Musgrave House, Ballycurreen, Airport Road, , Ireland Tel +353 (0) 21 452 2100 Fax +353 (0) 21 452 2244 Email [email protected] Web www.musgravegroup.com

19th August 2016

Ban Ki-moon Secretary-General United Nations New York, NY 10017 USA

Musgrave Group Annual Global Compact Communication on Progress

Dear Mr. Secretary-General,

We are pleased to confirm that Musgrave Group is committed to continuing its support for the ten principles of the Global Compact in respect to human rights, labour rights the protection of the environment and anti-corruption and to advancing them within our sphere of influence.

We are committed to continuing to make the Global Compact and its principles part of the strategy, culture and day-to-day operations of our company and undertake to continue to articulate our commitment - both to our employees, partners, clients and the public. We support public accountability and transparency and will publicly report on our progress in this regard.

Please find attached our Communication on Progress 2016, as well as the contact person responsible for communications with the office of the Global Compact.

Sincerely yours,

______Chris Martin Group CEO

Musgrave Group plc: Registered in Ireland No 105820. Registered office: Ballycurreen, Airport Road, Cork. Directors: P. Lacy (Chairman), C. N. Martin (Group CEO), T. Kenny (Secretary), N. Keeley, W. Mackeown, S.Buckley, N. Hartery, M. Kelleher, C. Musgrave, B. Flanagan, R. Brennan

Musgrave House, Ballycurreen, Airport Road, Cork, Ireland Tel +353 (0) 21 452 2100 Fax +353 (0) 21 452 2244 Email [email protected] Web www.musgravegroup.com

19th August 2016

Ban Ki-moon Secretary-General United Nations New York, NY 10017 USA

Musgrave Group Annual Global Compact Communication on Progress

Dear Secretary General,

Musgrave Group is one of Ireland’s largest and most successful companies. We are a private employee and family-owned business, founded in 1876 and headquartered in Cork, Ireland. Together with our retailer partners, we are Ireland’s biggest private-sector employer. Across our three international markets, we employ more than 45,000 people.

We partner with entrepreneurial retailers and support more than 1,423 local retail stores, operating 7 brands in the , Northern Ireland and Spain – including SuperValu, , Daybreak, , Market Place, Dialprix and Dialsur.

During 2016, we developed a new 3-year Sustainability Strategy, aligned with the United Nations Sustainability Goals. We are continuing to challenge ourselves to improve our sustainability performance and are proud to have become the first retail business to have achieved verification under the Irish Food Board (Bord Bía) Origin Green programme www.origingreen.ie

We have set new stretching sustainability targets that build on our success in minimising our impacts over the last 2 decades. We also want to support our retail partners in improving their sustainability performance and inspire consumers to live more sustainably too.

We have been signatories to the Global Compact since May of 2004 and undertake to continue to respect and promote its ten principles. We attach our 2016 Communication on Progress for your attention. We will also communicate our COP to our stakeholders via our sustainability website www.musgravesustainability.com

Yours sincerely,

______John Curran Head of Sustainability

Musgrave Group plc: Registered in Ireland No 105820. Registered office: Ballycurreen, Airport Road, Cork. Directors: P. Lacy (Chairman), C. N. Martin (Group CEO), T. Kenny (Secretary), N. Keeley, W. Mackeown, S.Buckley, N. Hartery, M. Kelleher, C. Musgrave, B. Flanagan, R. Brennan

United Nations Global Compact Musgrave Group Communication on Progress 2016

What is the UN Global Compact? By doing so, business, as a primary Through the implementation of driver of globalisation, can help ensure consistent policies and clear targets for “The Global Compact asks companies to that markets, commerce, technology every aspect of the business, as well as embrace universal principles and to and finance advance in ways that benefit mechanisms to continuously measure partner with the United Nations. It has economies and societies everywhere. and report performance, Musgrave is grown to become a critical platform for ensuring that the Global Compact forms the UN to engage effectively with a core part of our business strategy. enlightened global business.” Musgrave Group: Committed to UN Global Compact – UN Secretary-General Ban Ki-moon Communications unglobalcompact.org Musgrave Group has been a signatory to the Global Compact for over ten years; Our 2016 COP will be communicated to The UN Global Compact is a strategic we will continue our commitment to the our stakeholders via our website policy initiative for businesses that are ten principles, as set out in this musgravesustainability.com – here committed to aligning their operations Communication on Progress (COP) for you’ll find a wide range of information and strategies with ten universally 2016 and the accompanying statement relating to our approach to accepted principles in the areas of of support. sustainability. human rights, labour, environment and anti-corruption.

