Sustainability Report 2019 2 About this Report SODIMAC 2019 (102-45; 102-50; 102-51; 102-52; 102-53; 102-54) This is Sodimac Chile’s 13th Sustainability Report. It provides an REPORT SUSTAINABILITY account of the company’s economic, social and environmental performance between 1 January and 31 December 2019. (For previous reports, see www.sodimac.cl.) The Report was prepared in accordance with the Core option of the Guidelines of the Global Reporting Initiative (GRI). It refers to the performance of Sodimac Chile and does not cover either its business units in other countries or its Imperial S.A. subsidiary in Chile, which publish their own Sustainability Reports (available on their websites). The Report allows the company to comply with the Communication on Progress required under the United Nations Global Compact and the company’s commitment to its ten principles, which seek to strengthen human rights, labor norms, protection of the environment and the combat of corruption. We would appreciate your comments and suggestions. Please send them to: Juan Carlos Corvalán R. Legal Affairs and Sustainability Manager Tel: +562 27381192 E-mail: [email protected] Pablo Urbina M. Assistant Sustainability Manager Telephone: +562 27381784 E-mail: [email protected] 3 SODIMAC 2019 (102-1; 102-3; 102-56) SUSTAINABILITY REPORT SUSTAINABILITY Sodimac S.A. External Assurance: RUT: 96.792.430-K This Sustainability Report was externally assured by EY Address: Av. Presidente Eduardo Frei Montalva N° 3092 Assurance in order to ensure the accuracy and reliability Renca, Santiago, Chile. of the information reported. A copy of EY’s Assurance www.sodimac.com Statement can be found on page 127 of this Report. Coordination and Content: Design: Pablo Urbina M. Espacio Vital Marcela Erazo P. Photographs: Editing: Sodimac Archive Transparentia Consultores Advisory Team: Centro Vincular - RS, PUCV 4 SODIMAC 2019 Contents Letter from the General Corporate Governance Commitment to 05 Manager of Sodimac Chile 39 and Business Ethics 91 the Environment REPORT SUSTAINABILITY 09 Sodimac and its Context 53 Our Employees 107 Commitment to the Community • Retail industry • Strategic framework • Sodimac in Latin America 72 Our Suppliers 115 Appendices • Value chain • Economic Development • Sodimac Chile Workforce Responsible Growth 81 Our Customers • Inventory of GHG Emissions 17 • Sodimac’s strategy through to 2023 • GRI Index • Commitment to sustainability • External Assurance Statement • Management of sustainability • Feedback Questionnaire • Glossary 5 SODIMAC 2019 Letter from the General Manager REPORT SUSTAINABILITY 6 Letter from the General Manager SODIMAC 2019 of Sodimac Chile (102-12; 102-14) SUSTAINABILITY REPORT SUSTAINABILITY We are pleased to share with you Sodimac Chile’s 13th Sustainability Report. It provides an account to other stores but the loss they suffered was irreparable. We are convinced that, in order to progress as a country, Some of them had been working together for more than it is essential to understand the causes of this social of our economic, social and environmental 20 years and their store was a second home to them. crisis. To further develop our ability to listen and engage performance in line with the undertakings we in dialogue, we held 95 conversation events in which have entered into with our different stakeholders Although our activities were affected, we maintained 1,116 employees from all stores, distribution centers Eduardo Mizón our terms of employment and other benefits and, for and support offices around Chile participated. These General Manager under our Sustainability Policy. Sodimac Chile the sake of employees’ quality of life, reduced our conversations will be used to propose improvements opening hours. We also took a number of measures in for our company and the country. response to the needs of other stakeholders. For 90 days as from Monday, October 21, we froze prices in all However, the situation did not distract us from our long- 2019 was a complex year. In addition to the economy’s our stores around the country to help guard against term commitments. During the year, we continued to make deceleration, uncertainty increased as from October, speculative increases in the markets we serve. In the progress on the Sustainable Development Goals (SDGs) accompanied by levels of violence we had not previously case of our small and mid-sized suppliers, we brought to which we are committed as a means of managing experienced. In this context, our priority was the safety forward payment of their invoices. We also surveyed the and reducing the negative impacts of our business and of our employees and customers. Like the rest of the damage to the installations of the small companies and generating value for the context in which we operate. retail sector, we suffered numerous incidents of looting individual enterprises that rent space in our stores and and damage to our stores. Indeed, two stores - in the took measures to help especially those most affected by The company continued to place great emphasis on center of the city of Concepción and in Santiago’s Conchalí fires or looting. In the case of communities, we worked training and development programs. In 2019, we provided district - were burned down, as was the San Bernardo with the social organizations with which we have alliances 494,633 hours of training, benefiting 17,276 employees. store of our Imperial subsidiary. Fortunately, no one was (Techo, Junto al Barrio, Santiago+B and Movidos x Chile) This gave an average of 28 hours of training per employee injured and the people who worked there were relocated to evaluate needs and provide support. and represented an investment of almost US$2.8 million. 