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Sharing Good business journey
information in head office

governance - what's already been done

Progress towards meeting these 2012 targets and the related one-year goals, is monitored at an operational level through the Sustainability and transformation integration committee, chaired by Chief executive officer, Simon Susman. Below this, an integrated Good business journey governance system is in place incorporating strategy setting, delivery, communication and review of performance in terms of the programme.

A complete board evaluation is conducted of the Woolworths Holdings board and its subcommittees every two years. A report is also prepared on an annual basis for each committee to confirm that it has complied with its terms of reference.

governance - what we're doing

key sustainability risks

In the event that Woolworths does not achieve its 2012 sustainability targets, this would negatively impact our reputation and undermine stakeholder confidence, particularly following the awards received in 2008. This would be influenced by the extent to which the targets had been achieved.

The key risks associated with the achievement of the 2012 Good business journey targets and related mitigating actions are identified as follows:

Risk item	Risk rating	Mitigating actions
External trading conditions	High	The targets which were set for the Good business journey were based on an understanding of the international and local environments at that time. The sustainability team and business areas regularly scan the environment to identify and assess the impact of potential changes and, if necessary, our internal targets would be updated and shared publicly.
Inability to achieve energy targets	High	A co-ordinated energy programme is in place to deal with all aspects of energy (and climate change) across the business.
Inability to achieve packaging targets	High	Packaging benchmarks have been set and Good business journey guidelines included in all packaging processes.
Inability to achieve transformation targets	High	Transformation targets and plans have been put in place for every business unit to ensure focus.
Accountability	High	Guidelines included in all targets are incorporated into the group strategy and balanced scorecards.
Data integrity	High	An assurance framework is in place to ensure data integrity.
Non-alignment of business plans	Medium	Business decisions are aligned to the Good business journey targets as business units were consulted regarding targets which were ultimately agreed by the board.
Internal financial constraints	Medium	The strategy is self-funding in that no additional costs are to be incurred by business units in meeting the targets and all Good business journey savings would be reinvested in other GBJ initiatives. A process has been put in place to measure savings and ensure reinvestment.
Exclusions to the Good business	Medium	Country Road is developing a formal sustainability framework aligned to the Woolworths Good business journey. Franchise division and branded products require some additional engagement to ensure alignment with the Good business journey.
Inability to achieve water targets	Medium	Targets relating to direct water usage that had been incorporated into the Good business journey are considered to be achievable. A strategy for suppliers to manage their water usage more effectively is in the process of being developed in consultation with industry experts.

progress measurement 2007/8

• The total sustainability measurement score for 2008 is 77%. This shows that progress has been made but that there are a number of instances in which targets for 2008 have not been met.
• The 2012 score of 62% is by necessity lower than the 2008 score, because more stringent targets apply for many of the measures.
  
• The biggest challenges lie within the transformation and environment factors.

integrated sustainability reporting

Woolworths regards its sustainability reporting process as a valuable opportunity to engage with its stakeholder groups and respond to issues that have been raised.

The focus for sustainability reporting this year is to provide readers with an overview of the context for, and highlights of Woolworths good business journey progress.

Last year we told you what we had set out to achieve and gave you some indication of achievement. This year, we want to highlight much of what we’ve done over the past 75 years, note what we are currently busy with, and reiterate where it is we want to be by 2012 and how we intend to get there.

This sustainability report is the successor to the 2007 report and focuses largely on South African-owned operations and, for the first time, provides some information on our Australian subsidiary Country Road. There have been no significant changes in accounting standards regarding

The G3 guidelines of the Global Reporting Initiative (GRI) form the basis for this annual report cycle, and an analysis of the group’s compliance with these guidelines appears here. Woolworths internal audit team has assessed selected Good business journey indicators during 2008 and will continue this process during 2009.

We have also undertaken a stakeholder review session with the Worldwide Fund for Nature (WWF South Africa), and their feedback has been incorporated into this report.

Woolworths retained an “excellence” rating in the Ernst and Young 2007 annual report scoring, reflecting a sound level of financial disclosure and compliance with IFRS requirements.

A detailed review of the governance journey for the year can be found in the Governance report.

governance - where we're going

• Drive business delivery of Woolworths Good business journey 2009 goals and 2012 targets;
• a comprehensive review and relaunch of Woolworths Ethics policy, which was not completed in 2008, ensuring alignment with the values project; and
• move towards a more comprehensive assurance process for the content of the sustainability report.