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Human Rights

Principles of the UN Global terms of Global Compact, since that Outcomes Compact date. The Musgrave Ethical Trading Policy was Principle 1: Businesses should support Musgrave requires that the national laws updated and revised as part of the and respect the protection of and regulations of the country of development of our latest sustainability internationally proclaimed human rights; employment are observed, but, as a strategy during 2016 and is now aligned and minimum, that international human with the UN Sustainable Development rights and labour law is applied. Goals. We ensure that all Musgrave Principle 2: make sure that they are not Musgrave expects that people working own-brand products comply with our complicit in human rights abuses. for our suppliers will be treated fairly Ethical Sourcing Policy, and all suppliers and with respect. are required to sign up to the principles of that policy. Actions Musgrave is committed to ensuring that all of our supply chain stakeholders, Management systems are in place to As a responsible organisation, Musgrave regardless of where they live or work, guarantee the provenance of the believes that we must ensure that the are treated with respect and dignity and products we source and to manage goods we source are produced in a are able to live in an environment ethical issues we identify within our sustainable way, in the context of undamaged as a result of our business supply chain. Codes of conduct are potential impacts on the environment or activity. We want to ensure that those developed that inform and guide trading societal impacts. with whom we trade share our teams on ethical sourcing of all goods principles, are committed to ensuring and services. We underscored this commitment by that the rights of all workers and human signing up to the principles of the United rights in general are protected. There have been no incidences of Nations Global Compact in 2004, and we human rights violations associated with have publically reported an annual our operations. Communication on Progress, under the

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Labour

Principles of the UN Global Actions 4. Hours of work are in compliance Compact with the laws of the country where The fair exchange of goods and services workers are employed. Principle 3: Businesses should uphold is increasingly an issue of concern to the the freedom of association and the modern consumer. We want everyone 5. No forced or compulsory labour effective recognition of the right to who deals with us, directly or indirectly, (bonded labour) will be used. collective bargaining; to be treated with respect and dignity. 6. Child labour will not be used.

Principle 4: the elimination of all forms We also want to ensure that Musgrave 7. Discrimination in respect of of forced and compulsory labour; activities and the activities of our employment and occupation will not suppliers do not damage the be permitted. Principle 5: the effective abolition of environment. 8. Health, safety and welfare of child labour; and employees are protected. To that end, we have made the following 9. No goods will be sourced from Principle 6: the elimination of commitments, as part of our Ethical oppressive regimes. discrimination in respect of employment Trading Policy: and occupation. 10. Measures are taken to prevent 1. All Terms of Trading are fair and damage to the environment. honest. 11. Corruption, including extortion and 2. The rights of all workers and human bribery will not be tolerated. rights in general are protected.

3. Workers have freedom of association and the right to collective bargaining.

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Outcomes As an example of our community Most recent estimates show that our involvement and commitment to good retail stores spent €350 million in local Musgrave conducts its business in causes, the annual combined charitable communities in 2015. Our ‘Community accordance with traditional core values and community support by our retail Impact Study’ shows this spend which include: partners in SuperValu, Centra and averages €6.0 million per week through Daybreak is recorded to be over €3.5 a combination of payments to local . Long term, stable relationships million. suppliers, acquisition of local business . Not being greedy services, wages, charitable donations Our support of independent businesses, and local sponsorships. . Honesty and the communities they serve, helps . Working hard build and sustain vibrant local The study reveals that our stores economies through the multiplier effect: sourced over €80 million worth of . Achievement for every €1 spent at a local business, products, from over 3,800 local 45 cents is re-invested locally (this suppliers, and contributes €3.5 million in All Group divisions measure contrasts with a local re-investment of donations or sponsorship commitments performance and report quarterly to the only 15 cents for every €1 spent at a to over 5,500 local charities, community Head of Sustainability. corporate chain). groups, schools and sports clubs. As well as supporting local suppliers, our stores There have been no recorded incidences also spent an estimated €18 million in of discrimination, violations of freedom communities where its stores are of association/collective bargaining, child located during 2015. labour or forced or compulsory labour. Musgrave is one of the country’s leading employers with 45,000 people employed across its network of stores, On average, each of our stores accounts for an additional 25 jobs in the surrounding community.

