Corporate responsibility review 2012/13 Wm Morrison Supermarkets PLC
More of what matters Overview Corporate responsibility review 2012/13 Brief introduction to Morrisons
Food is at the heart of Morrisons history 1899 Stall opens in Bradford 2006 Safeway conversion Market programme complete what we do and we are 1958 First town centre shop 2007 Morrisons moves to opens in Bradford a new Head Office passionate about it. 1961 First supermarket 2008 Smaller format store opens in Bradford is launched in Scotland Perhaps not surprising 1967 Morrisons becomes 2009 Morrisons opens Farm a public company at Dumfries House 1976 Morrisons opens 2011 First convenience for a food retailer, produce depot, store launched Cutler Heights 2011 Morrisons acquires but what is unusual 1977 Takeover of Whelan FlowerWorld Discount stores 2011 Morrisons acquires 1980 Morrisons opens online retailer is the way our business Farmers Boy Kiddicare 1988 Morrisons opens 2011 Morrisons opens is structured. distribution centre Bridgwater distribution at Wakefield centre 1998 Morrisons opens 2012 Morrisons opens distribution centre, Grimsby seafood Our 2012/13 Year Gadbrook Park manufacturing site 1999 100th store opens 2012 Morrisons acquires Turnover in centenary year meat manufacturing bn 2000 First store opens site, Winsford £18.1 in Wales 2012 Morrisons launches 2001 Morrisons joins online with Morrisons Cellar Profit before tax FTSE 100 m 2004 First store opens 2013 Morrisons joins forces £879 in Scotland with online retailer 2004 Safeway becomes part Lakeland of the Morrisons family 2013 Morrisons acquires Corporation m 2005 Morrisons acquires Blockbuster and tax paid £243 Rathbone’s bakery HMV stores to operation expand convenience 2005 Morrisons acquires (post 2012/13 Year) Like-for-like sales % and expands abattoir 53 week vs 53 week basis (2.1 ) in Turriff Stores Where possible we source locally, buy direct 498 and manufacture at our own sites. We distribute Colleagues to stores through our own network. This gives us close control over provenance, freshness 129,000 and reduces waste, which means we can offer Customers m fantastic food at affordable prices. each week 11 Over the 2012/13 financial year, we opened 17 new stores, nine convenience stores, invested See our Facebook in two new manufacturing sites and launched Visit – facebook.com/Morrisons online. We remain the UK’s fourth largest See our Twitter supermarket by retail sales as well as the second Visit – twitter.com/Morrisons largest fresh food manufacturer. We pride ourselves Cover image Alison Cowan, fishmonger, Retford. Winner of our 2012 internal craft skills on the quality of the fresh food we prepare in store competition ‘Mastercraft’. Morrisons has over 1,000 academy trained fishmongers and more craft trained people than any other UK food retailer. and serve over 11 million customers each week. Overview Friendly people Making great food Affordable What’s in our Review For everyone Governance
Scope of the Review Contents Introduction to Morrisons 1 What’s in our Review 2 Chief Executive’s statement 3 Responsible retailing 4 Our business model 6 Highlights in 2012/13
Friendly people 8 Introduction 10 Recruitment 10 Developing talent 14 Sharing our skills 14 Employer of choice Steven Butts 16 Retirement Saver Corporate Responsibility 16 Equality and diversity policy 16 Ethics and conduct This is Morrisons seventh Corporate Responsibility Review. 17 Health and safety It reports on the progress from our financial year (53 weeks ended 3 February 2013) unless otherwise stated. Making great food Our corporate responsibility programme ensures we operate 18 Introduction in a way that is right for our customers, colleagues and suppliers, 18 The Morrisons farming programme whilst making a positive contribution to society and taking good 20 2012 British farm sourcing care of the environment. 23 Developing and promoting sustainable food supply 24 Environmental sustainability This document is divided into four sections: ‘friendly people’, 25 Food supply sustainability and security ‘making great food’, ‘affordable’, ‘for everyone’. Each section details 26 Buying the right ingredients our progress on key material issues for the business including 31 End-to-end product quality and supplier assurance updates on commitments, KPIs and future plans. It doesn’t cover all 33 Healthy choices the work we do, but gives an overview of our key activity. Affordable If you would like to comment on our corporate responsibility 36 Introduction programme, the Review itself or any of the issues we highlight 36 M savers please drop us a line at [email protected] 39 Avoiding food waste 43 Packaging This Review should be read in conjunction with our annual report 43 Customer recycling and financial statements 2012/13 which can also be found online. 44 Carrier bags 45 Reducing operational carbon emissions See our Review 50 Logistics Visit – morrisons.co.uk/cr For everyone See our Annual report and financial statements Visit – morrisons.co.uk/corporate/ar2013 52 Introduction 52 More of what matters locally 55 Let’s Grow 59 Save the Children
Governance 62 About our corporate responsibility programme 63 Board of Directors, Management Board and Corporate Compliance and Responsibility Committee 64 Stakeholder engagement 66 Independent Assurance Statement 68 Commitments and associated KPIs
1 Overview Corporate responsibility review 2012/13 Chief Executive’s statement
Friendly people making great food affordable for everyone
Dalton Philips Chief Executive
In our stores, we’re bringing our passion for ‘great food’ to life. In one of the toughest trading years Across our estate, we’re highlighting our fresh credentials with in a generation, we made good the roll out of our Fresh Formats concept. We’ve expanded and enhanced our fresh range and opened up more of our counters to progress in driving our corporate showcase our craft skills, offering customers a different, engaging shopping experience, with more Morrisons Academy trained skilled responsibility agenda. This Review craft specialists. shares the highlights and reports We’ve also improved our range across the rest of the store, against our commitments, as we build introducing NuMe which gives customers a greater choice of healthier pre-prepared products, without compromising on taste our business around more of what or price. We’ve gone out into communities to talk to customers matters: ‘friendly people making about our new healthy alternatives, providing information and free health checks as an incentive to make the switch. great food affordable for everyone’. In this challenging economic climate, it’s even more important Great shopkeeping starts with ‘friendly people’ delivering fantastic to us that we offer customers great food that’s ‘affordable’. customer service. The investments we’ve made for our colleagues Our unique business model, focused on buying, making and in training, skills development and support in the workplace moving a high proportion of the products we sell, is central to were recognised by a range of external awards, from The Grocer’s reducing both our costs and waste. Despite business growth, Employer of the Year Award for the third year in a row, to our we’ve successfully lowered our carbon emissions for another National Award for Excellence for Talent & Skills from Business year and remain on track for our 2020 target. in the Community. High quality, affordable fresh food prepared with skill and care As a food focused retailer, we pride ourselves on ‘making great is something that we want to be available ‘for everyone’. It’s more food’. The end of our financial year coincided with the discovery than just selling food in our stores; it means sharing our skills of horsemeat contamination in the European food supply chain. and passion with the wider community. Our established ‘Let’s Whilst we received a lot of positive coverage for our clean bill of Grow’ programme continues to educate and stimulate young health, it’s essential that we remain vigilant and that customers can people in growing and eating fresh food. We’re delighted that continue to trust the quality and provenance of the food they buy. it received a ‘Big Tick’ and was highly commended in the National Business in the Community Awards. The educational benefit We’ve reinforced our commitment to ‘making’ even more of the it provides, as well as the interest it encourages in fresh food, food we sell, maintaining direct relationships with our primary is very important to us. suppliers, and supporting responsible sourcing. Over the past year, we introduced new meat packing and seafood processing Last year I wrote that we are proud of what makes us different. facilities and started expanding our Colne abattoir and Wakefield This year we will be making that a central and more visible part bakery sites. of our communication. With our customers and our stakeholders, we will be sharing more of what matters. Fresh British sourced food remains a priority for us, with our annual farming conference providing the ideal forum to work in partnership with our suppliers to ‘Keep Britain Farming’. We’re also actively encouraging responsible fishing, both at home and abroad, to ensure the integrity of our sourcing practices is as high as the quality of the seafood we sell.
2 Overview Friendly people Making great food Affordable Responsible retailing For everyone Governance
Food with thought
Martyn Jones Group Corporate Services Director
During the year we addressed issues such as how we structure and We have again had our Review communicate our commitments. We looked at key performance independently assured by Two measures, strengthening the governance of our programme through our Management Board and Corporate Compliance and Tomorrows in accordance with Responsibility Committee and better integration with our wider AA1000AS (2008). The Independent corporate communication. Assurance Statement commenting Essentially our programme remains very much on track. For clarity, we have summarised our commitments and specific key performance on the report and elements of our indicators at the end of the Review in the same format as previous years. In the body of the document we’ve provided the detail and responsible business programme is case studies to demonstrate progress, highlight challenges and set out in full on pages 66 and 67. address requests for further information from key stakeholders. We took a great deal from the experience of external verification In particular, this year we’ve included new details on how we are last year. This was positively received by stakeholders who working on end-to-end supplier quality and assurance, fish sourcing recognised that this further improved the quality and accuracy developments, improvements to our policy for products derived of our reporting and gave us useful management feedback. from timber and a significant step on our palm oil ingredient sourcing. We’ve also provided more information on technical It’s helped us to revise and shape our corporate responsibility support for British farming suppliers and our second major programme and this year’s Review. We formalised the process update on our support for the Public Health Responsibility Deal. to determine the relative materiality of issues that we deal with. This in turn helped with decisions on where to focus resource and coverage.
Building on last year’s Management Board Member interviews and site visits, Two Tomorrows, this year, interviewed various senior colleagues over a three day period, including our Chairman. They undertook site visits and further senior management interviews at our Willow Green distribution centre, Grimsby fish processing plant and our St Alban’s Fresh Format store. Finally, Two Tomorrows requested evidence for claims made and key statistics used in this Review.
Over 2.7m customers visit our Fresh Format stores each week.
3 Overview Corporate responsibility review 2012/13 Our business model – doing more of what matters
What we do Where we do it Our business model is underpinned by We operate throughout the UK so the manufacturing and sourcing of great we’re closer to our suppliers and food, sold across our stores by our friendly customers – the people who matter. people – put simply we make, we buy, we move and we sell.
Morrisons has grown from a market stall in Bradford to the Key UK’s fourth largest supermarket group with c500 stores Head office including 12 Morrisons M local convenience stores. We employ 129,000 people across our business, including Online head office over 5,000 trained butchers, bakers and fishmongers. Distribution centres We have over 600 lorries and 150,000 trolleys. Manufacturing M local Each of our stores (including convenience) has its own Market Supermarkets Street, complete with trained colleagues using their craft skills to bring fresh products to our customers, prepared just the 58 way they like it. Every day in store we bake 128,000 loaves, fillet 5,000 fish and make 11,500 sandwiches. We make Scotland more fresh food in store than any other supermarket.
We have always cared about the origin of our food. In the 1960s we began sourcing our meat from Woodhead Brothers, 90 a company which became part of the Morrisons family North in 1991. We are now the UK’s second largest fresh food manufacturer and our vertical integration gives us both transparency over our supply chain and the flexibility to run industry leading promotions to support our profitability.
Our business model has evolved to reflect the changing 99 demands of today’s consumer, in particular ‘when, where Midlands and how’ they shop. We continue to invest in the convenience market. We have made progress with our multi-channel offer, with Kiddicare and Morrisons Cellar, and the development 85 of our online food proposition. Our head office, logistics and distribution teams support 84 South-East our stores and we continuously invest in technology. Our Evolve programme has helped us increase efficiency 70 South Central by making sure we have the right systems in place to South West deliver continuous improvement across our operations.
Who we are
We are ‘friendly people making great We are proud to be a British Group and close to both our food affordable for everyone’. customers and suppliers. This Review provides details from We are continuing to grow so that we can reach even more a responsible business perspective customers. In 2013/14 we plan to open 20 stores and increase our convenience store portfolio to 100. Our continued store about who we are and what we are roll out means we’re creating local jobs across the UK. doing to deliver more of what matters.
4 Overview Friendly people Making great food Affordable For everyone Governance
How we do it differently We provide great service to our customers by How we’re building on offering the best value fresh food, prepared Fresh in-store by our experts. We are unique Value because of the transparency of our supply Service chain and our focus on traditional crafts.
Fresh Value more of what matters more of what matters • fresh food – from field to fork, • honest prices – affordable for everyone catch to kitchen in hours • transparent promotions • made from scratch in store every day • great availability • vertical integration – we own the supply We price our food honestly to offer the best value to chain and we source locally our customers. Our vertical integration allows us to drive • we guarantee our fresh credentials efficiencies and quickly pass savings on to customers.
In Market Street our customers can see their food being prepared. Even our Morrisons M local stores have Market Street made products giving customers the same great fresh food. lue for o va ur s V h ng ha a s si re l e i h u r im o e l F x d a e
M r s
Service
Service more of what matters • craft skills in store – see and We pride ourselves on our in-store craft skills. We have over 5,000 trained butchers, bakers taste the food on Market Street and fishmongers preparing food and delivering • friendly people, offering the exactly what our customers want, tailored to best advice and service suit local markets. • knowledgeable HOT service (Hello, Offer, Thank)
5 Business highlights Corporate responsibility review 2012/13 Highlights in 2012/13
February 2012 March 2012 April 2012
Giving us greater control over the quality, Farmers and agricultural suppliers from We announced a new pension scheme value and supply of products, we acquired across the country attended our Farming for colleagues, providing a guaranteed Winsford meat processing plant, part of Conference. Held at the Yorkshire sum when colleagues choose to retire. the Vion Group, supplying pre-packed Showground, the Conference discussed In addition, we started work with leading pork and lamb products. This allowed how we can work even better with our independent financial expert and TV us to increase our in house meat production farmers to deliver great fresh food at personality Alvin Hall, to put in place a in an already outperforming category. affordable prices. three year programme of financial advice and support for all our colleagues.
August 2012 September 2012 October 2012
Our award winning Let’s Grow programme We became the first UK supermarket In an effort to help UK HGV drivers follow returned for its fifth year. We developed with its own seafood processing plant by a healthier lifestyle, we piloted a series it further by reaching out to the wider opening our Grimsby manufacturing site. of initiatives at truck stops throughout community, giving local people the Part of our wider growth plan, Grimsby, the UK. This included providing individual opportunity to grow and harvest their once fully operational, will aim to further health checks, dietary advice and healthy own crops. reduce the time from catch to kitchen. alternatives to traditional meals.
6 Overview Friendly people Making great food Affordable For everyone Governance
May 2012 June 2012 July 2012
Mastercraft, our colleague competition We launched our new healthier eating The Grocer Gold Awards recognises to find the best craftspeople from across range, NuMe, replacing Eat Smart. the ‘best of the best’ in grocery retail our business, was back for its third year. Developed by our professional chefs and for service, initiative and commitment. Building on last year’s competition, nutritional experts the range spans over We took home five awards, including Mastercraft 2012 saw the best butchers, 300 items. Clear iconography on our Employer of the Year for the third year bakers, cheesemongers, fishmongers, NuMe packs simplifies the nutritional in a row. flower shop, produce, cake shop and information of each product. wine advisor colleagues compete for the Mastercraft title.
November 2012 December 2012 January 2013
We hit our target to raise £4m by the end of Research reveals that more than one in We announced plans to open even more our 2012/13 financial year for our charity ten families start Christmas planning in M local convenience stores throughout partner, Save the Children. Funds raised September in order to combat the financial 2013. M locals focus on offering more will help towards their Families and Schools impact of the festive season. To help those fresh food than any other convenience Together programme, making a real and struggling we pulled together a Christmas stores. Ranges within each store have been lasting difference to children in the UK. dinner shopping list to feed a family of carefully tailored to suit the needs of its eight for just £20. neighbourhood location and typically stock over 100 lines of fresh fruit and vegetables.
7 Friendly people Corporate responsibility review 2012/13 Friendly people
Our people are at the forefront of 2012 Awards everything we do. Having the right The Grocer Gold Training Journal people is a key differentiator, allowing Awards 2012 Awards 2012 us to deliver excellent customer service Grocer of the Year Gold Award Employer of the Year Winner of Best Coaching Programme and meet our strategic objectives. At Grocer 33 – Service “The scale of what Morrisons set out to Grocer 33 – Availability do was immense and reached all levels Morrisons, we aim to create long term Hidden Hero of the Year of the organisation, and customers, with remarkable business results.” partnerships by giving colleagues the Special recognition for our commitment to training Judges comments time, qualifications and support needed “Morrisons ticked all the criteria” and cited our commitment to “offering to grow and develop their skills. customers the best possible service” Yorkshire & Humber by ensuring our colleagues feel Regional Awards rewarded and motivated. Judges comments for Training and Apprenticeships 2012 Highlights Food & Drink Top 100 Federation Apprenticeship Employer Top 100 Apprenticeship Employer 2012 1 Awards 2012 Labour turnover “Apprenticeships develop the workforce % Developing Skills Award of tomorrow, whilst giving people 15.0 the skills they need to succeed in “Morrisons provides a very innovative employment. To be named a Top 100 and thorough approach to developing Apprenticeship Employer is a sign skills throughout the chain – from 2 of excellence and these companies Employee stability school to senior management.” should feel incredibly proud of what % Judges comments they’ve achieved.” 87.0 Judges comments Business in People progressing from 3 the Community National the shop floor to managerial 1,205 Awards 2012 Apprenticeship Awards positions in 2012/13 Workplace Talent and 2012 Skills National Award Employer of the Year, Business in the Community Regional Regional winner Colleagues participating and National Big Tick in the Workplace % “Apprenticeships and skills development in the annual colleague Talent and Skills category bring so many benefits, allowing 93.0 “Congratulations to Morrisons, this is employers to tap into new raw talent, Climate Survey a wonderful result. BITC could not be up-skill their staff and grow their more delighted that all your commitment businesses.” and hard work in developing your Sue Price people, and delivering the Morrisons National Apprentiship Service Colleague engagement %4 Academy has been recognised.” increased by Stephen Howard 6.2 Chief Executive, Business in the Community
1 12 months to 31 January 2013. 2 12 months to 31 January 2013 measured as colleagues with more than one year’s service. 3 3 February 2013, compared with 31 January 2012. 4 From Climate Survey March 2012 to year end Pulse Survey.
8 Overview Friendly people Making great food Affordable For everyone Governance
Morrisons people
9 Friendly people Corporate responsibility review 2012/13
Friendly people – continued
Developing talent Talented people are our greatest asset and the way we train our colleagues helps us deliver better customer service. We bring the best out of our people by providing opportunities for continuous development and improvement.
A career at Morrisons starts with the ‘Best First Day’. Developed further over the last year, this is a comprehensive induction to the Morrisons vision, culture and Values. Each colleague’s progression after joining the business includes regular feedback, supplemented by more formal performance reviews.
Our colleagues also receive training through the Morrisons Academy, our company wide overarching development programme.
The Morrisons Academy gives colleagues at all stages of their We have over 1,000 fishmongers in our stores. career the opportunity to build skills, whatever their ambition may be. This is built on strong partnerships with leading academic training and development providers. Our Values “Developing our people is a way Can do of life. It’s enabled Morrisons to Getting things done build the successful business it is today and it’s what will ensure we One team continue to grow in the future.” Working well together Fiona Phillips Bringing the best out of our people Morrisons Academy We’re constantly learning and looking to improve on where we are Great selling and service We love to sell and serve Great shopkeeping Setting the standard in all areas of our business Fresh thinking Always looking for new and better ways of doing things
Recruitment The majority of our new colleagues come from the local community. For stores, for example, this typically means around 75% come from the local area and over half will be previously unemployed. Stores provide flexible work opportunities for a wide range of people from different backgrounds. We offer specialist positions as well as entry level jobs, qualifications and prospects so that our people can build a career.
Over the year, we continued to open more facilities, offering new positions within the Company. By the financial year end we had opened 17 new stores, nine new convenience stores and two new manufacturing facilities.
To find out more about careers at Morrisons Visit – morrisons.co.uk/corporate/jobs 232 butchery and bakery apprentices graduated in 2012.
10 Overview Friendly people Making great food Affordable For everyone Governance
Colleagues at our new Fresh Format stores received specific training Apprenticeship Minister focusing on excellence in preparation and customer service to joins us at Billingsgate support the enhanced layout of the retail space, product range and services. Dean Clough Cookery School now deliver our new The Minister for apprenticeships, store food based team builds. Matt Hancock, visited one of our fishmonger training sessions as Morrisons offers its managers and supervisors the opportunity part of National Apprenticeship to attend masterclasses with specialists. The one day masterclasses Week just after our financial year. are held by industry leading experts in a variety of locations which During a later Parliamentary are relevant to specific sectors. Examples include fish managers debate he said: “It has been a attending training at the iconic home of fish, Billingsgate Market, great National Apprenticeship and butchery managers attending training at the Morrisons Farm Week so far. At 5.30 this morning I was learning from Morrisons at Dumfries House. Masterclasses now include, meat, fish, deli, apprentices how to fillet fish, and what brilliant apprentices they produce and floristry. are. We need to increase quality throughout the apprenticeship system so that all apprentices can be as good as the very best Training and skills development is available across all parts of at MBDA, Morrisons and Rolls-Royce...” our business. In manufacturing, we helped 5,500 colleagues get closer to understanding what great food looks like through our pinnacle food quality standard. We also now offer colleagues in manufacturing, logistics and supply chain the opportunity to complete Level 2 Intermediate and Level 3 Advanced What did the Academy deliver in 2012? Apprenticeships in Business Improvement Techniques. Awards The Academy has become known throughout the retail industry and beyond as a leading authority in training and development. Last year, “ The last few years have seen a lot we received a number of awards based on its progress and specific activity during the year, including from Training Journal, Business of changes in the way we work, in the Community, National Apprenticeship Service (RAFTA’s) and but we’ve made sure we keep great we were once again named a Top 100 Apprenticeship Employer. customer service at the forefront Core training and up-skilling of everything we do.” To date over 110,000 colleagues have taken up the opportunity to complete a Level 2 qualification with 50% of these colleagues not previously having qualifications at this level. Paul Finch Store Manager, Cheadle Heath We maintained our position as the largest apprenticeship provider in the UK with 11,000 colleagues graduating this year with a Level 2 Intermediate Apprenticeship.
