we continued to experience pres- strategy because it helps us deliver growth ing to internal and external stakeholders to sure from economic troubles in many of our in a responsible way. understand what we were doing well - and markets. In response, we focused on con- what we were missing - to build a more trolling costs and managing capital, which Specifically, our sustainability efforts help us sustainable business. resulted in more than EUR 700 million of free increase revenue by improving our portfo- cash flow. lio of private brand products and designing Our 2020 Ambition is rooted in one of the new, more nutritious and sustainable products primary feedback points we heard: Delhaize We had to make difficult decisions about that meet customers’ needs. We reduce costs Group has the opportunity to influence areas repositioning brands and where to focus our via initiatives such as our move toward zero beyond our direct control by focusing on how resources, such as our efforts at Food Lion to waste, and build loyalty with associates and products are grown, manufactured, trans- close underperforming stores and improve customers by demonstrating our commitment ported, packaged, consumed and disposed. service, food quality and prices. Unfortunately, to improving the social, environmental and So we selected one top priority - creating the these efforts cost some associates their jobs, health-related impact of our business. Focus- most sustainable portfolio of private brand which we understand is a hardship for them ing on sustainability also helps us anticipate products. and their families. But our human resources and mitigate business risks, such as the impact team worked to support associates through on our supply chain from increasing storms the transition by offering them other positions and droughts or resource scarcity. Sustain- Q. What were some of the within Delhaize Group, or by assisting them ability projects engage our associates across most significant with their searches for new jobs elsewhere. the business in building a stronger company. sustainability achievements of the past year? Through these efforts and others, we man- aged to achieve 2.9% revenue growth despite Q. Looking ahead to 2020, Pierre-Olivier Beckers, CEO: We are proud to challenging economic conditions. But we what are some of the most say that all of our operating companies - even know we can improve our operations further, exciting steps you anticipate those in our newer markets - have started and will remain focused on these efforts as as you embark on this new work toward the 2020 Ambition. In 2012, we we expect to face similar challenges in 2013. made particularly good progress in moving strategy? to zero waste, in creating more sustainable Mats Jansson, Chairman: Becoming the private brand products and in engaging our sustainability leader in all of our markets by associates in sustainability. 2020 will require us to listen to feedback from our customers and associates. Their input For example, our operating companies in the will help us understand how they perceive U.S. and Belgium met ambitious sustainable sustainability issues, and show us what they seafood sourcing milestones. In the drive expect from us. Understanding and respond- toward zero waste, pilot programs across ing to customer feedback is also essential as the Group showed us we can significantly we improve the sustainability of our private reduce waste from stores - particularly food brand products. waste. This not only supports our sustain- ability strategy, it also has tangible business We are excited about further educating as- benefits, such as reducing waste disposal sociates and our customers that sustainability costs and minimizing losses from unsold is not someone else’s job - it’s everyone’s product. To create a stronger level of ac- job. We hope our leadership will show how countability across Delhaize Group for sus- they can contribute in small and large ways. tainability efforts, we started in 2012 to tie Our associates are essential partners for the some executives’ bonuses to performance implementation of our 2020 Ambition and on sustainability goals. also are the front line of communication with our customers. We know we will not achieve our goals without them. www.delhaizegroup.com/sustainabilityreport/2012 SUSTAINABILITY PROGRESS REPORT 2012 // APPROACH // CEO AND CHAIRMAN INTERVIEW // 4 APPROACH 2012 HIGHLIGHTS & CHALLENGES HIGHLIGHTS Moving to Zero Waste Sustainable Seafood Sourcing Healthier Private Brand Products All operating companies implemented We achieved major milestones in the U.S. We continued to reformulate private waste reduction pilot programs. In the and Belgium, with Delhaize America’s sus- brand products to improve their nutri- U.S., we reduced waste going to landfill tainable seafood sourcing policy now cov- tional value. In Belgium, for example, we by 8% from 2011 to 2012. ering all fresh, frozen and canned seafood replaced palm oil with sunflower oil in products and Delhaize Belgium’s stores all “Delhaize” brand frozen French fries. carrying 100% sustainable fresh fish. More info More info More info Performance Management Dow Jones Sustainability Indexes We tied executive compensation to sus- We were listed in both the World and Eu- tainability goals for the first time. 23% of rope versions of the Dow Jones Sustain- executives across the business were ac- ability Index. These benchmark indices only countable for sustainability goals in 2012. include companies that meet strict eco- nomic, environmental and social criteria, and signal that we are building a strong foundation of sustainability practices. More info More info www.delhaizegroup.com/sustainabilityreport/2012 SUSTAINABILITY PROGRESS REPORT 2012 // APPROACH // 2012 HIGHLIGHTS & CHALLENGES // 5 CHALLENGES • Economic pressures in many of our lenges and drive stronger performance. • Demonstrating the financial value of markets required us to limit direct in- In 2013, we will focus on accelerating our sustainability projects and goals vestments in new sustainability projects, sustainable product innovations and remains difficult. We will continue to as we cut back on
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