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Environment

Principles of the UN Global We published our original Corporate . Taking an Active Leadership role in Compact Environmental Charter in 2000, which the Community was a first for any Irish-based retail and Outcomes Principle 7: Businesses should support a distribution business. Since then, our precautionary approach to environmental and broader sustainability Musgrave Group has continuously environmental challenges; strategies have evolved and matured. expanded its retail business over the

last 10 years, but our strong focus on Principle 8: undertake initiatives to We have defined targets and reporting environmental programmes and promote greater environmental mechanisms for our Group facilities, and initiatives has meant that this growth responsibility; and work closely with our retail partners to has been achieved in parallel with

further our environmental goals as a reductions in environmental impacts. Principle 9: encourage the development business and at consumer level. and diffusion of environmentally friendly The overall result of this effort has been technologies. In 2016, we established a new 3-year that since 2006, we have halved our

sustainability strategy aligned to the UN carbon footprint.

Sustainable development Goals, which Actions focuses on the following key areas:

Musgrave has long been a proponent of . Minimising Environment & Climate doing business sustainably; it was a Change Impacts natural progression that we should formalise our approach to environmental . Driving Sustainable Sourcing & management and public reporting in the Consumption late 1990s. . Leading in Health & Wellbeing

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Minimising Environment & Climate We have continued to send zero Water Conservation: We have Change Impacts recoverable waste to landfill and are implemented a new Water Conservation targeting a further 10% reduced in total Policy and are targeting a 25% reduction Carbon Management: Our new strategy (absolute) waste at source against a in our consumption of water versus a focuses on the implementation of new 2015 baseline. 2015 baseline. Each business unit has Sustainability and Energy & Natural We are also maximising the amount of implemented water efficiency practices Resources Policies, which underpin recycling across our business and and set annual reduction targets. divisional action plans that are aimed at supporting more of our retailers to The next stage is to work more closely reducing the energy intensity of our improve their recycling performance. with our suppliers to reduce water usage operations by 10% against a 2015 in their operations. baseline. Food Waste: Prevention of food waste is We are also planning to collaborate with a key part of our waste management large own-brand suppliers on supply We have also set a 3 year ambition for a plans. We send zero food waste to chain water reduction projects that further 10% reduction in total carbon landfill and are working to help reduce the water footprint (embedded footprint of our operation against a 2015 consumers to reduce their food waste water) of our own-brand products. baseline. through initiatives such as own-brand packaging design improvements and We have continued to use 100% Green practical guidance on portion control, Electricity in all of our buildings. cooking and storage. We also focus on a hierarchy that Packaging & Waste: Our Packaging prioritises food waste prevention before Policy is driving actions at product re-distribution to charities; followed by development/review stage as we aim to other forms of re-use. be early adopters of packaging improvements by actively pursuing packaging optimisation with our suppliers.

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Driving Sustainable Sourcing & ‘high-Risk’ own-brand suppliers will be Our retail and wholesale brands are Consumption audited at a frequency appropriate to working with suppliers and bodies such the scale of risk and non-conformances as Bord Bia (Irish Food Board) on Ethical Sourcing: We updated our Ethical addressed without delay. appropriate collaboration projects that Trading Policy during 2016 and have bring about sustainability benefits. begun communicating it to key members Sustainable Consumption: We have of Trading teams in order to ensure that updated our Sustainability Policy and are Musgrave recently became the first ethical risks are identified, ranked and communicating its requirements of our retailer to achieve verification under the mitigated. stakeholders to ensure that it is Origin Green Sustainability programme, understood by all. The aim of this work Ireland’s only national sustainability We are also revising our risk-based is to support trading teams in working standard. auditing process to ensure that it is able with suppliers to drive actions that to identify and monitor the performance improve the sustainability attributes of Further partnerships with accreditation of high-risk categories/suppliers our own-brand portfolio. bodies will enable us to underscore our effectively on an on-going basis and commitment to farm animal welfare and enable appropriate actions to be taken We are also focusing on increasing sales biodiversity. where non-conformances are identified. of 'in season' and 'locally sourced' produce/products Plans are also in place to ensure that all key team-members receive regular Product/raw material provenance and training and guidance on supplier ethical sustainability credentials are verified risk management and on key areas of and, where possible/necessary, are risk in each category. underscored through the use of appropriate accreditation bodies Human Rights: We are developing plans to ensure that the requirements of our Animal Welfare & Biodiversity: The Ethical Trading Policy are understood by requirements of our Farm Animal key members of our Trading teams and Welfare and Biodiversity policies are communicated effectively to all suppliers being communicated to all stakeholders so that they also understand our and are driving actions that ensure that requirements and can demonstrate farm animal welfare is protected and compliance. As part of this process biodiversity is enhanced.

