Woolworths Holdings Limited 2013 GOOD BUSINESS JOURNEY Report Business' Role in Driving Sustainability Is Becoming Ever More Important
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WOOLWORTHS HOLDINGS LIMITED 2013 GOOD BUSINESS JOURNEY REPORT BUSINESS' ROLE IN DRIVING SUSTAINABILITY IS BECOMING EVER MORE IMPORTANT. THIS APPLIES TO BOTH THE COMMUNITY AROUND US AND TO THE ENVIRONMENT THAT SERVES US ALL. OUR RESPONSE IS OUR GOOD BUSINESS JOURNEY. CONTENTS 4 46 81 Setting out Social Climate change 6 KEY SUSTAINABILITY INDICATORS 49 OUR PEOPLE and energy AND RECOGNITION 54 OUR CUSTOMERS 84 CARBON MANAGEMENT 10 ABOUT US 58 OUR SUPPLIERS PROGRAMME 10 VISION 87 GREEN BUILDING INNOVATION 10 INTEGRATED SUSTAINABILITY 88 CARBON FOOTPRINT REPORTING 12 CEO/CHAIRMAN'S STATEMENT 61 14 MANAGING SUSTAINABILITY Environment 19 VALUE CREATED 90 64 SUSTAINABLE AGRICULTURE 20 STAKEHOLDER ENGAGEMENT AND MANAGEMENT OF The broader WHL Group BIODIVERSITY 92 WOOLWORTHS FINANCIAL SERVICES 65 FARMING FOR THE FUTURE 93 AFRICA 69 FISHING FOR THE FUTURE 32 95 COUNTRY ROAD GROUP Transformation 72 ANIMAL WELFARE 74 WATER and Corporate 73 WASTE Social Investment 98 34 OUR BBBEE STRATEGY Independent assurance 37 BBBEE SCORECARD report 37 BBBEE EMPLOYEE SHARE OWNERSHIP SCHEME 37 MANAGEMENT CONTROL 37 EMPLOYMENT EQUITY 37 SKILLS DEVELOPMENT TRAINING 38 PREFERENTIAL PROCUREMENT 38 ENTERPRISE DEVELOPMENT 39 CORPORATE SOCIAL INVESTMENT 43 SPONSORSHIP SETTING OUT 6 Key Sustainability Indicators and Recognition 10 About us 10 Vision 10 Integrated Sustainability Reporting 12 CEO/Chairman’s Statement 14 Managing Sustainability 19 Value Created 20 Stakeholder Engagement SETTING OUT KEY SUSTAINABILITY INDICATORS AND RECOGNITION 2015 INDICATOR 2013 2012 2011 2010 2009 PROGRESS TARGETS Revenue 35.4bn 28.8bn R25.8bn R23.7bn R21.9bn Return on equity (ROE) 49.7% 47.1% 44.1% 39.4% 26.3% Headline Earnings 340.4 267.3 214.9 157.2 126 per share (EPS) Share price appreciation 1 402 2 129 567 1 225 275 Good Business Journey index overall score (new 90% 85% 86% 81% 79% targets from 2012 to 2015) Customer tracking study regarding Good Business 26% 26% 29% 26% 24.9% 28% Journey elements Number of 23 538 22 462 20 433 18 836 17 551 permanent employees Equity ownership score 7.63 7.89 8.26 8.94 4.7 (out of 15) Training and skills development score 13.21 11.0 11.5 10.3 7.7 11.87 (out of 15) Management control 9.75 9.7 9.42 9.03 7.3 9 score (out of 15) Training spend R99.8m R75.1m R58.2m R51.4m – 22 Employment equity 10.87 12.32 11.22 10.6 9.8 12.01 score (out of 15) Preferential procurement 18.99 14.62 17 10.4 5.7 14 score (out of 20) Enterprise development 15 12.39 9.71 8.15 6.3 11 score (out of 15) Corporate social investment R500.1m R438m R370m R314m R292m R300m p/a contribution (Rm) WHL 6 / 2013 GOOD BUSINESS JOURNEY 2015 INDICATOR 2013 2012 2011 2010 2009 PROGRESS TARGETS Estimated GBJ savings R189m R105m R80m – – R100m to date Health and safety – number of injuries 682 778 563 693 551 on duty Energy (reduction in relative consumption 31% 27% 22.5% 18% 12% 40% from benchmark) Green buildings 29 24 18 13 – (as per Woolworths model) 40% Carbon footprint 398 568 411 522.35 452 996.73 422 897.34 408 627 relative (total tons of CO ) 2 reduction Water (reduction in relative consumption 20% 1% (5%) 26% 11.5% 50% from benchmark stores) 185 105 At least packaging packaging 100 pack Foods packaging improvements improvements 8.24% 6.6% 3.3% improvements during during per year the year the year Produce suppliers Benchmark qualifying for the Farming 98% 95% 70% 68.4% 100% year for the Future programme X X X X Retain Inclusion in JSE SRI index X Top Top Top Top position performer performer performer performer % of Clothing products with 48% 50% New focus area 60% a sustainability attribute % of Food products with 57.4% 52% New focus area 60% a sustainability attribute 2013 GOOD BUSINESS JOURNEY / WHL 7 SETTING OUT HOW WE’RE RATED Woolworths was again included in the JSE Socially Responsible Investment (SRI) index for 2012/13 Woolworths has been included in the Dow Jones World Sustainability Index, for 2012/13. We are one of only five South African-listed companies included. Woolworths has been recognised as one of the top 6 companies in SA for performance in reducing carbon emissions by the Carbon Disclosure Project (CDP). Woolworths also achieved a score of 94% in the Carbon Disclosure Leadership index. RECOGNITION Woolworths claimed the sustainability Woolworths is the industry leader in business award within the Trade and South Africa, scoring 6.2% above the Woolworths was a joint winner of Services Category for its Farming industry average satisfaction score. the International Responsible Retailer for the Future programme in the of the year award at the 2012 World Woolworths was recognised for inaugural Nedbank Capital Sustainable Retail Awards – an award