KEY SUSTAINABILITY RISKS

The key risks associated with the achievement of the 2012 Good business journey targets and related mitigating actions were reviewed during the current year, and are identified as follows:

Exposure high Reason based on key metrics Actions to address performance
The GBJ 2012 and beyond strategy: not being able to maintain sustainability leadership
  • Key shifts in the sustainability focus of a number of international retailers.
  • Woolworths is part of the way through a strategy development process.
  • We continually benchmark local and international retailers.
Inability to achieve energy targets and associated costs
  • % relative reduction from 2004 benchmark vs. 2010 target of 20%
  • energy tariff increases
  • The roll-out of technologies (metering on-line and automated lighting) has been accelerated.
  • Introduced new pilot technologies around refrigeration and air conditioning.
  • Recently launched an energy awareness campaign in stores.
Inability to meet Foods packaging reduction of 20% by 2012 and ensuring foods packaging recyclability  
  • A reduction of 600 tons of packaging vs. 2010 target of 1000 tons
  • Recycling programme available at 8 sites.
  • Focusing on inclusion of recycled content, ensuring recyclability of the containers, making sure recycling symbols are on containers, and the education of customers about recycling,
  • Further roll-out of recycling facilities in second half of 2010.
Retaining the majority of clothing sourcing in the region – reputational risk  
  • Local sourcing % target now 50% sourcing from the region in 2012
  • Working with key local suppliers to ensure a sustainable local value chain in key lines.
  • Increasing sourcing from Lesotho, Swaziland and Mauritius.
Water scarcity and quality issues
  • Water scarcity key issue for South Africa as over 90% catchments already over-allocated. Climate change impacts can create further pressures at a regional level
  • Water neutrality commitment and reductions achieved to date.
  • Installing water meters in all stores.
  • Working with suppliers to ensure they are water-efficient and managing waste water properly.

Exposure medium Reason based on key metrics Actions to address performance
Inability to achieve organic and free-range food sales and organic clothing sales
  • 2012 target sales organic cotton
  • 2012 target sales organic and free-range food
  • 2012 farming for the future target
  • 2009/10 target for sustainable fibres
  • Launched the SA organic cotton pipeline.
  • Investigating the replacement of conventional cotton with ‘better’ or fair- trade-based cotton.
  • Increasing the inclusion of other sustainable fibres such as bamboo in product mix.
  • Promoting ‘farming for the future’ produce and earth-friendly cleaning range as new product innovation commitments that are fundamentally changing our product offering.
Data integrity
  • A number of the GBJ measures had not previously been measured by the business.
  • The on-line GBJ measurement system has been improved.
  • The finalisation of the Metering on line technology has improved data around energy and water.
  • A three-year audit plan for GBJ is in place, with a view to preparing the business for external assurance.

Exposure low Reason based on key metrics Actions to address performance
Internal financial constraints
  • A focus on cost reduction has resulted in some GBJ initiatives not being pursued by the business.
  • Cost-saving projects are submitted to the investment committee to secure funding.
  • Broader business case development for other projects is being pursued with the business units.
Exclusions to the Good business journey programme: Branded products
  • To ensure consistency and credibility of the Good business journey programme, all aspects of Woolworths business should be involved.
  • Investigating how to incorporate branded products within the ambit of the supplier code and its audit process, to ensure a level of consistency.
  • Opportunities to partner with brands on sustainability issues to be investigated.

Competition commission inquiry

Woolworths is committed to fair competition principles.

The retail industry in South Africa and around the world is fiercely competitive. We are at pains to ensure that our practices drive the best prices for our quality standards.

Woolworths will continue to co-operate with the Commission and awaits the outcome of its investigation.