The craft skills of our colleagues on Market Street are a genuine point of difference to our main competitors. Last year 232 butchery and bakery apprentices graduated from their programme. We are planning to increase the number of craft skills apprenticeships to around 300 in 2013.
We also launched a Level 3 Advanced Apprenticeship in Retail Management with over 6,000 managers, supervisors and colleagues aiming to achieve the qualification level during the coming year. The Prime Minister endorses Feeding Britain’s Future To launch the new IGD youth employment initiative, Feeding 23,500 750,000+ Britain’s Future, we took our Meat Specialist Roy Craven Colleagues completed a Level Training days delivered across and Larkfield Meat Manager, Annie Sylvester, to showcase 2 Diploma in Retail Skills/ the year to our colleagues* their skills in Downing Street. The Prime Minister said: Customer Service “I was delighted to host an event in Downing Street today which brought together employers and young people, helping to inspire the next generation of Britain’s food industry. 10,000 young people will now have the opportunity to experience the industry first hand, encouraging them to develop the skills needed to ensure that Britain remains * 602,000 of these training days are the first three months a global leader and producer”. for new retail colleagues undertaking in-house training.
11 Friendly people Corporate responsibility review 2012/13
Friendly people – continued
“ The Future Business Leaders programme has allowed me to take a different perspective entirely, looking at all business matters rather than just thinking about my own area. I’ve learnt a huge amount about others and myself.” Nicola Hartley Meat Manufacturing
Leadership development Alongside our apprenticeship programmes, we inducted our largest ever cohort of graduates. We currently have 74 graduates Sharon Logie, Cake Shop Mastercraft Champion. on our tailored training programme and will recruit an additional 122 in 2013. They have a great opportunity to spend time within Mastercraft different parts of the business and build up a great breadth of experience from undertaking hands on roles through to supporting We pride ourselves on our craft skills and in September we Board Member projects. held Morrisons second Mastercraft competition. This year, the competition was expanded and butchers, bakers, fishmongers, Working in partnership with Bradford University we currently have cheesemongers, wine advisers, produce specialists, cake 25 people on a sponsored degree programme, which is designed shop colleagues and florists were all invited to compete. to help people gain real life work experience whilst at the same time growing their academic knowledge. The competition saw a number of challenges including live product knowledge tests, demonstration of craft skills, and for our wine We have continued our accelerated development programme advisers blind taste tests. Following a number of qualifying rounds, for future business leaders from within. Our future leaders 48 finalists were invited to a live finalé where they demonstrated programme supports individuals to identify their motivations, their skills in our busy head office. The winners of each category career ambitions, strengths and development areas in order to were invited to take part in specially arranged European industry create a specific personal development plan. To date 20% of visits to learn more about their crafts so that they could bring the 125 initial participants have had positive career progression. what they had learnt back to their stores. As part of future leaders, participants work in a group with a This is a great way of engaging with colleagues who are truly third sector or charity partner. The charity provide teams with passionate about their trades and provides a springboard from an operational issue they would like help to resolve. The team which they can add to their knowledge and skill set, often have one week working in the community with the charity opening up career progression opportunities. and make recommendations. The first pilot of this programme was held in 2012 with excellent feedback from both learners and community groups. “ We showcase our knowledge in stores every day and Mastercraft really celebrates that.” Lee Smith Morrisons gives Select Mastercraft Produce Winner 2012 Committee evidence We appeared before the Business, Innovation & Skills Committee inquiry into apprenticeships – explaining the way we run our apprenticeship scheme and how we up-skill colleagues in local communities. We challenged the negative view of modern apprenticeships and commented on our training ability to provide a pathway and a career ladder to colleagues. We also mentioned other training we provide including MBAs and debt-free degrees.
12 Overview Friendly people Making great food Affordable For everyone Governance
The Morrisons Academy – looking ahead in 2013 This year we are focusing on the Academy as one of our key points of difference, further developing our suite of training opportunities to support people to move from unemployed to employed and then through their career once in the workplace. Training and development will focus on key priorities for the business to extend and support our points of difference and key brand messages.
We have identified three key priorities.
Skills and qualifications development We’re increasing the number of craft skills qualifications, developing a full suite of qualifications across all divisions from shop floor to top floor (including pre-employment Our 2012 Mastercraft winners. training) and extending our programme of craft masterclasses.
We’re going to broaden colleague’s product knowledge through a “ I’m very keen to progress and new training initiative called ‘Word on the Street’. This programme is designed to build on our Department Advisor packs and enhance contribute as much as I can to the colleagues’ confidence through product knowledge, product tastings and perfect partner recommendations. All of which future success of Morrisons while are designed to create the ‘complete’ shopping experience for realising my personal ambitions.” our customers. Jamie Hulley Leadership and coaching Through the recently established Centre of Coaching Excellence Group Wide Graduate Programme we’re bringing the best of our people with advanced programmes, and developing our leaders of the future. The Morrisons Way Management talent development The Morrisons Way was developed in 2012, to translate our Values It’s vital that we nurture talent and give colleagues who show into action. We worked on creating behaviours that exemplify what potential the chance to move to the next level. This includes has made us successful today whilst weaving in others that will help our management trainees and graduate programmes and we us to be fit for the future, focusing in on ‘how’ we do ‘what’ we do. will focus our attention on more tailored support that offers the best opportunity for people to excel. We are using the Morrisons Way to help define and measure performance in our personal development review process, to help us give useful feedback about how we get things done. We ran workshops during the year to help colleagues explore what the Morrisons Way means for them and how they can better lead their teams.
Honest We tell it like it is Edge We show grit and determination Ambition We create and seize opportunities Respectful We care for each other; everyone counts Trusting We achieve more together Service We serve and delight our customers 23,500 colleagues trained in retail skill/customer service in 2012.
13 Friendly people Corporate responsibility review 2012/13
Friendly people – continued
Sharing our skills Employer of choice We want our stores to be truly part of the communities they serve. We are passionate about providing a great place to work for our We are committed to growing our people to build a loyal and colleagues, which in turn provides a better experience for our committed workforce, which provides the basis of a strong customers. We are proud to have won the Grocer Gold ‘Employer Morrisons culture and increased social mobility. We also want of Year Award’ for the third time in a row and the Retail Week communities to benefit from our growth plans by creating ‘Employer of the Year’ for the second year. opportunities. The current economic conditions are challenging for our colleagues Feeding Britain’s Future and this year we launched ‘Save your Dough’ (a money saving Last year we provided over 700 unemployed young people (16-24) initiative), featuring finance expert and TV personality Alvin Hall. with a three day work placement to support IGD’s Feeding Britain’s The scheme has been received positively, with over 45,000 Future week, including CV writing and interviewing skills and work colleagues saying it has helped them manage and improve experience within Morrisons stores. This resulted in 19.3% of their finances. trainees gaining permanent employment with us, well above the Government’s current output of 3% through the Back to Work We know the importance of communicating with our colleagues Programme which can last up to six months. This year we intend so that they know what’s going on at Morrisons. Our teams receive to increase this to 1,000 unemployed people, including placements regular updates through our Fresh News magazine and colleague in our manufacturing and logistics sites. communication boards.
Our Club The health and wellbeing of our colleagues is key to a happy workforce. As well as increasing healthy food options at This year we’re helping to get people who have been disadvantaged our sites for our colleagues we have a comprehensive in-house in society into work. With youth unemployment at around 1m, this occupational health service. Through this we offered all staff is life changing work and something we can be extremely proud of. free flu vaccinations and delivered over 18,000 in the 2012/13 One of the ways we are doing this is through ‘Our Club’ – a pre flu season. employment programme to support unemployed young people to get into the workplace. We’re working with the Centre for Coaching We also offer bespoke services such as physiotherapy to Excellence, other large employers and suppliers to help young colleagues in manufacturing and logistics where more manual people start their career. labour is required.
“What matters most to me is the Absence and sickness are important metrics which are closely positive difference we make to monitored. Our absence rate is around 3.7% and sickness rate the communities we operate in. as low as 3.5%. We’re doing more to support the unemployed with Our Club, giving young people real skills and real hope for the future.” Nick Rowe Morrisons Academy
Store community engagement In 2013, we’re going to deliver more of what matters locally. We’re creating a community champion in all of our main estate stores and we will be adding an enhanced re-designed community board to shout about all of the work colleagues and customers do in their local community.
We expanded our Mastercraft competition in 2012.
14 Overview Friendly people Making great food Affordable For everyone Governance
We have won The Grocer’s Employer of the Year Award for the third year in a row.
We listen to what our people tell us and colleague suggestions have played a key role shaping our strategic objectives and Deputy Prime Minister supported engagement strategy. Morrisons work with 16–24 year olds Formal feedback is important. Our annual Climate Survey is During the launch of the Deputy supported by quarterly Pulse Surveys. These ensure we regularly Prime Minister’s £1bn youth measure employee engagement. This year, our response rate for contract, Rt Hon Nick Clegg our Climate Survey was 93% and our year-on-year engagement MP welcomed Morrisons levels have increased by 6.2%. spearheading an initiative to get unskilled young people We’ve listened to the feedback we’ve received through our surveys back in to work. Morrisons and taken action to improve the way we work. In 2012 this jointly formed the 16–24 Alliance included adding extra hours back into our checkouts as a direct to help young people develop the confidence and experience result of colleague feedback. We’ve also supported our managers needed to gain a job and launch themselves into a career. with training to enable them to deliver better personal Nick Clegg said: “Morrisons and the 16-24 group of companies development reviews. are showing great leadership in coming forward and working with the Government’s Youth Contract”. We’ll do more in 2013 to unlock ideas originating from our teams and enable colleagues to play a bigger role. We recognise that the people closest to our customers can contribute more to improve the way we work. Once again we will share the results from our annual Climate Survey with everyone and support each local team’s development of their action plan.
It’s about creating a great place to work, with higher support and high challenge. We’re committed to continuing this work, ensuring we deliver more of what matters to our people.
15 Friendly people Corporate responsibility review 2012/13
Friendly people – continued
Retirement Saver Equality and diversity policy At the end of their careers, our colleagues celebrate their Best Equality and diversity at Morrisons is about respecting difference. Last Day. We then continue to support and keep in touch with We will treat all colleagues, customers, job applicants, contractors, them through the M Retirement Plus scheme. suppliers and visitors fairly, equally and with respect and value the diverse skills and talent that different individuals can bring This year, against a backdrop of significant pension changes, we to our Company. introduced our ground breaking Retirement Saver pension scheme. We pride ourselves in being different. This is underpinned by our The improved scheme is designed to be more straight forward desire to promote equality and diversity. We recruit, train and work and will provide a predictable pension pot when colleagues with people from all sections of society and value the different choose to retire, a significant improvement on the existing defined skills, ideas and experiences they can bring to our business. contribution plan. At Morrisons, we will not tolerate any form of discrimination, The cash balance scheme, which is relatively unusual in the UK, victimisation, bullying or harassment on account of an individual’s shares the risk of being in the pension scheme between Morrisons difference. In addition to our business values, legislation also exists and its employees. We will guarantee the pension pot payable at to legally protect the rights of individuals on the grounds of sex retirement when members typically purchase an annuity. (including pregnancy), sexual orientation, religion or belief, marital status (including civil partnership status), age, race (including The scheme is open to all permanent employees and we will ethnic or national origin, colour or nationality) or disability. manage and underwrite the investment to produce a guaranteed In addition, a colleague will not be treated less favourably on fund upon retirement, delivering a predictable pension pot for account of working part time, being on a fixed term contract employees irrespective of fund performance. or being a trade union member.
Providing a trustworthy predictable pension is our way of showing Ongoing training and development of managers and colleagues commitment to colleagues throughout their career and into linked to our Values, as well as actively putting this policy and retirement. We believe this approach sets us apart and will procedure into practice, supports a culture which is equal as encourage colleagues to stay with us for the long term. well as diverse.
Pensions Minister visits Manchester The Pensions Minister, Steve Webb, visited our store in Ethics and conduct Openshaw to talk to colleagues about the Retirement Saver launch. The Minister commented that Whistleblowing and standards our Retirement Saver scheme is an example of best practice We are committed to conducting our operations to the highest amongst the industry. standards. To help us achieve this, we encourage all colleagues to be aware of their working environment and the actions of other employees and third parties around them. Women in Business initiative Morrisons was one of the first major businesses to respond ‘Tell Us’ allows colleagues to raise any concerns they have about to the Lord Davies review into women on boards. We continue practices that may affect the business and our reputation such to support the progression of women into senior roles in as fraud, damage to property, bribery, breaches of health and our business. safety law, breaches of food safety law, unethical behaviour, or environmental damage. In 2011 we committed to increasing the female representation on the Company’s Senior Management Group from 13% to 30% ‘Tell Us’ operates through an independent third party, is completely by 2014. confidential and can be anonymous to encourage participation.
We made progress on this commitment in 2012 and now have Bribery and corruption 22% representation at this level (an increase of 2% on last year) We run our Company honestly and will not tolerate bribery or with women represented at senior management level across corruption from any of our colleagues in any of our dealings or all divisions. relationships. We have systems in place to prevent bribery and corruption and meet the law in the UK (specifically the Bribery This year we have increased our intake onto the Pearls programme Act 2010) and everywhere we operate. from 80 to 106, providing talented women with external networking and development opportunities.
16 Overview Friendly people Making great food Affordable For everyone Governance
“Since 1999 we have achieved a downward trend in colleague Health and safety accidents throughout our Group. The aim for us is to ensure this We are committed to achieving the highest standards of health and continues despite our expansion. safety at work across the Company through a process of continuous Over the year, we have improved improvement in both practice and performance. Since 1999 we have our management systems, reporting established a downward trend in accident rates despite a rapidly methods and in house training growing business in terms of both size and complexity. However, so we can continue to meet the we recognise that the only way to continue with this is through highest standards.” colleague engagement. Phillip Taylor We benchmark our performance against competitor organisations Health and Safety and against those companies in wider industry who are recognised as having world class safety management systems. We actively participate in benchmarking forums and are represented on industry Rate of colleague accidents (per 100,000 colleagues*) and professional bodies.
Rate of colleague accidents During 2012 we achieved a reduction year-on-year of 15.8% 40,000 in the rate of total colleague accidents.
35,000 Last year we reported that we were building a top down and bottom 30,000 up approach to the management of safety in our manufacturing 25,000 division. As a key initiative we introduced near miss reporting into manufacturing in early 2012. As a result, we have seen the numbers 20,000 of reports made rise from 60 in that month to 1,003 a year later 15,000 (January 2013) achieving an average of 544 per month with a formal 10,000 close out rate of 82%.
5,000 Our target remains to achieve an accident rate reduction of 20% 0 in total colleague accidents and 30% in reportable accidents 01 02 03 04 05 06 07 08 09 10 11 12 (under RIDDOR) over the three year period 2011 to 2013. * Reportable and non-reportable accidents (including agency workers and contractors) In 2012 we moved our Group health and safety management system in line with the international standard OHSAS 18001, we believe this will lead to improvement in both practice and performance. Establishment of near miss reporting month-on-month in the manufacturing division during 2012 As part of our process of equipping our managers with the tools they need to effectively manage health and safety, we provided 1,200 training to over 3,500 managers and supervisors in our retail division. 1,003 925 1,000 Health and safety commitments in 2013 824 800 We will continue to work towards our accident rate target,
585 728 utilising the OHSAS 18001 management system to support 600 485 our reduction framework. 574 528 400 452 256 We will improve our information gathering and trend analysis 200 to more effectively use and target our resources. 60 108 0 Colleagues working wholly or mainly in open food preparation areas F M A M J J A S O N D J within our stores will be provided with new slip resistant footwear.
15.8% 3,500 Year-on-year reduction Managers and supervisors in the rate of total trained in retail health colleague accidents and safety Near miss reporting has been introduced into manufacturing in 2012.
17 Making great food Corporate responsibility review 2012/13 Making great food
Within the context of our responsible The Morrisons farming programme business programme ‘making great food’ Provenance means working with our suppliers on Morrisons takes pride in the provenance and production of our food. Operating as a leading food manufacturer as well as a major improving social and environmental British retailer means that we source the vast majority of our inputs performance. for Morrisons branded products from British farmers. British sourcing is important for a number of reasons. It adds to It requires innovation, quality the national economy, bolsters agricultural industries and supports rural communities. It also means that we are closer to source management and careful control because we have shorter supply chains. throughout our manufacturing business. We know that our customers have confidence in British food and so we are committed to ensuring that British farming is our major In store and in the home we help marketplace, remains buoyant and continues to develop. customers by providing a wide We continue to lead the market through our major commitment to fresh British meat by sourcing all Morrisons brand labelled variety of choice, specialist advice unprocessed beef, lamb, pork and chicken from British farmers. and practical guidance. See our farming website Visit – morrisons.co.uk/farming
Fourth year of Morrisons expert led farming programme
Comprehensive support for the Government’s Public Health Responsibility Deal
Successful launch of healthy eating range, NuMe
Industry leading results for our ‘Challenge 25’ age restricted sales policy
We buy directly from British farmers.
18 Overview Friendly people Making great food Affordable For everyone Governance
The right ingredients
19 Making great food Corporate responsibility review 2012/13
Making great food – continued
Lamb 2012 British farm sourcing As with beef we process our own fresh lamb direct from suppliers. During the year, we purchased over 718,000 animals from British Where we differ from competitors is most evident when it comes farms for sale as fresh Morrisons branded meat. to sourcing and processing our own fresh meat. To give an idea of scale here are some facts and figures for the year. Pork We continue to be one of the biggest supporters of British pork Beef with over 1.2m pigs purchased direct from suppliers in 2012. We process fresh beef from our three abattoirs located across English Beef & Lamb Executive (EBLEX) suggests that the UK the country. During the year, we made over 153,000 livestock is only just over 50% self sufficient in pork and yet we buy all purchases for supply into store. of our fresh Morrisons branded pork from British farmers.
In 2012 we launched our traditional beef range to sell as a An independent report ‘Bringing Home the Bacon’ commissioned premium range in store. British breeds of cattle such as the by the Centre for Research on Socio-Cultural Change (CRESC) Shorthorn, Angus and Hereford are popular breeds for producing and published in June 2012 highlighted the benefits our supply high quality beef and are well suited for the British climate. chain ethos provides to the industry.
Farm to store Our senior livestock manager, Michael Winchester, at Fosses Farm, which supplies us with beef cattle. We are able to buy animals directly and process the meat at one of our abattoirs such as at Colne (pictured). Large cuts of meat, called primals, are transported through our own network to our Market Street butchers ready for preparation for customers.
20 Overview Friendly people Making great food Affordable For everyone Governance
“Our challenge working with our farming suppliers is to keep British food as first choice for our customers where possible. As the food market becomes even more globalised the challenge is becoming greater. Our farming programme is part of our commitment to a competitive, profitable and sustainable farming industry.” David Evans Agriculture
Morrisons pig supplier, Hallikeld Farm.
Whilst some stakeholders have been critical of our change we believe it properly responds to our customers’ demands for a “ The Morrisons model aligns the competitively priced, quality range of products. Even so, to put interests of firm, supply chain and this into perspective, over 95% (by weight) of all the fresh meat we purchase (when we take into account these brands) will remain society. Morrisons runs its vertically British sourced. That remains a level of commitment that is unique integrated processing plants at full in the marketplace compared to our competitors. capacity and proves the benefits of The rationale for creating Hemsley’s and Market Deals in branding terms was to clearly differentiate these products from Morrisons own plant loading with demand stabilised. brand fresh meat products where our customers have an expectation The firm increases margins, reduces and understanding that they will be supplied by British farmers. transaction costs and controls quality. Chicken We have successfully embedded the higher welfare regime we Society gains through reduced import introduced in 2011 for all UK sourced housed chickens. The system dependence, stable employment and that applies across our standard fresh range requires a minimum higher welfare regime that includes natural light, bales, pecking the capacity to address animal objects and perches. Free range and organic chickens have welfare and climate change.” additional welfare and environmental requirements. CRESC Report ‘Bringing Home the Bacon’
During the year, the new EU welfare directive (that affects 15% of pork meat we import for hams and bacon) was fully applied across our supply base.
As well as selling offal in our stores we are now beginning exports of pig offal to the Far East. We are offering wider customer choice, utilising more of the carcass and also reducing waste. Our standard fresh chicken now has higher welfare requirements. Hemsley’s and Market Deals During the year we introduced two exclusive brands to our stores for meat products; called ‘Hemsley’s’ and ‘Market Deals’. This First Minister welcomes group of products offers customers who are on a tight budget a Farmers Boy investment lower cost alternative to our standard Morrisons branded products. The major difference to our own brand products is that they may We announced that a new grant of £635,000 secured from be sourced from outside the UK and if so are labelled as such. the Welsh Government’s Economic Growth Fund helped us create up to 90 jobs at our Farmers Boy Deeside facility. Suppliers are carefully chosen and must utilise farm assurance The First Minister of Wales publicly welcomed the investment. schemes that we recognise, operating to clearly defined production The grant formed part of a £6.4m development programme and welfare standards. at the facility, which has enabled us to start producing ready to eat chicken meals as well as sliced meats. The plant supplies our stores across the country.
21 Making great food Corporate responsibility review 2012/13
Making great food – continued
Communicating our points of difference to customers in store.