7 Another priority for the company in 2019 was inclusion. This was reflected in In addition, we put over 4,000 products with environmental and social the adaptation of our infrastructure as well as in our recruitment and selection attributes at the disposal of customers and continued to work towards our SODIMAC 2019 “To further develop our ability to listen work. Our aim was not only to comply with Chile’s new Labor Inclusion Law, aim that, by 2020, 100% of the containers and packaging of the products we and engage in dialogue, we held 95 which requires that persons with disabilities account for 1% of a workforce, sell will be recyclable, starting with our own brands. In line with our view but also to embed awareness of diversity throughout the company. that we can achieve much more through collaboration than individually, conversation events in which 1,116 we joined the Chilean Plastics Pact, an initiative led by the Fundación Chile employees from all stores, distribution In 2019, we began to apply the eNPS (employee Net Promoter Score) survey as technology transfer institute. In addition, along with other companies, we centers and support offices around Chile an additional means of learning about employees’ views and identifying key signed a clean production agreement for electrical and electronic articles. REPORT SUSTAINABILITY moments in their experiences. This regular anonymous survey is a variation participated. These conversations will be on the NPS tool that we have been applying for years and has proved very Through our Construyendo Sueños de Hogar (Building Dreams of Home) used to propose improvements for our useful in managing customer experience. program, we implemented 83 projects that improved infrastructure and public company and the country.” or community spaces throughout Chile. These projects, in which 1,404 company During the year, we maintained constant dialogue with our union organizations. volunteers participated, directly benefited 40,190 people while, internally, Collective bargaining processes took place with five unions, which together 120 projects helped 84 employees to improve their homes and quality of life. represent 8,052 employees, equivalent to 45% of our workforce. All these processes were concluded without needing mediation. For the seventh consecutive year, we held the Great Tradesmen’s Training Fair. This has become the principal event at which construction professionals These and other efforts as regards human resources were reflected in our can receive training and learn about new technologies and trends so as to best result ever in the Great Place to Work (GPTW) ranking where we took be able to innovate in their work. In 2019, it offered a record of over 300 free 8th place among the best companies with more than 1,000 employees for training sessions that were attended by 18,000 people and followed by more which to work in Chile. than a further 50,000 online. In the face of the urgency of working together to combat climate change, In 2019, we once again implemented our Hágalo Usted Mismo en Comunidad we implemented a series of initiatives to contribute to protection of the (Do It Yourself in Community) program, holding 110 workshops around Chile environment and foster awareness among suppliers, customers, employees to offer vulnerable communities step-by-step advice on projects to build and and the community. As part of the objective of achieving a 30% reduction in repair different parts of their homes in accordance with their needs and, in the company’s direct GHG emissions by 2021, all deliveries to customers in this way, enhance their quality of life. Chile have been carbon neutral since 1 March 2019. The emissions generated are offset through the purchase of carbon credits from internationally Customer complaints represented 0.47% of total transactions in 2019 and recognized renewable energy projects in Chile. we will continue working to reduce this figure. In the case of technology, we progressed on a fundamental change in our e-commerce platform, migrating We have also continued to expand our National Network of Clean Points. In the base to micro-services so as to be able to advance dynamically in its 2019, we opened our first facility in the town of La Calera and, during the development, applications and the ecosystem of digital tools in stores.