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Leading in Health & Wellbeing to manage their fitness. Through Vibrant Communities: Our continued partnerships with local sporting and sponsorship of the Tidy Towns Nutrition & Healthy Eating: We are cultural organisations we are helping programme (see: www.tidytowns.ie), raising awareness among consumers of more people and age groups to become Irelands foremost community the benefits of nutrition & healthy eating active and take ownership of their sustainability programme is driving and are helping them to make informed personal wellbeing. projects that bring about positive food choices that fit with their own Our community fitness campaigns have improvements in local communities. personal needs and lifestyles. successfully captured hearts and minds Our community projects benefit people Health is a core driver of our range and and encouraged more consumers to visit by inspiring them to come together; we are making healthy eating more our stores. giving them a sense of pride in place. affordable through pricing and We are successful in building promotions that influence consumers to Our Group recycling rate now stands at connections with all members of the switch. 98%; that is up from 64% in 2006, and community and are connecting people marks a very significant improvement and building awareness of and action to Education & Awareness: Our brands are between 2012 and 2014, during which combat loneliness isolation especially in focused on meeting the needs of period, recycling rates improved by 15 rural communities. consumers seeking information on percentage points. healthy eating, diet and nutrition. We Employment & Opportunities: We are provide wide-ranging and clear Community active in creating local employment in information to consumers on all aspects our facilities and encourage our retailers of health and wellbeing. Being a Good Neighbour: Our facilities to support local employment. Our Our information is backed-up by are operated with minimum impact on mentoring and support for local guidance from recognised experts in their communities and on their producers strengthens their businesses healthy eating, diet and nutrition and neighbours. Teams at every one of our and enables them to grow and in turn enables us to provide in-store sites have built relationships with local create more local employment and personalised consumer healthy-eating communities and ensure that any issues prosperity. We are also creating information supported by helpline and are dealt with promptly. At the same awareness among young people of the online resources. time, our Store Development teams career possibilities in retail and are continuously improve the design of working with state and local bodies to Active Living: Our brands are helping stores to ensure that they minimise provide guidance and mentoring consumers to become more active and impacts on the local environment. opportunities for students.

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By signing the Call to Action, we ask . Support corporate efforts to Anti-corruption Governments to: enhance anti-corruption implementation, corporate . Fully implement and enforce the governance, innovative collective tenets of the UN Convention against action, and public-private Corruption by strengthening anti- partnership initiatives. Principles of the UN Global corruption policies, laws and Compact enforcement mechanisms to create Outcomes Principle 10: Businesses should work a level playing field and incentivise against corruption in all its forms, good behavior; There have been no incidences of including extortion and bribery. . Make a commitment to reduce corruption in Musgrave Group. corruption risks from procurement and contract processes of large- Actions scale projects that are designed to

support sustainable development; Musgrave is opposed to all forms of corruption, including extortion and . Commit to engaging in competitive bribery. Musgrave will not engage in and transparent procurement such practices nor will it accept its processes through public suppliers engaging in corrupt activities. advertising of all Government procurement cases; In June 2014, Musgrave committed its . Achieve greater transparency in support to the UNGC Call to Action: relation to revenues received by Anti-Corruption and the Global Governments from private sector Development Agenda; an appeal by the companies; private sector urging Governments to promote efficient and effective anti- corruption measures and to implement robust policies that will foster good governance.

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Measuring Our Performance

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