Eggs During the year we agreed to support dairy farmers, through All of our fresh eggs are supplied by British farms. We retained our processors, with a premium of 6p per litre for milk supply the Nature’s Nest system for free range but will look at measures for a limited time following a period where key input costs such during 2013 to retain the benefit of encouraging hens to roam as feed had increased significantly. We agreed that we would work but with more flexibility for farmers on the type of cover required. with the dairy industry to find a longer term solution and a more Currently the scheme requires specific types of tree cover. transparent pricing mechanism.
In 2012, we responded to customer demand for a less expensive Subsequently, through the Morrison Farming Programme, option for fresh eggs. We now sell M savers eggs from hens housed we have already delivered a significant project that will benefit in enriched cages as well as our higher welfare Nature’s Nest free dairy farmers supplying into our own brand cheese supply chain. range eggs. Working through First Milk we have created a pricing structure that will help farmers to plan for the longer term and better Whilst some stakeholders responded negatively, the option to manage market price volatility. choose free range or caged eggs in store essentially has remained the same. Our view is that changing enriched caged eggs into our Produce own brand allows us to take greater control of the egg supply chain, Morrisons buys around £310m of vegetables and fruit from British drive better welfare standards overall and help customers who are farmers annually. Much of this is bought direct and transported to on a tighter budget. be washed and packed in our own produce plants. British grown vegetables such as potatoes and carrots are purchased as whole All eggs used as an ingredient in Morrisons own brand products crops. This is good news for the farmer who only needs to find one must be from hens housed in enriched cages as a minimum, buyer and is not left with rejects. and from free range systems wherever possible. The weather in 2012 caused major problems for everyone in Many of our products, such as fresh pasta, sandwiches and quiches, the produce supply chain with quality issues and lower yields. are made using free range eggs, in addition to eggs served in our customer cafés. Products are clearly labelled to inform We agreed to further adapt specifications within the available customer choice. grades and sold more ‘knobbly’ products through our M savers range to ensure perfectly good vegetables were available to buy. Dairy Payment terms to farmers remained the same pre-adaptation. We continue to source all our fresh milk from British farmers and work closely with our milk processors to develop a more We also accepted smaller broccoli, leeks and swedes in our sustainable industry. standard vegetable range and courgettes that were lightly marked by wind and rain.
22 Overview Friendly people Making great food Affordable For everyone Governance
British farming – developing and promoting sustainable food supply The Morrisons Farming Programme undertook a number of events and projects designed to support a sustainable British agriculture industry capable of supplying quality and affordable food for future generations.
Morrisons Farming Conference We held our first major farming conference in March 2012. Farmers from across the country joined us at the Yorkshire Showground to debate how best to ‘Keep Britain Farming’.
Broadcaster and food expert, Jay Rayner, was given unique access to talk confidentially to our suppliers and present findings to the conference. In the main suppliers’ views were positive and we were able to use the exercise to inform the Farming Programme’s work stream and try to address specific areas where there were issues. Morrisons Open Farm Sunday.
Scotsheep at the Morrisons Farm at Dumfries House Open Farm Sunday HRH The Prince of Wales joined over 8,000 people at the We worked closely with a major chicken supplier to open one Scotsheep event at our Dumfries House Farm in June 2012. of their farms to the public. We saw this as an excellent opportunity to educate consumers and undertake insight into people’s attitudes This was an excellent opportunity for us to open the doors to food production and in particular for comments about how to Dumfries House and share progress with fellow farmers. Morrisons standard chickens are raised under our higher welfare system. We are now in the second year of activity as a Scottish Sheep Strategy Focus Farm with the red meat industry body, Quality We used an independent consumer research company to carry Meat Scotland (QMS), and we took part in trials to test the out interviews with visitors to the farm in Norfolk. The key findings breeding performance of rams measured through the quality were positive shifts pre to post interview. Discussion included the of their progeny. All of the sheep are processed at our own plant amount of natural light in chicken barns, views of overall welfare of at Turriff in Scotland with the lamb sold in our stores. QMS helps the chickens and an increase in numbers willing to pay more if they us share the results of this activity with other farmers in Scotland. knew chickens were well looked after.
Visiting farmers were also able to see another applied research Animal well-being progress project underway at the farm. Some of our cattle were wearing Animal welfare is one of the important ethical issues that concern ‘smart collars’ that send information to the farm manager on our customers. We work across all our supply chains and production important health and welfare factors affecting the animal. systems to ensure that we continuously understand and develop animal well-being. As our customers have different shopping requirements around welfare standards, we cover a range of clearly labelled products.
• Chicken – Environmental enrichment – The University of Bristol delivered their second applied research study following previous analysis of the benefits of enrichment in sheds housing broiler chickens. The results complemented their earlier work establishing that the use of enrichment objects such as natural daylight, perches and pecking objects does improve bird well-being.
– Wet litter management – Many chicken farmers continue to cite the quality of litter as a key determining factor in maintaining and improving bird health. To help them we provided teaching tools including a new guide and workbook that can be used for training staff who work in the industry.
Morrisons on the road at Scotsheep.
23 Making great food Corporate responsibility review 2012/13
Making great food – continued
• Eggs – Hen health management – Working with the University of British farming – Bristol we produced an illustrated guide giving information on best practice techniques to further improve the health of hens environmental sustainability raised in free range systems. As a follow up to this we have commissioned two related projects to be completed in 2013. Managing the environment is an important part of work with our farming suppliers as we recognise the challenge in producing affordable quality food for future generations whilst protecting • Milk the valuable resources in our environment. – Dairy cow housing – The challenge of creating the best environment for a productive and profitable dairy cow comes Renewable energy up at most of our farmer group meetings. To help farmers We published the second in a planned series of independent considering building new or upgrading existing housing we guidebooks aimed at helping farmers make the right investment collaborated with Arla farmers and DairyCo, the industry in renewable energy options. body, to produce ‘Dairy Housing – a best practice guide’. The guide was written with input from farmers at every stage ‘Energy in Farming’ looks at a range of technologies which can work of the editorial process. By working together we’ve been able across the farming spectrum with sections for dairy, poultry, arable to draw on the very latest thinking about dairy buildings on a and red meat producers. The new guide also includes farm case global stage whilst keeping firmly focused on the needs of the studies of wind, solar, solar thermal, hydro, heat pump, biomass British dairy farmer. boiler and anaerobic digestion technologies.
Over 5,000 copies of the guide have been distributed free Each study looks at the grants available, practicality of installation, of charge to dairy farmers. carbon dioxide reductions and the all important cost savings to the farm business. – Neospora – Another project developed at the request of our dairy farmers was to investigate the prevalence of Carbon footprint Neospora (a parasite driven disease) that affects both dairy cows and cattle. We are working with our suppliers to monitor the carbon footprint of key fresh supply chains. In 2012 this covered dairy, poultry Farmers believed the disease was on the increase and wanted and eggs. Our approach on greenhouse gas emissions is to track more practical information to help them tackle it on their farms. progress against Government targets and use the on-farm data The result was a collaboration with experts at the Moredun to help benchmark and improve. Research Institute and a landmark study revealing Neospora is affecting more farms than previously thought. The cost to the British dairy industry alone is around £45m a year.* We have shared our findings with stakeholder organisations including Defra and National Farmers Union to support calls for investment to develop an effective vaccine that can help eradicate the disease. A copy of the guide has been distributed to over 10,000 British farmers.
DfID Minister visits Winsford Department for International Development Minister and Winsford MP, Stephen O’Brien, visited our Winsford meat manufacturing site to take a tour and meet colleagues as part of his constituency work. He has a manufacturing background himself, and took a detailed interest in our plans for the future.
* Milk from 500 dairy herds across GB was tested as part of the project suggesting Neospora was present in more than half. A financial model developed by Animal Health and Veterinary Laboratories Agency (AHVLA) calculated the cost of Neospora in an average 121 cow herd was £3,000.
24 Overview Friendly people Making great food Affordable For everyone Governance
Waste in farming Many think of waste as the food or products that may be discarded at store or in the home. More significant waste is actually generated in the supply chain. Our programme helps us to establish where and what we can do about it. This year we focussed on inefficient use of feed in some of our supply chains.
In response we developed a project in our Beef Improvement Group to measure feed efficiency in beef cattle. Feed efficiency in cattle is genetically linked so it is possible to incorporate these measurements as part of a breeding programme.
Sustainable soya use in animal production Taking on board the views of farming stakeholders we moved away from a requirement that our standard (non-organic) poultry suppliers had to use non-GM soya for animal feed. The policy applied only to poultry and was out of kilter with other animal farming supply. We announced the change at our farming conference. Other retailers have now adopted this approach.
The change was not made in isolation. We have started to more actively monitor soya meal used for feed in our supply chains.
We are now working with our suppliers to look at alternate protein sources. Part of our soya monitoring records the proportion of the total protein in the diet that is derived from soybean meal and from alternate sources. Feed protein derived from soya for our egg producers is approximately 50%. For fresh chicken this figure increases to around 59%. Produce supplier, Strawsons Farm.
Part of this workstream has been a project on our farm at Dumfries Farm workers health and safety House looking at becoming self sufficient in feed proteins. Farming, according to the Health and Safety Executive (HSE), is the This involves planting a high protein crop based on red clover. UK’s most dangerous working environment. The project commenced in 2012 and will be completed in 2014. We wanted to play our part in helping make farming a safer industry. ‘Farm Safety by Numbers’ identifies the eight most common ways where people can come to harm on the farm. It’s coupled with a series of stick on signs for farmers to place in their workplace Food supply sustainability and security acting as reminders about staying safe. Market risk management Once again we worked in collaboration with other agencies and Market volatility continues to pose a severe challenge to many organisations to develop the work including our fellow members dairy businesses. It was estimated that the cost of dairy feed price of the NFU Farm Safety Partnership and the HSE who reviewed volatility in 2012 was in the order of £700m. Many farmers wanted and approved the content. to know more about how they could deal with this volatility and if there were tools that they could use to better manage the risk. For Morrisons Farm research Our Dairy Group established that its best course of action was Visit – morrisons.co.uk/farming to develop its own programme. Eight farmers agreed to trial our first risk management workshop.
English Food and Farming Partnership (EFFP) brought in a group of experts and worked with the farmers to determine what would work best for their dairy farm businesses.
The initial results revealed that there is potential to establish guidance. This has led to a further project that will be completed in 2013. As with all our applied research we will try and find a practical toolset for use in the industry.
25 Making great food Corporate responsibility review 2012/13
Making great food – continued
Quay to store Ocean Fish own and operate a number of vessels that supply Morrisons. Here, the ‘Asthore’ (pictured) is berthed at Penzance at the end of the sardine season and is soon to be registered under the Seafish Responsible Fishing Scheme which we are backing. This year we opened a new fish manufacturing facility in Grimsby which will process fish in the North-East ready for onward travel direct into our stores.
Behind this there are significant challenges to ensure that seafood is brought to store from responsible supply chains. It means Buying the right ingredients that for the fish we sell we minimise the impact on the marine We take great care over what we buy and from where. Our environment by verifying sufficient stock from the fisheries we preference is to keep it simple and buy from people we know and buy from. We check the capture method to see what impact it trust, use our own facilities wherever possible and keep the supply may have, ensure there is proper management of the fishery chain as short as we are able. and that this is followed. Finally, we want to ensure credible certification to verify and validate that these challenges are met. When it comes to more diverse global purchasing, where we can we try to positively influence the marketplace to encourage Over the last year we have redeveloped our seafood sourcing responsible sourcing of key ingredients, commodities and policy to use a carefully constructed selection process, we now finished products. use independent third party data and advice so that we ensure we are taking an active position to minimise our impacts. There are a number of issues that have attracted specific attention The policy restructure currently includes wild capture fish, in the food retail sector over recent years. This section of our farmed fish and bait fish. Review highlights wider sourcing issues that are of particular interest to our stakeholders. We’re committed to working with other key strategic partners to act collaboratively on wider industry matters. We maintained our Seafood active membership and participation of the Sustainable Seafood Coalition and became a founding partner (and the first UK food In many of our stores the fresh seafood counter is one of the retailer) to join the Global Sustainable Seafood Initiative which has first things our customers see. It’s a major part of our fresh food been set up to deliver a three year benchmark of 75 global seafood experience in Market Street and we have over 1,000 Academy certification schemes. We’re also working with the Seafish Industry trained fishmongers on hand across the business. Over the year Authority to improve health and safety conditions for fishermen we have around 50 different types of fresh fish available to buy. because of the unacceptable level of fatality and injury onboard fishing vessels. We’ve taken the vice-chair of GlobalGAP’s Aquaculture Technical Committee and we’re a member of the Seafish Training Advisory Group.
26 Overview Friendly people Making great food Affordable For everyone Governance
As demonstrable support for a number of our key initiatives in 2012 we made a commitment that we would work with our suppliers to ensure that all of our UK wild caught and landed seafood would come from Seafish Responsible Fishing Scheme (RFS) boats. The RFS was developed to raise standards in the catching sector and was created in response to the needs of the seafood supply chain to demonstrate their commitment to the responsible sourcing of seafood. RFS covers fishing practices, vessel criteria, crew competence and environmental considerations.
We identified 525 boats that provide us with seafood and we are aiming for them to be audited and certified over the coming year. We think it will help the UK fleet both to demonstrate their commitment to customer concerns over fishing practice but will also improve conditions for fishermen in a challenging environment.
With more dedicated expert resource we’ve also been able to select development and improvement programmes to support, ranging from research into scallop fishing in the English Channel, fishery improvement programmes in Asia and to roll out RFS auditing and certification in Sri Lanka.
In relation to Morrisons own brand canned tuna, we’ve continued to work with suppliers to move towards the commitment we made so that after the end of 2013 we would only buy tuna that is either Palm oil harvesting. pole and line caught or sourced from vessels that have not caught tuna using aggregation devices. Palm oil Another topical issue from the year included concerns over Stakeholders remain concerned over the use of palm oil and its stocking levels of mackerel from waters around the UK. We are derivatives in many products. This stems from the way palm oil taking an active part in the discussion in the industry and at a plantations have been created, in some cases, replacing valuable governmental level. We are keeping this under close review. primary forests with the resultant loss of biodiversity and threatening people’s livelihoods. In contrast, it is widely recognised As a significant step, underlining our strategic view that we aim that palm oil is a valuable commodity for developing countries to manage and own as much of our own supply chain as we can, with high yields and efficient growth when well managed. we established a new manufacturing facility in Grimsby to process fresh fish. On site, we fillet and portion a wide variety of seafood Alongside many other companies we have supported a responsible bought direct and then, through our own distribution network, supply chain system backed by WWF and administered through the we are able to sell quality product to our customers at affordable Roundtable on Sustainable Palm Oil (RSPO). The RSPO network prices and on site, with more control over inputs we can to further continues to grow and we have maintained our membership and minimise waste. encouraged our suppliers to also support this supply chain system.
We requested, as part of our specification for supplier products, that any product containing palm oil or key derivatives must come from one of the RSPO certified systems. The initial step for companies is to buy palm oil certificates which provide valuable funding to ensure the continued expansion of managed plantations. We surveyed our suppliers three times during the year and have confirmation that, as required, they will all have bought into the RSPO certification scheme as a minimum before the end of 2013.
In 2011 our own manufacturing sites first bought RSPO trading certificates corresponding to the remaining palm oil we use in our “We’ve built on our responsible own made products. We did so again in 2012 and will do the same seafood sourcing policy this year in 2013. Our challenge remains to move to fully segregated oil by working with key stakeholders and derivatives as they become more widely available. such as the Sustainable Fisheries Partnership to add informed We’ve also continued to re-label own brand products that contain external guidance into our palm oil so that they clearly state on pack ‘palm oil’ instead of programme.” a more generic ‘vegetable oil’ description. We do not have any Huw Thomas current plans to provide any messaging on pack that the products Fisheries and Aquaculture contain certified palm oil.
27 Making great food Corporate responsibility review 2012/13
Making great food – continued
Soya Alongside many other businesses we have been supportive The growth of soya plantations fed by increasing global demand of certification systems such as that managed by the Forest has had significant impact on natural habitats, particularly in Stewardship Council (FSC). In store, the higher volume lines South America. Like palm oil the issue is now one of encouraging of relevant products such as own brand tissues and toilet effective and responsible management. rolls, household wipes and tissues as well as greeting cards are all FSC certified. Whilst we are members of the Round Table on Responsible Soy (RTRS) we have not made a time bound commitment that We undertook a review during 2012 in relevant categories to ties suppliers to the RTRS system. We recognise that there see where there were opportunities to increase FSC or equivalent is stakeholder pressure to do so based on the argument that coverage given the increased range of products that we believed it would stimulate the market and encourage growers to buy our commitment should apply to. into the system. As a result we have tightened our policy with a more specific aim. It is an issue we are keeping under review and welcome comments All products with an FSC certification must remain within that and feedback on the matter, but there is some counter concern in scheme and by 2015 all wood and wood based products should be the marketplace, particularly from the farming community. This is FSC (or equivalent) certified. The effect will be to increase coverage because most soya (around 80%) in the UK presents itself in animal of responsibly sourced material for any relevant product. feed and the issue is that it could increase input costs for a sector already under strain. This allows us to cycle through relevant buying years between now and 2015 and take measured steps towards a more We announced last year that one way we could positively encompassing policy. contribute was to undertake action through our Farming Programme to reduce reliance on soya in animal feed by finding Fairtrade alternative proteins. We undertook our first year of work by We support Fairtrade with a variety of products in store in a trialling the growth of alternative crops at our farm at Dumfries wide range of key categories. Fairtrade is one of the most well House. We were not able to establish a clear and effective growth established ethical brands and remains popular with customers. pattern but will continue with the programme during 2013. Fairtrade standards cover social and gender issues, environmental issues as well as an economic framework regarding pricing for Timber suppliers in developing countries. We have a long term commitment to selling own brand products that use timber from certified supply chain systems as their source. This ensures careful management of forests and prevents unregulated deforestation, which is a significant factor in climate change and the reduction of biodiversity.
Managed forestry for timber-based products.
28 Overview Friendly people Making great food Affordable For everyone Governance
Our programme continues to minimise the occurrence of pesticide residues, is helping to phase out more hazardous variants, promotes bio-pesticides and is encouraging best practice around the world. In the EU, limits are set on how much residue can legally remain in food. These limits are called Maximum Residue Levels (MRLs) and in the UK are regulated by the Chemical Regulation Directorate. Pesticide MRLs are not safety limits but are based on good agricultural practice and are usually well below the levels that would be of concern for people’s health.
We have a comprehensive residue testing programme aimed at crops and countries where residues are more likely to be found. Our facilities test for over 450 types of chemical on 340 selected samples. In 2012, only 1.5% of samples exceeded the relevant MRL (below the retail average). 28% of samples had no detectable residues.
Flowers Through our programme we keep current technical issues under In 2011, we acquired Flower World, further extending our credentials review. Of current interest to stakeholders is the issue of potential in fresh flowers and strengthening our vertical integration strategy. harm to bee populations from pesticides. Bees are important from Flower World is one of the leading independent flower importers both a biodiversity standpoint and for natural pollination. Having and distributors in the UK and prides itself on having strong taken action in 2011 by revising our controlled pesticide list to working relationships with both growers and farmers. exclude chemicals that may harm bees, in 2012 we monitored the start of a process for a potential ban in Europe of certain All of our UK and European flower growers are required to have neonicotinoids. These are a specific range of insecticides that have membership to one of the following certification schemes: been linked by campaigners to colony collapse disorder of bee populations. We will ensure through our programme that our • MPS (Floriculture Environmental Programme); suppliers are compliant with any regulatory framework emanating • BOPP (The British Ornamental Plant Producers’ Certification from Europe. Scheme); and • GlobalGAP. Fair Working Conditions Since 2007, our commitment to promoting best employment Suppliers outside of the EU are regularly visited by Flower World practices throughout our wider supply chain and associated to ensure we maintain high standards throughout our global auditing programme has been undertaken by an independent supply chain. third party, Fair Working Conditions. Fair Working Conditions audits examine evidence based general employment conditions GM on an individual site-by-site basis set against our contractual We do not use genetically modified ingredients (including additives requirements of our suppliers to operate in accordance with and processing aids) in any of our own brand products. We have our ethical trading code. a comprehensive and continuous product sampling programme in place to help monitor this. The code encourages best practice as well as compliance in relation to fundamental employment principles including appropriate Similar to many of our competitors we do not prevent suppliers working hours, fair wages, freedom of association, occupational from using animal feed that may be derived from GM crops for use health and safety, no discrimination, forced labour or child labour. in the supply chain for meat and dairy products (unless it’s organic where there is a strict prohibition). GM animal feed must be Fair Working Conditions working practice emphasises a focus authorised for use by the European Food Safety Authority after on employee engagement. With supporting documentation and proper risk assessment. a developed understanding of genuine employee sentiment, a balanced approach is taken in order to identify both negatives Pesticides and positives and, where appropriate, followed by correction Pesticides are a range of products and chemicals that are designed and reaffirmation respectively. to protect plants. When correctly used, pesticides protect crops from insects, weeds and diseases, prevent contamination in storage In 2012, Fair Working Conditions conducted over 300 on-site and safeguard human health by stopping crops being contaminated supplier inspections on our behalf in more than 20 countries. by fungi. Where site visits are undertaken they are based on a risk assessment structure so that we direct attention on areas of greater risk or We carefully manage the use of pesticides on fresh fruit and new areas of engagement. In addition to continued audits in China, vegetables through a risk assessment process. This process controls Turkey, Greece, Spain, Kenya, UK, Thailand and Vietnam, 2012 risk for workers, the environment and consumers. This is especially saw Fair Working Conditions achieve a broader geographic reach. important for control of produce that comes from outside the EU. Regions not previously visited were added to the programme, namely: Italy, Croatia, Romania, Czech Republic, Slovakia, Switzerland, Belgium, Netherlands, Mexico, Belize, Egypt, Morocco, Swaziland and Canada.