we also won Outstanding Merit in the category, Business Awards. in 2008 and 2010. We have been chosen Supermarket/Grocery Store for our as a finalist for the 2013 Awards as well Woolworths was a finalist in the Nicolway store in Johannesburg by in the Corporate Social Responsibility 2012 African Access National Business the Association for Retail Environments Initiative of the year category. Awards in the category – Recognition (ARE), an international non-profit trade of Social Responsibilities. association advancing the retail sector. Woolworths achieved second position in the RepTrak™ Pulse survey. The seven MySchool MyVillage MyPlanet won the reputation drivers used in the Reputation ‘Best Corporate Social Responsibility REPORTING AWARDS Institute’s survey are products and Initiative Linked to Loyalty’ award for their Nkonki Integrated Reporting awards services, innovation, performance, ‘Doing Good Is Good Business’ campaign 2012 – Woolworths was chosen as the citizenship, workplace, governance at The International Loyalty Awards. overall winner of the JSE top 40 listed and leadership. companies assessed for their integrated Woolworths Foods came first overall in reporting practices. Woolworths was recognised as one the Orange® Index Benchmark winner of the Ten Most Innovative Companies for 2012 – an accolade we have won four EY Excellence in Integrated Reporting in Africa in 2012 by Forbes Magazine. times in the past 12 years. Woolworths – the 2012 Woolworths Integrated also won the clothing retail category. The report was rated as ‘excellent’. Woolworths was chosen as the winner Ask Afrika Orange® Index is the largest in the Supplier Development category Woolworths was recognised for and most widely referenced service of the Oliver Empowerment Awards the Best Sustainability Reporting excellence benchmark in South Africa. (Non Resources) in ACCA’s annual Woolworths has been awarded the The South African Customer Satisfaction sustainability reporting awards. ET Scope 3 Disclosure Leader Award Index (SAcsi) is a national economic for the 2013 ET Global Carbon Rankings. Woolworths was recognised for indicator of customer satisfaction in the Woolworths is being presented with this Best Sustainability Reporting for quality of products and services available award in recognition of the high degree the year at the Institute of Chartered to household consumers in South Africa of its greenhouse gas emissions (Scope 3) Secretaries Annual Report Awards. The customer satisfaction score recorded supply chain disclosure. for Woolworths is the highest current Woolworths was a finalist in the score for comparable supermarkets in Water management category of the the USA and in the UK. 2012 Sustainability Leaders Awards. WHL 8 / 2013 GOOD BUSINESS JOURNEY GBJ TIMELINE ’04 Stopped selling battery eggs • Good Business Journey strategy formalised and publicly announced ’07 • Set five year targets – to be BBBEE Level 4 by 2012 • Launched BEE Employee Share Option Scheme • Introduced our Sustainable Seafood Policy ’08 • Achieved BBBEE Level 6 (with 45.16 points) • Woolworths won the International Responsible Retailer of the year award at the 2008 World Retail Awards • Farming For the Future programme publicly launched ’09 • Launched our Enterprise Development/Supplier Development programme • Achieved BBBEE Level 5 (with 56.93 points) ’10 Woolworths won the International Responsible Retailer of the year award at the 2010 World Retail Awards • Won Oliver Empowerment Sector Award • Achieved BBBEE Level 4 (with 72.05 points) a year in advance ’11 • Woolworths was named as one of the 16 sustainability champions in the developing world by the World Economic Forum ’12 Acknowledged by the Employment Equity Commission for our EE Compliance SETTING OUT ABOUT US Woolworths Holdings Limited (“WHL”) is the parent company of Woolworths (Proprietary) Limited (“Woolworths”), commonly known as Woolworths in South Africa. It is one of two WHL subsidiaries, the other being Country Road (Proprietary) Limited (“Country Road Group”), listed on the Australian stock exchange, and Woolworths Financial Services (“WFS”), a joint venture with Barclays Africa Group (previously Absa bank). VISION TO BE A WORLD LEADER IN RETAIL BRANDS THAT APPEAL TO PEOPLE WHO CARE ABOUT QUALITY, INNOVATION AND SUSTAINABILITY. INTEGRATED SUSTAINABILITY REPORTING oolworths regards its focuses largely on South African-owned report predominantly covers the aspects sustainability reporting process operations, as well as including information related to human, social and relationship Was a valuable opportunity to on our Australian subsidiary, Country Road and natural capital, the Integrated Report engage with its stakeholder groups and Group. Our carbon footprint information offers detail about financial, manufacturing to respond to issues that have been covers