29 Making great food Corporate responsibility review 2012/13
Making great food – continued
• In Belize, the standards we found were generally good and supplier’s cooperative. Some health and safety issues were detected to be addressed via individual CAP’s. • Sites in Egypt and Morocco were found to have defective health and safety practices and, in many cases, Fair Working Conditions found unreliable records of actual hours worked and corresponding salary payment. Corrective action has been stipulated where applicable.
Developments for ethical trade in 2013 During 2012, we also commissioned an independent assessment of our working conditions programme. With comment and interaction from stakeholders we reviewed other established systems that we could utilise to gain greater coverage across our supply base for our compliance and auditing programme.
We asked experienced practitioner, Alan Roberts, from Aresa Consultants to spend some time looking at our programme Workers at a banana supplier (Fair Working Conditions audit). and make recommendations for improvement and development. We will be implementing key recommendations in 2013. Over the past six years, more audits have been conducted in China than any other single country as our business has greater supply engagement particularly for non food items.
Corrective action has been undertaken to address issues such as excessive working hours and minimum wage irregularities but equally encouraging is the discernible improvement in terms of employee forthrightness and site management receptivity.
In all cases, Fair Working Conditions audits are followed by individual Corrective Action Plans (CAP’s) per site. Conclusions are determined after careful examination of completed CAP’s and verified via a follow up audit. Where suppliers (or potential suppliers) do not comply with the fundamental principles in the code and are not willing or able to undertake effective and timely corrective action they are excluded from trade.
We have encountered positives and challenges in all geographical areas covered by Fair Working Conditions. Below are some examples of the types of supplier issues, in summary, that our programme identified during the year. In each case we are taking corrective action to address the issues identified. • In the UK, commendable collaboration from suppliers has rendered a high rate of compliance, however, issues still exist in relation to national minimum wage and agency worker regulations, specifically the use of salary sacrifice schemes and Swedish derogation clauses. • In Mexico, Fair Working Conditions identified and addressed a lack of control regarding working hours and payroll records for casual employees engaged in parts of the seasonal agricultural industry. • In Thailand, where large numbers of migrant labour from Cambodia, Laos and Myanmar are employed, employee engagement exposed poor working conditions for this category of worker. This means that greater caution must be used when identifying potential suppliers.
Fair Working Conditions conduct audits across our supply chain.
30 Overview Friendly people Making great food Affordable For everyone Governance
Colne is one of three abattoirs where we take supply direct from livestock farmers.
During 2012 over 5,500 food products were launched. Over 1,000 fresh produce lines were re-launched and over 2,000 End-to-end product quality non-food products. and supplier assurance It means that all products are inspected regularly (from a minimum Making great food to the level and scale on which we operate of two times per year to four times per year depending on risk). requires the highest standards and continuous monitoring. This amounts to at least 30,000 product inspections per year. We operate a full programme of surveillance testing to ensure To ensure technical excellence we employ a highly qualified and compliance with our specifications (compositional, nutritional expert team who are responsible for setting rigorous specifications and microbiological testing). for all product parameters, every aspect of product safety, the composition and quality of our food (and non food) including Our stores also remain under close control to ensure food safety raw materials, approval of all sites for manufacture of Morrisons for all products made and sold to customers. In 2012 we achieved branded food and then visiting sites regularly to verify compliance a 50% increase in stores receiving a top level Food Hygiene Rating. with our standards. We undertook 1,107 of our strict food safety assessments and reduced the percentage requiring re-visits demonstrating our As we are also food manufacturers ourselves we ensure that our commitment to getting it right first time. facilities operate to the best standards. We’ve used this expertise to develop and publish our own Morrisons Manufacturing We also undertook a detailed overarching review of our technical Standard. Anyone who supplies us with Morrisons branded food function to build on our foundations. Our approach is to achieve must comply with the standard and pass an independent audit. industry leading technical operations tailored to support our During the year we completed the major exercise to audit the vast unique integrated business model. In 2012 we made a number of majority of our Morrisons brand suppliers against the standard. key appointments to increase our capability, support our growing business function and appoint more specific expertise to support The value of our technical coverage, combined with our business and provide even greater coverage across our commercial, retail model was, we believe, one of the key factors that meant that and manufacturing teams. we were not implicated in the horsemeat contamination found in meat based products during the year. With fresh meat processing at the heart of our food manufacturing we Business, Innovation and Skills have significant expertise around all aspects of meat handling and supply. A senior civil servant from the retail team at the Department for Business, Innovation and Skills spent the day seeing first In addition, we have a thorough and detailed inspection and hand our vertically integrated model. He said of his visit: “I was surveillance programme for products destined for our stores. enormously impressed by the logistical achievement in bringing This means that all products are approved before launch in our together so seamlessly so many diffuse activities to deliver state of the art facilities at our head office. No changes are maximum value to the business and the customer.” allowed without re-approval and re-inspection.
31 Making great food Corporate responsibility review 2012/13
Making great food – continued
“In Technical Services, our focus is to be a step ahead of any issues that might occur, and apply creative problem solving and an integrated risk assessment process with strong internal reporting linked to our overall governance.” Andrew Clappen Technical Services
Developments for Technical Services 2013 Our trading standards and compliance team will upgrade our We’ve also identified key activity for the coming year for Technical current Enterprise IT system to ‘M Create’ which has greater Services to further improve performance and support product functionality and better integration with other business systems. quality and customer experience. We will also review and re-launch the auditing element of the We will develop and implement a Food Safety Management Morrisons Manufacturing Standard. Our quality team will focus System and introduce a quarterly food safety standards forum attention on fresh produce to improve the products in store and to drive innovation and better ways of working. improve shelf life.
Our manufacturing focus will be to complete the delivery of Critically we are also aiming to complete the major transition of front line training of ‘pinnacle’ ensuring full compliance with our own brand food and non food items in store a programme our own rigorous manufacturing standard. that we started two years ago and has touched over 11,000 of our Morrisons own brand products. The aim has been to improve quality and consistency across our entire range.
Our award winning produce at one of our Fresh Format stores, Cheadle Heath.
32 Overview Friendly people Making great food Affordable For everyone Governance
NuMe Healthy choices In 2012, we launched our new healthier eating range, NuMe, replacing Eat Smart. NuMe offers a wide range of healthier Government’s Public Health Responsibility Deal products. Morrisons is a signatory to the Government’s Public Health Responsibility Deal, which aims to tackle health inequalities The range was developed by our in-house professional chefs, through food, alcohol, physical activity and health in the workplace. nutritional experts and product development team. Innovative labelling systems were developed using clear iconography to help Under the Deal, we’ve signed a series of collaborative pledges customers more easily identify healthier options. and annually report our progress to the Department of Health. The 2009/10 National Diet and Nutrition Survey revealed that only Details on our progress with our Public Health Responsibility one third of adults currently manage to achieve the recommended Deal commitments are set out with our KPI’s and commitments ‘5 a day’. In addition, as a nation, we eat too much food with added from page 68 onwards. sugar, saturated fat and salt, and smaller amounts of food with high fibre content.
With this in mind, the NuMe team at Morrisons developed more stringent nutritional guidelines when creating the range. Levels of sugar, saturated fats and salt were capped to ensure NuMe “Our support for the Responsibility products offer customers who want to buy pre-prepared products Deal is part of our ongoing an option to help maintain a balanced diet. commitment to the health and wellbeing of our customers and colleagues. We are delivering on pledges across the spectrum, from calorie labelling to occupational health, which together will make a real difference.” David Scott Corporate Services and Policy
33 Making great food Corporate responsibility review 2012/13
Making great food – continued
All of our own brand pre-packed foods include front of pack Guideline Daily Amount (GDA) labelling and allergy information where appropriate. We are working with the Department of Health to agree on a universal ‘traffic light’ system based on common nutritional criteria.
Salt reduction Salt is an important preservative and is used for flavour. However, excessive consumption can lead to health problems, which is why we work continuously to reduce levels of salt in our products, while maintaining their quality and safety.
Salt still serves a critical food safety function. For example, removing too much salt from a product such as ham may increase the risk of listeria, one of the most virulent food-borne pathogens. While 70% of people still consume more salt than the 6g daily limit recommended by the Department of Health, official figures show a significant reduction in the average intake since 2001 – from 9.5g per day to 8.1g in 2011.
We are committed to salt reduction targets as part of the Public Health Responsibility Deal. The targets apply to all categories of our own brand food and drink. In order to help our suppliers reduce salt to meet these targets we have produced detailed information for each food and drink category and specific requirements on food safety testing. Any reduction in salt content is preceded by a thorough assessment, to ensure product safety and quality are A NuMe truck stop taste comparison. not compromised. Our product development teams work closely with our NuMe on the road manufacturing and supply base to find technically acceptable We considered which hard to reach audience might present solutions. Along with other retailers, Morrisons funded research a challenge to convince about our NuMe range. by Leatherhead Food Research into the technical solutions available to facilitate further salt reduction. We commissioned research that revealed 29% of UK HGV drivers are obese with 22% defined as morbidly obese. A limited choice Some products will not meet the targets by the reporting deadline of healthier food available at service stations was seen as the main of April 2013, but targets will be maintained and we will continue reason for the impact on their health, closely followed by the belief to seek technical solutions to the challenges. that healthier food isn’t tasty or convenient.
We piloted a series of initiatives at truck stops on major routes in Suffolk, Warwickshire and Cumbria; this included a NuMe truck serving fresh and healthy food options, demonstrations on healthier alternatives to traditional meals, as well as individual “Our increasingly busy lifestyles health check clinics. The response was positive and helped us mean that we cannot always take to tell a positive story about the wider benefits of carefully made time out to prepare nutritious and healthier food. tasty food. This year we improved our healthy product range, to make Nutritional information it easier for customers to make Towards the end of 2011, we launched ‘Market Street Nutrition’ balanced choices in store, without on our website, allowing customers to check the nutritional having to compromise on taste, information of items which are made or prepared in store. quality or affordability.” This was extended throughout 2012 and the website now provides Bryonie Hollaert calorie information per serving, as well as fat, saturated fat, sugar, Nutrition salt and fibre content per serving for nearly 1,100 Market Street lines across all categories (excluding produce, meat and fish). In response to customer demand, we also regularly update the website to include seasonal products and new lines.
Nutrition and café teams worked with stores to continue to provide calorie information to café customers in 2012. The printed café menus display calorie content of various café products, as well as shelf edge labels for cakes, sandwiches, cold drinks and salads.
34 Overview Friendly people Making great food Affordable For everyone Governance
Healthier lifestyles We want to make it easier for our customers and colleagues to follow a healthier lifestyle. We regularly communicate on how to make healthier, informed choices and engage in a more active lifestyle through our customer magazine, website, colleague magazine and intranet and in our stores.
We launched a Healthy Living Guide and NuMe information leaflet in our in-store pharmacies, offering advice and tips on how to exercise safely, healthy eating, how to boost energy levels and prevent illness.
For colleagues ‘You Choose’ menus were introduced into our staff canteens in stores in October 2012. The ‘You Choose’ initiative provides colleagues with healthier option recipes and added nutritional Market Street fresh ‘Pick of the Street’ deals. information. We’re also continuing to refresh the recipes in our canteens and provide at-a-glance calorie, salt and nutritional content of meals. Promoting fresh In 2012, we continued to roll out our Fresh Format stores, firmly We launched a new money saving website for colleagues, which placing fresh produce at the forefront of what we offer in store. includes a dedicated health portal which promotes the health Throughout 2013, we’re aiming to convert up to 100 more stores benefits of regular physical activity including discounts on gym into Fresh Formats. memberships, and how to find a local sports club. Launched at the beginning of 2013, we will also continue with Through our partnership with Save the Children, we also actively our ‘Pick of the Street’ Market Street deals on fresh produce, engage colleagues to take part in various challenge events such making it easier and more affordable for our customers. as the London Marathon and the Great North Run. Alcohol sales See our website We make it clear to our customers that alcohol is a product Visit – morrisons.co.uk/Family-Life/Health-and-Pharmacy/Healthy-Living for adults. Our priority is to ensure that customers have the information they need to drink responsibly and that sales are See our website only made to those over the age of 18. Visit – morrisons.co.uk/Food-and-Drink/Healthy-eating We are supporting all the relevant alcohol pledges in the Government’s Public Health Responsibility Deal to help foster a culture of responsible drinking. This includes collective industry action to reduce alcohol units, labelling with clear health and responsibility messages, continued funding for the charity Drinkaware, and support for local Community Alcohol Partnerships to tackle the problems associated with alcohol misuse.
We believe the Government should focus on more targeted action Morrisons announces support for to tackle problem drinking; a minimum unit price for alcohol will ‘hybrid’ nutrition labelling scheme hit responsible drinkers in the pocket and impact on the poorest at a time when alcohol consumption appears to be falling. We announced that we will move to a nutrition labelling system which combines GDAs and traffic lights We have introduced a number of own brand lower alcohol products if agreement can be reached by the UK food industry and over the past year including own brand low alcohol cider (1% ABV), Government on the nutritional criteria involved. The Public own brand beer (2% ABV), own brand lager (2% ABV). To further Health Minister, Anna Soubry MP, commented on our decision, expand our choice of lower alcohol alternatives we are planning saying: “We welcome Morrisons move towards a single to introduce a new own brand low alcohol beer (0.5% ABV) in nutrition labelling system and continue to work with industry 2013/14. and partners towards a clear and consistent scheme.” Our strict ‘Challenge 25’ policy is in operation throughout our stores to prevent under age sales of alcohol. Our compliance rate as measured by independent simulated test purchases has increased from 76% in September 2010 to 88% in December 2012. This is an industry leading pass rate, according to Serve Legal, the specialist company that monitors our performance and that of other major retailers.
35 Affordable Corporate responsibility review 2012/13
Affordable
Quality, service and value is what matters M savers to our customers. Driving efficiency from Morrisons serves a wide customer base and we aim to offer all field to fork, we aim to create affordable of our shoppers nutritious, tasty food regardless of their budget. products without compromise. In 2012 we created M savers. This category offers a range of high quality groceries at affordable prices. Since the launch, sales within our value category have increased by 37% and M savers Our vertically integrated supply chain has become the fastest growing own label value brand in the UK. means we work directly with suppliers, Through M savers we’ve also taken the value message beyond own and operate manufacturing sites, our stores and into homes and schools. run our own logistics and invest in new M savers summer play parks technologies across our estate, giving Research conducted in partnership with online forum, Netmums, revealed the average family spends over £30 per week more per us greater resource management and child during the school holidays in comparison to term time. The report into summer spending also highlighted that the average more control over waste and costs. parent is predicted to accrue £126.95 worth of debt over the course of the holidays, with 8% in debt at higher levels between £250 to £500.*
Increase in sales of M savers We set up free M savers summer ‘pop-up’ play parks in partnership % with Play England, a leading charity that promotes the importance 37 of play. The parks toured throughout the UK during the summer period, offering families free play areas and step-by-step play Approximate savings through m guides of free and low cost games. energywise £2 To give extra benefit we also provided easy to cook, low cost, nutritious M savers summer-themed recipes from 16p per head. Reduction in logistics absolute % carbon emissions between 27 2009 and 2012 Absolute reduction in carbon % emissions since our 2005 19.3 baseline (target 30% by 2020)
* Parents were spending an average of £31.59 more per week per child on food, entertainment, child care and days out between 02.07.12 – 15.07.12. Research conducted amongst 1,662 users of Netmums. Research was provided by Morrisons external communications consultancy 3 Monkeys. We provided low cost recipes at our summer play parks.
36 Overview Friendly people Making great food Affordable For everyone Governance
Managing cost and resources
37 Affordable Corporate responsibility review 2012/13
Affordable – continued
“ It was great to attend the cook-along session and see parents cooking recipes using products from the M savers range. It demonstrated that you really can cook family friendly meals whatever your budget.” Greg Jones Hartcliffe Store
“ Our parents thoroughly enjoyed the cook along! We would be more than happy to take part in future events, maybe an event could be arranged to involve the children?” School Teacher Crooksbarn Primary School, Stockton-on-Tees
Morrisons food education on the road in 2012.
M savers school workshops We hosted cook-alongs for 600 parents in 20 schools across the Food Affordability Roundtable UK, to help build their confidence in the kitchen and show how to We launched a new ‘Food Affordability make nutritious meals on a small budget. Each cook-along session Barometer’ at a roundtable event in Westminster attended was demonstrated by a professional chef providing M savers meal by our Chief Executive Dalton Philips, a range of food and solutions. Parents were then invited to create their own recipe consumer experts, and nine Parliamentarians including using the M savers ingredients. Special teaching resources and the Shadow Secretary of State for Defra, the former Farming a recipe book were also made available online after the event. Minister, and the new Shadow Farming Minister. Dalton talked through the consumer response to food inflation 97% of participants thought the sessions were a good way to during difficult economic times. create a link between parents, schools and the community.
98.5% of participants were more likely to buy M savers products in the future following the session.*
* Research provided by Morrisons external communications consultancy 3 Monkeys.
38 Overview Friendly people Making great food Affordable For everyone Governance
VAT rise on bakery products Avoiding food waste We were in discussions with the Government throughout the year on how VAT on hot food would affect We are able to minimise food waste through close control customers and our sales. Early in the year we challenged throughout our vertically integrated supply chain. whether VAT on hot bakery food should apply to our ‘hot cross buns’. As VAT will not be applied to bread, hot cross buns only In practice, this means that instead of buying cuts of meat, we escape VAT if they are defined as a bread product. can buy the whole animal; we buy the cow not the steak. As a result of the relationships that we have built with farmers, our buyers The Government eventually announced that they had decided buy British cattle, lambs and pigs and then transport the livestock to re-think closing VAT loopholes on food that is served above to one of our own abattoirs. We are then able to use every single ambient temperature, but is not being kept hot. This means cut of meat. that where we sell pasties and pies on the ‘cool down’ to our customers, these will not be subject to VAT. Large pieces of meat, called primals, are transported to stores where our trained butchers can expertly prepare smaller cuts upon customer request. We also supply our food preparation sites to make our own pies, sausages, cooked meats and other products. Real cost of Christmas Research revealed that over half of people were more concerned As with fresh meat, we buy much of our volume fruit and about the financial impact of Christmas in 2012 than in the vegetables direct from the farmer and, when in season, we buy previous year, with 17% claimed they needed to borrow money British. Produce going through our own pack houses is washed, to help fund their Christmas celebrations. Using M savers products, sorted and graded so that it arrives in store quickly and as fresh Morrisons pulled together a shopping list to create Christmas as possible. We buy whole crops from farmers and can utilise dinner for eight people at £2.49 per head, helping families to more of the food we buy. save money during the festive period.* In stores before products reach the end of their shelf life, we take Shelf edge labelling positive action to clear them by reducing the price or using the We introduced larger and more consistent unit pricing to help food in our own staff canteens. This is our preferred approach, customers choose the best deal from different products. The as we believe it also serves to engender a healthy respect for change in pricing allows customers to directly compare the prices food throughout our business. Close financial control, training of small and large packs and items that are on promotion with and streamlined stock rotation enable us to manage this process those at a standard price. effectively to minimise waste.
Our target is to apply this type of label across 30,000 products by the end of 2013. Products will be labelled with a price per kilogram Food redistribution for solids or the price per litre for liquids, with some exceptions To ensure we are both environmentally and financially efficient where different measures are more relevant or required by law. across our business, our aim is to ensure there is as little wasted stock as possible.
We recognise that occasionally there are problems with the useful disposal of surplus food and drink products within our supply chain. This can lead to perfectly acceptable items having to be disposed of unless there are other options available.
We partner with a number of organisations that redistribute these goods to divert waste from landfill, reduce costs of disposal and provide social benefit.
Company Shop Products with incorrect labelling, damaged cases, or packaging design issues are collected under a carefully controlled process by Company Shop. Stock is then sold on at a discounted price through the company shops of businesses in food retail.
* Research conducted by Vision Critical, October 2012 amongst 2,005 adults aged 18+ with children, who are responsible for their household’s shopping budget.
39 Affordable Corporate responsibility review 2012/13
Affordable – continued
Farm to store Anna Walton, from Technical Services, at Strawsons Farm, one of our long standing produce suppliers. Here leeks are picked and packed in the field ready for distribution. In other cases we take whole crops direct into our facilities such as Cutler Heights (pictured) for washing, packing and then onwards through our logistics operation, ready for customers in store.
FareShare “ Morrisons has always had a strong The national food charity FareShare redistributes surplus stock to a community based network of organisations working with the sense of corporate responsibility, most vulnerable people in society. By working with our suppliers, FareShare is able to redistribute surplus food that can’t be sold minimising waste where possible in our stores. and maintaining a short supply The dual benefit of FareShare is that the offer of free food chain. We have developed a great encourages disadvantaged people into an environment where they can receive appropriate support. This enables recipient relationship with the team and help organisations to reinvest funds into improving services such them to handle the residual product as housing advice, medical services and training. that does occur in a sustainable, His Church In 2012, we began work with the national charity, His Church. cost effective way.” His Church provides solutions for residual stock by redistributing goods to over 300 charities in the UK. Mark Game Managing Director, Company Shop
40 Overview Friendly people Making great food Affordable For everyone Governance
Similar to FareShare, His Church works with our suppliers to collect and redistribute goods that can’t be sold through our stores. They “ We are pleased to see Morrisons operate their own distribution fleet and can collect goods within 48 continued commitment to support hours. So far, Morrisons products have been donated to various charitable projects, including Lincolnshire Safer Communities FareShare by encouraging ‘Speak Out Against Domestic Abuse’ Campaign.
their suppliers to work with us. Developments for 2013 Morrisons are acting responsibly In 2013, we will begin a more structured but limited trial to try and establish processes for food redistribution at store level. To date by promoting the economic, social we haven’t solved key operational and food safety issues to allow and environmental benefits of donations of this type to be made. We are working with FoodCycle on this project. ensuring that their surplus food We are members of Waste Resources and Action Programme’s goes to people who need it, (WRAP) Food Waste and Redistribution Working Group, which is also supported by the British Retail Consortium. The Group is rather than being wasted.” working to develop practical industry guidance on how to safely redistribute surplus food, and will be reporting back progress Mark Varney to the Government in late summer. Director of Food, FareShare Food waste customer awareness UK households throw away over 7m tonnes every year, around “ Morrisons commitment to waste 20% by weight of that purchased. More than 60% (4.4m tonnes) of this could have been eaten, including around 17bn ‘5 a day’ prevention and food redistribution portions.
makes them one of our most valued We believe much of this unnecessary food waste can be tackled partners in meeting the needs of through information, education and communication on effective vulnerable people in the community. storage, preparation and cooking of food. In 2009 we launched our Great Taste, Less Waste campaign, Thanks to Morrison’s contribution, helping our customers to more meals for their money, by reducing in 2012, His Church gave over 10,000 waste and making the most of fresh food. meals to food-insecure families and The basic principles of the campaign are visible to customers both individuals.” in stores and online: • In-store signage – throughout our Fresh Format stores you will find Market Street communications on how fruit and vegetables Richard Humphrey should be best kept, to ensure longer shelf life. Senior Coordinator, His Church • Customer website – our Great Taste, Less Waste website provides tips, recipes for leftover food and how to store various food items within the home. • On-pack tips – we provide freezing and defrosting tips alongside information on how this affects use-by and sell-by dates. • Phasing out dual date codes – we know customers can be confused by use of both ‘best before’ and ‘display until’ dates. In 2012, we reported that we would phase out dual date coding and move to the sole use of ‘display until’ on pre-packed produce. However, based on further customer feedback, it is the ‘best before’ date we have opted to retain and the ‘display until’ date that we have removed. We believe that this will help customers get the best out of the food they buy, save money and reduce waste.
We know there is more we can do as a company to encourage our customers to reduce their food waste. We aim to refresh our campaign again in 2013/14.
41 Affordable Corporate responsibility review 2012/13
Affordable – continued
Store waste management We’ve made more progress on our ambition to reduce store waste going direct to landfill. In practice this means a strong reduction and recycling programme, treating ‘waste’ as a resource and working with our contractors to maximise reprocessing and hence minimise waste being tipped directly to landfill.
We’ve made steady headway since 2007/8 and as the following table shows we recycled or diverted nearly 97% over the year from the back of store. This is a significant achievement and has taken considerable management and operational restructuring to deliver.
The challenge to reach 100% may not be feasible within 2013. This would require disproportionate levels of routine transportation of relatively small amounts of waste across the country. We will, however, continue to keep this under review to close out the commitment if and when practical to do so. However, over the last three periods of the financial year our diversion rate was as high as 98.3% and we aim to maintain this level. Store waste, recycling and In the meantime we have begun the same process for waste from diversion analysis 2012/13 Tonnes Percentage our manufacturing sites. Whilst we already successfully mitigate and recycle much of the waste we are going to focus our attention Card 114,685.50 on a more joined up management programme starting in 2013. Confidential paper 1,224.13 Polythene 8,064.46 Animal by-product 5,926.25 Light tubes 65.93 Oil 4,841.41 “ As a signatory to Courtauld, Other recyclables 170.23 Morrisons has a long standing Diverted trade waste 54,895.43 commitment to reduce food and Total recycled/reprocessed 189,873.33 96.77% packaging waste, both within Landfill 6,340.51 3.23% their supply chain and in their Total waste produced 196,213.83 100.00% customer’s homes.”
Dr Richard Swannell Waste to Landfill tonnes Director of Design and Waste Prevention, WRAP 2007/08 53,395.00
2008/09 50,509.00
2009/10 42,690.00
2010/11 34,842.00 2011/12 10,859.96 “Reducing waste in the first place should always be a priority, but 2012/13 6,340.51 where waste remains we’ve made significant steps to convert it into Waste to Landfill tonnes a resource that can be reused, recycled or reprocessed.” Steve Duncan Waste and in store packaging NB. In 2011/12 the reporting methodology was changed to reflect the revised target and bring in line with retail industry practice.
42 Overview Friendly people Making great food Affordable For everyone Governance
Packaging Customer recycling Packaging remains an environmental concern to stakeholders. We want to make it easier for our customers to recycle their waste. For many of our customers, it’s seen as a visual representation The most efficient and effective way for customers to recycle is of waste in the home. According to a food waste and packaging through council operated kerbside schemes. However, kerbside report by WRAP, close to four in five consumers (81%) believe collections are dictated by individual local councils, and at present that packaging is an environmental problem and 57% think it is there isn’t a unified system in place. wasteful and unnecessary.* In addition, environmentalists want to ensure retailers use efficient packaging and the full life cycle To help our customers, where possible, we provide recycling of a product is also considered. facilities in our stores and car parks. We currently operate 4,263 banks across 378 stores which collect materials such as paper, Packaging plays a fundamental role in preserving the freshness, plastic, glass, cans and clothing. Within all core stores, we also quality and safety of a product, helping to significantly reduce food provide a carrier bag/plastic film and battery recycling services. waste. The resources needed to grow, manufacture and transport food are more impactful than packaging alone so food preservation Collection activity is critical. Salvation Army clothing collection banks The key is smart packaging. We aim to limit the amount of Total tonnes collected for The Salvation Army for 2012/13 packaging on each product using the most effective materials, was 3,380, showing a small decline from 2011/12 activity. whilst ensuring it still serves its purpose to protect and prolong shelf life. This makes sense from not only an environmental 2011/12 3,425 perspective but also financially, using the correct packaging can result in significant cost savings to the business and our customers. 2012/13 3,380 Tonnes donated Alongside other retailers, we are signatories to the second phase of WRAP’s Courtauld Commitment. Part of this commitment is to reduce the carbon impact of our own brand packaging by 10% Christmas card collection scheme by the end of 2012. Total Christmas cards collected in stores in 2012/13 was approximately 219 tonnes showing a drop of 32 tonnes from In 2012, we reported our 2011/12 figures to WRAP which they 2011/12. We believe the decline is a result of increased postage converted to an equivalent absolute reduction in the carbon impact costs, money saving, wider availability of paper and card recycling of our own brand packaging compared to 2009 in line with the and the prevalence of electronic e-cards. Courtauld target. Our 2012/13 figures also appear to be on track to meet WRAP’s 10% carbon reduction equivalent figure. 2011/12 approx 18.5m cards 251 2012/13 approx 16.1m cards 219 Our most recent figures also show that Market Street specific packaging has reduced in weight terms by 23% (in absolute terms) Tonnes donated when comparing 2012 against 2009. Save the Children clothing banks Recycle Now Total tonnes collected through Save the Children clothing banks It’s important that customers have clear and consistent recycling increased from 611 tonnes in 2011/12 to 973 tonnes in 2012/13 information on products bought at our stores. To help, since due to the increased number of banks being rolled out to stores. 2011, we’ve been converting our on pack recycling advice to the The funds from this collection scheme helped to support our universally recognised Recycle Now system in line with industry charity partner, Save the Children. best practice. Customers can easily identify the parts of each product which can be recycled. 2011/12 611
2012/13 973 Recycle Now logos are added during any packaging refresh (replacing our existing Recyclopedia logos). We aim to complete Tonnes donated this conversion process over the next couple of years. Staff uniform recycling Total tonnes of redundant uniforms collected decreased from 20 tonnes in 2011/12 to 7.79 in 2012/13. This is a result of a large uniform refresh in 2011/12 which involved a higher than usual volume of garments being recycled.
2011/12 20.0
2012/13 7.79
Tonnes donated
* WRAP: Consumer attitudes to food waste and food packaging (published March 2013, research date April – August 2012).
43 Affordable Corporate responsibility review 2012/13
Affordable – continued
Charging for bags Carrier bags Since October 2011, in accordance with regulation in Wales we have charged customers for using our single use standard carrier Since 2006 we have worked to manage and reduce customer bags in all of our Welsh stores. Each bag is now subject to a charge reliance on standard single use carrier bags. Over the last of 5p; all of the proceeds raised (less VAT) go towards our charity year, we have seen a further year-on-year absolute reduction. partner, Save the Children, helping to raise funds for their Families We achieved a reduction of 3.8% in comparison to 2011/12 and Schools Together (FAST) programme. (6.2% reduction like-for-like). The number of bags provided to customers throughout the year was 1.09bn, which is the Since the introduction of the new legislation we’ve seen a equivalent of less than two bags per customer transaction. significant decline in single use carrier bags given out in Wales and a total of £374,254 has been raised for Save the Children Where possible, we offer our customers alternatives to the during the annual period prescribed under the Regulations standard carrier bag. Our small and large size durable woven (to April 7th 2013). shopping bags, which can also be recycled, are available from display stands and checkouts in all stores. They are sold in addition We also introduced charging voluntarily in our store in Gibraltar, to our ‘bag for life’ which is made from recycled material and is charging 2p per bag with proceeds going to local charity partners; designed to encourage customer reuse. When damaged, ‘bags this has seen a decrease in carrier bag usage of 74.1% over for life’ can be recycled and replaced free of charge at our stores. the year.
Reusable bags require significant re-use before they provide environmental benefit, this is because of the resources used For more information of the proceeds raised through carrier bag charging in Wales to make and distribute them. Research commissioned by the Visit – morrisons.co.uk/Corporate/CR/Our-carrier-bag-savings-in-Wales Environment Agency assessing the life cycle of supermarket carrier bags found that the environmental impact of a cotton bag for example is 131 times greater than that of a standard plastic carrier bag.
In short, reusing standard carrier bags and recycling them when damaged is the most efficient and effective way for customers to reduce their environmental impact. Environment Minister endorses FAST Scheme Our standard bag is designed specifically to offer exceptional performance and be suitable for re-use, with a minimum of Welsh Environment Minister, John resources used in its production. In recent years, we have also Griffiths AM, visited Pentrebane Primary School in Wales to changed the messaging on our bag to encourage further reuse and see how a FAST scheme is helping families. We support the recycling and they now feature the Recycle Now logo. We have also scheme by donating funds raised on the sale of single use reduced the thickness of each bag so they contain 10% less plastic. carrier bags in Wales – following the introduction of mandatory charging. Mr Griffiths commented: “Retailers are passing All of our standard stores offer customers carrier bag recycling money from the bag charge on to environmental and good facilities, situated in prominent main entrance areas. At these causes and it is really heartening to see how the proceeds facilities customers can also recycle other types of plastic including from the charge are starting to directly benefit Welsh people.” LDPE, which we communicate on all relevant own brand packaging.
We encourage customers to use, re-use and then recycle our ‘bags for life’.
44 Overview Friendly people Making great food Affordable For everyone Governance
Total Carbon Footprint (tCO2e/yr)
2005 1,600,601
2006 1,542,757
2007 1,448,419
2008 1,473,756 2009 1,365,639
2010 1,389,045
2011 1,360,674
2012 1,291,367
Carbon Intensity for Combined Estate Solar panels on our Peterborough store. 2005 51.4 ) 2 2006 48.3 e/ft 2 Reducing operational carbon emissions 2007 44.6 In 2010, we communicated our commitment to reducing 2008 44.4 operational carbon emissions within our business by 30% in 2009 40.4 absolute terms by 2020 (from a 2005 baseline) to align with the UK Government’s targets developed by the Committee on Climate 2010 40.1 Change. This announcement followed the successful completion 2011 38.5 of our previous target after several years of significant focus on Carbon Intensity (Kg CO 2012 35.4 CO2 reduction within our estate. We are now nearly at the midpoint of this journey. At the end of 2012 we have achieved an absolute reduction of 19.3% against our 2005 baseline, which keeps us on target to achieve our 30% Following our success of being target by 2020. the first supermarket to achieve the Carbon Trust Standard back To date, the most effective area of emissions reduction has been in June 2008, we have now achieved the increasing efficiency in the use of electricity within our stores. our second reaccreditation in We have also significantly reduced haulage CO emissions due 2 early 2012/13. to our investment in transport optimisation and the reduction in refrigerant gas emissions has also added significant benefit to our emissions reduction through reducing leakage and replacing high global warming potential (GWP) refrigerants with low GWP natural refrigerants.
The most significant challenge in managing our target emission reduction within the absolute metric is the business growth we 19.3% are absorbing. Absolute reduction in carbon emissions since our 2005 Since 2005 our property estate has grown by 17%, mostly through baseline (target 30% by 2020) new store development, but there has also been a significant increase in our logistics operations through the opening of our Sittingbourne and Willow Green regional distribution centres.
Putting this into context, without an absolute metric we would have already achieved our emissions reduction target, by 2012 achieving a 31% reduction in seven years.
In order to measure our efficiency across a growing estate, we use the carbon intensity relative to our combined square footage of the business to demonstrate progress. In 2012, this saw metric supported an in-year saving of 8.0%, absorbing a 2.7% growth in the size of the estate. This is a clear demonstration of the commitment the management team have given to recognising our responsibility to assist the UK in reducing overall carbon emissions.
45 Affordable Corporate responsibility review 2012/13
Affordable – continued
Willow Green Distribution Centre incorporates a range of energy efficiency measures.
A further challenge in emissions management, at least in terms of perception, comes from our vertical integration business model; 2012 Footprint Breakdown by Source, the direct ownership and control of abattoirs, bakeries, haulage and tCO2e/yr food production provides opportunities to directly manage emissions reduction, but they increase the reporting responsibility for directly controlled carbon emissions (Scope 1 and 2 emissions and some direct Scope 3 as defined by GHG Protocol and PAS 2050). Whilst we continue to develop the reporting of our supply chain emissions (indirect controlled Scope 3 emissions) we operate in marked Refrigerant 217,481 – 17% Waste 23,030 – 2% distinction compared to our competitors because our emissions Electricity 762,686 – 59% are far more encompassing in terms of our direct supply chain. Gas 138,842 – 11% Haulage 108,475 – 8% Our focus for 2013 is to obtain even more detailed knowledge Staff Travel 35,078 – 3% of our emissions sources. We are developing in store energy Business Miles 4,768 – 0% management tools to allow our energy champions to be trained to seek further opportunities and analyse usage. Further investment in automated meter reading equipment will allow us to manage the estate more proactively and react faster to issues. 2012 Footprint Breakdown by Division,
tCO2e/yr Energy efficiency projects Whilst we continue to drive energy reduction across the estate, the focus remains firmly on the efficient use of power within our retail division. Aside from refrigeration, our single most intensive use of energy is lighting and we continue to develop initiatives to reduce consumption in this area.
In 2012 we carried out 22 separate energy efficiency roll out Central 13,357– 1% projects, undertaking 1,638 individual site installations across Retail 1,009,041,095 – 78% the estate. Manufacture 93,867 – 7% Logistics 175,095 – 14% In 2013, we have a further 23 planned efficiency projects in development.
Furthermore, as we increase the scale of our manufacturing activities, we are looking at ways to embed energy efficiency in our new facilities from day one.
46 Overview Friendly people Making great food Affordable For everyone Governance
Lightwells built in to store design to increase natural light.
New store development The look and feel of our new stores has changed significantly We are committed to ensuring our new store design embraces over the last few years. We continue to develop the use of natural efficient building services technology and incorporates sustainable daylight in our roof structures and select appropriate materials forms of energy generation where appropriate to do so. We continue to enhance the thermal properties of our stores to reduce heating to develop new ideas and technologies that enhance the ‘theatre’ demand. Our new Fresh Format within the store has given us the of the customer experience, yet reduce the operational costs of challenge and opportunity to incorporate more effective energy the stores to deliver better value to our business and therefore efficiency into our new store layout and design. our customers. LED lighting to sales areas Our approach to new store design has been developed from LED lighting is a far more efficient light source than traditional the success of the Peterborough Stanground store which was fluorescent lighting found in most retail space. We have developed supported by industry awards for refrigeration and lighting in our requirements, testing retrofit LED lighting in trial stores for 2012. We have now integrated three key initiatives into our the last 18 months. We have now commenced a roll out of this standard store specification: technology in our existing estate, with 33 stores completed to • LED lighting throughout the sales area of the store. date and a further 160 stores planned for 2013. When replacing fluorescent with LED lighting reduces the electricity consumption • Solar photovoltaic roof mounted renewable energy generation. by over 55%. • Heat reclaim for store heating and hot water from the refrigeration process. Store warehouse lighting In 2012, we upgraded the warehouse lighting in 200 stores. The new lighting, fitted with motion detection has enhanced the storage areas, increasing light levels but also significantly reducing energy consumption through lower demand and better control.
Car park lighting In the last quarter of 2012, we replaced the car park lighting in 85 stores with new induction lighting. This provides a whiter, more natural light which not only reduces energy, but provides better illumination to the area. The induction lamps make our customers feel safer whilst reducing light pollution to surrounding areas. They also improve site security and support CCTV imagery.
Morrisons new stores incorporate efficient building services technology.
47 Affordable Corporate responsibility review 2012/13
Affordable – continued
Voltage optimisation In December 2012, we completed our fourth phase of rolling out voltage optimisation technology into the retail estate. Today we have 190 stores benefitting from voltage reduction which typically reduces the electricity usage in store by around 8%.
Energywise We have now completed the first full year of our new behavioural awareness campaign in retail stores, which has achieved energy savings of £2m in 2012. Each store has an Energy Champion within the management team to deliver messages on energy saving tips and ensure compliance with company wide initiatives. The energywise campaign will continue in 2013 with an expanding roll out into our manufacturing and logistics divisions.
“Looking forward, our greatest challenge is absorbing business growth. Our multi channel offers will undoubtedly increase our estate through convenience stores, distribution hubs and data centres for our online businesses. More of what matters certainly applies to our energy reduction strategy as it does to every other aspect of our business.” Stuart Kirk Carbon Reduction and Energy
Refrigeration There is no getting away from the fact that refrigeration is key to presenting great fresh food to our customers. It is therefore no surprise that refrigeration is the single largest source of carbon emission within our business, due to a combination of 17% of total emissions through direct loss of refrigerant gases and the energy to run the refrigeration cabinets in store that account for over 40% of a store’s electricity consumption.
We have continued our dedication to provide robust and effective natural and CO2 refrigerant systems. Our work with the Natural Refrigerant Technology Centre in Hereford has provided further development to our new stores systems with hybrid hydrocarbon and CO refrigeration. This is currently being developed further 2 Our store solar wall at Peterborough captures heat from sunlight. in order to find refrigeration solutions which are affordable, reliable and environmentally friendly for all types and sizes of store.
Within our existing retail estate we have begun to remove the carbon intensive R404a refrigerant gas from our equipment, replacing it with the newly developed R407f which has a GWP, less than half that of its predecessor. This has been completed in a further 54 stores in 2012 using an innovative portable rig on the back of a trailer.
In addition to reducing emissions through gas loss, we have also reduced the power demand to our refrigeration cases in store. By introducing intelligent control to defrost settings, completing the installation of heater less doors to frozen food cases at 165 stores and installing small Perspex screens to the front of our open fresh food cases, they have contributed to a significant reduction in our emissions in 2012.
48 Overview Friendly people Making great food Affordable For everyone Governance
Freezer units converted to standing units with doors and LED lighting.
Refrigerant loss has become our first emissions source to more than half from our 2005 baseline. In the last seven years we have “ The Energy Managers Association reduced refrigerant emissions by 52.3% in absolute terms, assisted is delighted to have been supported by a significant year-on-year reduction of 21.1% in 2012.
by Morrisons over the last 12 months Operational water management and we continue to develop energy In 2012 we made significant strides forward in relation to our water management and reduction strategy. We’ve surpassed our target efficiency measures together for and reduced our costs by 10.6% when taking account of space the benefit of the energy industry growth and price rises. This equates to an absolute reduction of 2.9% year-on-year. In addition to repeating this challenge in 2013 as a whole. We have an exciting with a further 10% reduction, we are also looking at our long term time ahead as we continue to develop reduction strategy for water. Our retail stores are now equipped with remote meter reading training packages for staff awareness devices to allow detailed management of real time consumption. with the aim of training all staff Along with intelligent leak detection software we have been able to reduce base load water consumption at night and prevent long in store on energy efficiency.” term waste water usage.
Lord Redesdale In 2012, our analysis and reduction of base load consumption has saved 442m litres of water across our stores, equivalent to Chairman of the Energy Managers the volume of water in 175 Olympic sized swimming pools. Association and CEO of the Carbon Management Association Through intelligent data capture we are now able to accurately determine a baseline performance for our estate. Therefore we are able to establish a long term target to reduce water consumption in a similar fashion to our carbon emission target.
Our aim is to reduce water consumption by 20% in absolute terms by 2020, from our 2012 baseline consumption data. The major challenge in this target is to absorb the growth in the estate over the next seven years, especially in high water use facilities such as our manufacturing sites.
To support this target we must also challenge behavioural use of water by our colleagues. In 2013 we will be launching our waterwise campaign to run in parallel with our successful energywise campaign. The aim is to reduce our water consumption by a further 116m litres through behavioural change in 2013.
49 Affordable Corporate responsibility review 2012/13
Affordable – continued
In 2012 we reduced kilometres travelled by our fleet by 3%.
Logistics Transport optimisation Morrisons haulage fleet moves goods to and from our network Reducing our carbon footprint and efficient working go hand of stores, manufacturing facilities and depots. Where we can in hand with cost reduction. This helps to keep us affordable gain efficiency we also move products for our suppliers and for our customers. Since 2009 we’ve focused on areas where we form wider distribution linkage to try to ensure that we operate can make the best use of our fleet and secure the biggest savings. full lorries whenever they are on the road. Smarter service to stores Despite continued growth of the business, including new stores We are in the process of introducing new transport schedules and operations in 2012, we’ve increased fleet efficiency and have into all of our depots with 75% of the transport operation successfully reduced our haulage emissions compared to the completed so far, and the remainder being completed in 2013. previous financial year. The new schedules have contributed to the decreases in kilometres travelled and fuel usage. The recent development of our new Overall in 2012 we reduced kilometres travelled like-for-like by purpose built sites at Sittingbourne in the South-East and Willow our vehicles by 3% compared to 2011. In turn, this has reduced Green in the South-West have been a key element of this strategy. our fuel usage by 1.37m litres and led to a reduction in CO2 by 3,511 tonnes. We have made year-on-year efficiency savings Air tabs since 2009 despite volume growth to stores increasing by 12% during that period. To make our vehicle usage more efficient, all vehicles are currently having air tabs fitted to them to make them more aerodynamic and reduce drag, which in turn will reduce fuel consumption.
Refrigerated trailers We rolled out the use of mains power for our refrigerated trailers as an alternative to diesel when at station at our depots. This has 27% helped our business to save 673,110 litres of diesel and counting. Reduction in logistics absolute carbon emissions between 2009 and 2012
50 Overview Friendly people Making great food Affordable For everyone Governance
Euro 5 engine technology All of our current fleet now use more modern Euro 5 engine technology, which also helps to limit our nitrogen oxide emissions.
Dual fuel vehicles We have been trailling the use of dual fuel vehicles with the further aim of reducing our fuel usage and CO2 production in 2013 and beyond. Driver training All of our drivers are fully trained on mileage efficiency and journey planning. This ensures vehicles are used correctly and are travelling on the most effective route to minimise both time and mileage. We use sophisticated technology to track and record activity and we’ve encouraged healthy competition for drivers to drive as efficiently as possible.
Morrisons InMotion In 2011 we launched a backhaul service for suppliers called ‘InMotion’. This service is helping to reduce the number of road miles for our suppliers, by utilising existing Morrisons vehicles making return journeys from stores to collect goods from our suppliers. To date we have over 50 suppliers taking part, with more planned in 2013.
Double-deck and longer trailers Since 2011, we’ve introduced a programme to replace single trailers with streamlined larger and more efficient alternatives. During 2012, we further increased the number of double-decker trailers in our fleet. These trailers transport up to 80% more volume per trip, which also helps to reduce road miles.
The business has also secured 38 longer trailers as part of a Our new distribution centres have been located to best serve our Government trial involving 200 hauliers, with Bellshill taking 18 and national network. Wakefield and Latimer Park 10 each. At 15.65 metres – two metres longer than existing trailers – they are designed to carry more pallets, so cutting the number of journeys.
Focus on convenience in 2013 In the last two years we have trialled our own convenience format, Morrisons M locals, in 12 towns and cities. 2013 is time for lift-off and we aim to have at least 70 Morrisons M locals open by the end of 2013. Over 60 M local stores will open in the South-East alone in 2013 and to help manage the logistics side of the convenience expansion in this highly populated part of the country, we have acquired a convenience distribution centre in Feltham, West London, to supply these stores.
The site at Feltham is in an ideal spot for the spread of Morrisons M locals across London, having capacity to supply 100 stores and great road links including access to the heart of the capital.
The depot will receive stock from our main South-East distribution hub Our South-East M local stores will have their own logistics solution. in Sittingbourne, Kent, which will consolidate deliveries. The Feltham team will then break down stock onto roll cages then load them onto new smaller 18 tonne vehicles more suitable for inner city transport for delivery to M local stores.
The acquisition and smaller sized vehicle operation in a dense urban environment, is bespoke. Added to our wider integrated model in this way it allows us to expand but minimise impact with careful planning at the outset.
51 For everyone Corporate responsibility review 2012/13
For everyone
Contributing to community spirit is More of what matters locally essential to Morrisons. We strive to be Every store is made up of local people, from customers that shop there to the colleagues that serve. We want to ensure a good neighbour, creating a positive that any community investment is reflective of this, by supporting impact on the areas in which we operate. the causes that matter to each local neighbourhood. We do this in any number of ways, for example by partnering Where we are most effective is when we with local schools, charities and community groups, offering collections and bag packing, helping them to raise funds are at the heart of the local community throughout our stores. and understand the issues that matter Stores also offer local group tours and talks on what makes most to our customers and colleagues. Morrisons different; our skilled colleagues, our vertical integration model and our focus on serving fresh food.
As one of our ‘More of what matters’ promises to customers, throughout 2013, we will step up our activity; aiming to improve Highlights our community engagement strategy, and ensure more overall consistency throughout our shops. Raised for our charity partner m Save the Children £4.5 Let’s Grow gardening m* “ The judges were pleased to award equipment donated to schools £14 Morrisons with the title of Highly Commended in the Bank of America Charities and community ’s Merrill Lynch Education Award for groups supported through 1,000 in-store collections Excellence. They felt that Let’s Grow demonstrated a mass education programme at its best. Tackling obesity and food providence challenges are key issues that are relevant across young people, schools and communities. Morrisons have, 2012 Awards through this programme, developed Big Tick for Morrisons Let’s Grow presented at Business an approach that really looks at in the Community’s Awards for Excellence 2012 changing the habits and mindsets Highly Commended for Morrisons Let’s Grow for the Education Award at Business in the Community’s National across these groups.” Awards for Excellence 2012 Business in the Community’s Awards for Excellence 2012, Judges feedback
* £10.3m excluding VAT, £14m gross figure.
52 Overview Friendly people Making great food Affordable For everyone Governance
Our communities, our customers
53 For everyone Corporate responsibility review 2012/13
For everyone – continued
Store visits, with local schools and MPs.
Community Champions in 2013 In 2013, we will introduce dedicated Community Champions in Following our in-store Disney promotion in 2012, every main estate store. Initially spending eight hours per week Morrisons were able to donate 3,500 of the remaining in their appointed role, Community Champions will act as a soft toys to various Surestart Children’s Centres in point of contact for local groups, helping to provide support, Bradford to give to the children as Christmas presents. communications and engagement within their local community.
Allowing colleagues dedicated time and resources to focus on local activity will make a more positive impact on Morrisons 500 boxes of food were packed and distributed to community links and relationships, further building trust and homes of old people in and around the Leeds area, recognition. In addition, as Champions, store colleagues will supporting the Leeds Community Foundation, to help play an active role, which we believe will support their own personal development. them survive the winter months.
Community boards in 2013 Following on from the trial of our new style community board, Prior to Christmas, colleagues in a selection of stores in 2013, we will be rolling out redesigned boards to all stores. helped in the delivery of Christmas dinners to 1,000 Boards will act as in-store hubs providing a variety of customer families across Britain, as part of a special project in information including charity partnerships, local fundraising, news and updates, travel information, recruitment opportunities support of Save the Children and their efforts to and details of Let’s Grow activity in the local community. improve the lives of some of the country’s most deprived families. The business pulled together to ensure that the additional goods were sent to store, packed and delivered direct to people’s homes.
54 Overview Friendly people Making great food Affordable For everyone Governance
Let’s Grow “Let’s Grow is an incredibly powerful Our award winning Let’s Grow programme has now completed educational initiative which brings its fifth year of operation. The programme’s ongoing commitment is to educate children, our shoppers of tomorrow, about the life cycle together the wider community, of food through the practical experience of growing fresh fruit and parents, schools and pupils to provide vegetables in an outdoor environment. We hope to inspire them to think and care more about food. a platform where through the vehicle
Let’s Grow provides UK schools with free gardening equipment, of a community linked, hands on cooking equipment and key teaching resources. Since the growing activity, young people scheme began in 2008, we have now given away over £14m worth of equipment. are becoming more well rounded
Equipment and resources and engaged citizens for the future.” One voucher is issued to customers for every £10 spent in Morrisons stores between August and October. These vouchers can then Caroline Leroi be redeemed, by a school representative, for equipment through Strategy Director, National Schools Partnership the online catalogue on the Morrisons Let’s Grow website. Ordering equipment for schools is available throughout November.
Teaching resources designed by the National Schools Partnership can also be downloaded online. The resources cover Key Stages 1-4 and include lesson plans, how to guides, outdoor activities and interactive videos. Let’s Grow presented at DEFRA taskforce event in City Hall Evaluation and improvements A yearly research project is carried out by our Let’s Grow partners, We presented on the aims and aspirations of the Let’s Grow the National Schools Partnership, to ensure we gain independent programme at the follow up event to the DEFRA Food feedback from our key target audiences. Growing in Schools Taskforce report launch. The 100 strong event at London City Hall, was attended by educational Utilising the feedback received from both National Schools and horticultural specialists working with DEFRA to get Partnership and Department of Food and Rural Affairs (Defra) more schoolchildren growing fruit and vegetables. taskforce, throughout 2012, we added additional equipment and resources to the programme:
• Vertical growing systems – created for schools that have little or no outdoor growing space.
• ‘Weird and wonderful’ seeds – to educate and inspire children into trying new things; aiming to provide teachers with a real conversation starter.
• Fresh Market starter kit – which includes the ‘unusual’ vegetable varieties stocked in our Fresh Format stores.
• Outdoor wildlife kits – teaching children about insects and wildlife in the garden.
• Teaching resources and courses – in conjunction with Garden Organic.
55 For everyone Corporate responsibility review 2012/13
For everyone – continued
Let’s Grow NSP research The National Schools Partnership conducted research on behalf “ I think it gives schools a fantastic of Morrisons into the overall success of the 2012 Let’s Grow programme, so we could continue to understand its social impact. opportunity to teach their children • 99% of respondents are planning on taking part in the about growing your own produce programme next year, an increase of 5.5% in comparison to last year’s survey. and healthy eating; providing lovely • 77% of respondents gave Let’s Grow between an 8–10 out resources which might otherwise of 10 for excellence, a decrease of 2.6% in comparison to last year’s survey. be out of reach for some schools. My gardening club love learning Let’s Grow NSP research about growing their own food Which of the following changes have taken place as a and using the fantastic resources. result of your school’s participation in Let’s Grow? Thank you Let’s Grow.” Interest in growing things has increased 69.8% Knowledge about growing Garden Club Leader things has increased 60.2% Active involvement Infant School, South-East in growing things 59.8% Pupils spend more time outdoors 46.9% Increased understanding of where food comes from 46.3% Minister on Let’s Grow Teamwork/working together has improved 41.8% Fresh Format visit The whole school has benefitted 28.8% As part of our focus on Fresh Format stores, we hosted a Increased social interaction number of visits with Members of Parliament, MSPs and with the the school 19.1% Increased social interaction Assembly Members from Wales. Angela Constance MSP, with the wider community 15.2% Scotland’s Minister for Youth Employment mentioned None of these 4.9% us following her visit in the Scottish Parliament stating: “Morrisons runs a great programme that takes primary school children into the store and exposes them to a great learning environment where they can find out not Have you been able to measure the success of only about food but about the range of jobs that support Let’s Grow in terms of academic achievement? supermarkets. It is also a great example of the opportunities that are afforded by curriculum for excellence.”
Yes – we have seen some positive impact – 38.4% Yes – we have seen a significant positive impact – 7% We have not been able to measure it – 35.6% We have seen no impact – 2.1% Don’t know – 16.9%
Let’s Grow and academic achievement Teachers have seen some correlation between participating in the programme and academic achievement. It is difficult to attribute pupil attainment with one particular programme, but there are promising results in this area with nearly 50% reporting that they have seen academic achievement rise.
1 Statistics taken from quantitative research provided by National Schools Partnership, conducted between February and March 2013. 2,817 respondents took part in the research included positions within nursery, primary and secondary schools. We had a survey completion rate of 79.9% (2,250 respondents).
56 Overview Friendly people Making great food Affordable For everyone Governance
Since 2008, Let’s Grow has donated £14m worth of gardening equipment in total. Over 28,000 schools have registered.
Let’s Grow 2012 activity “We have worked with a range • Over 13,900 schools placed Let’s Grow orders, with nearly of national, governmental and 2,000 new schools registered. community based agencies and • We supported ‘Incredible Edible’ community groups in six sites partners to ensure Let’s Grow has across the UK, by allowing these groups to participate in Let’s a solid academic rationale. From Grow and redeem equipment. Following the success of this trial, developing the programme with we will be extending this to over 30 community sites in 2013. DCSF, to working with the National • ‘Big Dig’ saw over 100,000 students throughout the UK invite Schools Partnership and FACE; family and friends to help them with activities in their Let’s Grow we have ensured our products are school garden, further engaging local communities in the educationally relevant, engaging programme’s activity. and fun for the children involved.” • As part of ‘Big Lunch’, UK schools held various community David Hewitt cooking events, using produce grown throughout the year within Communities Let’s Grow gardens. • We began searching for our Young Gardener of the Year, with over 150 schools taking part. Winners received 40,000 Let’s Grow vouchers, a day with a celebrity gardener and a chance to write in the National children’s newspaper, First News. • We expanded in store lesson plans to become more integral into the Let’s Grow story. Hundreds of schools have now taken part in educational store visits, bringing the food story to life and showing how their produce, meat and bread goes from field to fork.
57 For everyone Corporate responsibility review 2012/13
For everyone – continued
Let’s Grow activity graphs “ The whole school is involved in the Let’s Grow project and there will be Products ordered
an enhanced range of produce grown 2008 488,956
and the students will be able to use 2009 319,044 the produce in their Food Technology 2010 373,729 classes to prepare and cook. Without 2011 335,635 the encouragement that Let’s Grow 2012 340,000 has given, this would not have been Products ordered part of the educational process here at the school.” Orders received 2008 15,693
Secondary School Teacher 2009 15,123
South–West England 2010 15,502
2011 15,500 2012 13,900
Orders received
Retail value of orders
2008 3.2m
2009 3.3m
2010 3.5m
2011 3.3m 2012 3.1m
£ Millions
2013 plans for Let’s Grow • A new educational website will be developed for use by schools and community groups entitled ‘Morrisons Food Academy’ focusing on our in-store butchers, fishmongers and bakers aiming to highlight the skills of our specialists and what happens to food once it arrives at store. • All Incredible Edible sites will be eligible to collect gardening equipment through the programme. We will also work to further integrate these groups into the community through our existing relationships with local Let’s Grow schools. • ‘Let’s Grow and Cook’ re-launch. Originally trialled in 2010, we will bring added emphasis on cooking equipment enabling schools to buy kitchen appliances and equipment which will enable them to prepare and cook the produce they grow. • Re-launching last year’s ‘Big Dig’, ‘Big Lunch’ and ‘Young Gardener of the Year’ competitions encouraging more schools, children and families to get outside, grow, cook and prepare food.
To find out more about Let’s Grow Visit – morrisons.co.uk/letsgrow
58 Overview Friendly people Making great food Affordable For everyone Governance
“ Teachers can see improvements in performance and there’s a real sense of community at this school now. It’s great to see the difference Morrisons has made right on our doorstep.” Sam Hill Morrisons Dukinfield
Once families have completed FAST, they have the option to advance to FASTWORKS; a continuation stage of the programme, led by FAST parent graduates.
FASTWORKS allows families to build on the skills gained through FAST and further strengthen their connections within the local community, attending meetings every month for a minimum of 22 months.
Across the UK, several FASTWORKS parents have now become parent governors or classroom assistants as a result, demonstrating the impact FAST has not only on the children but on the whole family. FAST programmes supporting children’s education. Morrisons 2011 2012 2013 Total Achievements: Save the Children Direct Delivery Morrisons have been supporting the international charity, Save FAST 6 43 70* 119 the Children, since 2011 by helping to transform the lives of Children Reached 421 2,543 – 2,964 the UK’s most disadvantaged children and their families through the Families and Schools Together (FAST) programme. Parents Reached 130 1,534 – 1,664 FAST Team members trained 130 681 – 811 Since our partnership began in 2011, our customers and colleagues and successfully delivered have raised over £4.5m through a variety of fundraising initiatives FAST groups such as challenge events, bucket collections, ‘Raise a Smile’ FASTWORKS Groups 5 25 – 30 merchandise, and cause related marketing campaigns.
FAST FAST is an award winning, early intervention programme that aims to create a positive impact on the lives of families and children across the UK through: • Improved learning Helping children who are experiencing difficulty at school become more engaged in the classroom. The programme shows parents how to support their child’s learning, which is essential to help children reach their full potential. • Improved confidence Giving parents the space, time and resources to talk and play with their children in a relaxed and open environment. This individual attention from parents can make a significant difference to children who lack confidence, helping them to make friends and become more active in school activities. • Increased involvement within the community FAST brings communities together to focus on the learning needs of local children enabling parents to create support networks with those in similar circumstances to themselves. * Predicted by end of 2013
59 For everyone Corporate responsibility review 2012/13
For everyone – continued
FAST facts After taking part in FAST: • 90% of parents have a stronger relationship with their child; • 73% of parents are more involved in their child’s education; and • Teachers report a 10% improvement in children’s English and Maths.
Morrisons activity highlights • Christmas Jumper Day – All colleagues were invited to take part in our first festive Christmas jumper day to work by donating £1 to Save the Children. Thousands of colleagues across the country participated and raised a total of £100,000. • Emergency response appeals – Morrisons customers continued to support Save the Children’s emergency response in aid of the hunger crisis in West Africa raising a total of £50,000 to reach thousands of children with food, water and healthcare. • Challenge events – Over 150 Morrisons colleagues took part in National challenge events such as the London Marathon, the Great North Run and the Royal Parks Half Marathon including a range of their own challenges such as bike rides, treks, golf days and skydives; raising over £100,000 in sponsorship. • Great British Cupcake Sale – Over 200 stores and sites signed up to take part in this activity and over 40,000 cupcakes were Lewis, age 5 sold, raising over £39,000. Bradford, West Yorkshire • Miles for Smiles – Encouraging colleagues to get fit and healthy through sponsored walks or runs, participants needed to clock FAST graduation date: December 2011 up as many miles as possible over a four week period. Over 1,100 colleagues from over 200 sites registered to take part Lewis lives with his mum Becky and older brother Dillian. Dillian and raised £32,000. has severe special needs and requires a significant amount of care. • Utterly Smiley – Linked to our Save the Children campaign Becky used to worry that she and Lewis didn’t spend enough with Utterly Butterly, all colleagues were sent a Raise a Smile one-to-one time together. Lewis also had a lot of excess energy, cookie cutter and fundraising kit to encourage participation struggled to concentrate at school and would often behave to make and sell cookies in aid of Save the Children raising aggressively towards his family. a total of £10,000. FAST transformed their relationship, and Lewis’ concentration and behaviour at school dramatically improved. 4.5m raised to date for Save the Children “ Since FAST Lewis is much more confident in class. His attendance has improved* and his attainment is on track. Lewis is now considered a good role model for the rest of his peers.” Mrs Disney School Director of Service Development
* Lewis’ attendance is currently 96.4%. The national average is 95%
60 Overview Friendly people Making great food Affordable For everyone Governance
Eat Sleep Learn Play! (ESLP!) Noah, age 2 We decided to extend our partnership with Save the Children, aiming to create a greater impact on the valuable work they Keighley, West Yorkshire do within local communities in the UK. We will be helping to When Noah and his Mum Natalie first moved into their raise £2m for their ESLP! programme by the end of home they had nothing. Natalie survived on less than £25 January 2014. a week and couldn’t afford basic essentials. Thanks to the ESLP! programme, Save the Children were able to provide Through ESLP!, we will support over 9,000 children and their the family with a crisis grant to supply them with a cooker. families living in poverty throughout the UK by providing basic items such as cots, cookers and toys. Eat: a cooker enables children and their families to have a hot, “ All of us at Save the Children healthy meal together. are delighted to be working with Sleep: a bed gives a child a good night’s sleep so they can be alert and able to learn at school. Morrisons for another year on our ESLP! programme. Morrisons Learn: books stimulate children’s minds, helping them to get ready for school. have made an enormous difference
Play: toys enable children to have fun and encourage them to move to the lives of some of the most and develop. disadvantaged children in the UK. I look forward to making our partnership even bigger and better. ” “Our community programme gives us a really positive platform to talk Tanya Steele to Members of Parliament with a Director of Fundraising, shared interest in social mobility and early intervention. I’m proud Save the Children of the recognition we’ve started to receive for a clearer, stronger community investment focus.” Guy Mason Corporate Affairs
61 Governance Corporate responsibility review 2012/13
Governance
This Review follows the same style and is again assured under AA1000AS(2008). A copy of the Assurance Management Letter About our corporate from Two Tomorrows, summarising their findings can be found responsibility programme on pages 66 and 67. Development Essentially, whilst the style of our communication and our Our first corporate responsibility report was published after our reporting has changed, our priorities remain the same. 2006/7 financial year. During this period of strategic review for the Morrisons Group the corporate responsibility programme Governance and Performance was more clearly defined after consultation with key stakeholders Best practice in responsible business performance and reporting including customers, colleagues and suppliers. The programme is constantly developing. Our current corporate responsibility was linked to a three year optimisation plan, up to 2010, which programme reflects both changes in the operation, scale and determined strategy and identified material issues for Group development of the Morrisons Group and influencing economic, as a whole. social and environmental factors.
In 2011, leadership of the Programme was realigned to our The three key areas of focus, for the corporate corporate senior management structure. Strategic development responsibility programme were set out in and policy for corporate responsibility were placed within Group Corporate Services. 2007 as: Central commitments and KPIs are managed under the stewardship Environment of relevant Management Board Directors. Their leadership is • T aking good care of our planet – assessed alongside their wider performance as part of their Professional Development Review. climate change, waste, sustainability. Progress reports and approval for significant strategic developments Society are presented to the Management Board. Progress and notification • T aking good care of our shoppers, our of significant strategic developments are reported to the Corporate Compliance and Responsibility Committee for review and colleagues and their communities. comment.
Business The Management Board is chaired by Chief Executive, Dalton Philips, has detailed terms of reference and is responsible amongst • T aking good care as we go about our other matters for development and implementation of strategy business – sourcing, supply, engagement. (subject to the overall supervision by the Main Board), financial performance, reporting and control, risk management and the development of corporate policies and procedures of the Group.
The Corporate Compliance and Responsibility Committee, is Our 2008/9 Report was the first of three that were designed chaired by Penny Hughes a Non-Executive Director and performs under the ‘Today’ banner. The intention was to make the Report an oversight, monitoring and advisory role for key areas of accessible and engaging and was supported by linked branding corporate governance and development including health and in our stores, in other corporate documents and online. safety, environmental, competitive and ethical compliance and corporate responsibility. By 2009/10 the Programme reached a significant milestone as we completed most of the original targets. Key performance Fuller details of members of our Group and Governance structure targets were reviewed by Directors on the Corporate can be found in our 2012/13 Annual report and financial Responsibility Project Leadership Team during 2009 and revised statements. commitments and associated KPIs were established and published. We reframed the document a ‘Review’ recognising that it would not capture all of our activity and we introduced more forward looking information.
Our 2011/12 Review took another step forward by including more information and adopting a more formal style more closely related to our business and brand strategy to reflect a growing maturity on the programme. We took a significant step by undertaking Assurance of the programme and the Review was set against a recognised Assurance Standard AA1000AS (2008). This process was independently conducted by Two Tomorrows.
62 Overview Friendly people Making great food Affordable For everyone Governance
2012/13 Financial Year – Board of Directors, Management Board and Corporate Compliance and Responsibility Committee (CCR)
Board of Directors (left to right)
Sir Ian Gibson C Johanna Waterous C Nigel Robertson C Philip Cox Penny Hughes C Richard Pennycook Dalton Philips C
Key Corporate Compliance and Responsibility Committee C
Management Board (left to right)
Neal Austin Trevor Strain Mark Amsden C Dalton Philips C Richard Pennycook Martyn Fletcher Martyn Jones C Terry Hartwell Mark Harrison
Additional CCR members 2013 Management Board appointments Retirements after the reporting period Richard Taylor C after the reporting period Board of Directors Casper Meijer Nigel Robertson 2013 CCR appointments after Nigel Robertson the reporting period Nick Collard Management Board Richard Gillingwater C Emily Lawson Richard Pennycook
See our Annual report and financial statements Visit – morrisons.co.uk/corporate/ar2013
63 Governance Corporate responsibility review 2012/13
Stakeholder engagement
Investors Stakeholder engagement is vital to As well as direct comment and review of our business operation ensuring that our approach to sustainable from shareholders we also engage with institutional advisory bodies and research analysts for corporate ESG performance. business is both relevant and effective. It enables us to identify issues and Non Governmental Organisations (NGOs) From industry associations, unions, campaign organisations to opportunities, respond to changing charities we continually engage and work with NGO’s both needs, adhere to best practice and formally and informally. At a basic level we will respond though correspondence. With more complex matters we may fully engage reflect different views and feedback with an NGO to work collaboratively to progress a particular issue. Where requests are linked to our operational capability, policy or on our business operation. strategy they will assessed in the most relevant part of the Group and may be raised up to Management Board level. Communities For greater social benefit, job creation needs to be rooted in the Suppliers locations where stores operate to reflect the community. We’ve worked hard to ensure our recruitment supports applicants from We trade with companies all around the world and our challenge across the community and can up-skill people once they are part is to ensure that their operation is aligned with our values, policy of the business. We also recognise the importance of community and responsible, sustainable business practice. Through our engagement and have developed a programme for better support terms of trade, monitoring processes, technology, supply chain, for local community good causes. certification and auditing we work hard to ensure compliance. Suppliers also require responsible and fair trading terms. Customers Through our contractual framework, adherence to regulation We get feedback through customer services, Insight and market and specific requirements such as the Groceries Supply Code research, focus groups and panels, our website, correspondence of Practice we work with our trading partners to ensure mutual and social media. commercial growth.
Customers care about environmental and wider sustainability Media issues. They want us to make it easier for them to be supportive through their buying habits and without additional cost. Media want access to information, comment on performance and hold us accountable for our operation.
Employees We have routine dialogue with the media and provide access and We continue to build our formal employee engagement with a information for broadcast, print and in social media. This is both major annual survey as well as regular pulse surveys throughout proactive and reactive and helps us to communicate with other the year and individual performance development reviews. stakeholders and opinion formers. We’ve already implemented a new suite of family friendly policies and continually reassess and our employment terms and support We also utilise the media in wide variety of channels for views for colleagues. and opinions about our business, the grocery sector and relevant current social and environmental issues. Government and Regulators Email your comments and views to We have regular dialogue, respond to consultations, support [email protected] initiatives and enter debate on business issues. Government policy can be implemented with legislation, regulation and increasingly sector specific voluntary agreements.
64 Overview Friendly people Making great food Affordable For everyone Governance
Govt and Regulators
Government and Regulators set the rules and regulations but also require support to deliver Government policy. Suppliers
NGOs Non Governmental Suppliers want our Organisations ask us to custom, a reliable trading follow their advice, change relationship and the or adapt the way we operate. best price.
Investors expect a good Employees want good return on their money; that working conditions, job Investors we grow, find opportunities security, satisfaction and mitigate risks. and opportunities to develop a career.
Employees
Communities are where Customers want our operations have the quality, responsible most immediate impact. products at a fair price They require us to be with good service. a good neighbour and bring employment and investment. Communities
Customers
65 Governance Corporate responsibility review 2012/13
Independent Assurance Statement
• Site visits to review processes and systems for preparing site level Corporate Responsibility data and implementation of the Corporate Responsibility strategy. In addition to visiting the head office to interview senior managers and review evidence for data and claims, we selected three sites to cover the different aspects of the business: Bridgewater logistics hub, Grimsby fish processing plant and St Albans store. We were free to select Scope and objectives the sites to visit. • Review of supporting evidence for key claims and data in the report. Our checking processes were prioritised according to DNV Two Tomorrows Limited (DNV Two Tomorrows) has materiality and we based our prioritisation on the materiality of undertaken independent assurance of the Morrisons Corporate issues at a group level and the specified performance information Responsibility Review (The Review) for the reporting period ending agreed as in scope. 3 February 2013. • We also checked the targets identified by management as most challenging: palm oil, carbon emissions reduction (30%), training, The assurance process was conducted in accordance with skills development, motivated workforce reporting, timber, AA1000AS (2008). We were engaged to provide Type 2 moderate pesticide usage (produce), ethical audit (working conditions), level assurance, which covers evaluation of: water reduction, local community partnerships, absence, • adherence to the AA1000APS (2008) principles of inclusivity, enhancements to farm welfare policies, salt reduction, soya, materiality and responsiveness (the Principles); and health and safety accident rates, seafood policy enhancement, • the reliability of specified Corporate Responsibility performance health and safety system, and zero store waste to landfill. information which for this report was agreed as: responsible • Review of the processes for gathering and consolidating the sourcing, palm oil, timber, fish, carbon/energy, water, waste, specified Corporate Responsibility performance information and training. and, for a sample, checking how the data was consolidated; and • For data collated by external agencies, we checked that the data Responsibilities of the Directors of Morrisons and of the provided are accurately included in the report, reviewed the assurance providers processes used by these agencies to collate data, but did not The Directors of Morrisons have sole responsibility for the check the actual calculations. This applies to all carbon data preparation of the Review. We were not involved in the preparation collated by external agencies. of any part of the Review. We have no other contract with Morrisons and this is the 2nd year that we have provided assurance. We used the AA1000 Accountability Principles Standard as criteria to evaluate the nature of adherence to the principles of Inclusivity, Our statement represents our independent opinion and is intended Materiality and Responsiveness and the Global Reporting Initiative to inform all of Morrisons stakeholders. We adopt a balanced Quality of Information Principles as criteria for evaluating the approach towards all stakeholders. selected performance information. Our team comprised Doug Farquhar, Rob Pearson, Judith Murphy, Gareth Manning and David Keddie. Further information, including Findings and opinion individual competencies relating to the team can be found at: We reviewed and provided feedback on drafts of the Review and www.twotomorrows.com where necessary changes were made. On the basis of the work undertaken, nothing came to our attention to suggest that the Basis of our opinion Review does not properly describe Morrisons’ adherence to the Principles or its performance. A multi-disciplinary team of corporate responsibility and assurance specialists performed work at Morrisons head office and three In terms of reliability of the specified performance information, further UK sites. Our work was designed to gather evidence with nothing came to our attention to suggest that these data have not the objective of providing moderate level assurance as defined been properly collated from information reported at operational in AA1000AS (2008). We undertook the following activities: level, nor that the assumptions utilised were inappropriate. We are • Review of the current Corporate Responsibility issues that could not aware of any errors that would materially affect the Group data affect Morrisons and are of interest to stakeholders; in the areas in scope. • Review of Morrisons approach to stakeholder engagement and recent outputs. This did not include direct engagement Observations and Recommendations with stakeholders; Without affecting our assurance opinion we also provide the • Review of information provided to us by Morrisons on its following observations and recommendations. reporting and management processes relating to the Principles; • Interviews with eight selected Directors and senior managers The Review is a fair reflection of Morrisons approach to Corporate responsible for management of Corporate Responsibility issues Responsibility and builds on previous Reviews to show how the and review of selected evidence to support issues discussed. Company is developing its approach, key commitments and goals These included an interview with the Chairman and Management which underpin the programme. The coverage of issues compared Board members. We were free to select interviewees; to previous years continues to be enhanced, providing a thorough account of progress for Review users.
66 Overview Friendly people Making great food Affordable For everyone Governance
We were encouraged that areas for improvement identified in Responsibility issues and a more in-depth understanding of the last year’s Review have been addressed, in particular the specific opportunities and challenges that the Company faced during information on the Corporate Responsibility challenges Morrisons the reported period. face. We were also encouraged by the engagement of the • As Morrisons approach to Corporate Responsibility matures we Management Board in Corporate Responsibility issues and would like to see more open and engaging debate included in acknowledge the improvements Morrisons have made following future Reviews with regards to challenging issues the Company the assurance statement provided in the previous Review, has faced during the reporting period. It was observed that particularly around the governance of the programme. Morrisons have made decisions which do not align with their previously stated positions. Examples include permitting the Given the focus Morrisons place on the business model of vertical introduction of genetically-modified soya bean animal feed for integration of the food supply chain, we recommend that future standard UK chicken production and importing fresh meat Reviews give further consideration and balanced discussion of the products sourced outside of the UK for the company’s tertiary opportunities and challenges faced by Morrisons as it continues brands, Hemsley’s and Market Deals. Although these are covered to develop its approach to Corporate Responsibility. briefly in the report, because of the importance of the issues and how they relate to Morrisons vertically integrated business model Inclusivity concerns the participation of stakeholders in a more detailed discussion and disclosure is recommended. This developing and achieving an accountable and strategic could show the range and depth of stakeholder concerns towards response to sustainability each issue and how Morrisons has responded to each. • Morrisons use a range of approaches to stakeholder engagement which are evident throughout the Review. Engagement in Performance Information issues such as fair working conditions and farming policies • Further to our recommendations in the previous Review we are are encouraging and demonstrate how the Company is using pleased to see a water reduction target and baseline has been a range of stakeholders to inform and involve in key business established this year. As with carbon, Morrisons have chosen to decision making. work towards an absolute reduction rather than one based on • We are pleased to see that our recommendations made in the intensity. Given the vertical integrated model of Morrison’s food previous Review assurance statement have resulted in a clearer supply we would recommend that future Reviews provide insight process to ensure that a broader range of stakeholder views into the challenges and opportunities that the Company identifies are fed back to the Management Board and the Corporate as it works towards these goals. Compliance and Responsibility Committee. We recommend this • Morrisons is going through a process of improving data collection continues to be developed into a more formalised and systematic systems and we noted a number of improvements from the data approach to external stakeholder engagement to ensure that all checked in the previous Review. In the very limited number of relevant stakeholders are considered adequately. areas where Morrisons could not have complete certainty on particular data, it was encouraging to see that the Company Material issues are those which are necessary consistently understated to ensure that Morrisons were not for stakeholders to make informed judgments over-reporting or misrepresenting data in their favour. It was also concerning Morrisons and its impacts encouraging to see that clarity over data boundaries had been • We believe that the Review covers Morrisons material issues. improved from the previous Review. It is encouraging to see Morrisons is now making a stronger link • Currently data collection in many areas of the Company is largely between the identification of material issues and perceived risk a manual process, with information provided from a variety of and business priority. This is now part of an on-going process different sources using a range of collection techniques. We at Management Board level. The outcome of this process is recommend improving the method of data collection to improve reflected in the KPIs and commitments in the Review. We would accuracy and support a move towards real time reporting. recommend that the issue identification process is communicated in future reports for the benefit of readers. DNV Two Tomorrows Limited • Morrisons have used the outcome of the process to prioritise and London allocate issue coverage in the Review, for example by reducing May 2013 coverage on community and charity engagement. We recommend that this continues.
Responsiveness concerns the extent to which an organisation responds to stakeholder issues • It is encouraging to see the development in commitments and KPIs from the previous Review and the achievements made Doug Farquhar in a number of key KPIs. Notable additions this year are new Director commitments around palm oil and timber sourcing. The Review would benefit from a more detailed discussion around the future DNV Two Tomorrows Limited is part of DNV, a global provider challenges and developments, particularly where KPIs are proving of services for managing risk, helping customers to safely and a challenge to be met. Prioritisation of the KPIs would also help responsibly improve their business performance. readers to understand focus areas. www.twotomorrows.com • We are pleased to see that our recommendation to develop more regular and formal reviews of Corporate Responsibility issues at Management Board level has been taken forward. We observed deeper senior management engagement in Corporate
67 Governance Corporate responsibility review 2012/13 Commitments and associated KPIs
Friendly people
Commitments and Progress update Status Future challenges associated KPIs and/or development
Deliver sector leading training and Approximately 750,000* training days delivered in 2012. Ongoing Independent verification of skills development to our people. ‘sector leading training’. Recognition across the year including National Workplace Talent and Skills Award 2012 at Business in the Community’s Awards for Excellence. * 602,000 of these training days are the first three months for new retail colleagues undertaking in-house training.
Develop craft skills to further 232 butcher and bakery apprentices graduated in 2012. Craft skills Ongoing Around 300 apprenticeships establish our Market Street and masterclasses rolled out to cover Market Street specialists. planned for 2013 and a wider fresh food credentials. programme of development for other Market Street specialists. Over 15,000 colleagues to receive 11,000 colleagues graduated during the year at Level 2 Intermediate Ongoing Communicating the benefit of Apprenticeship training in 2012/13 Apprenticeship and a further 6,000 to receive Advanced Level 3 QCF providing apprenticeship (NVQ Level 2 & 3) Apprenticeship training in 2013. training for colleagues and its role in up-skilling and longer term job creation. Colleague retention Labour turnover 15.0% (down from 16.2%). Ongoing Figures remain stable but would Build colleague stability and retention benefit from established trend Employee stability 87% (no movement). through the application of our Values. monitoring to consistent criteria Absence 3.7% (increased from 3.3%). as our systems become more integrated. Sickness 3.5% (NEW published figure). Increase female representation in our Increased the number of females in senior roles from 20% in 2011 to 22% Ongoing Challenge to encourage strong senior management group from 13% to in 2012. candidates for promotion and 30% by 2014. adapting working arrangements to support. Leadership 74 graduates recruited to the M Futures programme and 125 recruited Achieved 122 graduates to be recruited Develop M Futures (graduates) and to the Senior Management Advanced Leadership Programme. in 2013. Advanced Leadership our Advanced Leadership Programme Programme established and (Senior Management). to be extended. Values development Morrisons Way incorporated into core leadership training programmes. Achieved Wider recognition of the The ‘Morrisons Way’ (leadership Morrisons Way outside the behaviours) launched in 2012 will be Senior Management Team. incorporated into our Coaching for Performance training. Motivated workforce Regular Pulse Survey incorporated into business operation. Ongoing Data captured is providing Monitor, measure and improve trend data which is used as The results from our last employee engagement survey show that engagement colleague conditions and workplace management information to levels across Morrisons have improved by 6.18% from the 2012 initial Climate experience across the Group. target specific improvement Survey. activity. * This data was captured in Jan 2013 as part of our series of Pulse surveys. To be an employer of choice Updated and improved workforce terms and conditions including a suite of Ongoing Improving colleague ‘family friendly’ policies. Developments driven from the Climate Survey. In engagement through more 2012 we increased extra hours at checkouts following colleague feedback. support for managers through 2013 in their delivery of colleagues’ personal development reviews. Continually improving customer HOT service measurement developed and used as a management control Achieved experience and service within the business. Develop HOT service criteria, monitoring and measuring performance. Health and safety Moved management system in line with BSOHSAS 18001:2001 standard. Achieved Better systems support more Convert H&S management system increased accuracy and real in line with BSOHSAS 18001:2001. time reporting. Reduce accident rates by 20% and Aim to achieve targets by end of 2013. Ongoing Improvements to information reported accidents by 30% by the end systems and trend analysis to of 2013 (2011 baseline). better target our resources.
Green shaded means this is a Government Health Responsibility pledge
68 Overview Friendly people Making great food Affordable For everyone Governance Friendly people
Commitments and Progress update Status Future challenges associated KPIs and/or development
Public Health Responsibility Deal – Physical Activity Community Our Let’s Grow programme aims to inspire children to get more active, Ongoing “ We will use our local presence to get supporting the development of gardening clubs and growing schemes more children and adults more active, at school. more often including engaging Since the programme began in 2008 we have now provided over £14m communities in planning and delivery.” worth of gardening equipment and seeds to over 28,000 schools, allowing 5m children in the UK to get stuck in to gardening, learn more about where food comes from and enjoy a health enhancing activity. Physical activity guidelines In 2012/13 we launched a new money saving website for colleagues. Ongoing “ We will contribute to the This includes a dedicated health portal which promotes the health benefits communication and promotion of the of regular physical activity. In addition it features: Chief Medical Officer’s revised physical • Discounts on gym membership and fitness equipment; activity guidelines.” • How to find a local sports club; • Workouts of the month; • Nutrition advice; • Information about common lifestyle diseases; and • Advice on smoking cessation. Active travel The process of developing and implementing travel plans across our estate Ongoing Effective measurement “ We will promote and support more is ongoing. Progress will be reviewed on an annual basis with feedback processes that work across active travel (walking and cycling). from colleagues and relevant local authorities. the business. We will set measurable targets for this health enhancing behaviour.” Physical activity in the workplace We reported in our 2011/12 Corporate Responsibility Review that we were Ongoing Miles for Smiles will be back “We will increase physical activity in the looking to expand the opportunities available to colleagues to increase in 2013, bigger and better than workplace, for example through physical activity and last year we launched the “Miles for Smiles” in 2012. Our activity on this modifying the environment, promoting fitness challenge. pledge is showcased on the workplace champions and removing Department of Health website. During August 2012 colleagues from across the business were encouraged barriers to physical activity during the to see how far they could walk, run, swim and cycle with their progress working day.” tracked on a pedometer. Over 1,100 colleagues took part across the Company covering more than 66,000 miles over the four week period. And by working with Save the Children, Miles for Smiles did not just prove to be a fun way to get more active, it also helped to raise £32,000 for our charity partner. Inclusion More than 6,000 people are now signed up to the Morrisons Plus retirement Ongoing Increasing promotion and “ We will tackle the barriers to club, which helps our former colleagues stay connected to the Company and activity through the scheme. participation in physical activity faced enjoy an active retirement. This is an increase on the 5,000 we reported in by some of the most inactive groups in last year’s Corporate Responsibility Review. society.” In addition to retaining certain staff benefits, Morrisons Plus provides opportunities for former colleagues to return to work during busy seasonal periods and take part in volunteering. Public Health Responsibility Deal – Health at work Chronic conditions guides We have incorporated the principles of the chronic conditions guides into our Achieved “ We will embed the principles of the HR procedures. chronic conditions guides within We have our own in-house occupational health team which offers support to HR procedures to ensure that those colleagues across the business with a wide range of health issues and chronic with chronic conditions at work are conditions. managed in the best way possible with reasonable flexibilities and Colleagues with long term conditions are encouraged to seek occupational workplace adjustments.” health advice and where sickness absence is unavoidable, they are supported by regular contact with their HR manager and an occupational health nurse. Our occupational health team works closely with HR managers and others to facilitate a return to appropriate duties sympathetic to the individual’s medical problems. Return to work may be assisted by reduced hours (increased as appropriate), redeployment to alternative duties and the provision of aids or modification of equipment and workstations. We also operate a physiotherapy service at a number of our manufacturing and logistics sites where colleagues receive on the spot diagnosis and treatment.
Green shaded means this is a Government Health Responsibility pledge
69 Governance Corporate responsibility review 2012/13
Commitments and associated KPIs – continued
Friendly people
Commitments and Progress update Status Future challenges associated KPIs and/or development
Occupational health standards We are confident that our in-house occupational health service meets Ongoing Accreditation required. “ We will use only occupational SEQOHS standards. We aspire to apply for and gain this accreditation health services which meet the at the most appropriate time for the business and in the interim will new occupational health standards continue to be guided by the SEQOHS standards in current provision and which aim to be accredited and enhancements going forward. by 2012/13.” Health and wellbeing report Our 2012/13 Corporate Responsibility Review includes details on the health Achieved “ We will include a section on the health and wellbeing of colleagues and contains our current absence rate (3.7%) and and wellbeing of employees within our staff sickness absence rate (3.5%). annual reports and/or website. This should include staff sickness absence rate.” Healthier staff restaurants In 2012 we launched a new menu for our staff canteens which extends the Achieved Developing new menu “ We will implement some basic range of healthy choices. New recipes include guidance for cooks to help options and encouraging measures for encouraging healthier produce nutritionally balanced dishes. For example, adding salt is not healthy eating. staff restaurants/ vending outlets/ recommended and colleagues are encouraged to minimise the use of buffets for staff.” cooking oil. To help our colleagues make informed choices about what they eat, our staff canteens now display calories at point of choice, which includes the price list and menu boards. Healthier options will be clearly signposted not only with calorie content, but nutritional icons explaining what makes the dishes healthier. Our activity on this pledge is showcased on the Department of Health website.
Green shaded means this is a Government Health Responsibility pledge
70 Overview Friendly people Making great food Affordable For everyone Governance Making great food
Commitments and Progress update Status Future challenges associated KPIs and/or development
Extend our 100% British ranges Maintained 100% British fresh Morrisons own branded meat and poultry Ongoing Maintenance of British and in season produce (95% across whole fresh offering excluding Hemsley’s Morrisons branded fresh and Market Deals brands). meat and poultry. Buy around £310m of fruit and vegetables from British farmers annually. Use Category Plans to identify opportunities to further All fresh eggs are supplied by British farms. maximise our British buying All fresh milk is sourced from British farms. performance. Launched traditional beef range in stores from British breeds. Hosted conference to the farming industry entitled ‘Keep Britain Farming’ to share best practice and exchange information. Establish applied farm research Research completed and published in 2012: Ongoing Projects under development: programme to support British farming. Chicken • Hen health management • Environmental enrichment. • Sustainable soya usage • Wet litter management. in animal production Dairy • Carbon footprinting • Dairy cow housing. in farming • Neospora farmers guide. • Market risk management Farm efficiency • Energy in farming. Enhance farm animal welfare policies Enhanced policy work completed but will remain an ongoing commitment. Ongoing We are developing welfare and auditing processes by 2013. outcome measures across all All our own Morrisons branded fresh products must be Red Tractor farm intensive livestock systems assured as a minimum standard. to more frequently monitor All imported fresh products for Hemsley’s and Market Deals brands must animal wellbeing. be produced under an independently audited, Morrisons approved, farm assurance scheme. All our Morrisons branded fresh chicken has enhanced welfare in terms of natural light and environmental enrichment. All our Morrisons branded fresh meat is stunned before slaughter. We were the first major food retailer to install CCTV to enable careful welfare monitoring at every stage of the process.
Green shaded means this is a Government Health Responsibility pledge
71 Governance Corporate responsibility review 2012/13
Commitments and associated KPIs – continued
Making great food
Commitments and Progress update Status Future challenges associated KPIs and/or development
Palm oil Own manufactured products are now supporting RSPO supply chain systems Ongoing Ensuring suppliers are making By 1 Jan 2015 utilise RSPO certified (GreenPalm certificates covering non-segregated palm). progress to support a switch fully segregated palm across all own to sustainable palm oil through Monitoring third party suppliers to ensure compliance of 2013 commitment brand products. effective monitoring. to source palm oil through an RSPO certified supply chain. Soya We are members the Round Table on Responsible Soy (RTRS) and continue Ongoing Our view still remains that there Review utilisation of RTRS to support a potential move to a certified responsible supply chain system. is no clear path on utilising (or equivalent) sourced soya in own responsibly sourced soya. As 80% of soya used in the UK is in farming animal feed, we are conducting brand products and in animal feed. research into the sustainable supply of soya within animal feed and will be Concerns remain over the cost completed in 2014. to suppliers and availability on the market. Time bound commitment to RTRS or equivalent cannot yet be made. Fish Achieved initial detailed policy review but work will remain ongoing. Ongoing Re-establish sourcing Responsible seafood policies to apply credentials and more effective New species that we stock now has to meet a set of conditions for an across all own brand ranges by 2013. communication with customers. enhanced policy and decision tree process before it goes into our stores. This includes stock levels, fisheries management and where/how the fish Building responsible sourcing is caught. into our new fish manufacturing supply chain. We are the only British supermarket to own our own seafood manufacturing site. Support and utilisation of the Sustainable Seafood Coalition We are supporting fully documented fishery schemes, which are seen as Labelling Code once launched. a valuable tool to address discards and improve stock recovery. Morrisons is funding a fishery improvement project in Southeast Asia, linked to work being supported by the UN. We are supporting research by Bangor University into the sustainability of scallop fishing in the English Channel. Timber NEW timber sourcing policy states: NEW Suppliers must be able to Review relevant categories to find demonstrate compliance with Any wood and wood derived products which are already FSC certified must opportunities to increase FSC our policy and the exercise of remain FSC certified. (or equivalent) coverage. due diligence under the EU By 1 March 2013 all wood and wood derived products being contracted for Timber Regulation 2013. future sale must be FSC certified or from an approved alternative offering an equivalent means of verification if FSC is not available in sufficient volumes. Original target – 500 own brand Morrisons Food Manufacturing Standard now fully established. Complete Best practice in auditing suppliers to achieve Morrisons ‘Gold and ongoing management Morrisons Formulated Product Manufacturing Standard now fully established. (Value Added) Standard’ by 2013. and refinement. UPDATE: Now superseded by overarching redevelopment programme for all own brand suppliers. Supply chain working conditions. Programme in 2012 managed predominantly through Fair Working Revised We will be implementing 600 detailed site audits for Morrisons Conditions. We undertook an independent review of our programme recommendations from Ethical Trading Code (aligned with the in 2012 through Alan Roberts/Aresa Limited (former Non-Executive the review in 2013. ETI Base Code) compliance to be Director of the Ethical Trade Initiative). completed by 2013 – then reset.
Green shaded means this is a Government Health Responsibility pledge
72 Overview Friendly people Making great food Affordable For everyone Governance Making great food
Commitments and Progress update Status Future challenges associated KPIs and/or development
Continually developing our approach to We reported fully on our commitment to support the Department of Health’s Ongoing Reporting to the Department nutrition and formulation of products. Public Health Responsibility Deal in April 2012. of Health on our work in 2012 and work proposed for 2013. Providing customers with clear, The internal nutrition policy for making 5-a-day claims on composite foods consistent advice. (incorporating industry guidelines for 5-a-day claims, which were developed Continue to listen to customer by the IGD) was revised and reissued in July 2012. feedback and develop improved nutrition policies. In August we issued a nutrition policy for kids’ products, which was vetted by the British Nutrition Foundation ensuring that products in the new kids’ To meet the Responsibility brand, expected to launch late 2013, are nutritionally responsible. Deal salt reduction targets by the end of 2013. Store cafés continue to display calories on menus and shelf edge labels. We continued to reformulate popular products to reduce nutrients of public health concern. In September 2012 we issued a press release stating that we would move from displaying GDAs on front of pack to using a hybrid traffic light system, if agreement could be reached on the nutritional criteria for the scheme. We are involved in discussions with the Department of Health, NGOs, retailers and manufacturers regarding development of the scheme. Revive and further improve healthy Nutritional criteria were developed as the basis for our healthier Ongoing Promoting our ‘NuMe’ range product range in line with the re-launch product range. to customers and encouraging of our chilled meal solutions. healthy choices. Provide calorie information on We now provide calorie information per serving, as well as fat, saturated fat, Ongoing Now part of a wider programme our website. sugar, salt and fibre per serving for nearly 1,100 Market Street lines across linked to our pledges under all categories except produce and plain meat and fish. the Government Health Responsibility Deal. Throughout the year we have added more lines, mainly for Deli, Butchery and Fishmongers sections in addition to Fresh to go, Oven Fresh, Bakery and Cake Shop. Updated information on Morrisons website now include seasonal products and new lines on a regular basis in response to customer demand.
Green shaded means this is a Government Health Responsibility pledge
73 Governance Corporate responsibility review 2012/13
Commitments and associated KPIs – continued
Making great food
Commitments and Progress update Status Future challenges associated KPIs and/or development
Public Health Responsibility Deal – Food Out of home calorie labeling Morrisons Customer Cafés display calories for hot foods on the menu and Achieved We plan to introduce calorie “ We will provide calorie information for on shelf edge tickets for cakes, sandwiches, cold drinks and salads. labelling for hot drinks. food and non alcoholic drink for our In addition, we now have calorie information on the following areas customers in out of home settings of Market Street: oven fresh, sandwiches, salad pots, pizzas and from 1 September 2011 in accordance granola breakfast pots. with the principles for calorie labeling agreed by the Responsibility Deal.” Salt reduction We have worked to reduce salt in our own brand products. We reported to Ongoing Addressing the technological “ We commit to the salt targets for the the Department of Health in April 2013, that we had met 76% of the targets. challenges inherent in end of 2012 agreed by the salt reduction without Our progress was constrained by a number of technical challenges inherent Responsibility Deal, which collectively compromising quality in salt reduction. To improve our understanding of the difficulties involved, will deliver a further 15 per cent or safety. Morrisons was one of several companies who funded research by Leatherhead reduction on 2010 targets.” Food Research. The report identified eight main categories where meeting the targets will be challenging. It can be accessed via: www.leatherheadfood.com/salt-reduction-report Trans fats Morrisons removed all artificial trans fats from own brand products in 2008. Achieved Ongoing monitoring. “ We have already removed, or will remove, artificial trans fats from our products by the end of 2011.” Calorie Reduction NEW. We have rolled out a new health and wellness brand – NuMe – which NEW We recognise this is an “ We will support and enable our features over 200 new lines and extends our healthier offer across chilled, important issue. We will customers to eat and drink fewer frozen and ambient categories. engage with our stakeholders, calories through actions such as support developments and The eye-catching brand design features clear nutritional labelling to help product/menu reformulation, take careful note of customer shoppers navigate for healthier options. The packaging includes bold calorie reviewing portion sizes, education and opinion. and nutrition icons in order to communicate quickly and simply at point of information, and actions to shift the purchase the calorie content per serving, and other nutritional benefits, marketing mix towards lower calorie including low salt, high fibre and low saturated fat and, 5-a-day claims. options. We will monitor and report on our actions on an annual basis.” Our activity on this pledge is showcased on the Department of Health website. Fruit & Vegetables NEW. We are revamping the produce department in more of our stores to NEW Rolling out Fresh Format “ We will do more to create a positive encourage customers to increase their consumption of fruit and vegetables. stores across the estate. environment that supports and enables This includes new layouts, extended choice and exciting innovations. people to increase their consumption Our experience to date indicates that this could increase sales of fruit of fruit and vegetables.” and vegetables by an average of 14% in Fresh Format stores, helping customers get closer to their 5-a-day.
Green shaded means this is a Government Health Responsibility pledge
74 Overview Friendly people Making great food Affordable For everyone Governance Making great food
Commitments and Progress update Status Future challenges associated KPIs and/or development
Public Health Responsibility Deal – Alcohol Alcohol labelling All Morrisons own brand alcohol products already have labels that clearly Achieved Keep under review to maintain “ We will ensure that over 80% of display: best industry practice. products on shelf (by December 2013) • unit alcohol content; will have labels with clear unit content, • NHS guidelines; NHS drinking guidelines and a warning about drinking while pregnant.” • warning about drinking when pregnant; • responsibility statement; and • drinkaware.co.uk. Awareness of alcohol units, calories We have refreshed our policy on the responsible sale and promotion of Achieved & other information in the Off-trade alcohol, which reinforces our commitment to raising customer awareness. “ We will provide simple and consistent This includes providing: information as appropriate in the • clear information on product labels (for example units and NHS guidelines); off-trade (supermarkets and • details of Drinkaware on relevant products, advertising, web pages and off-licences) as well as other marketing in-store signage; channels (e.g. in-store magazines), to raise awareness of the units, calorie • guidance in our customer magazine to help customers keep track of their alcohol consumption (e.g. unit content and calorie content of standard content of alcoholic drinks, NHS alcohol measures, such as a glass of wine or pint of beer). lower-risk drinking guidelines, and the health harms associated with exceeding the guidelines.” Tackling Under-Age Alcohol Sales We operate a strict “Challenge 25” policy to prevent under-age sales Ongoing We commit to ensuring effective action of alcohol. Our compliance rate as measured by independent simulated is taken in all premises to reduce and test purchases has increased from 76% in September 2011 to 88% in prevent under-age sales of alcohol December 2012. (primarily through rigorous application This is an industry-leading pass rate, according to Serve Legal, the specialist of Challenge 21 and Challenge 25). company that monitors our performance and that of other major retailers. Support for Drinkaware We have maintained levels of direct financial support for Drinkaware of Ongoing We commit to maintaining the levels £250,000 per annum. This is supplemented by in-kind support equivalent of financial support and in-kind funding to over £1m annually. for Drinkaware and the “Why let the In-kind support includes the promotion of the Drinkaware website, logo and/ Good times go bad?” campaign as set or messaging on: out in the Memoranda of Understanding between Industry, Government and • all own brand product labels; Drinkaware. • certain in-store marketing such as shelf-edge labels and hanging boards; • relevant pages of the Morrisons website; • every editorial page of our customer magazine which includes alcohol; and • all Morrisons advertising that features alcohol. Advertising and marketing alcohol Morrisons abides by industry codes of practice on advertising and marketing Ongoing “ We commit to further action on of alcohol. This includes the Fifth Edition of the Portman Group Code of advertising and marketing, namely Practice on the Responsible Naming, Packaging and Promotion of Alcoholic the development of a new sponsorship Drinks, which was announced in November 2012. code requiring the promotion of Our advertising partners adopt the Outdoor Media Centre’s Standard of Best responsible drinking, not putting Practice, which commits to not displaying alcohol advertising on static panels alcohol adverts on outdoor poster located within a 100 metre radius of schools. sites within 100 metres of schools and adhering to the Drinkaware brand guidelines to ensure clear and consistent usage.” Alcohol Unit Reduction We want to help customers who wish to reduce their alcohol intake and To further expand our choice “ We will collectively with the industry introduced a number of own brand lower alcohol products in the past year: of lower alcohol alternatives remove 1bn units of alcohol sold • own brand low alcohol cider (1% ABV); we are planning to introduce annually from the market by Dec own brand low alcohol beer • own brand beer (2% ABV); and 2015 principally through improving in 2013/14. consumer choice of lower alcohol • own brand lager (2% ABV). products.”
Community actions to tackle alcohol During the year we participated in six Community Alcohol Partnerships Ongoing harms (CAPs) although by the end of 2012/13 this had fallen to three due to closure “ In local communities we will provide and consolidation. Morrisons has committed to assistance on a further four support for schemes appropriate for CAPs and we also sit on the CAP Advisory Board. local areas that wish to use them to CAPs aim to tackle public underage drinking through co-operation between address issues around social and health alcohol retailers and local stakeholders, such as Trading Standards, police, harms and will act together to improve local authority licensing teams, schools and health networks. joined up working between associated schemes.” Our stores have provided trainers and materials for stand alone training sessions as well as extending an invitation to local businesses to attend these events.
Green shaded means this is a Government Health Responsibility pledge 75 Governance Corporate responsibility review 2012/13
Commitments and associated KPIs – continued
Affordable
Commitments and Progress update Status Future challenges associated KPIs and/or development
Food Waste – Great Taste Less Waste In store food waste communications refreshed in new and refurbished stores. Ongoing Reviving food waste campaign. communications to customers. Members of WRAP’s Food Waste Redistribution group, reporting to the Secretary of State to develop practical industry wide guidance on Trials in two stores with redistribution. community group FoodCycle to redistribute potential food waste in 2013. Packaging – Reduction of the carbon We reported our progress to WRAP in 2011/12 which was better than their Achieved Across the sector primary impact of packaging by 10% by the end collective target of 10% reduction. We appear on target to successfully meet packaging is the greatest of 2012 (2009 baseline) – under the the closing Courtauld II packaging target based on our 2012/13 figures. reduction challenge because Courtauld II Commitment. of ongoing optimisation for a number of years. Support for the Courtauld III Commitment will require further absolute reduction. Ongoing carrier bag reduction Overall single use carrier bag usage reduced by 3.8% (year-on-year). Achieved Continual challenge to reduce year-on-year. numbers when the business continues to expand.
Charging for bags Figures reported online at www.morrisons.co.uk/corporate Achieved Continued reporting online as We will report online during 2012 required under the Single Use specific details of bag sales in Wales. Carrier Bag Regulations. Zero waste direct to landfill from Up to 98.31% diverted from landfill from stores. Ongoing Challenge to divert remaining stores by 2013. 1.7% by end of 2013. Zero waste direct to landfill NEW target NEW from manufacturing by 2016. 30% absolute reduction in carbon 19.3% reduction. Ongoing This is a very challenging target emissions by 2020 (2005 baseline). because of its ‘absolute’ Reduction figure from 2005 to 2012 is 309,240tCO e. 2 requirement and our continued significant expansion. In the year we have reduced by 69,313tCO2e equivalent to 5.1% in year reduction. Reduce water cost by 10% in 2012/13 Achieved. Now looking at a longer term commitment and potential proactive Achieved Assessment of water (compared to 2011/12). commitment to drive best practice in our wider supply chain. management in our wider supply chain. Reduce water consumption by 20% NEW target NEW (absolute) by 2020 (2012 baseline).
Green shaded means this is a Government Health Responsibility pledge
76 Overview Friendly people Making great food Affordable For everyone Governance For everyone
Commitments and Progress update Status Future challenges associated KPIs and/or development
Develop Let’s Grow as a vehicle £14m worth of equipment donated (gross figure, £10.3m excluding VAT). Ongoing Relaunch of Let’s Grow to engage young people with fresh and Cook. Over 13,900 schools placed Let’s Grow orders, with nearly 2,000 new food, supported through education. schools registered. Further integration of Let’s Grow into the local community. The amount of Let’s Grow vouchers redeemed against those issued at till increasing by 4.6m in comparison to 2011 activity. Engagement with local community group ‘Incredible Edible.’ Greater encouragement for stores to Expanded in-store lesson plans, hundreds of schools have now taken part Ongoing Development of an educational become more involved with Let’s Grow. in visits. website focussing on in-store skilled colleagues and what happens to food at stores. Corporate charity partnership £4.5m raised. Achieved Continue to work with Save the with Save the Children aiming to Children and engage customers raise £4m by end of 2012. and colleagues to support their initiative Eat, Sleep, Learn, Play! Refresh current local community Successful trial of new style community boards. NEW Full roll out of new style strategy so engagement better community boards in 2013/14. supports needs of local people. Effective community engagement NEW – Store ‘Community Champions’ established during 2013. NEW through stores Community Champions
Green shaded means this is a Government Health Responsibility pledge
Compiled by Photography Wm Morrison Supermarkets PLC Richard Moran Hilmore House, Gain Lane www.richardmoran.co.uk Bradford BD3 7DL Telephone: 011 3256 5370
Design Printing Salterbaxter Pureprint www.salterbaxter.com Telephone: 020 7229 5720 Paper stock: This report is printed on Amadeus Offset The Annual report and financial uncoated, a 100% recycled paper. statements, the Annual review and Amadeus Offset is manufactured to the summary financial statements in both certified environmental management paper and HTML format, and the system ISO 14001. Corporate responsibility review were designed and produced by Salterbaxter.
77 Information at your fingertips
Consumer Corporate Our website, www.morrisons.co.uk, Our suppliers Our corporate website, Shareholder information allows you to learn more about Read about what food is produced near www.morrisons.co.uk/corporate, Other relevant shareholder information Morrisons. your home and explore our seasonal has the following sections. is available, for example share price calendar to see which foods are fresh history, dividends, financial calendar Offers at different times of the year. Work with Morrisons and AGM minutes. • Latest promotions Career opportunities and information • Specific product offerings Let’s Grow about working for Morrisons. For our Electronic communications • Press releases/marketing Information about our Let’s Grow dedicated recruitment website, go to Electronic communications (eComms) • Sign up for our latest offers by email scheme, including how to register, facts, www.iwantafreshstart.com is the fastest and most environmentally how it works and teaching resources. friendly way to communicate with our Market Street Media centre shareholders. More about our unique in-store offering, Kiddicare Latest releases about the growing estate along with video presentations of where See our range of baby and toddler of Morrisons, along with promotions and Instead of receiving paper copies of the our food comes from and how to buy, products and order online at product news. annual and interim financial results, cook and present it. You can now find www.kiddicare.com notices of shareholder meetings and nutrition information for Market Street Corporate responsibility other shareholder documents, you will on our website. Here you can find out about our corporate receive an email to let you know this responsibility ethos, including how we information is available on our website. Food and drink take good care of our environment, Information about our food ranges, society and how we go about business. Visiting our website to obtain our results healthy eating and mouth watering www.morrisons.co.uk/cr reduces our environmental impact by recipes along with ideas of what drink saving on paper and also reduces our goes well with each recipe. Investors print and distribution costs. User-friendly Family life Presentations, announcements and Sign up to eComms on our website at From entertainment to bringing up baby financial reports can be quickly and easily www.morrisons.co.uk/corporate and looking after your pets. View our downloaded or viewed on-screen as and follow the investor eComms link. current and archived magazine and read PDFs. You can navigate around the our handy health information for the Annual report and financial statements About Morrisons whole family. 2012/13 on-screen, viewing only the You will find information about the parts you want to, at Group, its operations, strategy and www.morrisons.co.uk/corporate/ar2013 structure, and past financial information.
Wm Morrison Supermarkets PLC Hilmore House, Gain Lane Bradford BD3 7DL Telephone: 0845 611 5000 Visit our website: www.morrisons.co.uk